ABHINANDAN HIGHRISE PVT. LTD.,KOLKATA V. PR. C.I.T. (CENTRAL) - 1, KOLKATA

ITA 2483/KOL/2024

AI Insights

The case involves Abhinandan Highrise Pvt. Ltd., which appealed against the order of the Principal Commissioner of Income Tax (PCIT), Kolkata, under Section 263 of the Income Tax Act, 1961. The PCIT had set aside the assessment order passed by the Assessing Officer (AO) for the Assessment Year 2017-18, which involved a transaction where the assessee received Rs. 50,00,000 purportedly from the sale of stock in trade. The PCIT's order was based on the grounds that the buyers involved in the transaction were not genuine and lacked creditworthiness, as established in previous assessment orders under Section 153A of the Act. The Tribunal found that the assessee was not given adequate opportunity to respond to the notices under Section 263, which led to a violation of the principles of natural justice.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 705297 (ITAT-KOLKATA)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-07-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Assessment Year: 2017-2018
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Set aside; Principle of natural justice; Revision of order
• Section: 263; 153A; 68

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH”, KOLKATA SHRI GEORGE MATHAN, JUDICIAL MEMBER SHRI SANJAY AWASTHI, ACCOUNTANT MEMBER I.T.A. No. 2483/KOL/2024 (Assessment Year 2017-18) Abhinandan Highrise Pvt. Ltd., 8C, M.D. Road, Kolkata - 700007 [PAN: AAGCA9441C] ……..…...…………….... Appellant vs. Pr. CIT (Central)-1, Kolkata, Shanti Pally, 110, Eastern Metropolitan Bypass, Opposite Ruby, Kasba, Kolkata - 700107 ................................. Respondent Appearances by: Assessee represented by : Miraj D. Shah, A.R. Department represented by : P.N. Barnwal, CIT-DR Date of concluding the hearing : 30.06.2025 Date of pronouncing the order : 04.07.2025 O R D E R PER SANJAY AWASTHI, ACCOUNTANT MEMBER 1. The present appeal arises from the order u/s 263 of the Income Tax Act, 1961 (hereafter “the Act”), vide order dated 18.03.2024, passed by the Ld. Principal Commissioner of Income Tax (hereafter “the Ld. PCIT”), (Central) Kolkata -1. 1.1 In this case, the Ld. PCIT is seen to have set aside the order of Ld. AO mainly on the following issue: “A cursory look into the facts of the instant case would disclose that the assessee has received Rs. 50,00,000/- during the F.Y. 2016-17 relevant to A.Y. 2017-18 in the guise of sale of stock in trade from the buyers out of which Sure Tracom Pvt. Ltd., Mars Vinimay Pvt Ltd, Moontree Commercial Pvt. Ltd. Etc are already proved to be not genuine in as much as having no creditworthiness as held in the assessment orders passed u/s 153A of the Act in the previous AYs. Moreover, many of the names of the scrips/shares which were sold in the AY 2017-18 were also found to be same when those compared with the sold shares of the previous 2 ITA No. 2483/Kol/2024 Abhinandan Highrise Pvt. Ltd. AYs. So the amount of Rs 50,00,000/- was required to be charged to income tax by invoking the statutory provisions of sec. 68 r.w.s. 115BBE of the Income Tax Act, 1961 as it was done in the previous A.Ys which the Assessing Officer failed to do.” 1.2 The above mentioned findings were given after the assessee failed to comply with notices issued u/s 263 of the Act dated 20.02.2024 and 07.03.2024. These facts are recorded in paras 6 and 7 of the impugned order. 1.2 Aggrieved with this action of Ld. PCIT, the assessee is in appeal with the following grounds: “1. That the Learned Principal Commissioner of Income Tax erred in passing an order under Section 263 of the Income Tax Act, 1961, without serving notice of hearing to the assessee. Consequently, the order violated the principles of natural justice and ought to be set aside. 2. That the Learned Principal Commissioner of Income Tax erred in directing that the assessment order dated 22/09/2021, passed under Sections 153A/143(3) of the Income Tax Act, 1961, was erroneous and prejudicial to the interest of revenue. The said assessment order could not have been revised under Section 263 of the Income Tax Act, 1961. 3. That the Learned Principal Commissioner of Income Tax erred in holding the assessment order dated 22/09/2021, passed under Sections 153A/143(3) of the Income Tax Act, 1961, as erroneous and prejudicial to the interest of revenue, despite the fact that it pertained to an unabated assessment. The additions highlighted in the order under Section 263 of the Income Tax Act, 1961, were made without reliance on any incriminating material, and thus the assessment order should not have been disturbed. 4. That the Learned Principal Commissioner of Income Tax erred in holding the assessment order as erroneous and prejudicial to the interest of revenue. The conditions necessary for invoking the provisions of Section 263 of the Income Tax Act were not satisfied in this case, and therefore, the order under Section 263 of the Act should be quashed. 5. That the order passed by the Learned Principal Commissioner of Income Tax under Section 263 of the Income Tax Act is bad in law, lacks merit, is invalid, and thus liable to be quashed. 6. That the Learned Principal Commissioner of Income Tax neither conducted any independent enquiry nor provided a decision on the merits of the case. Therefore, the assessment order could not be set aside by labeling it as erroneous and prejudicial to the interest of revenue. 7. That the appellant reserves the right to file additional grounds and/or modify or amend the existing grounds at any stage before or during the hearing of the appeal.” 3 ITA No. 2483/Kol/2024 Abhinandan Highrise Pvt. Ltd. 2. Before us, the Ld. AR argued that the AO’s order which was set aside was an erroneous one since it was an unabated assessment and the impugned amount mentioned in the impugned order was “de hors” any seized/incriminating material. The Ld. AR also mentioned that due to a communication gap between the tax counsel and the assessee, the notices u/s 263 of the Act could not be responded to even though the assessee was quite alert before the Ld. AO in terms of complying to the notices issued by him. The Ld. AR thereafter pleaded that since they had a strong case on merit hence the assessee required an opportunity to present the facts before the Ld. PCIT again. 2.1 The Ld. DR relied on the order of Ld. PCIT. 3. We have carefully considered the submissions of the Ld. AR/DR and have also gone through the impugned order and the order of Ld. AO. As mentioned earlier, in paras 6 and 7 of the impugned order the fact of non- compliance by the assessee in response to notices issued u/s 263 of the Act has been duly mentioned. We feel that in the interests of substantive justice this matter deserves to be remanded back to the file of Ld. PCIT for fresh adjudication. Needless to say, the impugned order is set aside with the direction for re-adjudication. 4. In the result, appeal filed by the assessee is allowed for statistical purposes. Order pronounced on 04.07.2025 Sd/- Sd/- (George Mathan) (Sanjay Awasthi) Judicial Member Accountant Member Dated: 04.07.2025 AK, Sr. P.S. 4 ITA No. 2483/Kol/2024 Abhinandan Highrise Pvt. Ltd. Copy of the order forwarded to: 1.Abhinandan Highrise Pvt. Ltd. 2. Pr. CIT (Central)-1, Kolkata 3. CIT(A) 4. CIT 5. CIT(DR) //True copy// By order Assistant Registrar, Kolkata Benches "