ARJUN PITTI,KOLKATA V. A.C.I.T., CENTRAL CIRCLE - 4(1), KOLKATA

ITSSA 36/KOL/2025

AI Insights

The case involves Arjun Pitti, the appellant, contesting an assessment order under sections 143(3) and 153C of the Income Tax Act, 1961, for the assessment year 2019-20. The primary contention revolves around the additions made by the Assessing Officer, which included disallowances and unexplained cash credits, following a search and seizure operation. The CIT(A) dismissed the appeal due to non-compliance by the assessee during the appellate proceedings. The ITAT, however, found merit in re-evaluating the case and directed a detailed examination of the grounds of appeal by the CIT(A).

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 783619 (ITAT-KOLKATA)
• Duration Of Justice: 7 month(s) 25 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 06-11-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2019-2020
• Appeal Filed On: 12-03-2025
• Other Referred Cases: B.N. Bhattachargee, 118 ITR 461 (SC), ITA No. 1025-1027/CHANDI/2025
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Set aside; Opportunity of being heard; Unexplained cash credit; Search and seizure; Bogus
• Section: 143(3); 142(1); 132; 68; 131; 139

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA ‘A’ BENCH, KOLKATA Before SHRI GEORGE MATHAN, JUDICIAL MEMBER & SHRI RAKESH MISHRA, ACCOUNTANT MEMBER I.T.(S.S.)A. No.: 36/KOL/2025 Assessment Year: 2019-20 Arjun Pitti Vs. A.C.I.T., Central Circle - 4(1), Kolkata (Appellant) (Respondent) PAN: AEOPP1252K Appearances: Assessee represented by : Deep Agarwal, Adv. Department represented by : Raja Sengupta, (CIT) DR. Date of concluding the hearing : 13-August-2025 Date of pronouncing the order : 06-November-2025 ORDER PER RAKESH MISHRA, ACCOUNTANT MEMBER: This appeal filed by the assessee is against the order of the Commissioner of Income Tax (Appeals)-27, Kolkata [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 2019-20 dated 07.01.2025, which has been passed against the assessment order u/s 143(3)/153C of the Act, dated 28.12.2022. 2. The assessee is in appeal before the Tribunal raising the following grounds of appeal: “a) For that the order of the Ld CIT(A) is unjustified and bad in law as Ld CIT(A) has failed to fulfil its statutory obligations by not considering the facts and merits of the case while disposing off the appeal. Printed from counselvise.com Page | 2 I.T.(S.S.)A. No.: 36/KOL/2025 Assessment Year: 2019-20 Arjun Pitti. b) For that the Ld. CIT(A) has erred in passing the Order without considering the submission already submitted during hearing procedure c) That the Ld. Assessing Officer has erred in law as well as on facts by erroneously unjustifiably and illegally applying the provisions of the Income Tax Act 1961 (Act) to treat the Repairs and maintenance Expenses as bogus and added Rs. 10200 Trading Loss which was booked/earned amounting Rs. 96007 Long Term Capital Gain earned by selling shares of Balrampur Chinni Mills Ltd amounting to Rs. 149003 Balance with Revenue Authorities Rs. 50000 Total additions amounting to Rs. 305210 actually and genuinely considered by your Appellant subjecting it to tax accordingly on the alleged ground. d) For that the Appellant craves leaves to add, alter or amend any ground before or at the time of hearing.” 3. Brief facts of the case are that the assessee had filed its original return of income u/s 139 of the Act on 06.07.2020 declaring ‘NIL’ income. Later a search & seizure operation u/s 132 of the Act was conducted on 22.03.2021 in the case of Madan Lal Pareek. During the course of the search and post search proceedings, the statement of Sri Manoj Singh was recorded u/s 131 of the Act on 22.03.2021. Later, the proceedings u/s 153C of the Act was initiated for AYs 2015-16 to 2020- 21. Subsequently, a notice u/s 153C of the Act dated 22.02.2022 was issued and served upon the assessee, in response to which the assessee filed its return of income u/s 153C of the Act on 28.02.2022 declaring current year loss of ₹5,97,300/-. Subsequently, the notices u/s 143(2) and 142(1) of the Act were issued to the assessee along with detailed questionnaire. In response to the notice u/s 142(1) of the Act, the assessee furnished his submission from time to time. The Assessing Officer (hereinafter referred to as Ld. 'AO') found discrepancy in the submissions of the assessee and made three additions i.e. disallowance of expenses of ₹1,06,207/-, addition of ₹1,49,003/- u/s 69 of the Act and addition of bogus balance with revenue authorities of ₹50,000/- treated as unexplained cash credit u/s 68 of the Act. The Ld. AO had Printed from counselvise.com Page | 3 I.T.