BRIJLAXMI PAPER PRODUCTS PRIVATE LIMITED,KOLKATA V. DCIT, CIRCLE 5(1), , KOLKATA

ITA 827/KOL/2025

AI Insights

The case involves Brijlaxmi Paper Products Pvt. Limited, which appealed against the order of the Commissioner of Income Tax (Appeals) at the National Faceless Appeal Centre, Delhi. The appeal was related to the assessment year 2018-2019, where the assessee declared a nil income but was subjected to scrutiny and subsequent additions to its income by the Assessing Officer, primarily due to unexplained cash credits from unsecured loans. The CIT(Appeals) dismissed the appeal ex-parte, leading the assessee to approach the ITAT, which decided to remand the case back to the CIT(Appeals) for a detailed examination on merits.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 772261 (ITAT-KOLKATA)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-08-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Assessment Year: 2018-2019
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Set aside; Unexplained cash credit; Principle of natural justice; FORM 26AS
• Section: 142(1); 133(6)

Judgement Text

" ITA No. 827/KOL/2025 (A.Y. 2018-2019) Brijlaxmi Paper Products Pvt. Limited 1 IN THE INCOME TAX APPELLATE TRIBUNAL, ‘A’ BENCH, KOLKATA Before Shri Duvvuru RL Reddy, Vice-President (KZ) & Shri Rajesh Kumar, Accountant Member I.T.A. No. 827/KOL/2025 Assessment Year: 2018-2019 Brijlaxmi Paper Products Pvt. Limited,……..Appellant 686, Shrachi Tower, Anandapur EM Byepass, Kolkata-700107 [PAN:AAFCB2003G] -Vs.- Deputy Commissioner of Income Tax,….....Respondent Circle-5(1), Kolkata, Aayakar Bhawan, P-7, Chowringhee Square, Kolkata-700069 Appearances by: Shri Sanjay Chatterjee, CA, appeared on behalf of the assessee Shri Dheeraj, Addl. CIT, Sr. D.R., appeared on behalf of the Revenue Date of concluding the hearing: August 05, 2025 Date of pronouncing the order: August 25, 2025 O R D E R Per Duvvuru RL Reddy, Vice-President (KZ):- The present appeal is directed at the instance of assessee against the order of ld. Commissioner of Income Tax (Appeals), Printed from counselvise.com ITA No. 827/KOL/2025 (A.Y. 2018-2019) Brijlaxmi Paper Products Pvt. Limited 2 National Faceless Appeal Centre (NFAC), Delhi dated 18th February, 2025 passed for Assessment Year 2018-19. 2. Brief facts of the case are that the appellant-assessee is a Private Limited Company, which filed its return of income electronically on 29.10.2018 for the AY 2018-19 declaring income of NIL. Thereafter the return of income was selected for scrutiny under CASS. Accordingly statutory notice under section 143(2) of the Income Tax Act was issued to the assessee on 23.09.2019 and duly served upon the assessee electronically. Subsequently several statutory notices under section 142(1) of the Act along with query letters were issued to the assessee for furnishing the required information/documents/explanation with regard to ongoing assessment proceeding for the year under consideration. In reply, the assessee-Company furnished copy of IT Acknowledgment for the assessment year 2018-19, computation of total income, copy of audited balance sheet for AY 2018-19, copy of tax audit report for AY 2018-19 and copy of Form 26AS. The assessee-company claimed losses from business or profession to the extent of Rs.6,93,53,685/- and it had received significantly unsecured loans. As per ITR as well as audit report, it was found that the closing balance of the unsecured loans as on 31.03.2018 was Rs.43,62,65,558/- (Rs.35,22,90,044/- as loans from related parties plus Rs.8,39,75,515/- as loans from others). Notices under section 133(6) of the Act were issued to the unsecured loan providers for furnishing the requisite information/documents. However, in response to the said notices, some of the lenders furnished the details of closing balance of unsecured loan available Printed from counselvise.com ITA No. 827/KOL/2025 (A.Y. 2018-2019) Brijlaxmi Paper Products Pvt. Limited 3 as on 31.03.2018 in their books along with supporting documentary evidences, viz. copy of acknowledgment of ITR, bank account statement, ledger, etc. while some of the lenders even after getting reminder, have not complied with the notice. Thereafter the assessee was requested vide notice under section 142(1) to furnish its submission