MACRO DEALERS PVT. LTD.,KOLKATA V. P.C.I.T.(CENTRAL) - 1, , KOLKATA

ITA 2484/KOL/2024

AI Insights

The case involves Macro Dealers Pvt. Ltd., which appealed against the order of the Principal Commissioner of Income Tax (Central)-1, Kolkata, passed under section 263 of the Income Tax Act, 1961. The original assessment for AY 2017-18, conducted under sections 153A/143(3), was challenged due to alleged procedural errors and substantive issues regarding the assessment of income from sales deemed to be bogus transactions. The Tribunal found that the assessee was not given a proper opportunity to present its case, leading to the decision to set aside the previous order and remit the matter for a fresh assessment.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 711413 (ITAT-KOLKATA)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-07-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Assessment Year: 2017-2018
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Set aside; Opportunity of being heard; Principle of natural justice; Search and seizure; Assessment record; Revision of order; Bogus
• Section: 143(3); 263; 132; 153A; 68; 133A

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.: 2484/KOL/2024 Assessment Year: 2017-18 Macro Dealers Pvt. Ltd. Vs. PCIT (Central)-1, Kolkata (Appellant) (Respondent) PAN: AAFCM5256N Appearances: Assessee represented by : Miraj D. Shah, AR. Department represented by : Praveen Kishore, CIT DR. Date of concluding the hearing : 09-July-2025 Date of pronouncing the order : 24-July-2025 ORDER PER RAKESH MISHRA, ACCOUNTANT MEMBER: This appeal filed by the assessee is against the order of the Pr. Commissioner of Income Tax (Central)-1, Kolkata [hereinafter referred to Ld. 'Pr. CIT'] passed u/s 263 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) for AY 2017-18 dated 11.03.2024, which has Printed from counselvise.com Page | 2 I.T.A. No.: 2484/KOL/2024 Assessment Year: 2017-18 Macro Dealers Pvt. Ltd. been passed against the assessment order u/s 153A of the Act, dated 22.09.2021. 2. The assessee has raised the following grounds of appeal before the Tribunal: “1. That the Learned Principal Commissioner of Income Tax erred in passing an order under Section 263 of the Income Tax Act, 1961, without serving notice of hearing to the assessee. Consequently, the order violated the principles of natural justice and ought to be set aside. 2. That the Learned Principal Commissioner of Income Tax erred in directing that the assessment order dated 22/09/2021, passed under Sections 153A/143(3) of the Income Tax Act, 1961, was erroneous and prejudicial to the interest of revenue. The said assessment order could not have been revised under Section 263 of the Income Tax Act, 1961. 3. That the Learned Principal Commissioner of Income Tax erred in holding the assessment order dated 22/09/2021, passed under Sections 153A/143(3) of the Income Tax Act, 1961, as erroneous and prejudicial to the interest of revenue, despite the fact that it pertained to an unabated assessment. The additions highlighted in the order under Section 263 of the Income Tax Act, 1961, were made without reliance on any incriminating material, and thus the assessment order should not have been disturbed. 4. That the Learned Principal Commissioner of Income Tax erred in holding the assessment order as erroneous and prejudicial to the interest of revenue. The conditions necessary for invoking the provisions of Section 263 of the Income Tax Act were not satisfied in this case, and therefore, the order under Section 263 of the Act should be quashed. 5. That the order passed by the Learned Principal Commissioner of Income Tax under Section 263 of the Income Tax Act is bad in law, lacks merit, is invalid, and thus liable to be quashed. 6. That the Learned Principal Commissioner of Income Tax neither conducted any independent enquiry nor provided a decision on the merits of the case. Therefore, the assessment order could not be set aside by labeling it as erroneous and prejudicial to the interest of revenue. 