ASHOK KUMAR MAITI,PANSKURA V. ASST COMMISSIONER CIR 1(1), KOLKATA

ITA 1325/KOL/2023

AI Insights

The case involves Ashok Kumar Maiti, who appealed against the order of the Commissioner of Income Tax (Appeals) - NFAC, Delhi, which was passed under section 250 of the Income Tax Act, 1961. The appeal was against the assessment order under section 143(3) of the Act, which included additions to the assessee's income from share trading and undisclosed investments. The assessee argued that the Assessing Officer and the first appellate authority did not properly consider the method of calculating profits from share trading and unjustly assessed his investments as undisclosed. The Tribunal found that the legal grounds raised, which questioned the jurisdiction of the Assessing Officer and the validity of the notices issued, were not addressed by the CIT(A) and thus remitted the matter back for a detailed examination.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 36265 (ITAT-KOLKATA)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-02-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2014-2015
• Other Referred Cases: Asstt. CIT v. Hotel Blue Moon [2010] 188 Taxman 113
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Speculation loss; Salary income; Principle of natural justice
• Section: 143(3); 143(2); 250; 133(6)

Judgement Text

"आयकर अपीलीय अधिकरण कोलकाता 'डी' पीठ, कोलकाता में IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA ‘D’ BENCH, KOLKATA श्री दुव्वुरु आरएल रेड्डी, उपाध्यक्ष (कोलकाता क्षेत्र) एवं श्री राक ेश धमश्रा, लेखा सदस्य क े समक्ष Before SHRI DUVVURU RL REDDY, VICE PRESIDENT (KZ) & SHRI RAKESH MISHRA, ACCOUNTANT MEMBER I.T.A. No.: 1325/KOL/2023 Assessment Year: 2014-15 Ashok Kumar Maiti Vs. Asst. Commissioner, Cir- 1(1), Kolkata (Appellant) (Respondent) PAN: AEPPM4630M Appearances: Assessee represented by : Sukumar Mondal, AR. Department represented by : Amuldeep Kaur, Addl. CIT, Sr. DR. Date of concluding the hearing : February 3rd, 2025 Date of pronouncing the order : February 6th, 2025 ORDER 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 2014-15 dated 05.10.2023, which has been passed against the assessment order u/s 143(3) of the Act, dated 27.12.2016. Page | 2 I.T.A. No.: 1325/KOL/2023 Assessment Year: 2014-15 Ashok Kumar Maiti. 2. The assessee is in appeal before the Tribunal raising the following grounds of appeal: “1. From the facts and circumstances of the case it is obvious that the Assessing Officer and 1st Appellate Authority has not applied their mind in deciding that Gain or Loss on delivery based share trading is computed as capital gain or capital loss. The method of calculation of profit on delivery based share trading is totally incorrect, unjustified and bad in law. 2. From the facts and circumstances of the case it is obvious that the Assessing Officer and 1st Appellate Authority has not applied their mind in deciding that - Appellant being high salaried employee of Indian Oil Corporation Ltd., a reputed PSU, his investment out of his salary income in share trading assessed as undisclosed investment is totally unjustified and bad in law.” 3. Brief facts of the case are that return of income declaring total income of Rs. 30,67,240/- was filed electronically on 23.06.2014 and the case was selected for scrutiny through CASS. No compliance was made to the notices issued by the Ld. AO, which were sent on e-mail and also by Post and which were stated to have been duly served by the Postal authority. In para 2 of the assessment order, the Ld. AO has mentioned that he had no other option but to complete the assessment to the best of his judgment on the basis of documents available on records. During the year, the assessee had entered into share trading transactions through broker M/s Kotak Securities Ltd. with a combination of client code AVPQ3 and broker code 08081. Since the assessee did not furnish any details, information was collected from the broker by issuing notice u/s 133(6) of the Act and the details from the broker were examined and it was found by the Ld. AO that the assessee had done trading in shares (delivery based) as well as speculation transactions (intraday trading). An analysis of the data received from the broker revealed that while the assessee had made profit in share transactions (delivery based), he had suffered losses in speculation Page | 3 I.T.A. No.: 1325/KOL/2023 Assessment Year: 2014-15 Ashok Kumar Maiti. transactions. A show cause notice was accordingly issued to the assessee along with the copies of the data received from the broker based upon which the profit was calculated. No compliance was made to this notice either. Therefore, a sum of Rs. 35,75,102/- was added as the profit from shares and the speculation loss was not allowed. Further, the assessee had made payment of Rs. 8,27,500/- to the broker and since the source of payment was not disclosed, a sum of Rs. 8,27,500/- was also added and the assessment was completed at the total income of Rs. 74,59,842/-. Aggrieved with the assessment order, the assessee filed an appeal before the Ld. CIT(A) who, vide order dated 05.10.2023, dismissed the appeal of the assessee as in response to various notices issued, the assessee