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Facts
The assessee filed a NIL return for A.Y. 2013-14. Information regarding high-value transactions of Rs. 5.40 Crores with M/s. Divyadrishti Merchants Pvt. Ltd., identified as a shell company providing accommodation entries, led to the reopening of the assessment under Section 147. The Assessing Officer subsequently made an addition of Rs. 5.40 Crores as unexplained income, which the CIT(A) upheld by dismissing the assessee's appeal ex-parte due to non-submission of evidence.
Held
The Tribunal observed that the CIT(Appeals) dismissed the appeal ex-parte without considering the assessee's submissions and documentary evidence. Therefore, the Tribunal set aside the CIT(Appeals)' order and remitted the matter back to the CIT(Appeals) for fresh examination of documents after providing another opportunity to the assessee, with a caution for the assessee to cooperate.
Key Issues
1. Validity of assessment reopening under Section 147. 2. Addition of Rs. 5.40 Crores on account of unexplained high-value transactions/accommodation entries. 3. Dismissal of assessee's appeal ex-parte by the CIT(A) without considering evidence.
Sections Cited
147, 148, 142(1), 271(1)(c)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, ‘A’ BENCH, KOLKATA
Before: Shri Duvvuru RL Reddy, Vice-(KZ) & Shri Rajesh Kumar
Per Duvvuru RL Reddy, Vice-President (KZ):- The present appeal is directed at the instance of assessee against the order of Id. Commissioner of Income Tax (Appeals), (A.Y. 2013-2014) Beejay Investment And Financial Consultants Pvt. Limited National Faceless Appeal Centre (NFAC), Delhi, dated 10.03.2025 passed for Assessment Year 2013-2014.
Facts in brief are that the assessee is a Company, which filed its return of income for the assessment year 2013-14 on 01.10.2013 disclosing total income at NIL. Subsequently credible information along with the documents shows that the assessee had benefited from high value transaction amounting to Rs.5,40,00,000/- with M/s. Divyadrishti Merchants Pvt. Ltd. during the FY 2012-13, the sources of which remained unexplained. Accordingly, the instant case was reopened under section 147 of the Act by issuing notice under section 148 dated 18.03.2020 to the assessee-company after obtaining prior approval of the appropriate authority with due recording of reasons for reopening of the case. The assessee company was required to furnish the return of income in the prescribed form for the relevant assessment year. In response to the notice, the assessee filed its return of income disclosing total income at NIL. Subsequently statutory notice under section 142(1) was issued and served upon the assessee. On the basis of survey operation conducted by the Directorate of Income Tax (Investigation), Kolkata on 30.03.2015, the statement of Anuj Agarwal was recorded and accepted that M/s. Divyadristi Merchants Pvt. Ltd. is mere paper/shell company having no existence and real business. The entity was controlled and managed by him and he was engaged in the business of providing accommodation entries in the form of bogus prearranged long-term capital gain to various beneficiaries/parties through the concerns controlled by him in lieu of commission in cash with the (A.Y. 2013-2014) Beejay Investment And Financial Consultants Pvt. Limited help of dummy directors. From the bank accounts, it was noticed that huge amount was credited in the accounts from various shell companies and the same was transferred to various beneficiary companies. During the course of scrutiny, the assessee failed to submit any documentary evidence in support of the genuineness of the high value transaction of Rs.5,40,00,000/- with M/s. Divyadristi Merchants Pvt. Ltd. during the FY 2012-13, the sources of which remained unexplained. Getting no satisfactory reply from the side of assessee, the ld. Assessing Officer computed the total income of the assessee at Rs.5,40,00,000/- and penalty proceedings were initiated separately under section 271(1)(c) of the Income Tax Act, 1961.
On being aggrieved, the assesese preferred an appeal before the ld. CIT(Appeals). The ld. CIT(Appeals) dismissed the appeal of the assessee ex-parte by mentioning that the appellant has not furnished any written submission or documentary evidence in support of its grounds of appeal challenging the addition. The appellant has also not submitted any copy of its written submission or documentary evidence filed during the assessment proceedings. The onus lies on the appellant to support any claim by bringing in cogent documentary evidence but the appellant has not even filed written submission in support of its grounds of appeal despite several opportunities given.
1. 4. On being aggrieved, the assessee preferred an appeal before the Tribunal. At the outset, ld. Counsel for the assessee argued that the assessee filed all the documents, i.e. bank statements with (A.Y. 2013-2014) Beejay Investment And Financial Consultants Pvt. Limited explanation tax computation in support of its claim, but ld. Assessing Officer as well as ld. CIT(Appeals) did not consider it and dismissed the appeal. He, therefore, prayed before the Bench to set aside both the orders of revenue authorities.
On the other hand, it was the submission of the ld. Departmental Representative that during the appellate proceedings, so many opportunities were provided to the assessee to substantiate its claim, but no response was given from the side of assessee-company. Therefore, getting no other alternatives, ld. CIT(Appeals) passed his order ex-parte dismissing the appeal of the assessee.
We have heard both the sides and perused the material available on record. The ld. CIT(Appeals) dismissed the appeal of the assessee ex-parte as the assessee did not furnish any written submission or documentary evidence in support of its grounds of appeal challenging the addition in spite of several opportunities given. Therefore, considering the above finding of the ld. CIT(Appeals), we are of the view that it is a fit case to set aside the orders passed by the revenue authorities since the assessee has filed relevant documents before the Tribunal. Therefore, we set aside the order passed by the ld. CIT(Appeals) and remit the matter back to the file of ld. CIT(Appeals) to examine the documents after providing one more opportunity of being heard to the assessee. At the same breath, we 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 (A.Y. 2013-2014) Beejay Investment And Financial Consultants Pvt. Limited 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 in the appeal are allowed for statistical purposes.