M/S. POSITIVE VYAPAAR PVT. LTD.,KOLKATA V. I.T.O., WARD - 9(1), KOLKATA

ITA 2492/KOL/2024

AI Insights

The case involves M/s. Positive Vyapaar Pvt. Ltd., which appealed against the order of the Commissioner of Income Tax (Appeals) - NFAC, Delhi, concerning the assessment year 2012-13. The primary contention was the addition of Rs. 1,62,90,000 as unexplained cash credit under section 68 of the Income Tax Act, 1961. The assessee argued that they had provided sufficient evidence to substantiate the identity, capacity, and genuineness of the shareholders and the transactions involved. However, the Assessing Officer (AO) completed the assessment hastily without adequate opportunity for the assessee to respond, leading to an appeal that was dismissed in limine by the CIT(A) due to non-prosecution. The Tribunal found that the CIT(A) had not adjudicated the appeal on its merits and thus remitted the matter back for a comprehensive decision.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 707004 (ITAT-KOLKATA)
• Duration Of Justice: 6 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-07-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2012-2013
• Appeal Filed On: 09-12-2024
• Other Referred Cases: Ajji Basha Vs. CIT (2019) 111 taxmann.com 348 (Madras), Commissioner of Income-tax (Central) Nagpur v. Premkumar Arjun das Luthra (HUF) [2016] 69 taxmann.com 407 (Bombay)
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Set aside; Opportunity of being heard; Unexplained cash credit; Source of fund
• Section: 143(3); 68

