TIGERHILL TRADELINK PRIVATE LIMITED,KOLKATA vs. ITO, WARD 10(2), , KOLKATA

We will first take up the appeal in ITA No.: 956/KOL/2025. Brief facts of the case are that the assessee company filed the return of income for A.Y. 2014-15 on 26/09/2014 declaring loss of Rs. 13,346/-. As per information received from DDIT (Inv.), the assessee had received fund amounting to Rs. 2,31,00,000/- from various shell entities allegedly through layering of transactions in its account. The assessment was completed u/s. 147 r.w.s 144B of the Act dated 29/05/2023 wherein Rs. 2,31,00,000/- was added u/s. 68 on account of unexplained cash credit. Aggrieved with the assessment order, the assessee filed an appeal before the Ld. CIT(A) who dismissed the appeal by giving his findings as under: “5.1 I have perused the facts of the case, grounds of appeal raised, submissions made by the Appellant and other evidences on records. The Appellant has raised certain legal issues which I intend to dispose of first before proceeding to consider the Appeal on merits. 5.2 Ground 1, 2 and 5. The Appellant has submitted that the proceedings as initiated by the Assessing Officer under section 147 by issuing notice under section 148 of the Act are bad in law as there is no reason to believe that the income of the appellant has escaped assessment and further, the case has been reopened only on the basis of borrowed transaction. The Appellant has further submitted that the addition has been made by the AO on the basis of evidences collected behind the back of the Appellant and the same were never confronted. The Appellant has further submitted that he was not suitably heard in person although specific request was made in this regard. In this regard, I find that the same issue was raised by the Appellant in the course of assessment proceedings as well and has been discussed by the I.T.A. Nos.: 955 & 956/KOL/2025 Assessment Year: 2014-15 Tigerhill Tradelink Private Limited. AO in the assessment order. The AO has discussed in detail in the assessment order. Thus, it can be observed from above that notice u/s 148 of the Act was issued on 29.06.2021. In response, the Appellant has filed return u/s 148. Subsequently, the AO has issued notices u/s 143(2) and reasons for reopening. Subsequently, notices were issued u/s 142(1) of the Act on various dates which were duly complied with and the Appellant furnished details called for. The Appellant did raise objections to the reasons for reopening which was disposed by the AO and appellant continued to participate in the assessment proceedings The AO has considered the submissions of the Appellant and the details/evidences available on records and thereafter framed the assessment order. Therefore, in my considered opinion, the AO is justified in framing an order under section 148. The AO has relied on a credible information and was verified by the AO and then he proceeded and duly followed all procedures as laid down in Act. I have considered the submissions made by the Appellant. It is observed from the assessment order that the AO has issued notices u/s 142(1) on various dates calling for information/details. The AO has further issued show cause and providing reasons for reopening. Thus, the Appellant has been provided with sufficient opportunity to submit details and explanation. Thus, this allegation remains unsubstantiated. Therefore, in my considered opinion, there is no violation of principles of natural justice. As regards the issue of non-sharing report or not giving opportunity for any cross examination etc, I find that these issues have been decided in favour of the Revenue by Hon'ble Kolkata High Court in the case of PCIT Vs Swati Bajaj (Calcutta High Court) Appeal Number: IA No. GA/2/2022, date of Judgement/Order: 14/06/2022, where in the Hon'ble High Court has observed that: … … In the case of the Appellant, all evidences in possession of the AO were duly confronted to the Appellant and explanation was sought on the same. Thus, in the back drop of these crucial facts and respectfully following the above case laws, I hold that the assessment order passed by the AO does not get vitiated just because he has not provided cross-verification. Thus, the above three Grounds are dismissed. 5.3 Ground No. 3 and 4 these two grounds are based on merit and the appellant has raised objections to A.Os addition of Rs 2,31,00,000/- u/s 68. I have perused the assessment order and the submissions filed by the appellant. The A.O has acted upon the information received from I.T.A. Nos.: 955 & 956/KOL/2025 Assessment Year: 2014-15 Tigerhill Tradelink Private Limited. DDIT(INV)2(1) Kolkata whereby it was conclusively proved that the appellant has received fund amounting to Rs. 2,31,00,000/- from shell entities in its account at Oriental bank of Commerce. The directors of the appellant company Shri. Dharmendra Kumar Sharma (CETPS7192N) and Shri. Dhiraji Chawdhary (ALKPC2324E) were proved to be the dummy directors on behalf of Uday Shankar Mahavar. The statement of Shri. Uday Shankar Mahavar u/s 131 of Income Tax Act has been relied upon by the A.O which proves beyond doubt that Mr. Uday Shankar Mahavar provided bogus entries to various beneficiaries and one of the conduit was the appellant company. All the submissions provided during the appellant proceedings has already been examined by the A.