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

ITA 854/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 initially dismissed ex-parte due to the assessee's failure to provide satisfactory documentary evidence to support its claims, despite multiple opportunities. The primary issues revolved around the treatment of unsecured loans as unexplained cash credits and the disallowance of excess interest payments. The ITAT found that the CIT(Appeals) had not adequately considered the merits of the case and thus remanded the matter for a fresh evaluation.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 772263 (ITAT-KOLKATA)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-08-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Assessment Year: 2018-2019
• Other Referred Cases: Dr. P. Nalla Tampy -vs.- Shankar, New India Assurance -vs.- Srinivasan, CIT Vs. Multiplan India (P) Ltd.
• 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. 854/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. 854/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. 854/KOL/2025 (A.Y. 2018-2019) Brijlaxmi Paper Products Pvt. Limited 2 National Faceless Appeal Centre (NFAC), Delhi dated 28th 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. 854/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 as the assessee failed to produce satisfactory documentary evidences in support of its claim inspite of sufficient opportunities given. 4. On being aggrieved, the assessee preferred an appeal before the ITAT. 5. It was the submission of the ld. Counsel for the assessee that the ld. CIT(Appeals) simply upholding the order of ld. Assessing Printed from counselvise.com ITA No. 854/KOL/2025 (A.Y. 2018-2019) Brijlaxmi Paper Products Pvt. Limited 4 Officer and without going into the merit of the case dismissed the appeal. Ld. Counsel pleaded to set aside both the orders of revenue authorities. 6. It was the submission of the ld. Departmental Representative that sufficient opportunity was being provided to the assessee. 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. The ld. CIT(Appeals) dismissed the appeal of the assessee saying that the appellant is not interested in filing any details during the appellate proceedings and availed the opportunity under the Principles of Natural Justice. No further opportunity be provided as the appellant has already been granted several opportunities which shows that the appellant is a habitual non- compliant and had no regards for the statutory proceedings. The ld. CIT(Appeals) also relied on the judgment of the Hon’ble Supreme Court in the case of Dr. P. Nalla Tampy -vs.- Shankar (1984 (Supp) SCC 63 and the case of New India Assurance -vs.- Srinivasan (2000) 3 SCC 242 as well as Hon’ble Punjab & Haryana High Court in the case of Nirmal Singh & Others (Cr No. 3791 of 2013 (O & M) dated 01.05.2014. Likewise, in the case of CIT Vs. Multiplan India (P) Ltd. (38 ITD 320) (Del) similar view had been taken. The ld. CIT(Appeals), therefore, convinced that the assessee was not interested in prosecuting the appeal and, therefore, dismissed the appeal of the assessee as un-admitted. Printed from counselvise.com ITA No. 854/KOL/2025 (A.Y. 2018-2019) Brijlaxmi Paper Products Pvt. Limited 5 8. Now the question before us is imposition of penalty for furnishing inaccurate particulars of income was justified or not? No penalty can be levied for furnishing of inaccurate particulars of income or concealing particulars of income, which ld. AO has held in his penalty order that penalty is being levied under both the limbs, which itself shows his satisfaction is vague. By considering the totality of the facts and circumstances 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 to the assessee to decide the issue afresh on merit. 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 in the appeal are allowed for statistical purposes. 9. 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 Printed from counselvise.com ITA No. 854/KOL/2025 (A.Y. 2018-2019) Brijlaxmi Paper Products Pvt. Limited 6 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; (4) CIT - ; (5) The Departmen tal 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 "