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Facts
The assessee's appeal against an assessment order (under Section 143(3)) for AY 2012-13, which added ₹3,22,87,750 as unexplained cash credit (Section 68) and disallowed ₹3,121 (Section 14A), was dismissed by the CIT(A). The dismissal was due to the assessee's non-compliance with mandatory filing requirements, including failure to upload Form 35, Grounds of Appeal, and Statement of Facts, as per Rule 45(1) of the Income Tax Rules and Sections 246A, 249(1) of the Income Tax Act.
Held
The Tribunal set aside the CIT(A)'s order and remitted the matter back to the CIT(A) for fresh adjudication on merits. This remand is conditional upon the assessee paying a cost of ₹1 Lakh to the West Bengal State Legal Services Authority within 60 days, failing which the CIT(A)'s order would stand confirmed. The appeal was partly allowed for statistical purposes.
Key Issues
The key issues were whether the CIT(A) erred in dismissing the appeal for procedural non-compliance with mandatory filing requirements and the merits of the additions made by the AO under Section 68 (unexplained cash credit) and disallowance under Section 14A.
Sections Cited
250, 143(3), 143(2), 142(1), 68, 14A, 246A, 249(1), 249(2), 140
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, KOLKATA ‘C’ BENCH, KOLKATA
Before: SHRI GEORGE MATHAN & 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 2012-13 dated 22.03.2025, which has been passed against the assessment order u/s 143(3) of the Act, dated 17.03.2015. 2. The assessee is in appeal before the Tribunal raising the following grounds of appeal: “1.) (a) That on the facts and in the circumstances of the case, Ld. CIT(A) has erred in dismissing the appellant's appeal on the ground that mandatory I.T.A. No.: 1160/KOL/2025 Assessment Year: 2012-13 Nishtha Vincom Pvt. Ltd. documents i.e. Form 35, Statement of Facts and Grounds of appeal are not furnished by the appellant. (b) That on the facts and in the circumstances of the case, Ld. CIT(A) erred in dismissing the appellant's appeal without considering the fact that the appeal was filed manually on 24.04.2015 in the office of Ld. CIT(A)-2, Kolkata and also in response to notice u/s 250 dated 08.09.2023, the appellant furnished such documents on IT Portal on 26.09.2023. 2.) That on the facts and in the circumstances of the case, Ld. C.I.T. (A) erred in dismissing appeal without any discussions on the merit of additions/disallowance made by Ld. AO. 3.) That on the facts and in the circumstances of the case, Ld. CIT(A) erred in confirming the action of Assessing Officer who considered share capital with premium aggregating to Rs. 3,25,50,000/- as unexplained cash credit u/s 68 of Income Tax Act, 1961 without going into the merits of addition. 4.) That on the facts and in the circumstances of the case, Ld. CIT(A) erred in confirming the disallowance of Rs. 3,121/- u/s 14A read with Rule 8D. 5.) That the appellant craves leave to add, alter, amend or adduce any ground/(s) at or before the date of hearing”
Brief facts of the case are that the assessee had filed its return of income showing total income of ₹650/-. The case was selected for scrutiny through Computer Assisted Scrutiny Selection (in short 'CASS') and notices u/s 143(2) and 142(1) of the Act were issued to the assessee in response to which the Ld. AR of the assessee company appeared and filed supporting documents/details. On perusal of the balance sheet of the assessee, the Ld. AO found that during the year under consideration, the assessee had received share application money and premium amounting to ₹3,22,87,750/- by issuing 16,225 shares having face value of ₹10/- and a premium of ₹1,990/- per share and treated the same as unexplained cash credit u/s 68 of the Act. The Ld. AO also made a disallowance of ₹3,121/- u/s 14A of the Act and assessed the total income of the assessee at ₹3,25,53,770/- and framed assessment u/s 143(3) of the Act. Aggrieved with the assessment order, I.T.A. No.: 1160/KOL/2025 Assessment Year: 2012-13 Nishtha Vincom Pvt. Ltd. the assessee filed an appeal before the Ld. CIT(A) who, vide order dated 22.03.2025, held that the appeal was defective and invalid as it suffered from non-compliance with mandatory requirements under Rule 45(1) of the Income Tax Rules, 1962 and dismissed the appeal of the assessee holding as not maintainable.
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. The Ld. AR requested that in the interest of justice, another opportunity needs to be provided to the assessee so that proper compliance could be made. We have considered the submissions made, gone through the facts of the case and perused the record and the order of the Ld. CIT(A). The Ld. AO noted that there was non-compliance, the assessee was a shell company and relying upon the cases of M/s. Star Griha Pvt. Ltd. v CIT in ITA No. 1244/KOL/2013 and M/s. Bisakha Sales Pvt. Ltd. v CIT in ITA No. 1493/KOL/2013 where the Tribunal had analysed the modus operandi of such type of companies and after discussing the facts of the case added the share capital as well as the share premium under section 68 of the Act and also made disallowance under section 14A of the Act. The Ld. AO relied upon the decisions in CIT v Precision Finance Pvt. Ltd. 208 ITR 463 (Calcutta), CIT v Ruby Traders and Exporters Ltd. 134 Taxman 29 (Calcutta), CIT v Nipun Builders and Developers Pvt. Ltd. [2013] 30 Taxmann.com 292 (Del), A. Govindrajulu Mudaliar v CIT [1958] 34 ITR 807, CIT v Devi Prasad Vishwanath Prasad [1969] 72 ITR 194 (SC) and CIT v Independent Media (P.) Ltd. [2012] 25 taxmann.com 276 (Delhi) for making addition under section 68 of the Act besides, relying upon other judicial I.T.A. No.: 1160/KOL/2025 Assessment Year: 2012-13 Nishtha Vincom Pvt. Ltd. pronouncements for disallowance under section 14A of the Act. The Ld. CIT(A) dismissed the appeal by giving its finding as extracted under:
“3. Findings and Decision of the Appellate Authority-
1 The appellant has preferred this appeal against the order passed by the Assessing Officer for the AY 2012-13. As mandated under Section 246A of the Income-tax Act, 1961, an appeal is required to be filed in Form No.
