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Facts
The assessee filed returns declaring loss/NIL income for AY 2015-16 and 2017-18. After a Section 148 notice, the Ld. Assessing Officer added back significant loan amounts as unexplained cash credits under Section 68, alleging the lenders were paper companies. The Ld. CIT(Appeals) dismissed the assessee's appeals ex-parte due to non-compliance.
Held
The ITAT set aside the Ld. CIT(Appeals)'s orders, remitting the matters back for fresh adjudication. The tribunal directed the Ld. CIT(Appeals) to provide another opportunity of hearing to the assessee, with a caution to ensure prompt cooperation in the proceedings.
Key Issues
The key issues were the justification of additions under Section 68 for unexplained cash credits and the propriety of the ex-parte dismissal by the Ld. CIT(Appeals) without giving a full opportunity of hearing.
Sections Cited
148, 68, 115JB
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, ‘A’ BENCH, KOLKATA
Before: Shri Duvvuru RL Reddy, Vice-(KZ) & Shri Sanjay Awasthi
Per Duvvuru RL Reddy, Vice-President (KZ):- The present appeals bearing and 536/KOL/2025 are directed at the instance of assessee against the orders of ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi, both dated 28th February, 2025 passed for Assessment Years 2015-16 and 2017-18 respectively.
Brief facts of the case are that the assessee-appellant filed its return of income for the assessment year 2015-16 on 30.09.2015 declaring loss of Rs.3,24,707/-. The assessee filed its return of income for the assessment year 2017-18 on 03.11.2017 declaring income at ‘NIL’. After receipt of notice under section 148 of the Income Tax Act, the assessee filed the return of income for both the assessment years on 26.04.2021. The appellant-assessee declared loss of Rs.3,24,707/- and paid tax of Rs.4070 thereon for the assessment year 2015-16, whereas the appellant-assessee declared income at NIL and paid tax of Rs.14,269/- u/s 115JB thereon. The assessee in response to notices uploaded documents, bank statement, profit & loss account, tax computation, loan confirmation of parties, bank statements of parties from loan taken, income tax receipts and source of funds for both the assessment years. The ld. Assessing Officer added back a sum of Rs.70,00,368/- and Rs.30,00,000/- for the assessment year 2015-16 and 2017-18 respectively on the ground that the loans
ITA No. 535/KOL/2025 (A.Y. 2015-2016) & (A.Y. 2017-2018) Cyrus Merchandise Pvt. Limited from whom the assessee has taken are found to be paper company in the investigation of the Department and added back the entire loan amount to the income of the assessee as unexplained cash credits under section 68 of the Income Tax Act, 1961.
Being not satisfied, the assessee preferred appeals before the ld. CIT(Appeals) for both the assessment years.
The ld. CIT(Appeals) has given several opportunities to the assessee to substantiate its claim, but the appellant neither filed the written submission nor represented the case before the ld. CIT(Appeals). Thereafter the ld. CIT(Appeals) dismissed the appeals ex-parte for both the assessment years on 28th February, 2025. On being aggrieved, the assessee preferred appeals before the ITAT.
We have heard both the sides. At the time of hearing, ld. Counsel for the assessee prayed before the Bench that the impugned orders be set aside and remitted back to the file of ld. CIT(Appeals) for deciding it afresh.
At the outset, ld. D.R. brought to our notice that the appellant-assessee did not produce the relevant documents as asked by the ld. Assessing Officer during the assessment proceedings. Therefore, the ld. Assessing Officer passed the assessment order assessing the taxable income at Rs.70,00,368/- and Rs.30,00,000/- for the assessment year 2015-16 and 2017- 3 (A.Y. 2015-2016) & (A.Y. 2017-2018) Cyrus Merchandise Pvt. Limited 18 respectively. Thereafter the assessee preferred appeals before the ld. CIT(Appeals). The ld. CIT(Appeals) has given many opportunities to the assessee and the assessee neither filed written submission nor any evidence before the ld. CIT(Appeals). He further submitted that before the ITAT, the assessee did not substantiate its claim for both the assessment years. Therefore, he pleaded to uphold the orders passed by the CIT(Appeals).
We have perused the material available on record. Considering the facts and circumstances of the case, we are inclined to set aside the orders passed by the ld. CIT(Appeals) in order to meet the principle of natural justice, and remit the matter back to the file of ld. CIT(Appeals) with a direction to provide 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 order in accordance with law and merits based on the materials available on the record. Thus, the grounds for both the appeals raised by the assessee are allowed for statistical purposes.