Transcorp International Limited Vs DCIT (ITAT Jaipur)
CIT(A) Cannot Condone Delay and Then Dismiss Same Appeal as Time-Barred: ITAT
Introduction
The ITAT, Jaipur Bench, has set aside an appellate order containing contradictory findings on condonation of delay. The CIT(A), National Faceless Appeal Centre, initially accepted the assessee’s explanation and condoned a 25-day delay, but subsequently refused condonation and dismissed the same appeal as time-barred.
The Tribunal held that these inconsistent conclusions within a single order were legally unsustainable. Since the CIT(A) had also failed to adjudicate the substantive grounds, the matter was restored for a fresh decision on merits after providing a proper opportunity of hearing.
The assessee’s appeal was consequently allowed for statistical purposes.
Facts of the Case
The assessee, Transcorp International Limited, was engaged in the business of foreign exchange and inward money remittance.
For Assessment Year 2017-18, it filed its return of income on 30 October 2017, declaring total income of ₹2,71,45,940. The return was selected for scrutiny.
The assessment resulted in a ₹5 lakh disallowance of repair and maintenance expenses, a ₹32,51,200 disallowance under Section 14A, and a further disallowance of ₹58,577.
Aggrieved by the assessment, the company filed an appeal before the CIT(A). However, the appeal was filed with a delay of 25 days, for which the assessee furnished detailed reasons and supporting material.
Delay Initially Condoned
The CIT(A) reproduced the assessee’s explanation for the delay and expressly accepted it in paragraph 1.3.3 of the appellate order.
The appellate authority recorded that it had considered the submissions, found force in the explanation and the supporting evidence, and therefore condoned the delay.
This was an affirmative finding accepting the assessee’s request. It formed the basis of the company’s subsequent objection that the appeal could not consistently be dismissed on the opposite conclusion in the same order.
Contradictory Finding in the Concluding Portion
Despite initially granting condonation, the CIT(A) later reached a different conclusion.
In the findings recorded in paragraph 4.1, the appellate authority discussed judicial decisions and observed that the assessee was required to explain each day’s delay with credible proof. It then declined to condone the 25-day delay and dismissed the appeal.
The resulting order thus both condoned and refused to condone the same delay.
Although the assessee’s written submissions had been reproduced, the CIT(A) did not decide the underlying assessment issues on merits. The company challenged this contradictory disposal before the Tribunal.
Grounds Raised by the Assessee
The assessee argued that dismissal of the appeal as time-barred was inconsistent with the express condonation already recorded in the order.
It also contended that failure to adjudicate the substantive grounds violated Section 250(6) and the principles of natural justice.
On the assessment issues, the company challenged the lump-sum disallowance of repair and maintenance expenses, arguing that the supporting details and evidence had been ignored.
It disputed the Section 14A read with Rule 8D disallowance, contending that the requisite satisfaction had not been recorded and that no exempt income had been earned during the year.
The company further argued that the ₹58,577 expenditure was compensatory rather than penal and claimed denial of credit for ₹8,28,202 of Dividend Distribution Tax. These remained the assessee’s contentions; the Tribunal did not determine their correctness.
Submissions Before the Tribunal
The assessee’s representative furnished an 88-page paper book and advanced arguments seeking deletion of the assessment additions.
It was emphasised that the first appellate authority had dismissed the appeal only on limitation, without examining its merits.
The Revenue, on the other hand, supported the orders of the lower authorities.
The Tribunal examined the appellate order and the material placed before it, focusing on the conflicting findings concerning the delay.
Tribunal’s Findings and Directions
The Tribunal found that the CIT(A) had clearly recorded condonation of delay after considering the assessee’s explanation, but had refused condonation in the concluding portion.
It held that taking these opposing positions in the same order was legally unsustainable.
The Tribunal also noted that merely reproducing the assessee’s written submissions did not amount to adjudicating the grounds on merits.
Accordingly, it set aside the CIT(A)’s order and directed the appellate authority to provide a proper opportunity of hearing and pass a fresh order on merits in accordance with law.
The Tribunal expressly refrained from expressing any opinion on the substantive disputes.
Conclusion
The ruling underscores the need for consistent findings and effective adjudication in appellate orders. An express acceptance of a delay-condonation request cannot coexist with dismissal of the same appeal on the contradictory premise that the delay remains uncondoned.
The relief granted was a fresh appellate consideration, rather than deletion of the assessment disallowances. The company’s claims concerning expenditure, Section 14A and tax credit remain open for determination by the CIT(A).
FULL TEXT OF THE ORDER OF ITAT JAIPUR
This appeal is filed by the assessee as against the order dated 07.08.2025 passed by Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi (hereinafter referred to as “Ld. CIT(A)”), refusing to condone the delay of 25 days in filing the appeal.
2. Brief facts of the case are that the assessee is a company engaged in the business of foreign exchange and inward money remittance. For the Assessment Year 2017-18, assessee filed its return of income on 30.10.2017 declaring total income of Rs. 2,71,45,940/-. The case was selected for scrutiny assessment and thereafter the assessment was completed by making disallowance of repair and maintenance expenses of Rs. 5 lakhs, disallowance u/s. 14A of Rs. 32,51,200/- and disallowance of Rs. 58,577/- and demanded tax thereon.
