RAJ KUMAR AGARWAL,KOLKATA vs. DCIT, CC 4(1), , KOLKATA

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ITSSA 42/KOL/2025Status: DisposedITAT Kolkata24 July 2025AY 2016-176 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal found that all three cases required intense fact-finding to assess the correct income of the assessee. It noted that due to non-compliance before the AO, the assessee had suffered various additions. In the interest of substantive justice, the Tribunal set aside all three impugned orders. The matters were remanded to the file of the AO for fresh assessment. The Tribunal expected the assessee to be alert and vigilant regarding notices issued by the AO. The Tribunal did not decide on the merits of the additions or the validity of the AO's orders, as the primary decision was to remand the cases for fresh adjudication. The ratio decidendi is that where substantial justice requires further fact-finding and the assessee demonstrates a genuine inability to present their case fully before the lower authorities, a remand to the AO is appropriate, even if the assessee was at fault for non-compliance.

What were the facts?

This judgment concerns a batch of three appeals filed by Raj Kumar Agarwal (the assessee) for Assessment Years 2016-17, 2018-19, and 2019-20. The appeals arise from orders passed by the Commissioner of Income Tax (Appeals)-Kolkata-27, which upheld additions made by the Assessing Officer (AO). In AY 2016-17, the AO passed an order under Section 153A, making additions under Section 68 and from other sources, based on material recovered during search and survey operations on the Klipcon Group on March 18, 2019. The CIT(A) dismissed the appeal on technical grounds, stating no specific grounds were raised. For AY 2018-19, the AO also passed an order under Section 153A, making similar additions, with the assessee not making comprehensive submissions. In AY 2019-20, the AO passed an order under Section 144 due to the assessee's lack of full compliance, leading to additions under Sections 68, 69B, 69C, and for undisclosed income. The CIT(A) confirmed these additions.

What were the issues?

The Tribunal had to decide the following issues: 1. Whether the CIT(A) erred in dismissing the assessee's appeal for AY 2016-17 on the technical ground that no specific grounds of appeal were filed, when the assessee contends detailed grounds were submitted in Form 35. 2. Whether the CIT(A) erred in confirming additions made by the AO under Section 153A for AY 2016-17 in the absence of any incriminating material found during search and seizure operations. 3. Whether the AO's orders for AYs 2016-17 and 2018-19 were void ab initio due to mechanical approval under Section 153D. 4. Whether the CIT(A) erred in confirming additions on account of capital introduction, loans, income from other sources, and depreciation disallowances for the respective assessment years, without going into the merits of the additions. 5. Whether the CIT(A) erred in confirming the assessment made under Section 144 for AY 2019-20. Assessee's Contentions: - The assessee argued that grounds of appeal were duly filed before the CIT(A) and ITAT. It was prayed that the CIT(A) be directed to adjudicate these grounds or that the matters be remanded to the AO for fresh assessment, as facts could not be presented properly before the AO and CIT(A) due to a communication gap with tax counsel. Revenue's Contentions: - The Revenue relied on the orders of the authorities below and had no objection to the matters being remanded back to the AO.

Which sections of the Income-tax Act were involved?

Section 68,Section 153A,Section 132,Section 133A,Section 250,Section 144,Section 69B,Section 69C,Section 153D,Section 115BBE,Section 24

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “D” BENCH”, KOLKATA

IN THE INCOME TAX APPELLATE TRIBUNAL “D” BENCH”, KOLKATA SHRI GEORGE MATHAN, JUDICIAL MEMBER SHRI SANJAY AWASTHI, ACCOUNTANT MEMBER IT(SS) A 42/KOL/2025 Assessment Year: 2016-17

IT(SS) A 43/KOL/2025 Assessment Year: 2018-19

IT(SS) A 44/KOL/2025 Assessment Year: 2019-20 Raj Kumar Agarwal, 5B, Gem House, Russel Street, Park Street HO, Kolkata - 700016 [PAN: ACSPA5196M] ……..…...…………….... Appellant vs. DCIT/ACIT, CC-4(1), Kolkata, Aaykar Bhawan Poorva, 110, Shanti Pally, Kolkata – 700107 ................................. Respondent

Appearances by: Assessee represented by : Manish Tiwari, FCA Department represented by : Sanat Kumar Raha, CIT-DR Date of concluding the hearing : 21.07.2025 Date of pronouncing the order : 24.07.2025 O R D E R PER SANJAY AWASTHI, ACCOUNTANT MEMBER 1. This is a batch of three appeals of the same assessee for (Assessment Years (AY) 2016-17, 2018-19, and 2019-20. These appeals arise from orders of Ld. Commissioner of Income Tax (Appeals)-Kolkata-27 [hereafter “the Ld. CIT(A) as under:

(a) IT(SS)A 42/Kol/2025:

2 IT(SS)A 42-44/Kol/2025 Raj Kumar Agarwal Order u/s 250 of the Income Tax Act, 1961 (hereafter “the Act”) dated 18.02.2025.