7. That the appellant reserves the right to file additional grounds and/or modify or amend the existing grounds at any stage before or during the hearing of the appeal.” Printed from counselvise.com Page | 3 I.T.A. No.: 2484/KOL/2024 Assessment Year: 2017-18 Macro Dealers Pvt. Ltd. 3. Brief facts of the case as mentioned in the order u/s 263 of the Act are that Macro Dealers Private Limited (here-in-after referred to as assessee) filed its return of income for the A.Y. 2017-18 electronically on 30.10.2017 disclosing total income of Rs. 2,600/-. In pursuance of a search and seizure operation conducted on 04.02.2020 u/s 132 of the Act at the office premises of the assessee and a survey operation u/s 133A of the Act on 04/02/2020, the assessment proceedings that had been initiated, were concluded vide the order passed u/s 153A r.w.s. 143(3) of the Act on 22.09.2021 determining the total income at Rs.2,600/-. On examination and scrutiny of assessment record for A.Y. 2016-17 in the case of the assessee, the Ld. Pr. CIT noted that the assessee had received a sum of Rs.3,57,79,000/- from various Private Companies on account of sale of stock-in-trade. In the assessment order passed u/s. 153A of the Act dated 27.09.2021 for the A.Y. 2016-17, it had been held that all the private limited companies to whom such stock in trade was sold were nothing but paper entities and the transactions were merely bogus/sham entries in a premeditated manner to route the unaccounted fund of Bagaria group as sales consideration through several layers with the help of exit providing companies controlled and managed by Narendra Kumar Jain as admitted by him in the statement u/s, 132(4) of the Income Tax Act. 1961, dated 04.02.2020. In the said assessment order, the buyers of the stock in trade from whom the amount received had been proved to be not genuine in as much as having no creditworthiness and the transactions were proved to be bogus by a detailed analysis. Accordingly, total amount of Rs.3,57,79,000/- received in the guise of sale of stock in trade was charged to income tax by invoking the statutory provisions of section 68 r.w.s. 115BBE of the Act. Similarly, adopting the same procedure, Printed from counselvise.com Page | 4 I.T.A. No.: 2484/KOL/2024 Assessment Year: 2017-18 Macro Dealers Pvt. Ltd. sale of stock in trade amounting to Rs.2,60,00,000/- and Rs.3,00,000/- were charged to income tax by invoking the statutory provisions of sec. 68 r.w.s. 115BBE of the Act in the A.Y. 2014-15 and A.Y. 2015-16 respectively. In the assessment year under consideration i.e. A.Y. 2017- 18, the assessee had received total sum of Rs.3,12,07,100/- from various private limited companies on account of sale of stock-in-trade as per the details mentioned in para 6 of the order u/s 263 of the Act. 4. The Ld. Pr. CIT also highlighted from the details of sale of stock furnished by the assessee in the course of assessment proceedings that many buyers viz. Mainak Vanijya Pvt. Ltd., Amanat Mercantile Pvt. Ltd., Hooghly Vinimay Pvt. Ltd., Blow Vinimay Pvt. Ltd., Sketch Agency Pvt Ltd., Improve Vincome Pvt. Ltd. and Star Merchants Pvt. Ltd were already proved to be not genuine in as much as having no creditworthiness and the transactions were proved to be bogus as held in the assessment orders passed u/s 153A of the Act in the AYs 2014- 15, 2015-16 & 2016-17 and the sums were charged to income tax by invoking the statutory provisions of section 68 r.w.s. 115BBE of the Act. Hence, the total amount of Rs.3,12,07,100/- received during the F.Y. 2016-17 relevant to A.Y. 2017-18 in the guise of sale of stock in trade was required to be charged to income tax by invoking the statutory provisions of sec. 68 r.w.s. 115BBE of the Income Tax Act, 1961 as it was done in the previous A.Ys. However, the Ld. AO failed to make adequate enquiries or verification and completed the assessment proceedings without making the addition of Rs.3,12,07,100/-, which has resulted in erroneous assessment of income and this was held to be prejudicial to the interest of Revenue. The Ld. AO, however, at the Printed from counselvise.com Page | 5 I.T.A. No.: 2484/KOL/2024 Assessment Year: 2017-18 Macro Dealers Pvt. Ltd. time of making scrutiny assessment in the instant case, had failed to take cognizance of the fact emanating from assessment orders passed in the case of Macro Dealers Private Limited for the A. Yrs. 2014-15, 2015-16 & 2016-17 and also failed to verify this issue satisfactorily or to make necessary inquiries during the course of the assessment proceedings. The Ld. AO was required to examine all the relevant issues, which have bearing on the determination of the true income of the assessee. However, the Ld. AO passed the assessment order without application of mind in as much as inadequate inquiries or no verifications were made which should have been made and also in view of the findings of the Ld. AO in the instant case in the preceding years. 