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Facts
The assessee company filed a NIL return. Based on Investigation Wing information about accommodation entries (Rs. 87 lakhs initially), the AO initiated reassessment under Section 148, later determining income at Rs. 12.47 Crores ex-parte under Section 144/147 due to the assessee's non-compliance with notices. The CIT(A) dismissed the assessee's appeal for non-submission of documents and non-representation.
Held
The Tribunal condoned the delay in filing the appeal. It then set aside the CIT(A)'s order, remitting the matter back to the CIT(A) to provide the assessee another opportunity to be heard, emphasizing the principle of natural justice. The assessee was cautioned to cooperate with the proceedings.
Key Issues
Whether the CIT(A) was justified in dismissing the appeal for non-compliance without considering the merits, and if the ex-parte assessment based on accommodation entries without proper inquiry by the AO was valid.
Sections Cited
148, 143(2), 142(1), 144, 147
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),
The appeal is time barred by 39 days in filing the appeal by the assessee. However, the assessee did not file condonation petition When the assessee came to know about the order passed by the ld. CIT(Appeals), the assessee approached the ld. A.R. to prefer an appeal, due to that there was a delay of 39 days in filing the appeal before the Tribunal. Therefore, he pleaded to condone the delay.
Considering the facts and circumstances of the case, we are inclined to condone the delay since the delay is not due to negligence on the part of assessee. Hence the delay is condoned.
Brief facts of the case are that the assessee is a Private Limited Company, who filed its return of income on 29.03.2012 declaring total income at ‘NIL’. Information was received from the Investigation Wing that the assessee was a beneficiary of Rs.87,00,000/- received through accommodation entry for the assessment year 2012-13. Therefore, the ld. Assessing officer had reason to believe that the income of the assessee had escaped assessment and accordingly notice under section 148 was issued to the assessee on 27.03.2019. The assessee filed its return on 08.04.2019 with a total income at ‘NIL and again notices under section 143(2) and 142(1) were issued to the assessee, but no compliance was received from the assessee. Finally, a show-cause notice was issued to the assessee on 06.12.2019 to file reply by (A.Y. 2012-2013) Intimate Commotrade Private Limited 11.11.2019 clearly mentioning that being a time barring matter, no further opportunity will be given and the case will be decided ex-parte under section 144 of the Act. 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 144 /147 of the Act assessing the total income at Rs.12,47,46,000/-. On being aggrieved, the assessee preferred an appeal before the ld. CIT(Appeals).
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 7th December, 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. There was no independent inquiry held by the ld. Assessing Officer. The ld. Assessing Officer relied on the report of the Investigation Wing which stated that the company has been used for providing accommodation entry. Whereas the appellant company had received accommodation entry Rs.12,23,00,000/- (A.Y. 2012-2013) Intimate Commotrade Private Limited through the entry operators, who facilitates such accommodation entry on receipt of commission only. 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. 12,47,46,000/ as unexplained. 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 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 (A.Y. 2012-2013) Intimate Commotrade Private Limited 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.