had uploaded only the bank statement and Form 16 and had failed to explain the complete transaction of shares made during the previous year and which was not disclosed in the return of income filed. The assessee also failed to explain the source for the purchase of shares with the details such as name of the stock, number of shares purchased, amount of investment, date of delivery and date of sale with sale value and none of the details including the working had been uploaded during the course of appellate proceedings. Further, from the bank statement enclosed the transactions of purchase and sale were not discernible. Accordingly, the additions made were confirmed and the appeal was treated as dismissed. Aggrieved with the appeal order, the assessee has filed this appeal before the Tribunal. 4. Before us, the Ld. AR appeared and argued the case stating that the assessment order was passed by the ACIT as the assessee did not appear. Our attention was drawn to page 3 of the paper book III and it was argued that the revised grounds of appeal filed before the CIT(A)- Page | 4 I.T.A. No.: 1325/KOL/2023 Assessment Year: 2014-15 Ashok Kumar Maiti. 22, Kolkata vide letter of the assessee were not considered by the Ld. CIT(A). However, these grounds were not raised before the Ld. AO. It was stated that the Ld. CIT(A) has not even seen the revised grounds of appeal which were filed by the assessee physically and were transferred online and since all the documents were not uploaded, the Ld. CIT(A) has not considered the issue. 5. We have heard the submission made. The assessee has raised several legal grounds challenging the jurisdiction of the Ld. AO and has also questioned the validity of the notice u/s 143(2) of the Act which is claimed to not have been issued nor served upon the assessee. The revised grounds of appeal claimed to be filed before the Ld. CIT(A) are as under: “On the facts and circumstances of the case it is evident that:- a) The Assessing Officer who has passed the assessment order u/s 143(3) of the IT Act 1961 dated 27.12.2016 appealed against, has no jurisdiction over the case. b) The order passed is without jurisdiction and bad in law and need to be declared void ab intio. (c) The Assessing Officer has not issued and served any notice u/s 143(2) of the IT Act 1961 which is mandatory for initiation of any assessment proceedings. In the absence of this the assessment proceeding is void ab- initio. The Supreme Court judgment in the case of Asstt. CIT v. Hotel Blue Moon [2010] 188 Taxman 113. Circular No. 717, dated August 14, 1995 issued by the CBDT clarifying the requirement of law in respect of service of notice under section 143(2) of the Act which is binding on the field officers. Expl note F A. d) The documents or the materials and the information on which such determination of gross Turn over has never been provided to the appellant allowing an opportunity to explain and submit his point of view in this regards as such natural justice has been denied and the assessment made as such is illegal and void ab initio and prayed to be quashed. Reliance is cited on different ruling of different Courts of law and ITATs. Page | 5 I.T.A. No.: 1325/KOL/2023 Assessment Year: 2014-15 Ashok Kumar Maiti. (e) The AO has prepared the P/L account without taking into consideration the opening stock and allowing brokerage and STT etc. which is void and determination of income thereof is also void. (f) The AO has not verified the payments made to Kotak Securities Ltd., with the Bank statement of the assessee. A/C No. 10522002080 State Bank of India, Haldia Refinery Branch, IFSC SBIN0007090 where all the payments have duly been displayed debited from the SB account so the determination of concealed income is illegal and need to be quashed. (e) Appellant crave leave for amend, rescind, add, withdraw grounds of appeal in course of hearing of the appeal proceeding.” 5.1 The Ld. Sr. DR supported the order of the Ld. CIT(A) as well as of the Ld. AO as the assessee had made no submission. We have considered the rival submissions and also gone through the facts of the case. Since the legal grounds, which go to the route of the matter, have not been considered and disposed of by the Ld. CIT(A), we deem it appropriate to remit the issue to the Ld. CIT(A) to decide the revised grounds of appeal placed before him. The assessee shall be at liberty to file all necessary evidences in this regard and the Ld. CIT(A) shall also grant an opportunity to the Ld. AO or call for the remand report as per Rule 46A of the Income Tax Rules, 1962. 6. In the result, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced in the open Court on 6th February, 2025. Sd/- Sd/- [Duvvuru RL Reddy] [Rakesh Mishra] Vice President (KZ) Accountant Member Dated: 06.02.2025 Bidhan (P.S.) Page | 6 I.T.A. No.: 1325/KOL/2023 Assessment Year: 2014-15 Ashok Kumar Maiti. Copy of the order forwarded to: 1. Ashok Kumar Maiti, Vill- Mangalduari, P.O. Ratulia, Purba Medinipur, West Bengal, 721139. 2. Assessee Trust. Commissioner, Cir-1(1), Kolkata. 3. CIT(A)-NFAC, Delhi. 4. CIT- 5. CIT(DR), Kolkata Benches, Kolkata. 6. Guard File. //True copy // By order Assistant Registrar ITAT, Kolkata Benches Kolkata "