5. Accordingly, the assessment order completed under section 153A of the Act vide order dated 22.09.2021 was considered to be erroneous in so far as it was prejudicial to the interest of revenue in terms of clause (a) of Explanation-2 to section 263 of the Act and proceedings u/s 263 of the Act were initiated by issuing show cause notice date 20.02.2024 and the assessee was provided an opportunity to represent the case either personally or through an Authorized Representative with all supporting materials along with written submission if any on 27.02.2024. No one appeared on that date and no submission was made by the company. Therefore, the order dated 22.09.2021 made u/s 153A of the Act was set aside to be passed afresh after making proper enquiries. Aggrieved with the order of the Ld. Pr. CIT, the assessee has filed the appeal before the Tribunal. 6. Rival submissions were heard and the record and the submissions made have been examined. The Ld. AR stated that the Ld. Pr. CIT examined the assessment order and noted that the assessee had Printed from counselvise.com Page | 6 I.T.A. No.: 2484/KOL/2024 Assessment Year: 2017-18 Macro Dealers Pvt. Ltd. received a sum of ₹3,12,07,100/- from several entities, many of which were proved to be not genuine in as much as having no creditworthiness and the transactions were proved to be bogus. After examination, he set aside the order under section 153A/143(3) with the directions to conduct enquiries and to pass a fresh assessment order after offering reasonable opportunity of being heard to the assessee and for proper and correct computation of assessed income as discussed in the order under section 263 of the Act and directed the Ld. AO to decide the matter as per law after giving a reasonable opportunity of being heard to the assessee. It was submitted that none appeared before the Ld. Pr. CIT as the assessee did not receive the notice and could not comply. It was requested that the matter may be remanded back to the Ld. Pr. CIT so that the assessee could make proper submission. The Ld. DR did not raise any serious objection to this request of the Ld. AR. 7. We have considered the submissions made, gone through the facts of the case and perused the record and the order of the Ld. Pr. CIT. Since there was no proper compliance before the Ld. Pr. CIT, in the interest of justice and fair play it was considered that the request of the Ld. AR to set aside the order of Ld. Pr. CIT may be allowed so that a proper opportunity of being heard may be provided. Hence, after examining the facts of the case, we deem it appropriate to set aside the order of the Ld. Pr. CIT and remit the matter for passing a fresh order u/s 263 of the Act. 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 its grounds of appeal and shall not seek unnecessary adjournments. Accordingly, all the grounds taken by the assessee in his appeal are allowed for statistical purposes. Printed from counselvise.com Page | 7 I.T.A. No.: 2484/KOL/2024 Assessment Year: 2017-18 Macro Dealers Pvt. Ltd. 8. In the result, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced in the open Court on 24th July, 2025. Sd/- Sd/- [George Mathan] [Rakesh Mishra] Judicial Member Accountant Member Dated: 24.07.2025 Bidhan (Sr. P.S.) Printed from counselvise.com Page | 8 I.T.A. No.: 2484/KOL/2024 Assessment Year: 2017-18 Macro Dealers Pvt. Ltd. Copy of the order forwarded to: 1. Macro Dealers Pvt. Ltd., 25 Adi Banstolla Street, Kolkata, West Bengal, 700007. 2. PCIT (Central)-1, Kolkata. 3. CIT(A)- 4. CIT- 5. CIT(DR), Kolkata Benches, Kolkata. 6. Guard File. //True copy // By order Assistant Registrar ITAT, Kolkata Benches Kolkata Printed from counselvise.com "