ARISTRO FINCORP PVT. LTD.,KOLKATA vs. ITO, WARD-4(3), KOLKATA

This appeal of the assessee for the assessment year 2014-15 is directed against the order dated 16.12.2024 passed by the ld. Commissioner of Income-tax, Appeals, NFAC, Delhi [hereinafter referred to as ‘the ‘ld. CIT(A)’].

Brief facts of the case are that the assessee filed its return of income on 30.09.2014 for the assessment year 2014-15 by declaring total income of Rs.4,51,050/-. The case of the assessee was reopened u/s 147 of the Act as the information received from the DGIT(Inv.), Mumbai under Project Falcon regarding coordinated and premediated trading on the Bombay Stock Exchange by engaging in reversal trades in illiquid stock options resulting in non-genuine business loss/gains to the beneficiary assessees and that the present assessee is a party to such manipulation. From the data made available under Project Falcon on the Assessment Year: 2014-15 Aristro Fincorp Pvt. Ltd insight portal, it was seen that the assessee had incurred fictitious loss of Rs.28,38,000/- in equity/derivative trading. Accordingly, notice u/s 148 of the Act was issued to the assessee and in response to such notice, the assessee reiterated the same income as declared earlier at Rs.4,51,050/-. However, the assessee failed to comply to the notice issued u/s 142(1) of the Act and accordingly, a show-cause notice was issued to the assessee. The Assessing Officer stated that in the absence of the any reply from the assessee, the assessment order was passed u/s 144 of the Act and there was no explanation or any documentary evidence was filed in order to substantiate the said claim of the assessee. Accordingly, the Assessing Officer held that the loss to the tune of Rs.28,38,000/- u/s 69A of the Act as unexplained money and determined the total income of the assessee at Rs.32,89,050/- and also initiated penalty proceedings u/s 271(1)(c) of the Act.

Aggrieved by the above order, the assessee preferred an appeal before the ld. CIT(A). However, the appeal of the assessee was dismissed by the ld. CIT(A) sustaining the order of the Assessing Officer solely on the ground of non-compliance on various notices fixed for hearing.

Dissatisfied with the above order, the assessee preferred appeal before this Tribunal raising various grounds. However, the primary contention of the assessee is that the impugned order of the ld. CIT(A) was an ex parte order and the assessee did not get proper opportunity to represent its case, therefore, one more opportunity may be given to the assessee in order to substantiate the claim of the assessee before the ld. CIT(A).

On the other hand, the ld. DR submitted that both the orders of the lower authorities are ex parte order. No proper representation was made earlier by the assessee and at this stage, still the assessee is not in Assessment Year: 2014-15 Aristro Fincorp Pvt. Ltd a position to substantiate its claim by submitting documents even if one more opportunity is allowed. Hence, the appeal may be dismissed in limine.

We, after hearing the rival submissions and perusing the materials available on record, find that in the present case, both the orders of the Assessing Officer as well as of the ld. CIT(A) passed ex parte without going into merits of the case. We note that the assessee could not represent its case properly and the ld. CIT(A) sustained the order of the Assessing Officer solely on the technical ground of non-compliance without going into the merits of the case. Therefore, in the interests of justice and fair play, we deem it necessary to remand the whole issue to the file of the ld. CIT(A) with a direction to re-examine the matter on merits after affording reasonable opportunity of being heard to the assessee. The assessee is also directed to strictly comply with the notices which will be issued by the ld. CIT(A) as and when asked for without any fail and in case, the assessee fails to appear in remand proceedings, the ld. CIT(A) may pass a speaking order in accordance with law on the basis of materials available on record.

In terms of the above, the appeal of the assessee is allowed for statistical purposes.