3. Aggrieved against the assessment order, the assessee filed an appeal before Ld. CIT(A) with delay of 25 days and also filed the detailed reasons for the delay. The Ld. CIT(A) has reproduced the reasons for the delay at page no. 3 to 5 of his order and in para 1.3.
3. condoned the delay by observing as follows:-
“1.3.3. I have considered the submissions of the assessee on the issue of condonation of delay. I find force in the submissions made by the assessee and the evidence furnished in support of the contention. Accordingly, the delay is condoned.”
3.1. It is thereafter Ld. CIT(A) has reproduced the written submission filed by the assessee and again at page no. 16 in his findings at para 4.1 discussing various case laws, observed that although the delay in this case is 25 days, but it was incumbent upon the assessee to explain the delay for each day alongwith credible proof and therefore declined to condone the delay and dismissed the appeal of the assessee.
4. Aggrieved against the appellate order, the assessee is in appeal before us raising the following Grounds of Appeal:-
“1. In the facts and circumstances of the case and in law, the National Faceless Appeal Centre (NFAC) has grossly erred in dismissing the appeal of the assessee company by holding it as time-barred, despite having categorically condoned the delay in para 1.3.3 of the order. The contradictory findings render the order bad in law and void ab initio. The action of the NFAC is illegal and arbitrary and relief may please be granted by quashing the order of the NFAC.
2. In the facts and circumstances of the case and in law, the NFAC has grossly erred in dismissing the appeal of the assessee company without adjudicating P a g e | 3 ITA No.1194/JPR/2025 Transcorp International Limited the grounds on merits, contrary to the mandate of section 250(6) of the Act and in violation of principles of natural justice. This fundamental error committed by the NFAC vitiates the appellate order. The action of the NFAC is illegal and arbitrary and relief may please be granted by quashing the order of the NFAC.
3. In the facts and circumstances of the case and in law, the NFAC has grossly erred in confirming the action of the Id. AO in disallowing a lump sum addition of Rs. 5,00,000 out of Repair & Maintenance expenses without assigning cogent reasons and ignoring the details and evidences furnished by the assessee company. The action of the NFAC is illegal and arbitrary and relief may please be granted by quashing the order of the NFAC and by deleting the addition made by the Id. AO and confirmed by the NFAC.
4. In the facts and circumstances of the case and in law, the NFAC has grossly erred in confirming the action of the Id. AO in making disallowance of Rs. 32,51,200 u/s 14A read with Rule 8D, without recording mandatory satisfaction under section 14A(2) and despite the fact that no exempt income was earned during the year. The action of the NFAC is illegal and arbitrary and relief may please be granted by quashing the order of the NFAC and by deleting the addition made by the Id. AO and confirmed by the NFAC.
5. In the facts and circumstances of the case and in law, the NFAC has grossly erred in confirming the action of the Id. AO in disallowing Rs. 58,577 by wrongly treating the same as penalty in nature, ignoring that the expenditure was compensatory and allowable u/s 37(1). The action of the NFAC is illegal and arbitrary and relief may please be granted by quashing the order of the NFAC and by deleting the addition made by the Id. AO and confirmed by the NFAC.
6. In the facts and circumstances of the case and in law, the NFAC has grossly erred in confirming the action of the Id. AO in denying credit of Rs. 8,28,202 being Dividend Distribution Tax duly paid by the assessee company, resulting in unlawful demand and double taxation. The action of the NFAC is illegal and arbitrary and relief may please be granted by quashing the order of the NFAC and by deleting the addition made by the Id. AO and confirmed by the NFAC.
7. The assessee company craves leave to add, amend, alter or withdraw any of the above grounds at the time of hearing.”
5. Ld. Counsel appearing for the assessee submitted before us a Paper Book containing 88 pages as well as on merits of the case, canvassing that the addition made by the AO is liable to be deleted. The Ld. CIT(A) dismissed the appeal only on the point of delay, therefore requested to allow the appeal of the assessee.
6. Per contra, Ld. DR appearing for the Revenue supported the orders passed by the lower authorities.
7. We have given our thoughtful consideration and perused the materials available on record including the paper book filed by the assessee. On perusal of the order of Ld. CIT(A) at page no. 5, he clearly mentioned that he considered the submission of the assessee on the issue of condonation of delay and again condoned the delay, but in concluding part of his order, he declined to condone the delay of 25 days in filing the appeal. Thus, Ld. CIT(A) had made hot and cold in the same order which is legally not sustainable. Further, Ld. CIT(A) has reproduced the written submission of the assessee, but not adjudicated on the merits of the case. Thus, the order passed by Ld. CIT(A) is liable to be set aside with a direction to give proper opportunity of hearing to the assessee and then pass fresh order on merits of the case. Thus we are not expressing any opinion on merits of the case and leave it open to the Ld. CIT(A) to adjudicate in accordance with the provisions of law.
8. In the result, the appeal filed by the assessee is hereby allowed for statistical purposes.
In the result, the appeal filed by the assessee is hereby allowed for statistical purposes.
Order is pronounced in the open Court on 30-10-2026