(b) IT(SS)A 43/Kol/2025:

Order u/s 250 of the Act dated 19.02.2025

(c) IT(SS)A 44/Kol/2025:

Order u/s 250 of the Act dated 19.02.2025.

All of these orders have been passed by the Ld. CIT(A)-Kolkata 27.

1.1 In IT(SS) A 42/Kol/2025, the Ld. AO passed an order u/s 153A of the Act through which several additions u/s 68 of the Act and income from other sources have been made ostensibly on the basis of material recovered during the course of search and seizure operation u/s 132 of the Act and survey operation u/s 133A of the Act conducted on 18.03.2019 on the Klipcon Group of cases. A perusal of the AO’s order shows that the assessee has made sporadic compliance to the notices issued by the Ld. AO for eliciting responses. Interestingly, in the impugned order it is mentioned that the assessee has not raised any specific grounds of appeal and hence the same was held to be non-maintainable and thereby dismissed.

1.2 In IT(SS)A 43/Kol/2025, it is seen that the Ld. AO has passed an order u/s 153A of the Act in which also addition u/s 68 of the Act and income from other sources have been added. It is seen in this case also the assessee did not make any comprehensive presentation of facts before the Ld. AO. It is seen that at first appeal stage also, the substantial quantum of additions was confirmed and the Ld. CIT(A) has often mentioned that the assessee did not respond to the opportunities provided by the Ld.AO.

1.3 In IT(SS)A 44/Kol/2025, the Ld. AO passed an order u/s 144 of the Act mainly on the ground that the assessee did not fully avail of opportunities to present the facts before the Ld. AO, in response to his notices. In this case also, the additions were made u/s 68, 69B, 69C of the

3 IT(SS)A 42-44/Kol/2025 Raj Kumar Agarwal Act and on account of undisclosed income. At first appellate stage, the assessee has not been able to counter the findings of the Ld. AO.

2.

Aggrieved with the action of Ld. CIT(A), the assessee has approached the ITAT with the following grounds:

IT(SS)A 42/Kol/2025

“1.) That on the facts and in the circumstances of the case, the order dated 18.02.2025 passed by Ld. CIT(A)-27, Kolkata u/s 250 of the Act is bad in law. 2.) That on the facts and in the circumstances of the case, Ld. CIT(A) erred in dismissing the appeal of the appellant on technical ground that no grounds of appeal filed by the appellant inspite of the fact that the appellant had filed detailed grounds of appeal along with Form 35. 3.) That on the facts and in the circumstances of the case, Ld. CIT(A) erred in confirming the action of AO who made addition in assessment order u/s 153A in absence of any incriminating materials found in course of search & seizure operation. 4.) That on the facts and circumstances of the case, the order of the AO is void ab- initio as the same has been passed on the basis of mechanical approval given u/s 153D of the Income Tax Act, 1961. 5) That on the facts and in the circumstances of the case, Ld. CIT(A) erred in confirming the addition to the tune of Rs. 50,30,000/- on account of capital introduction into the business as unexplained cash credit u/s 68 r.w.s. 115BBE of the Act without going into the merits of addition. 6.) That on the facts and in the circumstances of the case, Ld. CIT(A) erred in confirming the action of AO in making addition of Rs 28,95,895/- as unexplained cash credit u/s 68 r.w.s. 115BBE of the Act on account of loan without going into the merits of addition. 7.) That on the facts and in the circumstances of the case, Ld. CIT(A) erred in confirming the action of AO who made addition of Rs. 6,08,960/- as income from other sources instead of income from house property without going into the merits of addition. 8.) That on the facts and in the circumstances of the case, Ld. CIT(A) erred in confirming the action of AO who disallowed a sum of Rs. 14,060/-on account of depreciation on Mumbai Flat without going into the merits of disallowance. 9.) That the appellant craves leave to add, alter, adduce or amend any ground on or at the time of hearing of the appeal.” IT(SS)A 43/Kol/2025

1.) That on the facts and in the circumstances of the case, the order dated 19.02.2025 passed by Ld. CIT(A)-27, Kolkata u/s 250 of the Act is erroneous and bad in law.

