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Facts
The assessee filed its return of income declaring a certain amount. During scrutiny, the Assessing Officer treated the gross interest income and gross receipt on sales of shares as undisclosed income, based on information from an Investigation Wing and a statement of a director. The assessee appealed to the CIT(A) and also filed a revision petition under Section 264 of the Act.
Held
The CIT(A) dismissed the assessee's appeal as infructuous because a revision petition under Section 264 had already been filed and an order was passed on it. The Tribunal agreed with the CIT(A)'s finding that the appeal was non-maintainable and infructuous.
Key Issues
Whether the CIT(A) was correct in dismissing the appeal as infructuous due to the filing of a revision petition under Section 264 of the Act.
Sections Cited
133A, 143(3), 264
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Income Tax Appellate Tribunal, RANCHI BENCH, RANCHI
Before: SHRI PARTHA SARATHI CHAUDHURY & SHRI RATNESH NANDAN SAHAY
Assessee represented by None Department represented by Shri Shadab Ahmed, CIT-DR Date of hearing 10/01/2025 Date of pronouncement 20/02/2025 O R D E R PER: RATNESH NANDAN SAHAY, ACCOUNTANT MEMBER: 1. This appeal by the assessee is directed against the order of the National Faceless Appeal Centre, Delhi (NFAC)/learned Commissioner of Income Tax (Appeals), [in short, the ld. CIT(A)] dated 08/08/2023 for the Assessment Year (AY) 2014-15 as per the grounds of appeal on record.
2. At the time of hearing, none has appeared on behalf of assessee, though, the notices of hearing have been duly served on the given address.
3. Submissions of the ld. CIT-DR for the revenue were duly considered and the documents produced have been perused while taking the matter as heard.
4. Brief facts of the case are that the assessee filed its return of income on 19/09/2014 declaring total income of ₹ 1,41,240/-. The main business of Rajrath Merchants P Ltd. Vs DCIT assessee company is granting loans, trading and investment in shares and securities. The Assessing Officer issued notice in the course of scrutiny proceedings to which the assessee made necessary compliances. During the assessment year under consideration, the assessee purchased some shares and also sold the shares. However, the Assessing Officer simply relying on the enquiries conducted by the Investigation Wing of Kolkata and statement of some of persons, e.g., Jay Kishan Poddar, Director of Consortium Capital Pvt. Ltd. was recorded on oath during the survey proceedings under Section 133A of the Income Tax Act, 1961 (in short, the Act) conducted in their office premises on 11/09/2015, who accepted that the purchase and sales of shares are not genuine. The Assessing Officer then computed total income by taking gross interest income of ₹ 4,06,55,584/- and further treated the gross receipt on sales of shares of ₹ 1,57,19,382/- as undisclosed income.
Being aggrieved by the order of Assessing Officer, the assessee filed appeal before the ld. CIT(A). In the mean time, the assessee also filed a petition under Section 264 of the Act before the ld. PCIT to set aside the assessment made by the Assessing Officer.
The ld. CIT(A) vide impugned order, dismissed the appeal of assessee as infructuous on the ground that the assessee has preferred revisionary petition under Section 264 of the Act before the ld. PCIT and thus, the appeal filed before the ld. CIT(A) becomes defunct and non-maintainable and accordingly, infructuous.
Rajrath Merchants P Ltd. Vs DCIT 7. Aggrieved by the order of ld. CIT(A), this instant appeal has been preferred before the Tribunal. During the appellate proceedings, the assessee, though, not appeared in person, a written submission was filed as under: "It is evident that Ld. CIT(A) has assumed that the Ld. PCIT Hazaribagh vide his order u/s 264 dated 16/03/2017 has set aside the assessment order u/s 143(3) for fresh consideration which order was under the present appeal. However, it is submitted that this is not the correct fact and it appears that there has been some misunderstanding. The Ld. PCIT Hazaribagh passed his order u/s 264 on 20/02/2018 dismissing the petition u/s 264 on the ground that the assessee has already filed appeal and hence 264 petition was not maintainable. The copy of the order u/s 264 is enclosed herewith for your kind perusal. Hence, the appeal should have been decided on merits by Ld. CIT(A). Hence, the first appeal before CIT(A) being dismissed as infructuous on wrong facts is clearly a mistake apparent from record. Therefore, it is requested to your honour to kindly set aside the order passed by Ld. CIT(A) and direct him to decide the case afresh after considering the submissions filed before him in accordance with law."
The appellant has also placed reliance on the decisions of the various High Courts in support of its claim in order to justify that the assessee had genuine transactions in shares and securities. On the other hand, the ld. CIT-DR for the revenue defended the order of ld. CIT(A).
We have considered the rival submissions and it is found that the ld. CIT(A) has correctly treated the appeal as non-maintainable and infructuous in view of the fact that the assessee had filed petition under Section 264 of the Act before the ld. PCIT, who passed the order under Section 264 of the Act on