Ο during the assessment proceedings and the findings is in para 4 of the assessment order which clearly proves that appellant company has received the above mentioned amount of money on account of accommodation entries from the entry provider company. Thus the conclusion drawn by A.O is confirmed. Thus, the above two Grounds are dismissed. 5.4 Ground no 6 and 7 deals with initiation of penalty which is not the subject matter of this appeal and hence not adjudicated upon. Thus, these grounds of appeal are dismissed. 5.5 Ground no 8 deals with the claim of loss in original return filed u/s 139(1) of the appellant. The A.O is directed to verify this claim and give resultant effect as per the provisions of the Income Tax Act hence this ground of appeal is allowed subject to verification done by A.O. 5.6 Ground no. 9 is general in nature and hence not adjudicated and dismissed. 5.7 Additional Ground during the appellate proceedings it is noted that the appellant has raised an additional ground of invalidity of notice issued u/s 148 due to bar of limitation. It is noted that the appellant has submitted the case of Arati Marketing Pvt. Ltd vs. Union of India and Others [2024] 470 ITR 453 (Cal). The submission filed by the appellant was perused carefully and the additional ground filed by the appellant is rejected. The Appellant has participated in the assessment proceedings before the A.O and has never raised this argument of invalidity of notice issued u/s 148. The A.O has provided a number of opportunities during the assessment proceedings and the appellant has responded to it on various occasions. Further in a recent judgement on October 3, 2024, Union of India v. Rajeev Bansal [2024] 167 taxmann.com 70 the Supreme Court delivered a significant judgment concerning reassessment under the Income Tax Act. The core issue was whether the Taxation Laws Amendment (TOLA) had any impact on the Income Tax Act after the amendments made by the Finance Act 2021. The I.T.A. Nos.: 955 & 956/KOL/2025 Assessment Year: 2014-15 Tigerhill Tradelink Private Limited. Court ruled in favor of the department, confirming that reassessment notices issued between April 1, 2021, and June 31, 2021, for AY 2013-14 to AY 2018-19 would be considered valid. Thus notwithstanding the factual findings the additional ground is rejected legally based on the findings of Hon'ble Supreme Court judgement. 6. Hence this appeal is dismissed.” 5. Aggrieved with the order of the Ld. CIT(A), the assessee has filed the appeal before the Tribunal. 6. Rival contentions were heard and the record and the submissions made have been examined. The Ld. AR also filed written submissions in support of the claim that the notice issued without DIN was invalid. However, this matter is subjudice before the Hon’ble Supreme Court and therefore, we refrain from expressing any view on the same as the findings of the Hon’ble Supreme Court shall apply as and when the issue is decided. The Ld. AR also filed chronological sequence of events in support of the claim that the notice issued under section 148 was invalid in light of the decision of under the Supreme Court in the case of Union of India v Ashish Agarwal [2022] 138 taxmann.com 64 and Union of India v Rajeev Bansal [2024] 167 taxmann.com 70 (SC). The Ld. DR sought time to ascertain the dates. Another issue raised was that the approval required u/s 151A was not obtained and the notice u/s 148 ought to have been issued by the Faceless Assessing Officer. The Ld. DR also filed written submissions. We also noticed that on the merits of the addition, the Ld. CIT(A) has merely reproduced the finding of the Ld. AO. Hence, in order to be fair to both assessee as well as the Ld. AO, and since the issue relating to sale proceeds of shares being received has not been examined properly, the chronological sequence of events for the validity of the notice issued under section 148 and the issue of approval by the competent authority have not been adequately I.T.A. Nos.: 955 & 956/KOL/2025 Assessment Year: 2014-15 Tigerhill Tradelink Private Limited. addressed as the record does not appear to have been examined, hence the order of the Ld. CIT(A) is hereby set aside to be decided de novo after considering all the objections including the objection on the legal grounds raised by the assessee which the assessee shall be at liberty to raise before the Ld. CIT(A). The Ld. CIT(A) may either call for a remand report from the Ld. AO or grant an opportunity as per rule 46A so that the facts can be ascertained and a judicious order can be passed. For statistical purposes, the appeal of the assessee is partly allowed. 