4 IT(SS)A 42-44/Kol/2025 Raj Kumar Agarwal

2.) That on the facts and circumstances of the case, the order of the AO is void ab- initio as the same has been passed on the basis of mechanical approval given u/s 153D of the Income Tax Act, 1961. 3.) That on the facts and in the circumstances of the case, Ld. CIT(A) erred in confirming the addition to the tune of Rs. 74,44,831/- on account of capital introduction into the business as unexplained cash credit u/s 68 r.w.s. 115BBE of the Act. 4.) That on the facts and in the circumstances of the case, Ld. CIT(A) erred in allowing part relief of Rs. 9,84,653/- only and confirming the addition of Rs. 2,80,000/- on account of loan as unexplained cash credit u/s 68 r.w.s. 115BBE of the Act. 5.) (a) That on the facts and in the circumstances of the case, Ld. CIT(A) erred in confirming the action of AO who made addition of Rs. 4,87,000/- as income from other sources instead of income from house property (b) That on the facts and in the circumstances of the case, Ld. CIT(A) erred in confirming the action of AO who disallowed the deduction u/s 24 of the Act to the tune of Rs. 1,46,100/- claimed by the appellant 6.) That on the facts and in the circumstances of the case, Ld. CIT(A) erred in confirming the action of AO who disallowed a sum of Rs. 11,388/- on account of depreciation on Mumbai Flat 7.) That the appellant craves leave to add, alter, adduce or amend any ground on or at the time of hearing of the appeal.” IT(SS)A 44/Kol/2025

1.) That on the facts and in the circumstances of the case, the order dated 19.02.2025 passed by Ld. CIT(A)-27, Kolkata u/s 250 of the Act is bad both on facts as well as on the law. 2.) That on the facts and in the circumstances of the case, Ld. CIT(A) erred in confirming the action of AO who made assessment u/s 144 of the Act. 3.) That on the facts and circumstances of the case, the order of the AO is void ab- initio as the same has been passed on the basis of mechanical approval given u/s 153D of the Income Tax Act, 1961. 4.) That on the facts and in the circumstances of the case, Ld. CIT(A) erred in confirming the addition to the tune of Rs. 12,50,000/- on account of loan as unexplained cash credit u/s 68 r.w.s. 115BBE of the Act. 5.) That on the facts and in the circumstances of the case, Ld. CIT(A) erred in confirming the action of AO who made addition of Rs. 16,88,386/-on account of increase in opening cash balance as unexplained investment u/s 698 r.w.s. 115BBE of the IT Act. 1961. 6.) That on the facts and in the circumstances of the case, Ld. CIT(A) erred in confirming the action of AO who made addition of Rs. 2,48,57,913/- on account of decrease in closing cash balance as unexplained expenditure u/s 69C r.w.s. 115BBE of the IT Act, 1961.

5 IT(SS)A 42-44/Kol/2025 Raj Kumar Agarwal 7.) That on the facts and in the circumstances of the case, Ld. CIT(A) erred in confirming the action of AO who made addition of Rs. 2,27,76,804/-on account of increase in closing cash balance as on 16.03.2019 from 15.03.2019 as unexplained investment u/s 698 r.w.s. 115BBE of the IT Act, 1961. 8.) That on the facts and in the circumstances of the case, Ld CIT(A) erred in confirming the action of AO who made addition of Rs. 21,00,000/- on account of cash seized during the search and seizure operation as undisclosed income of the appellant. 9.) That the appellant craves leave to add, alter, adduce or amend any ground on or at the time of hearing of the appeal. 2.1 Before us, the Ld. AR argued regarding IT(SS)A 42/Kol/2025 that the grounds were duly before the Ld. CIT(A) and the same have been filed in the ITAT also (copy of Form 35), along with Form 36. It was prayed that the Ld. CIT(A) may be directed to adjudicate on the said grounds and that the matter may be remanded back to the file of Ld. AO since it would be better in case the facts were to be presented before the Ld. AO as the same could not be done so before him in the first place. Regarding IT(SS)A Nos. 43- 44/Kol/2025, the Ld. AR averred that since the assessee could not comply in full before the Ld. AO hence, it would be in the interest of justice to remand the matters back to the file of Ld. AO so that the assessee gets a chance to present the facts before him. In the end the Ld. AR concluded by saying that the assessee deserves a chance for a second round before the Ld. AO since he could not comply fully due to a communication gap between his tax counsel and himself.

2.2 The Ld. AR relied on the orders of authorities below and stated that he had no objection in case the matters were to be remanded back to the file of Ld. AO.

3.

We have carefully considered the rival submissions and have also gone through the records before us. We find that these three cases require intense fact finding to assess the correct income of the assessee. We find that due to non-compliance before the Ld. AO, the assessee has suffered with various additions. Accordingly, in the interest of substantive justice, we set aside all the three impugned orders and remand these three matters

6 IT(SS)A 42-44/Kol/2025 Raj Kumar Agarwal to the file of Ld. AO for fresh assessment. We would expect the assessee to be alert and vigilant regarding the notices issued by the Ld. AO in his cases.

4.

In the result, these appeals filed by the assessee are allowed for statistical purposes.

Order pronounced on 24.07.2025

Sd/- Sd/- (George Mathan) (Sanjay Awasthi) Judicial Member Accountant Member Dated: 24.07.2025 AK, Sr. P.S. Copy of the order forwarded to: 1. Raj Kumar Agarwal 2. DCIT/ACIT, CC-4(1), Kolkata 3. CIT(A) 4. CIT 5. CIT(DR)

//True copy// By order

Assistant Registrar, Kolkata Benches

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