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Facts
The assessee, a private limited company, filed its return for AY 2012-13, which was selected for scrutiny due to large share premium received. After issuing notices under Section 143(2), Section 142(1), and Section 131, the Assessing Officer assessed the income at Rs.6,31,96,180/- under Section 143(3) as unexplained cash credit, citing the assessee's non-compliance in proving identity, creditworthiness, and genuineness of transactions. The CIT(A) dismissed the appeal as the assessee failed to file submissions or appear.
Held
The ITAT acknowledged the assessee's lack of cooperation but remitted the case back to the CIT(A) to ensure the principle of natural justice. The CIT(A) was directed to provide one more opportunity for the assessee to present its case, with a strong caution to the assessee to cooperate promptly with the proceedings.
Key Issues
Whether the CIT(A) was justified in dismissing the appeal without considering the merits due to the assessee's non-compliance, and if the matter should be remitted back for a fresh opportunity to ensure natural justice.
Sections Cited
143(2), 142(1), 131, 143(3)
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 appeal is directed at the instance of assessee against the order of ld. Commissioner of Income Tax (Appeals),
Brief facts of the case are that the assessee is a Private Limited Company, who filed its return of income on 24.09.2012 showing total income of Rs.45,184/-. The case was selected for scrutiny assessment through CASS with the reason large share premium received. Accordingly, notice under section 143(2) was issued and served on the assessee-company. Later notice under section 142(1) was also issued to the assessee. In response to the said notices, ld. Authorized Representative of the assessee appeared and produced statement of accounts for the AY 2012-13 including e-filed returns of the assessee-company. It is noticed that the assessee-company issued its shares involving different entities against high premium. Thereafter notice under section 131 was issued to the asseessee requiring to appear personally alongwith all the Principal Officers, Directors of the investor companies and individual investors for the purpose of verifying identity and creditworthiness of the shareholders and genuineness of the transactions made by them in the assessee-company as well as analysis of various entries in Bank statements, cash book, ledger etc. The assessee company has no plausible explanation in this regard. Due to non-compliance by the assessee, the ld. Assessing Officer has left with no alternative but to assess the income of assessee on the basis of information/data available on the records and the assessment was completed under section 143(3) of the Act assessing the total income at Rs.6,31,96,180/-.
The ld. CIT(Appeals) has given several opportunities to the assesese to substantiate its claim, but the appellant did not file the written submissions and did not represent the case before the ld. CIT(Appeals). Thereafter the ld. CIT(Appeals) dismissed the appeal on 26th October, 2023.
On being aggrieved, the assessee preferred an appeal before the ITAT.
At the time of hearing, it was the submission of the ld. Counsel for the assessee that ld. CIT(Appeals) did not consider the case on merit, rather he just upheld the order passed by the ld. Assessing Officer. Therefore, he pleaded to delete the addition made by the ld. Assessing Officer as confirmed by the ld. CIT(Appeals).
At the outset, ld. D.R. brought to my notice that the 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. Rs.6,31,96,180/ as unexplained cash credit. Thereafter the assessee preferred an appeal 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 (A.Y. 2012-2013) Tropex Suppliers Private Limited that before the ITAT, the assessee did not substantiate its claim. Therefore, he pleaded to uphold the orders passed by the revenue authorities.
We have heard the rival submissions and perused the material available on record. Considering the facts and circumstances of the case, we are inclined to set aside the order 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 raised by the assessee are allowed for statistical purposes.
In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open Court on 26/02/2025.