(S.S.)A. No.: 36/KOL/2025 Assessment Year: 2019-20 Arjun Pitti. passed the assessment order u/s 143(3) r.w.s. 153C of the Act on 28.12.2022 determining a total income of the assessee at ₹3,05,210/-. Aggrieved with the assessment order, the assessee filed an appeal before the Ld. CIT(A), who issued notices for hearing to the assessee but the assessee remained non-compliant during the entire appellate proceedings. Therefore, the Ld. CIT(A) relying upon the findings of Hon'ble ITAT, Chandigarh Bench in the case of ITA No. 1025- 1027/CHANDI/2025 and following the decision of the Hon'ble Supreme Court in the case of B.N. Bhattachargee, 118 ITR 461 (SC) dismissed the appeal of the assessee holding as under: “5. In the instance of the case the appellant failed to make any submissions in support of grounds of appeal, this gives rise to an undisputable conclusion that the assessee has got nothing more to say in this regard. I have gone through the record before me and based on the record I have decided to adjudicate the issue on the merits of the case. In the instant case the AO has rightly assessed an income of Rs.3,05,210/-. Since the appellant failed to substantiate appellant's claim and additions made by the Assessing Officer of Rs. 1,06,207/-, Rs. 1,49,003/- and Rs.50,000/- are confirmed. 6. Ground Nos. 1 to 6 of the appeal are dismissed. 7. In the result, the appeal is dismissed.” 4. Aggrieved with the order of the Ld. CIT(A), the assessee has filed the appeal before the Tribunal. 5. Rival contentions were heard and the submissions made have been examined. It was submitted by the Ld. AR that in the search and seizure carried out on 22/03/2021, no incriminating material was found and the assessment was unabated. In response to question number 8 of the statement a sum of ₹10,00,000/- was added in the hands of Mr Arjun Pitti and the addition is beyond the scope of section 153C of the Act as no incriminating material was found. The assessee Printed from counselvise.com Page | 4 I.T.(S.S.)A. No.: 36/KOL/2025 Assessment Year: 2019-20 Arjun Pitti. himself is a Chartered Accountant and was himself handling the appeal but could not track the notices. Before the Tribunal also the appeal is filed by the assessee. The assessee had sold the shares in the assessment year 2021-22 and the Ld. AO doubted the purchase transactions through bank account. The paper book was filed which was not paginated. However, our attention was drawn to Page 3 of the Paper Book in which balance in the case of Balram Chinni Mills shown was doubted. The Ld. DR countered this argument of lack of incriminating material by saying that the incriminating material was found in the case and the cash was found in the possession of the assessee’s employee. Our attention was drawn to page 2 of the assessment order in which in response to question 9 Shri Manoj Singh, the third person who was the employee of the assessee, has mentioned that the cash belongs to Shri Arjun Pitti, the assessee, therefore, the addition was rightly made. Our attention was also drawn to Question No. 11 and 12 in which the assessee had confirmed that Shri Manoj Kumar Singh was his employee. It was stated that the cash of ₹ Ten lakh was given by him to deposit in the bank and the said cash belongs to his son. It was stated by the Ld. DR that thus there were incriminating evidences and our attention was also drawn to page 4 paragraph para 4and so the notice was issued and addition was made. The Ld. CIT(A) has discussed this issue on page 3 para 4 of his order as the assessee did not make any submission nor this ground was taken up in Form No. 35 and the Ld. DR relied upon the order of the Ld. CIT(A) and requested that the same may be upheld. The Ld. AR in the rejoinder stated that the cash belongs to the son of the assessee and it has been assessed in his hand, therefore, the addition made is liable to be deleted. Printed from counselvise.com Page | 5 I.T.(S.S.)A. No.: 36/KOL/2025 Assessment Year: 2019-20 Arjun Pitti. 6. We have considered the submissions made, gone through the facts of the case and perused the record and the order of the Ld. CIT(A). After examining the facts of the case and the law, we deem it appropriate to set aside the order of the Ld. CIT(A) and restore the appeal to the Ld. CIT(A) for disposal of the grounds of appeal taken by the assessee on merits by passing a speaking order. The assessee is at liberty to file the assessment order of his son in support of the proof that the cash found and seized has been assessed in the hands of the son. Needless to say, the assessee shall be given a reasonable opportunity of being heard to make any further submission it wants to make in support of its grounds of appeal and shall not seek unnecessary adjournments and rule 46A of the I.T. Rules, 1962 shall also be followed and an opportunity of being heard may be provided to the Ld. AO, if required. Accordingly, the grounds taken by the assessee in his appeal are partly allowed for statistical purposes. 7. In the result, the appeal filed by the assessee is partly allowed for statistical purposes. Order pronounced in the open Court on 6th November, 2025. Sd/- Sd/- [George Mathan] [Rakesh Mishra] Judicial Member Accountant Member Dated: 06.11.2025 Bidhan (Sr. P.S.) Printed from counselvise.com Page | 6 I.T.(S.S.)A. No.: 36/KOL/2025 Assessment Year: 2019-20 Arjun Pitti. Copy of the order forwarded to: 1. Arjun Pitti, CE 147, Salt Lake City, Sector-1, Bidhan Nagar, Kolkata, West Bengal, 700064. 2. A.C.I.T., Central Circle - 4(1), Kolkata. 3. CIT(A)-27, Kolkata. 4. CIT- 5. CIT(DR), Kolkata Benches, Kolkata. 6. Guard File. //True copy // By order Assistant Registrar ITAT, Kolkata Benches Kolkata Printed from counselvise.com "