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Facts
The Assessing Officer (AO) made an addition of Rs. 50,00,000 under Section 68 of the Income Tax Act, 1961. The assessee challenged this before the CIT(A), but did not file any documents or submissions despite multiple notices. The CIT(A) upheld the AO's order.
Held
The Tribunal acknowledged the assessee's failure to comply with notices from the CIT(A) but, in the interest of substantive justice, allowed the assessee another opportunity to present their case. The impugned order was set aside, and the matter was remanded to the CIT(A) for fresh adjudication.
Key Issues
Whether the CIT(A) erred in upholding the assessment order without providing a proper opportunity for hearing, and whether the addition under Section 68 was justified.
Sections Cited
250, 68, 148, 143(2), 147, 151, 65
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “A” BENCH”, KOLKATA
Dhanman Jewells Private Limited, 9/12, Block-A, 3rd Floor, Lal Bazar Street, Kolkata - 700001 [PAN: AANCS1231P] ……..…...…………….... Appellant vs. Income Tax Officer, Ward –1(1), Kolkata, Aayakar Bhawan, P-7, Chowringhee Square, Kolkata - 700069 ................................. Respondent Appearances by: Assessee represented by : A.K. Tirbriwal, FCA Department represented by : Sandeep Kumar Mehta, Sr. DR Date of concluding the hearing : 03.07.2025 Date of pronouncing the order : 07.07.2025 O R D E R
PER SANJAY AWASTHI, ACCOUNTANT MEMBER
The present appeal arises from order u/s 250 of the Income Tax Act, 1961 (hereafter “the Act”) dated 10.03.2025, passed by the Ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi.
1.1 In this case, the Ld. AO has made, vide order dated 29.12.2017, an addition of Rs. 50,00,000/- u/s 68 of the Act. The assessee carried this matter to the Ld. CIT(A) and there it is recorded on pages 3 to 5 of the impugned order that the assessee did not file any document or submissions even when 7 notices were issued for hearing.
“1. That the impugned order passed by the Ld. Commissioner of Income Tax (Appeals), NFAC dismissing the appeal of the Appellant Assessee Company is against law and facts of the case without allowing proper and reasonable opportunity of hearing violating the principles of natural justice.
That, on the facts and in the circumstances of the case, the Ld. CIT(A), NFAC erred in upholding the assessment order which is without jurisdiction, illegal, and void ab initio, as it was passed pursuant to a notice Issued under section 148 of the Act that was time-barred and served on the assessee only after 31st March 2017.
3. That the Impugned assessment order passed by Ld. Assessing Officer should have been quashed by Ld. Commissioner of Income Tax (Appeals) since the assessment was selected for scrutiny pursuant to invalid Notice u/s 143(2) of the Act issued by the Assessing Officer having not been issued in the Format prescribed by CBDT in Circular F. NO. 225/157/2017/ITA.II dated 23-6-2017 4. That, on the facts and in the circumstances of the case, L.d. Commissioner of Income Tax (Appeals), NFAC erred in upholding the Assessment order dated 29.12.2017 passed u/s 147/143(3) of the Act when Assessing Officer did not follow the mandatory conditions' precedent to assumption of jurisdiction under section 147 to 151 of the Act 5. That, on the facts and in the circumstances of the case, the Ld. CIT(A), NFAC erred in upholding the assessment order dated 29.12.2017 passed under section 147/143(3) of the Act, despite the failure of the Assessing Officer to dispose of the objections raised by the assessee during the assessment proceedings, in violation of the principles laid down by the Hon'ble Supreme Court in GKN Driveshafts (India) Ltd. That on the facts and in the circumstances, the Ld. Commissioner of Income Tax (Appeals), NFAC erred in upholding the Assessment order dated 20.12.2017 passed u/s 147/143(3) of the Act when the jurisdiction to reassess the income has been assumed on the information received from Investigation Wing without application of independent mind by the Assessing Officer in examining the information rather than accepting the information as gospel truth.
That, on the facts and in the circumstances of the case, the Ld. CIT(A), NFAC erred in confirming the addition of Rs.50,00,000/- under section 68 of the Income Tax Act, 1961, on an unfounded allegation that the assessee had received accommodation entries from Sunglow Vinimay Pvt. Ltd., without proper appreciation of the facts and evidence on record 8. That, on the facts and in the circumstances of the case, the Ld. Commissioner of Income Tax (Appeals), NFAC erred in confirming the addition of Rs. 50,00,000 u/s 65 of the Act which was made by the Assessing Officer on mere surmises, conjectures, assumptions and presumptions.
That the appellant craves leave to amend, alter modify, substitute, add to, abridge and/or rescind any or all of the above grounds.”
Dhanman Jewells Pvt. Ltd. 2. Before us, the Ld. AR mentioned that they sought time before the Ld. CIT(A) for filing the requisite documents and submissions. The Ld. AR stated that since they could not gather the requisite material for making a presentation of facts before the Ld. CIT(A), hence they could not reply to the notices of hearing. The Ld. AR requested for another opportunity to present the facts before the Ld. CIT(A).
2.1 The Ld. DR relied on the orders of authorities below.
We have carefully considered the facts of this case and heard the Ld. AR/DR. While it is clear that the issuance of notices providing opportunity to the assessee started on 06.01.2021 and the last notice was issued only on 27.01.2025. Thus, the assessee had ample opportunity to comply with such notices before the Ld. CIT(A). While we cannot condone the casual approach of the assessee in this regard, we are equally conscious of the fact that in the interests of substantive justice, the assessee deserves a chance to present the facts before the Ld. CIT(A). For this reason alone, we are setting aside the impugned order and remanding this matter back to the file of Ld. CIT(A) for fresh adjudication. Needless to say, the assessee would comply with the notices issued by the Ld. CIT(A) for hearing in the matter.
In result, appeal is allowed for statistical purposes.
Order pronounced on 07.07.2025