ANAND JYOTI DEVELOPERS PVT. LTD.,KOLKATA vs. ITO, WARD-11(1), KOLKATA

IN THE INCOMETAXAPPELLATE TRIBUNAL “A” BENCH, KOLKATA Before ShriRajesh Kumar, Accountant Member and ShriPradip Kumar Choubey, Judicial Member ITA No.172 & 173/Kol/2025 Assessment Year: 2011-12 Anand Jyoti Developers Pvt. Ltd……………………….………………………….Appellant 9A, Rajhans Apartments, 6, Hasting Park Road, Alipore, Kolkata- 700027 [PAN No. AAICA5646B] Vs. ITO, Ward 11(1)……………..………………..…………….………... Respondent West Bengal- 7000069 Appearances by: Shri Miraj D shah, AR, appeared on behalf of the Appellant. Smt. Madhu Malati Ghosh, CIT(DR), appeared on behalf of the Respondent. Date of concluding the hearing :May 11, 2026 Date of pronouncing the order :May 29 ,2026 ORDER Per Pradip Kumar Choubey, Judicial Member: The present appeal has been preferred by the assessee against the order dated 26.11.2024 of the Office of the Commissioner of Income Tax [hereinafter referred to as ‘CIT(A)’] passed u/s 271(1)(c) of the Income Tax Act (hereinafter referred to as the ‘Act’). Since in both the appeal the issues are common hence taken up together for disposal by taking lead case of ITA No. 172/25. 2. The brief facts of the case are that a search and seizure operation u/s 132 of the L.T. Act, 1961, was conducted on 17.12.2014 and 18.12.2014 at various premises of Adhunik Group. Search warrant was executed in the name of the appellant. Consequently, a notice u/s 153A of the Income Tax Act, 1961, was issued for the A.Y. 2011-12 on 23.09.2015 asking the assessee company to file the return

ITA No.172/Kol/2025 Assessment Year- 2011-12 of income. In response to the said notice, the assessee company filed its return of income on 03.11.2015 showing a total income of Rs.60,870/-. Subsequently, notices u/s 143(2) and 142(1) of the Income Tax Act, 1961, were issued and duly served on the appellant. In response to the said notices, the A/R of the appellant appeared from time to time and filed various details and documents. During the course of search and seizure operations, incriminating documents were found in the office premises of the assessee group which ware I.D. marked as AIPL/4. Page no. 4, 5, 6 and 7 of the said I.D. marked bunch contained the details of cash paid for allotment of shares relating to particular year of various companies of the group. Statement of Shri Sanjay Sureka was recorded. During the course of assessment proceedings, the Ld. A.O. observed that the assessee has debited office electricity expenses of Rs.1,73,116/-. However, in thebooks of the assessee company there was no office premises, no rent and no fixed assets. Since the assessee couldn't produce any evidence in respect of the aforesaid expense of Rs.1,73,116/- was disallowed and added back to the total income of the assessee. The Ld. Assessing Officer had also initiated penalty u/s 271(1)(c) of the I.T. Act, 1961 proceedings on the same. After, the matter was disposed of by Hon'bleCIT(A), wherein that he confirmed the addition to the extent of 60% of total disallowance on estimate basis, the penalty proceedings got fixed for hearing on 15.11.2019. The assessee in its reply dated 15.11.2019 stated that the present addition was partly confirmed by the Hon'ble CIT(A) on estimate basis and it's a settled principle wherein any addition is made/confirmed on the basis of estimation, no penalty should be levied in such case. However, the Ld. Assessing Officer as not satisfied by the reply filed by the assessee company and he levied a penalty of Rs.21,397/- being 100% of tax sought to be evaded.