7. As regards ITA No. 955/KOL/2025, the Ld. CIT(A) held as under: “6.1 The ground of appeal is related to levy of penalty u/s. 271B of the Act. In the case of the Appellant the AO passed the assessment order u/s. 147 of the Act on 09.01.2023 assessing total income at Rs. 2,31,00,000-. As during the assessment proceedings, the AO has noted that the appellant had not furnished audit report as prescribed u/s. 44AB of the Act, initiated penalty proceedings u/s. 271B of the Act. Subsequently, the AO passed order u/s. 271B dated 20/02/2024, levying penalty of Rs. 1,15,000/- for not furnishing of audit report. 6.2 Further, on perusal of earlier submissions made by the appellant, it was noted that the appellant did not file any relevant evidence/submission which justifies his delay of filing Audit Report. During the appellate proceedings, the appellant had not filed any supporting documentary evidence which can prove his intention. The appellant has been provided many opportunities to file his submission, however, the appellant did not file any relevant details/submission. 6.3 The relevant part of penalty order is given below: … … From the perusal of above penalty order it is noted that the AO has clearly proved that the appellant was duty bound to get his account audited and the appellant had submitted the audit report beyond the time prescribed as per Income Tax Act, 1961. Moreover, the AO has also pointed out that the appellant had failed to submit any reasonable cause, as given under section 273B of the Income Tax Act, 1961. Thus, the appellant failed to submit any reasonable cause for the delay. I.T.A. Nos.: 955 & 956/KOL/2025 Assessment Year: 2014-15 Tigerhill Tradelink Private Limited. 5.4 The words "reasonable cause" has not been defined under the Income tax Act but they could receive the same interpretation which is given to the expression "sufficient cause". Therefore, in the context of the penalty provisions, the words " reasonable cause" would mean a cause which is beyond the control of the assessee. "Reasonable cause" obviously means a cause which prevents a reason able man of ordinary prudence acting under normal circumstances, without negligence or inaction or want of bona fides. In its analysis, the reference is also drawn from Dinabandhu v. Jadumoni (AIR 1954 SC 411), a Supreme Court decision that deals with the interpretation of "sufficient cause" in legal contexts. In Dinabandhu v. Jadumoni, the Supreme Court adopted a liberal interpretation of "sufficient cause" to advance substantial justice, especially when no negligence or inaction was attributable to the party involved. This caselaw serves as a critical reference point in understanding the boundaries of what constitutes a "reasonable cause" for non-compliance with tax filing deadlines. This case reinforces the principle that legal obligations must be met diligently, and penalyable delays cannot be excused through internal organizational conflicts unless substantiated by concrete evidence. As such, it shapes the jurisprudence around tax compliance, offering clarity and setting a precedent for future cases involving similar factual matrices. Therefore, it is noted that the appellant has failed to prove the delay on the parameters of any reasonable cause and hence the penalty order is hereby confirmed. 5.5 The appellant has submitted that the amount of Rs. 2,31,00,000/- is not his business turnover which is Inaccurate because during the assessment it was conclusively proved that the appellant is showing purchase and sale of shares as his course of business activities. In his submission before the A.O during assessment proceedings the appellant himself has submitted that he is into business of dealing in shares and securities, while in the appellant proceedings of penalty u/s 271B he is claiming otherwise. Thus this claim of the appellant is rejected based on the findings of A.O during the assessment proceedings. The appeal related to the assessment order has already been confirmed. Thus the A.O has rightly concluded that the appellant was duty bound to get his books of account audited before the specified date and furnish the said report on the specified date. 5.6 In the result, the appeal of the Appellant is Dismissed.” 8. After going through the order of the Ld. AO as well as of the Ld. CIT(A) and considering the rival submissions, we are of the view that the assessee needs to be provided one more opportunity for making the submission and to justify that there was a reasonable cause for non- I.T.A. Nos.: 955 & 956/KOL/2025 Assessment Year: 2014-15 Tigerhill Tradelink Private Limited. imposition of penalty. Hence, the order of the Ld. CIT(A) hereby set aside for granting an opportunity of being heard to the assessee and thereafter to pass an order as per law. Hence, this appeal is also partly allowed for statistical purposes. 9. In the result, both the appeals are partly allowed for statistical purposes. Order pronounced in the open Court on 3rd October, 2025. [George Mathan]

Tigerhill Tradelink Private Limited, C/o. Agarwal Vishwanath & Associates, 133/1/1A, S.N. Banerjee Road, Pushkal Bhawan, 3rd Floor, Kolkata, West Bengal, 700013. 2. ITO, Ward-10(2), Kolkata. 3. CIT(A)-NFAC, Delhi. 4. CIT- 5. CIT(DR), Kolkata Benches, Kolkata. 6. Guard File. //// By order