AVLOKAN VINIMAY PVT. LTD.,,KOLKATA vs. ITO, WARD 4(3), KOLKATA, KOLKATA

ITA 2453/KOL/2026Status: DisposedITAT Kolkata07 October 2026AY 2012-20138 pages
AI SummaryAllowed

What were the facts?

The assessee, Avlokan Vinimay Pvt. Ltd., is in appeal against the order of the National Faceless Appeal Centre, Delhi, dated 30.04.2025, for Assessment Year 2012-13. The appeal was filed 10 days late, but the delay was condoned. The assessee had declared a loss of ₹34,425/-. During the assessment, the company had collected ₹1,69,00,000/- by way of share capital/premium. The Assessing Officer (AO) noted that the assessee received money by issuing equity shares to shell companies and treated it as an unexplained cash credit. However, the AO made the addition on a protective basis, stating the real beneficiary was not the assessee but someone else. The AO framed the assessment under Section 144(1) of the Act, adding ₹1,69,00,000/-. The CIT(A) confirmed the AO's order.

What did the Tribunal hold?

The Tribunal held that a protective assessment cannot survive in the absence of a substantive assessment. The concept of substantive and protective additions are integrated; one cannot exist without the other. The AO's role is to protect the revenue's interest by making additions on a protective basis in one hand and a substantive basis in another, ensuring that if one addition fails, the other can be sustained. In this case, the AO made an addition on a protective basis in the hands of the assessee, but no substantive addition was made in the hands of any other person. The Tribunal relied on the co-ordinate bench decision in Pravinkumar Valjibhai Pujara HUF Vs. ITO and the Mumbai Tribunal's decision in Suresh K.Jajoo Vs. ACIT, which held that substantive assessment must precede protective assessment. Consequently, the assessment framed by the AO on a protective basis without a substantive assessment was held to be unsustainable and a nullity in the eyes of law. The Tribunal set aside the order of the CIT(A) and directed the AO to delete the addition. The grounds raised by the assessee on merit were dismissed as the assessee succeeded on a technical ground.

What were the issues?

1. Whether a protective assessment is valid in law when there is no substantive assessment in the hands of any other person, and whether such an assessment is null and void? (Question of law) Assessee's contention: The assessee argued that a protective assessment cannot exist without a substantive assessment. Therefore, the assessment framed on a protective basis alone is invalid and should be quashed. Revenue's contention: The Revenue did not raise any objection regarding the condonation of delay. No specific arguments were recorded for the revenue on the substantive issue of the validity of a protective assessment without a substantive assessment.

Which sections of the Income-tax Act were involved?

Section 143(2),Section 142(1),Section 131,Section 144(1),Section 69

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “A” BENCH, KOLKATA

For Appellant: Shri S.K. Pransukha, AR
For Respondent: Shri Nilkantha Chakraborty, DR
Hearing: 21.09.2026Pronounced: 07.10.2026

Per Rajesh Kumar, AM:

This is an appeal preferred by the assessee against the order of the National Faceless Appeal Centre, Delhi (hereinafter referred to as the “Ld. CIT(A)”] dated 30.04.2025 for the AY 2012-13. 2. At the outset, we note that the appeal of the assessee is barred by limitation by 10 days. At the time of hearing the counsel of the assessee explained the reasons for delay in filing the appeal. The Ld. D.R did not raise any objection in condoning the delay. After hearing the rival contentions and perusing the materials available on record, we find that the delay is for bonafide and genuine reasons and hence, we Avlokan Vinimay Private Limi

The order continues below.

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