Velocious Trading Private Limited vs Deputy Commissioner Of Income Tax, Circle-25(1)

PER MANISH AGARWAL, ACCOUNTANT MEMBER:

This appeal is filed by the assessee against the order of the Ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi [‘CIT(A)’ in short] in Appeal No. NFAC/2020-21/10204396 dated 22.07.2025 passed u/s 250 of the Income Tax Act, 1961 (the Act, in short) arising out of the assessment order dated 13.12.2022 passed u/s 143(3) r.w.s 144B of the Act for Assessment Year 2021-22.

From the perusal of the records, it is found that the present appeal is delayed by 241 days. The assessee has filed an application for condonation of delay supported by an affidavit on stamp. In the condonation application, it was the claim of the assessee that he was preoccupied in personal legal matters of divorce etc. and thus could not look into the income tax matters which caused the delay in filing the appeal. These facts are confirmed in the affidavit filed by the assessee.

Ld. DR for Revenue left the matter to the wisdom of Bench.

We have considered the explanation advanced by assessee and in absence of any contrary fact or material on record, the assessee is found to have a sufficient cause for delay in filing present appeal. We find that section 253(5) of the Income Tax Act, 1961 (the Act, in short) empowers the ITAT to admit an appeal after expiry of prescribed time, if there is a sufficient cause for not presenting appeal within prescribed time. Hon’ble Supreme Court in the case of Collector, Land Acquisition Vs Mst. Katiji and Others reported in 1987 AIR 1353, 1987 2 SCC 387 (SC) has held that whenever substantial justice and technical considerations are opposed to each other, the cause of substantial justice must be preferred by adopting a justice-oriented approach. Thus, taking into account the provision of section 253(5) and the decision of Hon’ble Supreme Court, we condone the delay in filing of appeal by 210 days and admit the appeal for adjudication on merits.

The brief facts of the case are that the assessee is a company engaged in the business of Trading of Garments, Fabrics, Active Wear etc. The return of income for the year under appeal was filed on 15.03.2027 declaring total income of Rs.17,18,640/-. The case of the assessee was selected for complete scrutiny on the issue that assessee has made substantial purchases from certain parties which were either non-filer or filed non business ITR and, therefore, the purchases to the extent of Rs.5,02,52,100/- made from such parties were treated as unverifiable and addition was made u/s 69C of the Act for the same. Besides this the AO has made disallowance of Rs.50,503/- on account of interest paid on delayed payment of income tax.

Aggrieved by the said order an appeal was filed before the Ld. CIT(A) wherein despite of repeated reminders no compliance was made, therefore, the Ld. CIT(A) had dismissed the appeal of the assessee for non-prosecution.

Aggrieved by the said order, the assessee filed the present appeal before the Tribunal by taking various grounds of appeal as per appeal memo.

In Ground of appeal No.1, the assessee has challenged the action of the Ld. CIT(A) in passing the order ex-parte for non-prosecution.

Heard the parties and perused the materials available on record. It is observed that assessee has despite of providing as many as nine opportunities had failed to file any submissions nor had filed the evidences in support of the claim that the purchases alleged as unverifiable are genuine purchases. It was the submissions of the assessee that the Counsel did not diligently monitor the faceless portal, and had failed to file any submissions before the NFAC. It is thus, submitted that if one more opportunity is provided, the assessee would file all the necessary details. It is further submitted that the assessee had not made substantial purchases from the suppliers who were either non-filer and had filed non-business ITR, however, entire purchases from the genuine parties were alleged as bogus. Considering the overall facts and circumstances of the case, it appears that despite of repeated opportunities, assessee has failed to make any compliance before the Ld. CIT(A) which has resulted into dismissal of the appeal without considering the merits of the issues. Before us, assessee has filed all the necessary details in support of the purchases made, however, at this stage, we are unable to verify the same. Thus, in the larger interest of justice, we set aside the order of Ld. CIT(A) and remand the matter back to his file for fresh adjudication after due verification of the documents filed by the assessee and if needed necessary report could be obtained from the AO. The assessee is also directed to participate before the Ld. CIT(A) and file all the necessary details in support of the grounds taken. With these directions, grounds of appeal No.1 of the assessee is allowed for statistical purposes.

In the result, the appeal filed by the Assessee is allowed for statistical purposes.