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Facts
The Revenue filed an appeal against the order of the CIT(A) who had deleted an addition of Rs. 4,22,38,464/- on account of share premium receipt. The Revenue contended that the CIT(A) relied on new documents not produced before the AO and did not give the AO an opportunity to examine them.
Held
The Tribunal noted that the CIT(A) appeared to have considered new documents not presented to the AO. To ensure substantive justice, the Tribunal set aside the CIT(A)'s order and remanded the case back for fresh adjudication.
Key Issues
Whether the CIT(A) erred in deleting an addition based on new documents without giving the AO an opportunity to examine them?
Sections Cited
250, 56(2)(vib)
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Income Tax Appellate Tribunal, “B” BENCH, KOLKATA
Deputy Commissioner of Income Tax, Central Circle-3(3), Kolkata, Aayakar Bhawan Poorva, 5th Floor, 110 Shantipally, Kolkata – 700107 ……..…...…………….... Appellant vs. Kaushalya Nirman Private Limited, 69 Girish Park, North Kolkata - 700006 [PAN: AHJPM1335Q] ................................ Respondent Appearances by: Assessee represented by : Abhishek Bansal, A.R. Department represented by : Dheeraj, Addl. CIT, Sr. DR Date of concluding the hearing : 24.06.2025 Date of pronouncing the order : 30.06.2025 O R D E R
PER SANJAY AWASTHI, ACCOUNTANT MEMBER
In this case there is a delay of 75 days in the filing of the present appeal by the Revenue. The Revenue has filed the following application for condoning of the said delay:
“In the instant case order u/s 250 of the Income Tax Act, 1961 vide appeal no. CIT (A), Kolkata-21/10426/2018-19 dated 27.12.2023 was received in the Pr. CIT's office on 04.01.2024 and limitation of filing appeal was expired on 04.03.2024. That on 12.01.2024 the ASR was submitted before the Addl. CIT, Central Range-3, Kolkata for perusal and onwards transmission to the Ld. Pr. CIT, Central-2. Kolkata. Subsequently, on 07.05.2024 the Ld. Pr. CIT accorded approval for filing appeal before the Hon'ble ITAT, Kolkata. After receiving the approval, the following documents have been prepared (three copies each) for filing the appeal before the Hon'ble ITAT, Kolkata. 1) Form No. 36 Kaushalya Nirman Pvt. Ltd. 2) Grounds of Appeal before the tribunal 3) Certified Copy of CIT(Appeal) order 4) Certified Copy of Form No. 35 along with Grounds of Appeal & Statements of facts 5) Certified copy of relevant assessment order 6) Certificate of the Commissioner (certified Copy) Further, the relevant documents, have been scanned and finally uploaded in the ITAT online portal for e-filing of appeal. Your petitioner states that there is a delay of 65 days in filing the instant appeal. Your petitioner states that if the delay of 65 days is not condoned the revenue shall suffer loss. Leave may please be given to file the Appeal by condoning the delay. 1.1 Considering the reasons given in the said application, the delay is hereby condoned and the appeal is admitted for adjudication.
This appeal arises from order u/s 250 of the Income Tax Act, 1961 (hereafter “the Act”), passed by Ld. Commissioner of Income Tax (Appeals), Kolkata – 21, vide order dated 27.12.2023.
2.1 In this case, the main issues involve an addition of Rs. 4,22,38,464/- on account of share premium receipt. This addition has been deleted by the Ld. CIT(A) based on appreciation of certain new documents, not before the Ld. AO, as has been alleged by the Revenue. Needless to say, the addition was deleted by the Ld. CIT(A).
2.2 Aggrieved with this action, the Revenue is in appeal with the following grounds:
“1. The Ld.CIT(A) has erred on facts and in law by deleting the addition of Rs. 4,22,38,464/ on account of receipt of share premium under section 56(2)(vib) of the Act on the basis of fresh documents submitted by the assessee.
2. The Ld. CIT(A) has erred on facts and in law by deleting the addition made by the A.O. based on the documents submitted by the assessee without giving an opportunity to the AO to examine the same, in contravention of Rule 46A of the Income Tax Rules, 1962 ? 3. The Ld. CIT(A) has erred on facts and in law by not addressing the factual position of outstanding demands towards Income Tax orders in the case of the assessee as on 13.12.2018 which were misrepresented by the assessee before the Ld.CIT(A).
Kaushalya Nirman Pvt. Ltd. 4. The department craves the right to add, alter, amend or withdraw any ground of appeal before or at the time of hearing.
3. Before us, the Ld. DR argued that the assessee had not made much of a compliance before the Ld. AO in terms of submitting the documents to prove the bonafides of the impugned transaction. The Ld. DR pointed out para 1.1 on pages 1 and 2 of the Ld. AO’s order to show that in spite of numerous opportunities given to the assessee not much was done by way of complying to the said notices. It was further pointed out by the Ld. AR that before the Ld. CIT(A) it is obvious that a host of new documents were submitted which were not before the Ld. AO and the Ld. CIT(A) is not seen to have called for any remand report or even admitted the same under Rule 46A of the IT Rules. In this manner, the Ld. DR assailed the action of Ld. CIT(A) and stated that the department was denied an opportunity to examine the documents before the Ld. CIT(A) on the basis of which he has granted relief.
3. Per contra, the Ld. AR vehemently stated that no new documents were filed before the Ld. CIT(A). It was argued that the Ld. CIT(A) merely examined the facts and documents before the Ld. AO to arrive at a conclusion in favour of the assessee. A query was put forth to the Ld. AR from the Bench regarding the paper book filed by the AR running into 121 pages where documents at serial numbers 5, 6 and 10 were shown to have been filed only at the level of Ld. CIT(A) and not before the Ld.AO. The Ld. AR stated that such documents cannot be considered to be new evidences. In this manner the Ld. AR supported the order of Ld. CIT(A).
4. We have carefully considered the arguments of Ld. DR/AR and have also gone through the documents before us. On a prima facie examination of the documents in the paper book filed by the assessee and a close reading of the impugned order as also the order of Ld.AO, it is revealed that the Ld. CIT(A) appears to have been in possession of certain new facts and documents which were apparently not before the Ld.AO. We hasten to add that this opinion is only based on a prima facie appreciation of the Kaushalya Nirman Pvt. Ltd. documents before us. However, in the interest of substantive justice, we deem it fit to set aside the order of Ld. CIT(A) and remand the same back to his file for fresh adjudication. We direct that the Ld. CIT(A) would share all the documents presented before him to the Ld. AO for his comments through a remand report.
With these remarks, appeal of the Revenue is allowed for statistical purposes.
Order pronounced on 30.06.2025