PRABHA COMMERCIAL PVT. LTD.,KOLKATA vs. I.T.O., WARD - 5(1), KOLKATA

ITA 2543/KOL/2026Status: DisposedITAT Kolkata29 September 2026AY 2013-201414 pages
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What were the facts?

The assessee, Prabha Commercial Pvt. Ltd., filed an appeal before the Income Tax Appellate Tribunal (ITAT) challenging the order of the Commissioner of Income Tax (Appeals)-NFAC, Delhi, for Assessment Year 2013-14. The Assessing Officer (AO) initiated proceedings under Section 147 by issuing a notice under Section 148. The AO alleged that the assessee was an intermediary company involved in providing accommodation entries and transferring funds. As the assessee allegedly failed to comply with notices and produce supporting documents, the AO passed an ex parte assessment order under Section 147 read with Section 144 of the Income Tax Act, 1961, making an addition of ₹13,00,000/-. The assessee contended that all notices were duly complied with and that the assessment order and demand notice were unsigned. The CIT(A) had set aside the assessment order and referred the case back to the AO for a fresh assessment, which the assessee also challenged.

What did the Tribunal hold?

The Tribunal allowed Grounds No. 4 and 9, setting aside the order of the CIT(A) and deleting the addition of ₹13,00,000/- made by the AO. The Tribunal found that the addition made by the AO had no basis. The Tribunal noted that the AO's conclusion that the assessee company was running on paper and that summons to intermediate companies were not replied did not justify the addition. The Tribunal observed that the assessee had denied any such transaction and had admitted a transaction of ₹7 Lakhs and ₹6 Lakhs from M/s. Topten Fashion Pvt. Ltd. on account of share application money, which was used for share allotment in subsequent years. The AO had not rebutted the assessee's denial with any evidence regarding transactions with M/s. Keytouch Marketing Private Limited. The Tribunal also noted that the CIT(A), instead of examining the case as per the Tribunal's direction, had once again referred the proceedings back to the AO. Grounds No. 1, 5, and 6 were dismissed. Other grounds were considered general and did not require separate adjudication as the addition was deleted. The appeal was partly allowed.

What were the issues?

1. Whether the CIT(A) erred in law and fact by setting aside the assessment order and referring the case back to the AO for a fresh assessment, especially when the ITAT had directed the CIT(A) to provide one more opportunity of being heard to the assessee. 2. Whether the CIT(A) erred in law and fact by deciding the appeal ex-parte without giving an opportunity of being heard to the appellant, despite the ITAT's specific direction. 3. Whether the invocation of Section 144 by the AO and the ex-parte appellate orders by the CIT(A) were erroneous, invalid, and void ab initio due to alleged non-compliance with notices, when the assessee claimed to have complied with all notices. 4. Whether the AO erred in adding ₹13,00,000/- to the income of the appellant, and whether the CIT(A) erred in not deleting this addition or recording findings in respect thereof. 5. Whether the AO erred in uploading unsigned assessment orders, tax computation, and demand notices, and whether the CIT(A) erred in not declaring them invalid or non-est. 6. Whether the AO erred in invoking Section 144 of the Act without any tangible material on record to justify his action, and whether the CIT(A) erred in passing orders without considering that no notices remained unreplied. 7. Whether the CIT(A) erred in passing the appellate order by reverting the matter to the AO without giving an opportunity of being heard. 8. Whether the CIT(A) erred in passing the appellate order without considering that the AO failed to issue the mandatory notice under Section 143(2), rendering the assessment proceedings illegal. 9. Whether the CIT(A) erred in not recording findings or deleting the addition of ₹13,00,000/- made by the AO. 10. Whether the CIT(A) erred in not considering the fact that the reasons recorded for reopening assessment under Section 147 and non-furnishing of approval under Section 151 constituted a legal flaw rendering the proceedings invalid. Assessee's Contentions: The assessee argued that all notices were duly complied with. They contended that the assessment order and demand notice were unsigned, making them invalid. The assessee also argued that Section 144 was wrongly invoked as there was no non-compliance. They further argued that the addition of ₹13,00,000/- was erroneous and that the AO failed to issue mandatory notice under Section 143(2). The assessee relied on the fact that they did not have any bank account with Karnataka Bank Ltd., which was mentioned by the AO. They also claimed no monetary transaction with Keytouch Marketing Private Limited. Revenue's Contentions: The Revenue relied on the order of the CIT(A) and requested that it be upheld.

Which sections of the Income-tax Act were involved?

Section 147,Section 148,Section 144,Section 250,Section 142(1),Section 156,Section 274,Section 271(1)(c),Section 143(2),Section 151

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, KOLKATA ‘SMC’ BENCH AT KOLKATA

Before: SHRI YOGESH KUMAR US & SHRI RAKESH MISHRA

PER RAKESH MISHRA, ACCOUNTANT MEMBER:

This appeal filed by the assessee is against the order of the Commissioner of Income Tax (Appeals)-NFAC, Delhi [Ld. 'CIT(A)'] passed u/s 250 of the Income Tax Act, 1961 [the 'Act'] for AY 2013-14 dated 26.05.2026. ITA No(s). 2543/KOL/2026 Assessment Year(s) 2013-14 P

The order continues below.

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