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Facts
The assessee company filed a 'NIL' income return for AY 2018-19. The case was reopened under Section 147 due to alleged bogus purchases from two non-genuine entities. Despite notices, the assessee failed to respond adequately and did not submit substantiating documents, leading to the addition of ₹94,26,275/- as unexplained expenditure.
Held
The Tribunal found that the assessee had not made proper compliance before the Assessing Officer (AO) or the CIT(A). However, in the interest of justice, the Tribunal set aside the order of the CIT(A) and restored the appeal to the CIT(A) for a fresh disposal on merits, ensuring a proper opportunity of being heard to the assessee.
Key Issues
Whether the CIT(A) erred in dismissing the appeal ex-parte without providing adequate opportunity and whether the matter should be remanded for fresh consideration on merits.
Sections Cited
250, 147, 148, 142(1), 149, 69C, 115BBE, 143(3), 144B, 46A
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, KOLKATA ‘D’ BENCH, KOLKATA
Before: SHRI SONJOY SARMA & 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 [hereinafter referred to as Ld. 'CIT(A)'] passed u/s 250 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) for AY 2018-19 dated 30.07.2025. 2. The assessee is in appeal before the Tribunal raising the following grounds of appeal:
“1. That on the facts and in the circumstances of the case, Ld. Commissioner of Income Tax (Appeals) - National Faceless Appeal Centre was not justified and grossly erred in not condoning the delay in filing the appeal and rejecting the same without appreciating the merits of the case.
That on the facts and in the circumstances of the case, the learned CIT(A) has grossly erred in disposing of the appeal ex-parte under section 250 of ITA No.: 2057/KOL/2025 Assessment Year: 2018-19 Sultania Realtors Pvt. Ltd. the Act, despite the fact that the appellant had duly filed an adjournment application.
That the learned CIT(A) has erred in not affording a proper and reasonable opportunity of being heard to the appellant, thereby violating the principles of natural justice.
That the appellant craves leave to add, to amend, modify, rescind, supplement or alter any of the Grounds stated here-in-above, either before or at the time of hearing of this appeal.”
Brief facts of the case are that assessee ‘Sultania Realtors Private Limited’ is a company and had filed its return of income for the AY 2018- 19 on 31.10.2018 declaring ‘NIL’ income. The case was reopened u/s 147 of the Act based on the information from the Insight Portal and as per the Risk Management Strategy of the CBDT, revealing alleged bogus purchases of ₹94,26,275/- from two non-genuine entities, viz. M/s. Saraf Enterprise (₹21,48,825/-) and M/s. Ultra Trade Mart (₹72,77,450/-). Despite several statutory notices issued u/s 148 and 142(1) of the Act, the assessee failed to respond except for a partial reply filed on 01.09.2023 and 05.09.2023, wherein it contested the reopening on juri ictional grounds u/s 149 of the Act and cited delay due to oversight. No substantiating documents or evidence of genuine purchases were submitted despite several opportunities having been granted. Verification reports confirmed that both supplier entities were paper companies issuing fake GST invoices to facilitate accommodation entries. Consequently, the entire amount of ₹94,26,275/- was treated as unexplained expenditure u/s 69C r.w.s 115BBE of the Act and the assessment was completed u/s 147 r.w.s. 143(3) r.w.s 144B of the Act, determining the total income at ₹94,26,280/.
Aggrieved with the assessment order, the assessee filed an appeal before the Ld. CIT(A) who issued four notices of hearing to the assessee ITA No.: 2057/KOL/2025 Assessment Year: 2018-19 Sultania Realtors Pvt. Ltd. but as the assessee remained non-compliant, the Ld. CIT(A) cited several decisions of various Hon'ble Courts and dismissed the appeal of the assessee for non-compliance and non-prosecution and confirmed the order of the Ld. AO.
Aggrieved with the order of the Ld. Addl/JCIT(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 drew our attention to page 9 of the assessment order and mentioned that the assessment order was ex parte and even before the Ld. CIT(A) no compliance was made and requested that the matter may be remanded to the Ld. CIT(A). Our attention was also drawn to page 3 of the assessment order in which the submissions made partly have been mentioned.
Since there was no proper compliance before both the Ld. AO as well as the Ld. CIT(A), in the interest of justice and fair play it was considered by the Bench that the request of the assessee to set aside the case before the Ld. CIT(A) may be allowed so that a proper opportunity of being heard may be provided.
Hence, after examining the facts of the case and the law, we deem it appropriate to set aside the order of the Ld. CIT(A) and restore the appeal to the Ld. CIT(A) for disposal of the grounds of appeal taken by the assessee on merit by passing a speaking order. Needless to say, the assessee shall be given a reasonable opportunity of being heard to make any further submission it wants to make in support of the grounds of appeal and shall not seek unnecessary adjournments and rule 46A of the I.T. Rules, 1962 shall also be followed and an opportunity of being ITA No.: 2057/KOL/2025 Assessment Year: 2018-19 Sultania Realtors Pvt. Ltd. heard may be provided to the Ld. AO, if required. Accordingly, the grounds taken by the assessee in this appeal are partly allowed for statistical purposes.
In the result, the appeal filed by the assessee is partly allowed for statistical purposes. Order pronounced in the open Court on 29th December, 2025. [Sonjoy Sarma] [Rakesh Mishra] Judicial Member Accountant Member Dated: 29.12.2025 Bidhan (Sr. P.S.) ITA No.: 2057/KOL/2025 Assessment Year: 2018-19 Sultania Realtors Pvt. Ltd. Copy of the order forwarded to:
Sultania Realtors Pvt. Ltd., 7, Rabindra Sarani, Dalhousie, Kolkata, West Bengal, 700001. 2. I.T.O., Ward 5(1), Kolkata.
CIT(A)-NFAC, Delhi.
CIT-
CIT(DR), Kolkata Benches, Kolkata.
Guard File. //// By order