Judgement Text

"आयकर अपीलीय अधिकरण कोलकाता 'सी' पीठ, कोलकाता में IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA ‘C’ BENCH, KOLKATA श्री जॉजज माथान, न्याधयक सदस्य एवं श्री राक ेश धमश्रा, लेखा सदस्य क े समक्ष Before SH. GEORGE MATHAN, JUDICIAL MEMBER & SH. RAKESH MISHRA, ACCOUNTANT MEMBER I.T.A. No.: 2492/KOL/2024 Assessment Year: 2012-13 M/s. Positive Vyapaar Pvt. Ltd. Vs. I.T.O., Ward-9(1), Kolkata (Appellant) (Respondent) PAN: AADCP6325M Appearances: Assessee represented by : Abhishek Bansal, AR. Department represented by : Bonnine Debbarma, Addl. CIT, Sr. DR. Date of concluding the hearing : 19-May-2025 Date of pronouncing the order : 07-July-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 2012-13 dated 03.05.2024, which has been passed against the order u/s 143(3) of the Act, dated 12.03.2015. Page | 2 I.T.A. No.: 2492/KOL/2024 Assessment Year: 2012-13 M/s. Positive Vyapaar Pvt. Ltd. 2. The assessee is in appeal before the Tribunal raising the following grounds of appeal: “1. For that the assessment order passed by the Ld. AO is bad in law as well as on facts. 2. For that the Ld. Assessing Officer erred in assessing the share capital and premium aggregating Rs. 1,62,50,000/- as unexplained cash credit whereas the assessee duly discharged the onus lying upon it to establish the identity and capacity of the shareholders and genuineness of the transactions by submitting the name, address, PAN of the share applicants, details of amount received towards share application money and also the copies of return of income, audited financial statements, bank statements and confirmation letters from each of the shareholders explaining source of fund. 3. For that Ld. AO completed the assessment in haste without providing sufficient opportunity of being heard whereas the Show Cause Notice was served upon the appellant on 12.03.2015 wherein the appellant was required to comply within 3 days of receipt thereof. However, the Ld. AO without waiting for compliance by the assessee passed the Assessment Order on 12.03.2015 itself. 4. For that the Ld. AO made addition merely based upon surmises and conjectures by merely brushing aside the evidences adduced by the assessee without there being any defect in the evidences adduced by the assessee and without any adverse material on record. 5. For that under the facts and circumstances of the case, the addition made by the Ld. AO is liable to be deleted. 6. For that the Ld. CIT(A) erred in dismissing the appeal filed by the assessee without any communication through post. 7. For that even otherwise, the Ld. CIT(A) erred in dismissing the appeal without dealing with the grounds taken by the assessee in appeal. 8. For that the assessee craves leave to add, alter or withdraw any ground/s of appeal before or at the time hearing.” 3. Brief facts of the case are that the assessee had filed the return of income showing total loss of ₹ 7,072/- and the assessment was made at the total income of ₹ 1,62,91,100/- after making AN addition u/s 68 of the Act at ₹ 1,62,90,000/-. Aggrieved with the assessment order, the assessee preferred an appeal before the Ld. CIT(A), who vide order dated Page | 3 I.T.A. No.: 2492/KOL/2024 Assessment Year: 2012-13 M/s. Positive Vyapaar Pvt. Ltd. 03.05.2024 dismissed the appeal. Aggrieved with the order of the Ld. CIT(A), the assessee has filed the appeal before the Tribunal. 4. Rival submissions were heard and the record and the submissions made have been examined. The Ld. CIT(A) issued several notices but the assessee failed to comply with the same and the appeal was dismissed in limine on account of non-prosecution. It was submitted by the Ld. AR that the notices were sent on the old email ID and at the time of filing the appeal, the new email ID was not mentioned in Form No. 35. Even before the Ld. AO, adequate opportunity to file the required details was not provided as the assessee was required to comply with the summons within 3 days only. He requested that the matter may be set aside to the Ld. CIT(A) so that the assessee could make proper submission as the appeal was dismissed in limine on account of non-prosecution without discussing the merits of the case. 5. On perusal of the appellate order it is noticed that while the Ld. CIT(A) has discussed non-compliance on the part of the assessee as the notices sent by e-mail were not complied with but he has not adjudicated the appeal on merit. In this respect, it is relevant to examine the provisions of section 250(6) of the Act which are reproduced as under: “250(6)- The order of the Commissioner (Appeals) disposing of the appeal shall be in writing and shall state the points for determination, the decision thereon and the reason for the decision.” 6. Thus, section 250(6) of the Act casts a duty on the Ld. CIT(A) to pass an order in appeal which should state the points for determination and the decision as well as the reason for arriving at such decision. In the present case before us, the Ld. CIT(A) has not mentioned the reasons after examining the records while disposing of the appeal. The Ld. CIT(A) Page | 4 I.T.A. No.: 2492/KOL/2024 Assessment Year: 2012-13 M/s. Positive Vyapaar Pvt. Ltd. has neither adjudicated upon various grounds of appeal nor has passed a reasoned order for arriving at the decision, as is required u/s 250(6) of the Act. We further note that in Ajji Basha Vs. CIT (2019) 111 taxmann.com 348 (Madras) it has been held that a speaking order on merits with reasons and findings is to be passed by Commissioner (Appeals) on basis of ground raised in assessee's appeal; he cannot dispose the assessee's appeal merely by holding that Assessing Officer's order is a self-speaking order which requires no interference. The relevant extract from the order is as under: “6. ... The first respondent is the appellate authority. Needless to state that the Appellate Authority is also a fact finding authority and therefore, he has to consider the order of assessment on the grounds raised in the appeal and thereafter, pass a speaking order on merits and in accordance with law by giving his own reasons and findings as to whether the order of assessment can be sustained or not. In other words, the order passed by the Appellate Authority should explicitly exhibit his application of mind to the facts and circumstances and the objections raised in the grounds of appeal, also by expressing his reasons and findings in support of his conclusion. 