Accountant Resigned, Emails Missed, ITAT condones 581-Day Delay
The Income Tax Appellate Tribunal (ITAT), Mumbai, condoned the delay and restored the matter to the CIT(A) for factual analysis of the case involving profit estimation and disallowance under section 14A.
The assessee company, S.D.Bhalerao Constructions Pvt. Ltd, filed two appeals against the orders passed by the National Faceless Appeal Centre (NFAC) for the AY 2017-18 and 2014-15 to challenge the estimation of profits at 7.5% on closing stock and disallowance under section 14A of the Income Tax Act. However, the appeals were delayed by 520 days for AY 2017-18 and 581 days for AY 2014-15.
The company explained that this delay was due to the administrative lapse, as its accountant, who was managing the email communications, resigned, and the new accountant did not review the previous emails, due to which the company was not aware of the CIT(A) orders until the penalty proceedings for AY 2017-18 were started through the e-proceeding portal. After coming to know about this, the company checked the past communications and orders that were issued much earlier.
The company submitted that the appellate proceedings were ex parte, as the assessee was unaware of the notice and could not get the chance to present its case.
The Tribunal condoned the delay for the assessment years, as the explanation for the delay in filing the appeal was genuine and bona fide.
Regarding the assessee’s arguments against the estimation of profit and disallowance under section 14A, the Tribunal noted that the matter needs a factual analysis of the accounting records, the reason for the estimation made and the nature of expenses.
Therefore, the ITAT restored the matter to the CIT(A) for fresh consideration, directing that the appellant be given a full opportunity to submit evidence and be heard.
Case Citation: S.D. Bhalerao Constructions Pvt. Ltd Vs DCIT (ITAT Mumbai); ITA No.3958/Mum/2025 & 3959/Mum.2025; 12/11/2025; 2017-18 and 2014-15
