Geet Reality Vs DCIT (ITAT Ahmedabad)
Ex-Parte CIT(A) Order Set Aside—Advance Rent Reconciliation to Be Examined Afresh; Delay of 656 Days Condoned with ₹5,000 Cost
The Assessee, engaged in construction & rental of a commercial mall, filed appeal against NFAC’s ex-parte order dated 24.03.2023, which confirmed an addition of ₹36,29,972 treating “advance rent” as undisclosed rent receipts based on mismatch between booked rent (₹62,81,762) and Form 26AS rent from PVR Ltd (₹99,11,734).
Condonation of Delay (656 days)
The appeal was filed nearly two years late. The Assessee submitted that:
- it had no knowledge of CIT(A)’s order;
- appeal was filed in 2020 and no follow-up communication was noticed;
- COVID-19 disruptions and staff-level lapses caused missed notices;
- the last notice dated 16.03.2023 escaped attention.
Tribunal accepted the explanation, applied the liberal principles laid down in Collector, Land Acquisition v. Katiji (SC), Vedabai, New India Insurance, etc., and condoned the entire delay.
Merits of the Addition
AO noted a difference of about ₹36.30 lakh between rent recorded and rent appearing in 26AS. Assessee stated that ₹40,83,720 was advance rent for future months up to March 2017. AO rejected the explanation, held advance rent taxable on receipt basis, and added the differential amount.
CIT(A) issued multiple notices between 2020–2023. Although the Assessee sought adjournments thrice, no written submissions or evidence were filed. CIT(A) therefore dismissed the appeal ex-parte, invoking the principle that “law assists the vigilant”.
Tribunal’s Findings
Tribunal noted that CIT(A):
