M/S. BENGAL SHRISTI INFRASTRUCTURE DEVELOPMENT LTD.,,DURGAPUR vs. ACIT, CIRCLE 2, DURGAPUR,, DURGAPUR

The assessee is in appeal before the Tribunal raising the following grounds of appeal:

Brief facts of the case are that the return of income was filed on 30.09.2011 declaring total income at ₹2,09,80,696/- as per normal provision. However, tax of ₹1,04,44,353/- was paid on the income of ₹5,24,03,873/- u/s 115JB of the Act as the tax on MAT exceeded the tax on normal income. The return was processed u/s 143(1) of the Act. The assessee company is a joint venture of Asansol Durgapur Development Authority and Shristi Infrastructure Development Corporation Limited and both the concerns are holding shares of the assessee company at 49.78% each. The assessee is engaged in the business activity of development and construction of a township project, which includes commercial and residential complex at Asansol, M/s. Bengal Shristi Infrastructure Development Ltd. Raniganj and Durgapur. The assessment was reopened u/s 147 of the Act after obtaining the statutory approval and the reason for reopening was that information from the ADIT(Inv.), Unit-2, Kolkata revealed on perusal of cash trail that the assessee company had received an amount of ₹3,32,17,432/- from bank A/c no. 4342000100074701 of Karnataka Bank Limited of Inter Globe Finance Limited as accommodation entries. The report stated that high value cash was deposited in the bank account maintained with ICICI Bank in the name of some dummy persons/concerns and thereafter these funds were transferred to other bank accounts through RTGS/TRF by various persons/concerns in designed layers. After verification of the cash deposits, the Investigation Wing found that certain beneficiaries had brought back their unaccounted money into their bank accounts by using banking channel after layering the funds through different bank accounts of shell companies and the assessee was found to be one of the beneficiaries which had received a sum of ₹3,32,17,432/- as accommodation entries from Inter Globe Finance Limited during the FY 2010-11 relevant for AY 2011-12. Accordingly, the notice u/s 148 of the Act was issued and in response thereof, the assessee e-filed the return declaring total income of ₹2,09,80,696/- on 29.09.2018. The assessee filed objections to the reopening, which was addressed vide order dated 20.11.2018 and the objections were disposed of by the Ld. AO. A notice u/s 133(6) of the Act was also issued to M/s. Inter Globe Finance Limited to furnish the nature and details of the transactions with the assessee company and copy of bank statement reflecting the transactions and to furnish other related documents. After receipt of the response, it was noted that the nature of transaction was for purchase of warehouse at Raniganj; therefore, the Ld. AO issued a detailed letter requesting the assessee to ITA No(s). 2349/KOL/2026 Assessment Year(s) 2011-12 M/s. Bengal Shristi Infrastructure Development Ltd. furnish details/explanation. After analysing the same, the Ld. AO did not find any plausible explanation regarding the receipt of the sum of ₹3,32,17,432/-. After considering the facts of the case and discussion, he added the sum of ₹3,32,17,432/- u/s 68 of the Act to the total income of the assessee and also denied the deduction u/s 80-IB(10) of the Act, which was claimed at ₹3,06,09,157/- and the total income was assessed at ₹8,48,07,285/- u/s 143(3) of the Act. Aggrieved with the assessment order, the assessee filed an appeal before the Ld. CIT(A) who noted that during the course of the appellate proceedings, the assessee did not respond to the notices and the Ld. CIT(A)-NFAC, vide order u/s 250 of the Act dated 26.04.2023 dismissed the appeal. The assessee filed a further appeal before the “B” Bench of ITAT, Kolkata vide ITA No. 2035/KOL/2024 and the Bench set aside the appeal vide order dated 05.05.2025 to the file of the Ld. CIT(A) by observing as under:

A perusal of the impugned order passed by the ld. CIT(A) at para 5.2, shows that the assessee has not cooperated in the appellate proceedings However, ld. AR before us requested for one more opportunity to produce the documents before the ld. CIT(A) to file all the details as required. In such circumstances, in the interest of justice, we restore the issues to the file of ld. CIT(A) for readjudicating the issues afresh after granting the assessee adequate opportunity of being heard, subject to a payment of cost of Rs.50,000/- (Rupees Fifty Thousand only) by the assessee to the Legal Aid Services, 3rd Floor of the Centenary Building, High Court, Calcutta 700001, within sixty days from the date of this order and receipt of the same would be produced before the ld. CIT(A) at the first hearing. In case the receipt is not duly produced within the time mentioned, the action of the ld. CIT(A) would stand confirmed. The assessee is also directed to cooperate with the ld. CIT(A) in the readjudication proceedings, positively."

The Ld. CIT(A), in compliance with the order of the Tribunal, issued notices to the assessee but no response was received. Therefore, he dismissed the appeal of the assessee on account of non-prosecution and confirmed the order of the Ld. AO.

Aggrieved with the order of the Ld. CIT(A), the assessee has filed the appeal before the Tribunal.

Rival contentions were heard and the submissions made have been examined. At the outset, the Ld. AR mentioned that the addition had been made u/s 68 of the Act, though the amount was part of sale. It was submitted that the assessee had participated before the Ld. AO, but could not participate before the Ld. CIT(A) and requested the matter to be remanded to the Ld. AO.

On the other hand, in the rejoinder, the Ld. DR brought it to the notice of the Tribunal that this was the second round of appeal and also drew our attention to page 5 of the Ld. CIT(A)’s order which has been reproduced above. On a query to the Ld. AR as to whether the cost of ₹50,000/- which was directed to be paid before the first appeal was paid or not, the Ld. AR submitted that the same was not paid till date.

The Tribunal in para 6 had directed that in case the receipt is not duly produced within the time mentioned, the action of the Ld. CIT(A) would stand confirmed. Hence, the Bench was of the view that the non- compliance with the direction of the Tribunal should have resulted in confirmation of the order of the Ld. CIT(A). However, the Bench was also of the view that in the interest of justice and fair play, since the merits of the case have not been examined, therefore, besides the cost of ₹50,000/- (fifty thousand) imposed earlier the assessee should pay additional cost. Hence, in the interest of justice and fair play, we hereby set aside the order of the Ld. CIT(A) and restore the appeal before him and direct the assessee to pay further cost of ₹10,000/- (ten thousand) besides ₹50,000/- (fifty thousand) imposed earlier and on failure of payment of the same, the order of the Ld. CIT(A) shall stand confirmed.

In the result, the appeal filed by the assessee is partly allowed for statistical purposes. Order pronounced in the open Court on 16th October, 2026. [Yogesh Kumar US] [Rakesh Mishra] Judicial Member Accountant Member Dated: 16.10.2026 Bidhan (Sr. P.S.)