Case Law Details
Rotodyne Engineering Services (P) Ltd Vs ITO (ITAT Hyderabad)
Introduction: The Income Tax Appellate Tribunal (ITAT) in Hyderabad addressed an appeal filed by Rotodyne Engineering Services (P) Ltd. against an order from the Commissioner of Income Tax (Appeals)-12, Hyderabad. Central to the dispute was the ability of the assessee to provide supporting documents due to the constraints of the COVID-19 pandemic.
Analysis: Rotodyne Engineering Services, engaged in the metals business, was aggrieved by additional tax liabilities imposed for the assessment year 2013-14. The assessment included unexplained expenses and credits under section 68 of the Income Tax Act. Upon appeal, the Commissioner upheld these additions, noting the company’s failure to provide supporting documentation despite several opportunities.
The key argument presented by Rotodyne was that the COVID-19 pandemic hindered their ability to furnish the necessary documents. Their contention was that many employees could not attend work, while others left the company, making it challenging to procure the required paperwork. This argument was further bolstered by the mention of the Supreme Court’s ruling that excluded time limitations generally from March 2020 to February 2022, due to the pandemic.
ITAT, after careful consideration, decided in favor of granting Rotodyne another opportunity to produce the necessary documents. The Tribunal, recognizing the unprecedented circumstances posed by the pandemic, believed this decision would meet the ends of justice. However, to emphasize the seriousness of the issue, ITAT also imposed a cost of Rs. 5,000/- on Rotodyne, to be remitted to the Prime Minister’s Relief Fund.
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