However, in the present case, the appeal has been filed without uploading Form No. 35 on the ITBA portal. On careful verification of attachments/submissions made in respect of the appeal available on the Income Tax Business Application (ITBA) system, it is observed that the appeal suffers from non-compliance with the mandatory requirements prescribed under Rule 45(1) of the Income-tax Rules, 1962 and Section 249(1) of the Act, due to the non-availability of Form No. 35 on the portal.
2 It is important to mention here that every appeal under Chapter-XX shall be filed in the prescribed form and shall be verified in prescribed manner as mandated in Section 249(1) of the Act.
3 As per Rule 45(1) of the Income-tax Rules, 1962, an appeal to the Commissioner (Appeals) must be filed electronically in Form No. 35, accompanied by the Grounds of Appeal (GOA) and Statement of Facts (SOF), duly signed and verified by the person authorized under Section 140 of the Act. Despite being afforded multiple opportunities and having been issued notices through the ITBA portal, the appellant has failed to upload the mandatory documents.
4 In the instant case, it is noted that certain responses have been made by the appellant in reply to notices issued during the appellate e-proceedings. However, the compliances made by the appellant in response to the notices issued during the appellate proceedings do not include Form No.
These submissions are merely explanatory in nature and cannot substitute the mandatory requirements under Rule 45(1) of the Income-tax Rules, 1962. In the absence of Form No. 35, the appeal remains procedurally non-est and is not validly instituted.
5 In the absence of these core documents, it is not possible to ascertain the precise grievance of the appellant or the factual basis of the appeal. It is a well- settled legal position that Form No. 35, Grounds of Appeal, and Statement of Facts form the foundation of any appellate proceeding; without them, the Appellate Authority has no specific issue to adjudicate upon. I.T.A. No.: 1160/KOL/2025 Assessment Year: 2012-13 Nishtha Vincom Pvt. Ltd. Moreover, the appellant has not submitted the acknowledgment or challan evidencing the payment of the prescribed appeal fee. In the absence of Form No. 35, it is also not possible to verify whether the appeal was filed within the time limit prescribed under Section 249(2) of the Act, thus leaving the issue of limitation unresolved.
6 Despite being given ample opportunities, the aforesaid mandatory enclosures have not been made. In such circumstances, the appeal suffers from non-compliance with mandatory requirements under Rule 45(1) of the Income- tax Rules, 1962.”
It is evident that despite being provided multiple opportunities by the appellate authority, the assessee was non-responsive, so much so that even the appeal memo was not properly filed. The assessee had received share premium, which needed verification that the level of the Ld. AO. But before the Ld. AO as well, proper compliance was not made. The Ld. AR requested that another opportunity may be provided so that further submission could be made while The Ld. DR relied upon the order of the Ld. CIT(A) and requested that the same may be upheld. However, after examining the facts of the case, in the interest of justice and so as to grant the assessee adequate opportunity to substantiate its case, we deem it appropriate to set aside the order of the Ld. CIT(A) and remit the matter back to the Ld. CIT(A) for disposal of the grounds taken by the assessee on merits, by passing a speaking order subject to the cost of ₹1 Lakh (Rupees one lakh) only payable to West Bengal State Legal Services Authority, City Civil Court Building 1st Floor 2 & 3, Kiron Sankar Roy Road, Kolkata - 700001 within sixty days from the date of this order and the receipt of the same would be produced before the Ld. CIT(A) at the first hearing. This cost is warranted as the assessee had been non-responsive to the notice issued and was not vigilant in prosecuting its appeal and the non-compliance before the Ld. AO could not enable the Ld. AO to properly examine the facts of the case. Should I.T.A. No.: 1160/KOL/2025 Assessment Year: 2012-13 Nishtha Vincom Pvt. Ltd. the assessee not pay the abovementioned cost within the prescribed period of sixty days from the date of this order, the order of the Ld. CIT(A) shall stand confirmed. Accordingly, the grounds taken by the assessee in the 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 28th October, 2025. [George Mathan] [Rakesh Mishra] Judicial Member Accountant Member Dated: 28.10.2025 Bidhan (Sr. P.S.) I.T.A. No.: 1160/KOL/2025 Assessment Year: 2012-13 Nishtha Vincom Pvt. Ltd. Copy of the order forwarded to:
Nishtha Vincom Pvt. Ltd., 8, Amartalla Street, 4th Floor,, Kolkata, West Bengal, 700001. 2. ITO, Ward-6(3), Kolkata.
CIT(A)-NFAC, Delhi.
CIT-
CIT(DR), Kolkata Benches, Kolkata.
Guard File. //// By order