ELECTROMECHANICAL TRADING PVT. LTD.,FORTUNA TOWER V. ITO 5(3), AAYAKAR BHAWAN

ITA 1066/KOL/2025

AI Insights

The case involves Electromechanical Trading Pvt. Ltd., which appealed against the order of the National Faceless Appeal Centre (NFAC) under section 250 of the Income-tax Act, 1961, concerning the assessment year 2012-13. The primary issue arose from the assessee's failure to comply with statutory requirements during scrutiny, leading to the addition of share capital and premium as unexplained cash credit under Section 68 of the Act. The assessee's appeal to the CIT(A) was dismissed ex parte due to non-appearance and non-submission of required documents. The Tribunal, considering the circumstances and the substantial amount involved, decided to give the assessee another opportunity to present its case before the CIT(A).

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 712061 (ITAT-KOLKATA)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-07-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Assessment Year: 2012-2013
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Set aside; Opportunity of being heard; Reasonable cause
• Section: 142(1); 68; 131; 2

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA ‘A” BENCH Before Shri Sonjoy Sarma, Judicial Member and Shri Rakesh Mishra, Accountant Member I.T.A. No.1066/Kol/2025 Assessment Year: 2012-13 Electromechanical Trading Pvt. Ltd. …………………....Appellant 23A, NS Road, 11th Floor, Room No.53, Kol-1. [PAN: ADCPA8526G] vs. ITO, Ward-5(3), Kolkata……..……………..………………….…..... Respondent Appearances by: Shri Vijay Kr. Singhal, FCA appeared on behalf of the appellant. Shri Raja Sengupta, CIT-DR, appeared on behalf of the Respondent. Date of concluding the hearing : July 23, 2025 Date of pronouncing the order : July 23, 2025 आदेश / ORDER Per Sonjoy Sarma, Judicial Member: This appeal by the assessee is directed against the order dated 27.02.2024 passed by the NFAC under section 250 of the Income-tax Act, 1961. 2. At the outset, it is noted that there is a delay of 358 days in filing the present appeal before the Tribunal. The assessee has filed a condonation petition explaining the reasons or such delay. After considering the submissions and materials on record, we are satisfied that there was reasonable cause for the delay in filing the appeal. Accordingly, the said delay is condoned, and the appeal is admitted for adjudication. 3. Brief facts of the case are that the assessee filed its return of income for the assessment year 2012-13 by declaring a total income of Rs.50,050/- which was processed under Section 143(1) of the Act. Subsequently, the case was selected for Scrutiny and notice under Printed from counselvise.com I.T.A. No.1066/Kol/2025 Electromechanical Trading Pvt. Ltd 2 Sections 143(2) and 142(1) were issued, calling for details and documents in support of the return filed. Despite repeated notices, the assessee did not comply with the statutory requirements. Even summons under Section 131 issued to the directors of the assessee company went unanswered. It was noted by the Assessing Officer that during the year under consideration, the assessee had issued 10,40,000 equity shares of Rs.10 each at a premium, aggregating to Rs.101,00,00,000 (1,04,00,000 crore face value and Rs.99,96,00,000/- premium). The assessee failed to substantiate the identity, creditworthiness of the shareholders and the genuineness of the transactions, Accordingly, the entire share capital and premium amount was treated as unexplained ash credit and added under Section 68 of the Act. Since there was total non-compliance, assessment was completed under Section 144. 4. Aggrieved, the assessee preferred an appeal before the ld. CIT(A), but once again failed to appear or file any submissions, The ld. CIT(A), having no alternative, dismissed the appeal ex parte by upholding the order of the Assessing Officer. 5. The assessee is now in appeal before this Tribunal and has contended that it could not represent the case properly before the ld. CIT(A) due to reasons beyond its control. It has prayed for one more opportunity to present its case on merits, asserting that it is now ready to comply with any direction and submit relevant documents. 6. On the other hand, the learned DR objected to such prayer, stating that the assessee had been a habitual defaulter and the lower authorities rightly concluded the matter based on material available. 7. We have heard the rival submissions and perused the material available on record. It is evident that both the lower authorities have passed their respective orders ex parte in absence of the assessee. Printed from counselvise.com I.T.A. No.1066/Kol/2025 Electromechanical Trading Pvt. Ltd 3 However, in the interest of substantial justice and fair play, we are of the view that the assessee deserves one final opportunity to present its case before the ld. CIT(A), particularly in light of the large quantum of addition and the serious consequences that follow. We accordingly set aside the order of the CIT(A) and restore the matter to the file of the ld. CT(A) with a direction to provide a reasonable opportunity of being heard to the assessee and to adjudicate the appeal afresh after considering the documents and submissions that may be filed in support of its case. The assessee is also directed to appear before the Id. CIT(A) promptly upon service of notice, and not to seek unnecessary adjournments. Failure to comply may result in adverse inference 8. In the result, the appeal of the assessee is allowed for statistical purposes. Kolkata, the 23rd July, 2025. Sd/- Sd/- [Rakesh Mishra] [Sonjoy Sarma] लेखा सदèय/Accountant Member ÛयाǓयक सदèय/Judicial Member Dated: 23.07.2025. Copy of the order forwarded to: 1. Appellant - 2. Respondent - 3.CIT (A)- 4. CIT- , 5. CIT(DR), //True copy// By order Assistant Registrar, Kolkata Benches Printed from counselvise.com "