SANTLAL ENTERPRISE,SILIGURI V. ITO, WARD 1(1), , SILIGURI

ITA 822/KOL/2025

AI Insights

The case involves Santlal Enterprise appealing against the order of the National Faceless Appeal Centre, Delhi, which sustained an addition of \\u20b923,30,000 to the assessee's income for the Assessment Year 2018-19. The addition was made under section 68 of the Income Tax Act, 1961, as unexplained cash deposit. The Tribunal noted that the protective assessment was made due to uncertainty about the real entity liable for the tax, but since the partners had already paid tax on the income, the addition became redundant. The Tribunal referenced the decision in CIT vs. Ram Chand Tilli Works to support the view that protective assessments should not burden the assessee if the tax has been paid by another entity on the same income.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 779247 (ITAT-KOLKATA)
• Duration Of Justice: 5 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-10-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2018-2019
• Appeal Filed On: 21-04-2025
• Other Referred Cases: CIT vs. Ram Chand Tilli Works (2013) 217 Taxman 76 (Allahabad)
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MANAS MONDAL
• Assessee Lawyers: GIRIDHAR DHELIA
• Keywords: Set aside
• Section: 68

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL “D” BENCH, KOLKATA BEFORE SHRI RAJESH KUMAR, AM AND SHRI PRADIP KUMAR CHOUBEY, JM ITA No. 822/KOL/2025 (Assessment Year:2018-19) Santlal Enterprise Santdeep Building, Sevoke Road, Siliguri-734001 Vs. ITO, Ward 1(1) Aaykar Bhawan Poorva, Matigara, Siliguri-734004, West Bengal (Appellant) (Respondent) PAN No. ADOFS3041C Assessee by : Shri Giridhar Dhelia, AR Revenue by : Shri Manas Mondal, DR Date of hearing: 17.09.2025 Date of pronouncement: 15.10.2025 O R D E R Per Rajesh Kumar, AM: This is an appeal preferred by the assessee against the order of the National Faceless Appeal Centre, Delhi (hereinafter referred to as the “Ld. CIT(A)”] dated 19.03.2025 for the AY 2018-19. 02. The issue raised in ground no.1 by the assessee is against the order of learned CIT (A), NFAC, Delhi passed u/s 250 of the Act dated 19.03.2025 is bad in law and the same may be quashed. 03. The ld. Counsel for the assessee submitted that the assessee filed the return of income on 08.06.2018, declaring total income at ₹nil. Subsequently, the case of the assessee was selected for scrutiny under CASS, statutory notices along with questionnaire were duly served upon the assessee. The assessee complied with the said Printed from counselvise.com Page | 2 ITA No. 822/KOL/2025 Santlal Enterprise; A.Y. 2018-19 notices by filing various details/ evidences before the learned AO electronically. Thereafter, the learned AO issued show cause notice along with draft assessment order on 13.04.2021, calling upon the assessee to furnish various documents along with reasons for disputing draft assessment order. The assessee requested for the adjournment till 15.04.2021. On 15.04.2021, the assessee moved an adjournment petition upto 25.04.2021, stating that the assessee is engaged in the process of gathering material. However, the learned AO passed the final assessment order on 21.04.2021, making the addition of ₹2,73,30,000/- to the total income of the assessee comprising addition u/s 56(2)(x) of the Act of ₹2,50,00,000/- and addition u/s 68 of the Act read with section 115BBE of the Act of ₹23,30,000/-. 04. In the appellate proceedings, the learned CIT (A) partly allowed the appeal of the assessee by deleting the addition of ₹2,50,00,000/- as made by the learned AO u/s 50(2)(x) of the Act and the Revenue is not in appeal before us while the learned CIT (A) sustained the addition of ₹23,30,000/-. 05. After hearing the rival contentions and perusing the materials available on record, we find that ₹23,30,000/- was added by the learned AO on protective basis u/s 68 of the Act read with section 115BBE of the Act as unexplained cash deposit. In our opinion the protective assessment is a type of assessment made in order to protect the interest of the Revenue nonetheless there is no provision in the Income Tax Act to charge tax on a person other than a person on whom the tax is lawfully payable but its customary to make protective / alternative addition if it is not ascertainable as to who is the real person who is liable to pay the tax. In other words, if the Printed from counselvise.com Page | 3 ITA No. 822/KOL/2025 Santlal Enterprise; A.Y. 2018-19 assessee is not in a position to ascertain on which person the tax is to be charged and recovered then the assessment is made on substantive basis on the person whom the learned AO believes that the tax should be levied and also makes addition on protective basis, where other than a person in whose hands the substantive addition is made. Once the assessment attains finality then the protective assessment becomes redundant. Thus, we find merit in the contention of the learned Authorized Representative that the cash deposits in the bank account of the partners out of their taxable income were already included in the income tax returns and due tax were paid therefore, the protective addition done by the learned AO on the assessee firm becomes redundant and otiose. The case of the assessee find support from the decision of CIT vs. Ram Chand Tilli Works (2013) 217 Taxman 76 (Allahabad), wherein it has been held that in case of doubt or ambiguity about the real entity in whose hands a particular income has to be assessed the learned AO is entitled to have recourse to make protective assessment. There is no doubt as to the real entity or a person in whose hands the cash deposited is to be assessed as the partnership of the firms have already pad the tax on this amount. Accordingly, we set aside the order of the learned CIT (A) on this issue and directed the learned AO to delete the addition. 06. In the result, the appeal of the assessee is allowed. Order pronounced in the open court on 15.10.2025. Sd/- Sd/- (PRADIP KUMAR CHOUBEY) (RAJESH KUMAR) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) Kolkata, Dated: 15.10.2025 Sudip Sarkar, Sr.PS Printed from counselvise.com Page | 4 ITA No. 822/KOL/2025 Santlal Enterprise; A.Y. 2018-19 Copy of the Order forwarded to: BY ORDER, True Copy// Sr. Private Secretary/ Asst. Registrar Income Tax Appellate Tribunal, Kolkata 1. The Appellant 2. The Respondent 3. CIT 4. DR, ITAT, 5. Guard file. Printed from counselvise.com "