in respect of the discrepancies in the unsecured loan balance as on 31.03.2018 as per claim of assessee and as per the information received from the unsecured loans lenders. The ld. Assessing Officer treated all these sum as unexplained cash credit and added to the income of the assessee. Accordingly, the excess interest payment claimed to the tune of Rs.1,51,233/- (Rs.3,94,521/- minus Rs.2,43,288/-) is disallowed and added back to the income of the assessee. Finally, ld. Assessing Officer determined the total taxable income of assessee at Rs.3,15,61,942/- and carry forward loss to the extent of Rs.6,92,02,452/-. On being aggrieved, the assessee preferred an appeal before the ld. CIT(Appeals). 3. The ld. CIT(Appeals) dismissed the appeal of the assessee ex- parte by mentioning in the appellate order that inspite of several opportunities given, the assessee had no evidence to substantiate the grounds taken and not even has argued with any supporting documents in favour of its grounds of appeal. The ld. CIT(Appeals) also observed that the ld. Assessing Officer made the additions after considering the facts of the case and there is no material before him to deviate from the order of the ld. Assessing Officer. Printed from counselvise.com ITA No. 827/KOL/2025 (A.Y. 2018-2019) Brijlaxmi Paper Products Pvt. Limited 4 4. On being aggrieved, the assessee preferred an appeal before the ITAT. 5. At the time of hearing, ld. Counsel for the assessee contended that the ld. CIT(Appeals) dismissed the appeal of the assessee ex- parte without going into the merit of the case. The ld. CIT(Appeals) was of the view that in absence of any submission inspite of given so many opportunities to the assessee to substantiate its claim in support of its contention as well as in absence of any material before him to deviate from the order of ld. Assessing Officer, he dismissed the appeal ex-parte. The ld. Counsel prayed before the Bench to set aside both the orders of revenue authorities and remit the matter back to the file of ld. CIT(Appeals) to decide the issue afresh. 6. At the outset, ld. Departmental Representative submitted that sufficient opportunity was being provided to the assessee but the assessee failed to appear before the ld. CIT(Appeals). Therefore, the ld. CIT(Appeals) has no other option except dismissing the appeal and he pleaded to uphold the order passed by the ld. CIT(Appeals). 7. We have heard both the sides and perused the material available on record. We find that the ld. CIT(Appeals) dismissed the appeal of the assessee ex-parte without going into the merit of the case. By considering the totality of the facts and circumstances of the case, and in order to ensure the principle of natural justice, we are of the view that it is a fit case to provide one more opportunity Printed from counselvise.com ITA No. 827/KOL/2025 (A.Y. 2018-2019) Brijlaxmi Paper Products Pvt. Limited 5 to the assessee. Therefore, we remit the matter back to the file of ld. CIT(Appeals) with a direction to dispose of the appeal without any inference on the observations of earlier order passed by him and to decide it afresh on merit. At the same breath, we also hereby caution the assessee to promptly co-operate with the proceedings before the Ld. CIT(Appeals) failing which the Ld. CIT(Appeals) shall be at liberty to pass appropriate order in accordance with law and merits of the case, based on the materials available on the record. Thus, the grounds raised by the assessee are allowed for statistical purposes. 8. In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open Court on 25/08/2025. Sd/- Sd/- (Rajesh Kumar) (Duvvuru RL Reddy) Accountant Member Vice-President Kolkata, the 25th day of August, 2025 Copies to :(1) Brijlaxmi Paper Products Pvt. Limited, 686, Shrachi Tower, Anandapur EM Byepass, Kolkata-700107 (2) Deputy Commissioner of Income Tax, Circle-5(1), Kolkata, Aayakar Bhawan, P-7, Chowringhee Square, Kolkata-700069 (3) CIT(Appeals), NFAC, Delhi; Printed from counselvise.com ITA No. 827/KOL/2025 (A.Y. 2018-2019) Brijlaxmi Paper Products Pvt. Limited 6 (4) CIT - ; (5) The Departmental Representative; (6) Guard File TRUE COPY By order Assistant Registrar, Income Tax Appellate Tribunal, Kolkata Benches, Kolkata Laha/Sr. P.S. Printed from counselvise.com "