Loading judgment…
Facts
The assessee sold unlisted equities amounting to Rs. 6,05,18,000/-. The Assessing Officer (AO) reopened the case under Section 147 and treated Rs. 2,10,18,000/- as unexplained capital gains. The assessee's appeal before the CIT(A) was dismissed for non-prosecution.
Held
The Tribunal found that the assessee was not properly represented before the CIT(A) and the appeal was dismissed without a decision on merits. Therefore, the Tribunal set aside the order of the CIT(A) and remitted the matter back for fresh adjudication.
Key Issues
Whether the CIT(A) rightly dismissed the appeal for non-prosecution when the assessee was not properly represented, and whether the matter should be remanded for fresh adjudication.
Sections Cited
250, 147, 148, 148A, 151A, 250(6), 46A
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, KOLKATA ‘C’ BENCH, KOLKATA
Before: SHRI GEORGE MATHAN & SHRI RAKESH MISHRA
IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA ‘C’ BENCH, KOLKATA Before SHRI GEORGE MATHAN, JUDICIAL MEMBER & SHRI RAKESH MISHRA, ACCOUNTANT MEMBER ITA No.: 1273/KOL/2025 Assessment Year: 2018-19 M.A. Financial Services Pvt. Ltd. Vs. ITO, Ward-4(1), Kolkata (Appellant) (Respondent) PAN: AACCM0481E Appearances: Assessee represented by : Manoj Kataruka, AR. Department represented by : Praveen Kishore, CIT (DR). Date of concluding the hearing : 30-October-2025 Date of pronouncing the order : 25-November-2025 ORDER
PER RAKESH MISHRA, ACCOUNTANT MEMBER:
This appeal filed by the assessee is against the order of the ld. 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 15.05.2025.
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, the action of the Ld. CIT(A) to uphold the action of the AO to have passed order u/s 147 of the Act is illegal and bad in law. 2) That on the facts and in the circumstances of the case the action of the Ld. CIT(A) to uphold the action of the AO in making addition of Rs.2,10,18,000/-as unexplained money on account of consideration received for sale of shares is contrary to the material evidences on record and the addition is arbitrary. excessive, illegal and bad in law. ITA No.: 1273/KOL/2025 Assessment Year: 2018
19. M.A. Financial Services Pvt. Ltd. 3) That the order passed by the A.O. and upheld by the CIT(A) is arbitrary. excessive and illegal. 4) That the above grounds of appeal will be argued in detail at the time of hearing and the appellant crave leave to submit additional grounds of appeal, if any, and/or alter, verify, modify or rectify any grounds of appeal at or before the time of hearing.” 2.1. The assessee has also raised additional grounds of appeal which are as under: “1) That on the facts and in the circumstances of the case, the action of the Ld. CIT(A) to uphold the action of the AO to issue notice u/s 148 of the Act is illegal and bad in law. 2) That on the facts and in the circumstances of the case the action of the Ld. CIT(A) to uphold the action of the AO in having framed assessment u/s 147 without correctly following the procedure laid down in the Act and in the absence of issue of notice u/s 148A(a) the proceedings are illegal and bad in law. 3) That on the facts and in the circumstances of the case the action of the AO to have issued notice u/s 148 of the Act is without jurisdiction and in violation of section 151A of the Act. The aforesaid additional grounds of appeal raised are purely legal issue which goes to the root of the matter and the same does not require any fresh investigation into the fact, facts already being on record. Further, the omission to raise the additional grounds is neither wilful nor intentional. In view of the above, the aforesaid additional grounds may kindly be admitted and adjudicated while hearing the cross objection filed by the assessee.”
3. Brief facts of the case are that the assessee filed its return of income for the impugned assessment year 2018-19. Information was available with the Revenue, which showed that the assessee had sold unlisted equities amounting to Rs.6,05,18,000/- and, therefore, a show-cause notice under section 148A(b) of the Income Tax Act was issued to the assessee on 10.03.2022 by jurisdictional Assessing Officer with prior approval of the specified authority, through ITBA Online Portal. In response, no reply/submission was furnished by the ITA No.: 1273/KOL/2025 Assessment Year: 2018-19 M.A. Financial Services Pvt. Ltd. assessee. Therefore, the case was reopened under section 147 of the Act and statutory notices were issued from time to time. The reply filed by the assessee was considered by the ld. Assessing Officer but was not found acceptable as in absence of copy of share certificates issued by the three companies, quantity of shares, purchase cost per share, total purchase amount of shares were not verifiable and justifiable and the net capital gain/loss from sale consideration of unlisted equities/shares could be determined. The variation of Rs.2,10,18,000/- was proposed and in response to the show-cause notice, the assessee did not avail personal hearing through video-conference as requested in the written reply as well as on ITBA Online Portal. The sale consideration of unlisted equities/shares of Rs.2,10,18,000/- was treated by the ld. Assessing Officer as unexplained capital gains of shares/equities and added to the total income of the assessee. Finally, ld. Assessing Officer determined the total assessed income of the assessee at Rs.2,16,07,140/-.
4. Aggrieved with the assessment order, the assessee filed an appeal before the Ld. CIT(A), who issued 7 (seven) notices for hearing to the assessee but except for seeking adjournment for one day, the assessee did not comply with the notices. Therefore, the Ld. CIT(A) dismissed the appeal of the assessee on account of non-prosecution without discussing the case on merits and on the basis of available facts on record. The Ld. CIT(A) held as under: “7. However, the case is being decided on merits and on the basis of available facts on record. On perusal of Form-35, it is seen that appellant has only attached/uploaded copy of AO's order dated 24.03.2023 vide which the AO has made addition of Rs.2,10,18,000/- on account of unexplained sale consideration of unlisted equities shares. Despite being given many opportunities, appellant did not respond during appellate proceeding nor furnished requisite details/order which was required to adjudicate the present appeal. ITA No.: 1273/KOL/2025 Assessment Year: 2018-19 M.A. Financial Services Pvt. Ltd.
8. In the present case, appellant has been provided more than sufficient opportunity but appellant failed to submit any submission or evidence during appeal proceedings in support of grounds of appeal as well as statement of facts, and remained non-compliant, therefore, in view of the above, I am constrained to uphold the order of the AO in absence of any supporting evidence, document presented by the appellant.
9. In the result, the appeal of the assessee is dismissed.”