ITA No.172/Kol/2025 Assessment Year- 2011-12 3. Aggrieved by the said order assessee preferred appeal before the CIT(A) wherein appeal of the assessee has been dismissed in limine on the ground that there was a delay of 19 months and 2 days in filing the appeal and assessee has suppressed this fact by mentioning that there is no delay. Being aggrieved by and dissatisfied the assessee preferred appeal before us. 4. The Ld. AR challenges the very impugned order of the CIT(A) thereby submitting that CIT(A) dismissed the appeal of the assessee on the alleged delay in filing the appeal ignoring the fact that penalty order was served to the assessee on 21.12.2021 and appeal had been filed on 19.01.2022 which is well within the statutory time frame of 30 days allowed from the date of the service of the order as per the provisions of the Income Tax Act. The Ld. AR brought the copy of the notice issued by the department to the assessee in support of his contention. The Ld. AR submits that an Assessing Officers did not serve the penalty order in a timely manner though passed and remained unserved to the assessee for a period of 19 months and two days which is evident from the notice itself, hence there is no delay in filing of the appeal as being assessee has been served to the notice on 21.12.2021. The Ld. AR further submits that penalty order passed u/s 271(1)(c) of the Act is bad in law as CIT(A) has confirmed the addition to the electricity expenses and addition was made on estimation basis and it is a settled law that penalty cannot be imposed when addition was made on estimation basis. Contrary to that Ld. DR supports the impugned order. 5. We have perused the order of the CIT(A) and find that CIT(A) has dismissed the appeal of the assessee by stating that appeal has been filed after a delay of 19 months and 2 days as the order passed on 18.06.2020. The Ld. AR submits before us that there was no delay

ITA No.172/Kol/2025 Assessment Year- 2011-12 as the order was sent or received to the assessee on 21.12.2021 and from that date assessee has filed appeal within the 30 days so there is no delay. The assessee has brought the copy of the notice which as here under:-

Going over the notice, we find that it has been issued on 21.12.2021. We find substance in theargument of the assessee that there was no delay as he filed the appeal within 30 days. The correct position of law for computation of limitationis from the date of service of notice and not from the date of passing order.

Keeping in view the issuance of date of notice as discussed above we find substance in the arguments of the AR is that there was no delay in filing the appeal. Accordingly, the order passed by the CIT(A) on the point of limitation as hereby set aside.

ITA No.172/Kol/2025 Assessment Year- 2011-12 imposed.We have gone through the decision of the Coordinate Kolkata Bench in ITA No. 455/2024 as well as Rajasthan High Court passed in CIT versus Krishi Tyre Retreading & Rubber Industries reported in (2014) 44 taxmann.com 9 (Rajasthan) and find that Hon’ble High Court of Rajasthan held thus: - Section 271(1)(c) of the Income-tax Act, 1961 – Penalty – For concealment of income (In case of addition on estimate basis)- Assessment year 1996097 – Whether where addition had been sustained purely on estimate basis and no positive fact or finding had been found so as to even make said addition, no penalty was leviable under section 271(1)(c) – Held, yes [In favour of assessee] 7. We have also gone through the order passed by the Tribunal passed in ITA No. 455/2024 and fined that Hon’ble ITAT has held thus:- With the assistance of ld. Representatives, we have gone through the record carefully. Though earning of alleged commission income by providing accommodation entry in itself is a doubtful activity, but Id. Assessing Officer has not doubted this activity. He has accepted the alleged commission income of the assessee in providing accommodation entry of huge sum of Rs.78.9 crores. He only made changes that instead of half percent, it should be 1% of commission income. The assessee should have earned in this activity. To our mind, the income of the assessee has been revised on an estimate basis, which is based on difference of opinion without any scientific method. Therefore, on such an issue the Id. Assessing Officer as well as by the Id. CIT(Appeals) should have not been visited the assessee with penalty. Accordingly, we allow this appeal of the assessee and delete the penalty

ITA No.172/Kol/2025 Assessment Year- 2011-12 8. Keeping in view the discussion made above, considering the facts of the case as well as considering the judicial pronouncement as discussed above,we find substance in the arguments of the AR no penalty can be imposed when addition made on estimation basis.

Accordingly, penalty order passed by the AO confirmed by the CIT(A) are set aside and penalty as levied is hereby deleted.

In the result, the appeal of the assessee is allowed.

Kolkata, the 29th May, 2026.

Sd/- Sd/- [Rajesh Kumar] [Pradip Kumar Choubey] Accountant Member Judicial Member Dated:. 29 .05. 2026. DC, PS

Copy of the order forwarded to: 1. Appellant - 2. Respondent - 3. CIT(A)- 4. CIT- 5. CIT(DR)

//True copy// By order Assistant Registrar, Kolkata Benches

ITA No.172/Kol/2025 Assessment Year- 2011-12