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Facts
The assessee-company filed its return declaring income. A notice under Section 148 was issued alleging escaped assessment due to a loan of Rs. 40,00,000/- from a shell entity. The Assessing Officer made an addition for concealed income, leading to an assessed income of Rs. 41,22,880/-.
Held
The Tribunal set aside the order of the CIT(Appeals) and remitted the matter back for fresh adjudication on merits. The assessee was cautioned to cooperate with the proceedings.
Key Issues
Whether the CIT(Appeals) was justified in dismissing the appeal ex-parte without considering the assessee's willingness to provide supporting evidence for the unsecured loan.
Sections Cited
148, 148A(d), 151, 142(1)
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Income Tax Appellate Tribunal, ‘SMC’ BENCH, KOLKATA
Before: Shri Duvvuru RL Reddy, Vice-(KZ)
Assessment Year: 2016-2017 Safal Commodeal Private Limited,……..……Appellant 3, Saklat Place, Kolkata-700012 [PAN:AANCS8815K] -Vs.- Income Tax Officer,……………………………....Respondent Ward-1(1), Kolkata, Aayakar Bhawan, P-7, Chowringhee Square, 7th Floor, Kolkata-700069 Appearances by: Shri Abhishek Bansal, FCA, appeared on behalf of the assessee Shri Susanta Saha, Sr. D.R., Addl. CIT appeared on behalf of the Revenue Date of concluding the hearing: September 04, 2025 Date of pronouncing the order: October 30, 2025 O R D E R
The present appeal is directed at the instance of assessee against the order of Id. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi dated 07.03.2025 passed for Assessment Year 2016-2017.
Brief facts of the case are that the assessee-Company filed its return of income electronically on 31.03.2017 (A.Y. 2016-2017) M/s. Safal Commodeal Private Limited declaring total income of Rs.1,22,880/- for the assessment year 2016-17. Notice under section 148 of the Income Tax Act, 1961 was issued to the assessee on 04.05.2021 after obtaining prior approval of the Competent Authority vide dated 04.05.2021. From the record, it transpires that the assessee-Company is one of the beneficiaries lying under jurisdiction, which has taken a loan amounting to Rs.40,00,000/- from the shell entity managed and controlled by Nawal Kishore Jalan during the financial year 2015-16 relevant to the assessment year 2016-17, which has escaped assessment. The then ld. JAO passed an order under section 148A(d) of the Act with prior sanction of the Competent Authority in accordance with section 151 of the Income Tax Act, 1961. It is evident that the then ld. Assessing Officer had an information in his possession, which strongly suggested that the income chargeable to tax has escaped assessment in the case of assessment for AY 2016-17. Hence the ld. JAO found the case to be a fit one for issuing notice under section 148 of the Act, which was issued on 31.07.2022. Accordingly, a notice under section 148 of the Act was issued along with a copy of order passed under section 148A(d) of the Act, which was duly served upon the assessee on 31.07.2022 after taking prior sanction of the Competent Authority by the then JAO. Further notices under section 142(1) of the Act bearing detailed questionnaires were issued and duly served upon the assessee seeking compliance on or before 18.01.2023 for AY 2016-17. In response thereto, the ld. (A.Y. 2016-2017) M/s. Safal Commodeal Private Limited Counsel for the assessee-Company stated that during FY 2015-16 (AY 2016-17), the assessee-company did not receive any amount as unsecured loan. In support of the same, copies of audited financial statement were attached, which indicate that there were no long-term or short-term borrowing by the assessee-company. From the record, it is crystal clear that the assessee company’s own unaccounted money was brought back in the books in the garb of fictious loan for converting black money into white. Accordingly, ld. Assessing Officer made an addition of Rs.40,00,000/- as concealed unaccounted money arising out of the said transaction during the FY 2015-16 to the total income of the assessee and ld. Assessing Officer determined the taxable assessed income of the assessee at Rs.41,22,880/-. On being aggrieved, the assessee preferred an appeal before the ld. CIT(Appeals).
The ld. CIT(Appeals) dismissed the appeal of the assessee ex-parte saying that the assessee was provided multiple opportunities to submit documents and make submissions in support of its claim. However, the assessee has not exercised this option despite multiple reminders.
On being aggrieved, the assessee preferred an appeal before the Tribunal. It was the submission of the ld. Counsel for the assessee that since the allegation of receipt of unsecured loan of Rs.40,00,000/- from Nawal Kishre Jalan has been made by the ld. CIT(Appeals), the (A.Y. 2016-2017) M/s. Safal Commodeal Private Limited assessee is willing to prove the same with supporting evidences and materials and to prosecute the appeal before the ld. CIT(Appeals) on merit and he pleaded to set aside the order passed by the ld. CIT(Appeals) and restore the matter to the file of ld. CIT(Appeals) to decide it afresh.
On the other hand, ld. Departmental Representative submitted that as the assessee did not file any documentary evidence in support of its claim inspite of providing sufficient opportunities, the ld. CIT(Appeals) has left no other option but to dismiss the appeal of the assessee. He pleaded to confirm the order passed by the ld. CIT(Appeals).
I have heard both the sides and perused the material available on record. By considering the totality of the facts and circumstances of the case, I am of the view that it is a fit case to set aside the order passed by the ld. CIT(Appeals) and remit the matter back to the file of ld. CIT(Appeals) with a direction to dispose of the appeal without any inference on the observations of earlier order passed by him and to decide it afresh on merit. At the same breath, I also hereby caution the assessee to promptly co- operate with the proceedings before the Ld. CIT(Appeals) failing which the Ld. CIT(Appeals) shall be at liberty to pass appropriate order in accordance with law and merits of the case, based on the materials available on the record. Thus, the grounds raised by the assessee are allowed for statistical purposes.
(A.Y. 2016-2017) M/s. Safal Commodeal Private Limited 7. In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open Court on 30/10/2025.