ITAT Kolkata Judgments — May 2025

The Tribunal condoned the delay in filing the appeals. In the interest of justice, and acknowledging the assessee's admitted failure, the Tribunal restored all issues in the appeals to the Assessing Officer for fresh adjudication, granting the assessee another opportunity to substantiate claims.

The Tribunal noted that the CIT(A) had followed the judicial discipline by relying on the order of the coordinate bench of the Tribunal for the previous assessment years. The Tribunal found no reason to interfere with the CIT(A)'s order as the Revenue had not demonstrated any change in facts for the impugned assessment year. The Tribunal referred to a coordinate bench's decision in the assessee's own case (IT(SS)A Nos.169 to 172/Kol/2023) which, while dealing with bank balances of 11 concerns as part of entry providing business, estimated the commission income at 0.16% on a total turnover of Rs. 15,59,76,290/-, resulting in an addition of Rs. 2,49,562/-. The Tribunal upheld this rate of 0.16% for the current assessment year. The appeal of the revenue was dismissed.

The Tribunal held that while the assessee admittedly failed to produce the required evidence before the Assessing Officer to prove purchases were made via Demand Drafts (DDs), certain evidence was produced before the CIT(A) which was disregarded. In the interest of justice, the issues in both appeals were restored to the file of the Assessing Officer for readjudication. The assessee was to be granted an adequate opportunity of being heard and to produce all such evidence as it desired to substantiate its claim before the Assessing Officer when called upon to do so. The Tribunal noted that the CIT(A) had disregarded the evidence produced before him. The ratio decidendi is that where evidence was produced before the first appellate authority but disregarded, and the assessee expresses willingness to produce evidence before the AO, the matter should be remanded for a fair adjudication, especially when the assessee's business operations are situated near the border of a neighboring country facilitating banking transactions.

The Tribunal upheld the CIT(A)'s decision, finding no error in the deletion of the penalty. It observed that the very foundation for the penalty – the quantum additions – had been deleted by the coordinate bench. The Tribunal concluded that no penalty was leviable where the additions forming its basis were either deleted or not sustained.

The Tribunal set aside the orders of the CIT(A) and the Assessing Officer, remitting the matter back to the AO for a fresh de novo assessment. This decision was made to grant the assessee another opportunity to provide submissions, provided no unnecessary adjournments are sought. The appeal was allowed for statistical purposes.

The Tribunal observed the assessee's failure to present documents to lower authorities but accepted additional evidence. Consequently, the matter was restored to the AO for readjudication with directions for the assessee to provide all necessary documentary evidence.

The Tribunal noted that while the CIT(A) issued notices, the assessee did not comply. However, considering the interest of justice, the Tribunal decided to restore the matter to the file of the CIT(A) for fresh adjudication, providing the assessee another opportunity to be heard and present documents.

The Tribunal condoned the 336-day delay in filing the appeal, finding reasonable cause. It set aside the CIT(A)'s ex-parte order, emphasizing the necessity of granting the assessee a reasonable opportunity of being heard. The matter was remanded back to the Assessing Officer for fresh adjudication on merits, with a direction for the assessee to cooperate.

The Tribunal found that the assessee had not produced the required evidence before the AO. However, some evidence was produced before the CIT(A) which was disregarded. In the interest of justice, the appeals are restored to the AO for readjudication after providing the assessee an opportunity to present evidence.