7. In this case, the Appellate Authority, after extracting the order of the Assessing Officer in full, has not given any other reason or finding to dismiss the appeal except by stating that he is of the considered view that the Assessing Officer's order is a self speaking order and does not call for any interference. In my considered view, such single line finding of the Appellate Authority, cannot be sustained as a proper exercise of the Appellate Authority, while disposing the appeal. Therefore, it is apparent that the order impugned in this writ petition is an outcome of total non-application of mind. Consequently, the impugned order cannot be sustained. It is further contended that before passing the order, the petitioner was not heard.” 6.1. It has also been held in the case of Commissioner of Income-tax (Central) Nagpur v. Premkumar Arjun das Luthra (HUF) [2016] 69 taxmann.com 407 (Bombay) that the law does not empower the CIT(A) to dismiss the appeal for non-prosecution as is evident from the provisions of the Act. The relevant extract is as under: 7. An appeal is filed with the CIT(A) from appealable orders listed in Section 246A of the Act. We find that the procedure in appeal before the CIT(A) and Page | 5 I.T.A. No.: 2492/KOL/2024 Assessment Year: 2012-13 M/s. Positive Vyapaar Pvt. Ltd. the powers of the CIT(A) are governed by Sections 250 and 251 of the Act respectively. The relevant provisions for consideration are as under:— Procedure in appeal 250 (4) The Commissioner (Appeals) may, before disposing of any appeal, make such further inquiry as he thinks fit, or may direct the Assessing Officer to make further inquiry and report the result of the same to the Commissioner (Appeals). (6) The order of the Commissioner (Appeals) disposing of the appeal shall be in writing and shall state the points for determination, the decision thereon and the reason for the decision. Powers of the Commissioner (Appeals) \"Section 251(1) In disposing of an appeal, the Commissioner (Appeals) shall have the following powers — (a) in an appeal against an order of assessment, he may confirm, reduce, enhance or annul the assessment. … (b) in an appeal against an order imposing a penalty, he may confirm or cancel such order or vary it so as either to enhance or to reduce the penalty.\" (2) The Commissioner (Appeals) shall not enhance an assessment or a penalty or reduce the amount of refund unless the appellant has had a reasonable opportunity of showing cause against such enhancement or reduction. Explanation. - In disposing of an appeal, the Commissioner (Appeals) may consider and decide any matter arising out of the proceedings in which the order appealed against was passed, notwithstanding that such matter was not raised before the Commissioner (Appeals) by the appellant.' 8. From the aforesaid provisions, it is very clear once an appeal is preferred before the CIT(A), then in disposing of the appeal, he is obliged to make such further inquiry that he thinks fit or direct the Assessing Officer to make further inquiry and report the result of the same to him as found in Section 250(4) of the Act. Further Section 250(6) of the Act obliges the CIT(A) to dispose of an appeal in writing after stating the points for determination and then render a decision on each of the points which arise for consideration with reasons in support. Section 251(1)(a) and (b) of the Act provide that while disposing of appeal the CIT(A) would have the power to confirm, reduce, enhance or annul an assessment and/or penalty. Besides Explanation to sub-section (2) of Section 251 of the Act also makes it clear that while considering the appeal, the CIT(A) would be entitled to consider and decide any issue arising in the proceedings before him in appeal filed for its consideration, even if the issue is not raised by the appellant in its appeal before the CIT(A). Thus once an assessee files an appeal under Section 246A of the Act, it is not open to him as of right to withdraw or not press the appeal. In fact the CIT(A) is obliged to dispose of the appeal on Page | 6 I.T.A. No.: 2492/KOL/2024 Assessment Year: 2012-13 M/s. Positive Vyapaar Pvt. Ltd. merits. In fact with effect from 1st June, 2001 the power of the CIT(A) to set aside the order of the Assessing Officer and restore it to the Assessing Officer for passing a fresh order stands withdrawn. Therefore, it would be noticed that the powers of the CIT(A) is co-terminus with that of the Assessing Officer i.e. he can do all that Assessing Officer could do. Therefore just as it is not open to the Assessing Officer to not complete the assessment by allowing the assessee to withdraw its return of income, it is not open to the assessee in appeal to withdraw and/or the CIT(A) to dismiss the appeal on account of non-prosecution of the appeal by the assessee. This is amply clear from the Section 251(1)(a) and (b) and Explanation to Section 251 (2) of the Act which requires the CIT(A) to apply his mind to all the issues which arise from the impugned order before him whether or not the same has been raised by the appellant before him. Accordingly, the law does not empower the CIT(A) to dismiss the appeal for non-prosecution as is evident from the provisions of the Act.” 7. After examining the facts of the case, we deem it appropriate to set aside the order of the Ld. CIT(A) and remit the matter back to the Ld. CIT(A) for disposal of the grounds taken by the assessee on merit by passing a speaking order. 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 the grounds of appeal and shall not seek unnecessary adjournments and rule 46A of the I.T. Rules, 1962 shall also be followed, if required. Accordingly, the grounds taken by the assessee in his appeal are allowed for statistical purposes. 8. In the result, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced in the open Court on 7th July, 2025. Sd/- Sd/- [George Mathan] [Rakesh Mishra] Judicial Member Accountant Member Dated: 07.07.2025 Bidhan (P.S.) Page | 7 I.T.A. No.: 2492/KOL/2024 Assessment Year: 2012-13 M/s. Positive Vyapaar Pvt. Ltd. Copy of the order forwarded to: 1. M/s. Positive Vyapaar Pvt. Ltd., Room No. 2B, 2nd Floor, 58, Metcalfe Street, Kolkata, West Bengal, 700013. 2. I.T.O., Ward-9(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 "