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Facts
The assessee's appeal was against the order of the CIT(A) for AY 2009-10. The initial assessment was completed for ₹9,98,15,720/- including an addition of ₹9,97,50,000/- on account of unexplained cash credit. The appeal was previously restored by the ITAT to the AO for re-examination. A subsequent assessment order was passed by the AO on 16.07.2021, assessing the total income at ₹9,98,15,722/-.
Held
The Tribunal noted that the assessee failed to provide submissions to the CIT(A) despite multiple opportunities, leading to the dismissal of the appeal by the CIT(A). However, considering the assessee's claim that relevant documents were filed but not considered, and referencing legal precedents, the Tribunal deemed it appropriate to provide another opportunity. The CIT(A)'s order was set aside, and the appeal was restored to the CIT(A) for fresh adjudication.
Key Issues
Whether the CIT(A) was justified in dismissing the appeal for non-prosecution without a speaking order on merits, and whether the assessee should be granted another opportunity to present its case with supporting documents.
Sections Cited
250, 143(3), 147, 144, 263, 144B, 68, 133(6), 251(1), 46A
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, KOLKATA ‘C’ BENCH, KOLKATA
Before: SHRI GEORGE MATHAN & SHRI RAKESH MISHRA
PER RAKESH MISHRA, ACCOUNTANT MEMBER:
This appeal filed by the assessee is against the order of the Commissioner of Income Tax (Appeals)-NFAC, Delhi [hereinafter referred to as Ld. 'CIT(A)'] passed u/s 250 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) for AY 2009-10 dated 07.08.2023. 2. The assessee is in appeal before the Tribunal raising the following grounds of appeal:
“1. For that the Ld. CIT(A) was not justified in dismissing the additional ground raised before him challenging the validity of the assessment order in question on the ground that the preceding re-assessment framed u/s 143(3)/147 dated 13.04.2012 was invalid since the same was framed without taking approval from the higher authority.
For that the Ld. CIT(A) was not justified in confirming the addition of Rs.9,97,50,000/- made by the A.O. on account of share capital including share premium by wrongly invoking the provisions of section 68 of the Act.
The appellant craves leave to add further grounds of appeal or alter the grounds at the time of hearing.” ITA No.: 1057/KOL/2023 Assessment Year: 2009-10 Samudra Commotrade (P) Ltd.
Brief facts of the case are that the assessment was completed u/s 147/143(3)/144/263 of the Act on 31.03.2016 and income was assessed at ₹9,98,15,720/- by making addition of ₹9,97,50,000/- on account of unexplained cash credit. The assessee filed appeal before the Commissioner of Income tax (Appeals)-5, Kolkata, who vide appeal order dated 04.09.2018 had dismissed the appeal of the assessee. Thereafter, the assessee had preferred an appeal before the Hon'ble ITAT, Kolkata 'A' Bench, who vide ITA No. 2586/Kol/2018 order dated 05.02.2020 had held that we, therefore, deem it appropriate to restore the matter back to the assessing authority to re-examine the entire issue(s) afresh going by the CIT's original revision directions. Suffice to say, assessee would be afforded adequate opportunity of hearing in consequential proceedings. In view of the findings of the Tribunal, the Assessing Officer (hereinafter referred to as Ld. 'AO') passed the assessment order on 16.07.2021 u/s 147 r.w.s. 254 read with section 144B of the Act assessing the total income of ₹9,98,15,722/-. Aggrieved with the assessment order, the assessee filed an appeal before the Ld. CIT(A), who noted in para 6.1 of the appeal that the assessee did not respond to the notice in which it was informed to it that the response submitted by the assessee earlier on the portal was not seen on the ITBA portal. Further, the assessee was given a final opportunity to furnish the submission/reply on 13.07.2023 vide the notice dated 06.07.2023. However, the assessee again did not respond to the said notice till the passing of the appeal order. The Ld. CIT(A) considered the matter and since no submission was made, the appeal was dismissed by holding as under:
“7. 5. The appellant responded on 21.06.2023 stating that in response to your aforesaid notice and also notice dated 15/06/2023 under DIN No ITBA/NFAC/APL-1/2023-24/1053740433(1) please note that we have already filed our submission along with all the annexures on 08/06/2023 in multiple acknowledgement numbers copy enclosed. However, the ITA No.: 1057/KOL/2023 Assessment Year: 2009-10 Samudra Commotrade (P) Ltd. appellant did not furnish any submission in favour of grounds of appeal. Further, the appellant was requested to furnish submission on or before 26.06.2023 and 13.07.2023 vide notice dated 22.06.2023 and 06.07.2023 but the appellant did not respond to these both notices till date.
The appeal has to be disposed off within six months as per direction of the Hon'ble High Court, Kolkata. Thus, despite the multiple requests, the same have not been filed by the appellant till date despite five notices. In view of the same, there is no reason available on record for any change in the order of the AO as during appellate proceeding no submission was furnished by the appellant. In view of all of the above, the order u/s 147 r.w.s 254 r.w.s. 144B of the Act dated 29.09.2021 of the AO is confirmed. Accordingly, the second ground of appeal is dismissed.
In the result, the appeal of the appellant is dismissed.”
Aggrieved with the order of the Ld. CIT(A), the assessee has filed the appeal before the Tribunal.
