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Facts
The assessee failed to produce the directors of its own company and the subscribing company before the Assessing Officer in response to summons issued under Section 131 of the Income Tax Act. This non-compliance was the sole reason for an addition made by the AO.
Held
The Tribunal restored the issue to the file of the Assessing Officer, directing him to examine the directors of both the assessee and the subscribing company. The AO is to decide the issue de novo based on statements and any other evidence produced by the assessee.
Key Issues
Whether an addition made solely due to non-compliance with summons under Section 131 for production of directors can be sustained, and if the issue should be restored to the AO for a fresh examination.
Sections Cited
131
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “SMC” BENCH, KOLKATA
Before: SHRI RAJESH KUMAR, AM Shri Sunil Surana, AR
O R D E R Per Rajesh Kumar, AM:
This is an appeal preferred by the assessee against the order of the National Faceless Appeal Centre, Delhi (hereinafter referred to as the “Ld. CIT(A)”] dated 21.06.2023 for the AY 2011-12.
The ld. Counsel for the assessee at the outset submitted that in this case the directors of the assessee company as well as the directors of the subscribing company could not be produced before the ld. AO in compliance to summons issued u/s 131 of the Act and that was the sole reason for making the addition.The ld. Counsel for the assessee has undertaken to produce these directors before the ld. AO if the issue is restored to the file of the ld. Assessing Officer.
The ld. DR on the other hand relied on the order of the authorities below.
After hearing the rival contentions and perusing the materials available on record, we find that the addition was made primarily on
In the result, the appeal of the assessee is partly allowed for statistical purposes.
Order pronounced in the open court on 21.04.2025.