The case of Freeplay Energy India Private Limited, New Delhi, against the ITO Ward-11(3), New Delhi, pertains to the assessment year 2009-10. The appeal was filed on June 23, 2021, under case number ITA 773/DEL/2021. The final tribunal order was pronounced on May 16, 2023.
The appellant, Freeplay Energy India Private Limited, filed appeals against two separate orders dated March 28, 2018, by the Commissioner of Income Tax (Appeals)-34, New Delhi, pertaining to assessment years 2009-10 and 2011-12. The primary issue was the ex parte disposal of the appeals by the learned Commissioner (Appeals) and the subsequent delay in filing the appeals due to the company’s liquidation proceedings.
The hearing for this case was conducted on May 8, 2023, before the Delhi ‘H’ Bench of the Income Tax Appellate Tribunal, with the order being pronounced on May 16, 2023. The case was presented by Sh. Purab, CA, and Sh. Varun Nagaratha, Advocate, representing the assessee, and Sh. Bhupendera Anant, Sr. DR, representing the revenue.
The key legal principles in this case revolved around the provisions of the Income Tax Act concerning the condonation of delay in filing appeals and the fair opportunity of being heard. The primary contention was whether the ex parte disposal of appeals by the learned Commissioner (Appeals) was justified, especially considering the company was under liquidation, which prevented it from participating in the proceedings.
The counsel for the assessee argued that the delay in filing the appeals was due to the company being under liquidation by virtue of an order passed by the Hon’ble High Court. During the liquidation proceedings, the Official Liquidator was in charge of the company, preventing the assessee from accessing the Income Tax Department Portal and being aware of the culmination of proceedings before the first appellate authority. Only after receiving a show-cause notice for the imposition of penalty under section 271(1)(c) of the Income-tax Act, 1961, did the assessee become aware of the orders passed by the first appellate authority. The delay was further exacerbated by the COVID-19 pandemic. The counsel contended that the delay was bona fide and not due to any negligence of the assessee.
The tribunal observed that the delay in filing the appeals was due to reasonable cause. The company was under the process of liquidation, and the Official Liquidator was in charge, which disabled the assessee from accessing the online portal of the Income Tax Department. The tribunal was convinced that the delay was justified and condoned the delay, admitting the appeals for adjudication on merits.
The tribunal further noted that this was the second round of litigation before the Tribunal. In the first round, the Tribunal had restored the matters back to the first appellate authority for a fresh decision. In the second round, the learned Commissioner (Appeals) decided the appeals ex parte by confirming the additions, as none appeared on behalf of the assessee to represent the case. The tribunal found that the assessee did not get a fair opportunity of representing its case before the first appellate authority due to circumstances beyond its control.
Given these circumstances, the tribunal set aside the impugned orders of the learned first appellate authority and restored the matters back to his file for deciding afresh after providing due and reasonable opportunity of being heard to the assessee. The tribunal also directed the assessee to comply with the notice of hearing to be issued by the learned first appellate authority and cooperate in the finalization of the proceeding.
In conclusion, the tribunal allowed the appeals for statistical purposes. The detailed judgment underscores the importance of fair representation and the consideration of bona fide reasons for delays in legal proceedings. The tribunal’s decision serves as a significant reference for similar cases involving liquidation proceedings and procedural delays.
Order pronounced in the open court on May 16, 2023.
Signed by:
SaktiJit Dey, Judicial Member
M. Balaganesh, Accountant Member
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