We have heard the rival contentions and perused the material available on record. Before us, a paper book running into 670 pages has been filed which is claimed to have been filed before the lower authorities. The assessee has also enclosed additional Grounds of appeal raised before the Ld. CIT(A) and the copy of the written submission filed before him. The Ld. AR drew our attention to page 8 of the appeal order and also to pages 24 to 27 of the assessment order being the statement of Smt. Vasudha Jain, Director recorded before the Ld. AO. Other subscribers, however, did not appear before the Ld. AO. It was submitted that as mentioned in pages 25-66 of the assessment order, details were filed before the Ld. AO. The Ld. AR relied upon the decision of the Hon'ble Calcutta High Court in PCIT 1, Kolkata vs. Mainak Suppliers Pvt. Ltd. in ITAT/253/2023 in IA No.GA/2/2023, order dated 31.01.2024 in which it has been held as under: “We have carefully gone through the orders passed by the Commissioner of Income Act (Appeals)-7, Kolkata, CIT(A) dated 8th September, 2020. From the said order it is seen that the source of funds by all the share applicants has been examined by the CIT(A) and it has been pointed out that the ITA No.: 1057/KOL/2023 Assessment Year: 2009-10 Samudra Commotrade (P) Ltd. assessing officer has not found any defect or deficiency in the source of funds explained by the share applicants through their replies to the statutory notices issued under Section 133(6) of the Act. Furthermore, on facts, it has been noted that every share applicant in their respective replies to the statutory notices issued under Section 133(6) of the Act has furnished copies of their income tax acknowledgements evidencing filing of income tax returns by each of them, copies of their audited accounts including balance- sheets wherein such investments made by each of them in the subscription of share capital issued by the assessee are duly reflected as also copies of their bank statements for the relevant period from which the subscription monies were paid by them respectively and copy of the allotment advice received by them from the assessee in respect of the shares allotted to them. We find that the CIT(A) has made a thorough factual exercise and examined the matter and held that the genuinity of the transactions has been proved apart from the identity and the creditworthiness of the share applicants. The revenue carried the matter in appeal before the learned Tribunal and the learned Tribunal on its part once again did a factual verification and affirmed the order passed by the CIT. Thus, we find the matter is entirely factual which has been decided concurrently in favour of the assessee by the CIT(A) and the learned Tribunal and, therefore, we find that there is no question of law much less substantial question of law arising for consideration in this appeal. Accordingly, the appeal fails and is dismissed.”
Before us, the assessee has also relied upon the order of the “C” Suppliers Pvt. Ltd. ITA No.38/Kol/2021 for the A.Y. 2009-10, dated 28.12.2022, which has been confirmed by the Hon'ble High Court as mentioned in para 5. The Ld. DR relied upon the order of the appellate authority and requested that the same may be confirmed.
We have considered the submissions made. Hon’ble High Court in the case of Mainak Suppliers Pvt. Ltd. (supra) had dismissed the appeal of the revenue as no question of law, much less a substantial question of law arose for consideration in the appeal. The facts of the case were different in that case relied upon. Before us, the assessee has filed voluminous documents, which were apparently not available before the Ld. CIT(A). Since the assessee did not file any evidence before ITA No.: 1057/KOL/2023 Assessment Year: 2009-10 Samudra Commotrade (P) Ltd. the Ld. CIT(A) as mentioned in the appellate order, the appeal was dismissed. We note that section 250(6) of the Act casts a duty upon the Ld. CIT(A) to pass an order in appeal which should state the points for determination and a decision as well as the reason for arriving at such decision. We find that at both the stages of assessment order before the Ld. AO as well as before the Ld. CIT(A) in the appeal, proper representation was not made on behalf of the assessee. We note that in Ajji Basha Vs. CIT (2019) 111 taxmann.com 348 (Madras) it has been held that a speaking order on merits with reasons and findings is to be passed by Commissioner (Appeals) on basis of ground raised in assessee's appeal; he cannot dispose the assessee's appeal merely by holding that the Assessing Officer's order is a self-speaking order which requires no interference. It has also been held in the case of Commissioner of Income-tax (Central) Nagpur v. Premkumar Arjundas Luthra (HUF) [2016] 69 taxmann.com 407 (Bombay) after discussing the provisions of sections 250(1) and 251(1) that the law does not empower the CIT(A) to dismiss the appeal for non-prosecution as is evident from the provisions of the Act. Therefore, we deem it appropriate in the interest of justice and fair play that on the facts before us, another opportunity needs to be provided to the assessee to represent its case properly before the Ld. CIT(A) as the assessee claims that the required documents were filed which were not considered by the Ld. CIT(A). We, therefore, set aside the order of the Ld. CIT(A) and restore the appeal to him to be decided afresh, who shall allow an opportunity of being heard to the assessee and also grant an opportunity of representing the case and to be heard to the Ld. AO as per rule 46A of the Income Tax Rules, 1962, if required, and thereafter pass an order in accordance with law. Thus, all the grounds of appeal are partly allowed for statistical purposes. ITA No.: 1057/KOL/2023 Assessment Year: 2009-10 Samudra Commotrade (P) Ltd.
In the result, the appeal filed by the assessee is partly allowed for statistical purposes. Order pronounced in the open Court on 15th January, 2026. [George Mathan] [Rakesh Mishra] Judicial Member Accountant Member Dated: 15.01.2026 Bidhan (Sr. P.S.) ITA No.: 1057/KOL/2023 Assessment Year: 2009-10 Samudra Commotrade (P) Ltd. Copy of the order forwarded to:
Samudra Commotrade (P) Ltd., C/o. Manoj Jain, 15-B, Clive Row, Ground Floor, Kolkata, West Bengal, 700001. 2. A.O., NFAC, New Delhi.
CIT(A)-NFAC, Delhi.
CIT-
CIT(DR), Kolkata Benches, Kolkata.
Guard File. //// By order