VIVID COLORS PVT. LTD.,BIHAR, PATNA V. DCIT-CIRCLE 2, PATNA, BIHAR, PATNA

ITA 113/PAT/2025

AI Insights

The case involves Vivid Colors Pvt Ltd, which appealed against the order of the National Faceless Appeal Centre, Delhi, concerning the assessment year 2011-12. Initially, the assessee's return showed a loss, but upon reopening the case based on information from DDIT, Kolkata, it was found that the assessee received unexplained accommodation entries totaling \\u20b91,60,00,000. The Assessing Officer (AO) passed an order under sections 144 and 147 of the Income Tax Act, 1961, due to non-compliance with notices under sections 142(1) and 143(3). The CIT (A) dismissed the appeal due to non-compliance by the assessee. The Tribunal, considering the circumstances including COVID-19 and health issues of the assessee's accountant, restored the appeal to the CIT (A) for a fresh decision.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 708193 (ITAT-PATNA)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-07-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Assessment Year: 2011-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: ASHWANI KR. SINGAL
• Assessee Lawyers: PARNA DUTTA
• Keywords: Accommodation entries; Source of fund; Non compliance
• Section: 147; 148; 144; 143(3); 142(1)

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL ‘Patna’ BENCH, PATNA (Through virtual hearing at Kolkata) BEFORE SHRI RAJESH KUMAR, AM AND SHRI PRADIP KUMAR CHOUBEY, JM ITA No. 113/PAT/2025 (Assessment Year: 2011-12) Vivid Colors Pvt Ltd. C/o Subash Agarwal & Associates, Advocates Siddha Gibson, 1, Gibson Lane, Suite 213, 2nd Floor, Kolkata- 700069, West Bengal Vs. DCIT-Circle 2, Patna 4th Floor, Lok Nayak Jai Prakash Bhawan Fraser Road, Patna, Bihar (Appellant) (Respondent) PAN No. AACCV1786F Assessee by : Shri Parna Dutta, AR Revenue by : Shri Ashwani Kr. Singal, DR Date of hearing: 08.07.2025 Date of pronouncement: 18.07.2025 O R D E R Per Pradip Kumar Choubey, JM: 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(E)”] dated 04.02.2025 for A.Y. 2011-12. 02. The brief fact of the case is that the assessee has filed its return of income for the A.Y. 2011-12 was showing loss. On the basis of information received from DDIT, Unit-1, Kolkata, the case of the assessee was reopened. Accordingly, notice u/s 148 of the Income-tax Act, 1961 (the Act) was issued. The ld. AR of the assessee made compliance and filed the written submission and also filed fresh return of income showing loss. Subsequently, notice u/s 143(3) of the Act was issued and notice u/s 142(1) of the Act along with questionnaire was Page | 2 ITA No.113/PAT/2025 Vivid colors Pvt. ltd; A.Y. 2011-12 issued but the assessee did not comply. The ld. AO found in the report of DDIT (investigation) that the assessee is a beneficiary of accommodation entries which are received through various Jama kharchi companies and the funds finally reached to the Vivid Colors Pvt. Ltd. The ld. AO also stated that a sum of ₹1,60,00,000/- received by the assessee company on different dates during the F.Y. 2010-11 through accommodation entries and nature and source of funds received remain unexplained. Since the assessee has failed to comply with all the terms of notice u/s 142(1) of the Act, the assessment order was passed u/s 144 read with section 147 of the Act on the basis of documents available on the records and income of the assessee are assessed at ₹1,60,00,000/- for the assessment order 2011-12 and net amount payable to the assessee as ₹1,11,33,950/-. Aggrieved by the said order, assessee preferred the appeal before the ld. CIT (A), wherein the appeal of the assessee has been dismissed as there was no compliance from the side of the assessee. 03. Being aggrieved and dissatisfied, the assessee has preferred the appeal before us. 04. The ld. AR instead of arguing into the merits of the case has to give an opportunity to place his case before the ld. CIT (A) as the order passed by the ld. CIT (A) is an ex-parte order. The ld. AR has filed an affidavit and indicates that the proper compliance shall be made from the side of the assessee, if the appeal of the assessee is restored back to the file of the ld. CIT (A). 05. The ld. DR did not raise any objection. Page | 3 ITA No.113/PAT/2025 Vivid colors Pvt. ltd; A.Y. 2011-12 06. Upon hearing the submission of the Counsel of the respected parties, we have perused the order of the ld. CIT (A) and find that it has passed an ex-parte order. The ld. AR has filed an affidavit which is as below: - “BEFORE THE NOTARY PUBLIC AFFIDAVIT 1, SHAMSHER ALAM, son of KAMRUDDIN, aged 58 years, by religion Muslim, resident of Koirpurawa, Ward-28, Buxar, Bihar, PIN-802101, do hereby solemnly affirm and state as follows- 1. That I am one of the directors of M/s Vivid Colors Private Limited, hereinafter referred to as the \"assessee\" and, as such, I am competent to swear this affidavit on behalf of the said company. 2. That an appeal relating to A.Y.2011-12 was filed before the Ld. CIT(A), NFAC on 31.01.2019 against the assessment order dated 29.12.2018 u/s 147 r.w.s 144 of the Income Tax Act. 3. That the said appeal was dismissed by the Ld. CIT(A) by passing an ex- parte order on 04.02.2025 due to non compliance of anyone on assessee's behalf 4. That initially compliance could not be made since the assessee's office was not functioning due to covid. Thereafter, the accountant of the assessee-company who was entrusted with the task of accessing emails was not regularly attending office due to his ill health. As such, most of the notices skipped his attention. 5. That later on, on or around 25.02.2025 when I enquired the status of the appeal from my accountant and thereupon the said order was located in the Income Tax Portal which was already passed on 04.02.2025. 6. That then I immediately sought an appointment of Advocate Siddharth Agarwal of 1. Gibson Lane, Kolkata 700069 for filing an appeal before the Hon'ble Tribunal and handed over him all the relevant documents. 7. That the office of the said counsel prepared the appeal and finally the same was filed on 10.03.2025. 8. I give an undertaking that proper compliance shall be made from our end in case the matter is restored back to the file of lower authorities. 9. That the facts stated in para 1 to 7 are true to the best of my knowledge and belief and that in para 8 is an undertaking given by me. Place: Patna Date: 16.06.2025 Sd/- Deponent” 07. Keeping in view the order passed by the ld. CIT (A) and considering the affidavit filed by the ld. AR, we are inclined to restore the appeal of the assessee to the file of the ld. CIT (A) for fresh adjudication. The ld. CIT Page | 4 ITA No.113/PAT/2025 Vivid colors Pvt. ltd; A.Y. 2011-12 (A) is directed to pass a fresh order after hearing the assessee. The assessee is also directed to co-operate in the proceedings. 08. In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open court on 18.07.2025. Sd/- Sd/- (RAJESH KUMAR) (PRADIP KUMAR CHOUBEY) (ACCOUNTANT MEMBER) (JUDICIAL MEMBER) Kolkata, Dated: 18.07.2025 Sudip Sarkar, Sr.PS Copy of the Order forwarded to: 1. The Appellant 2. The Respondent 3. CIT 4. DR, ITAT, 5. Guard file. BY ORDER, True Copy// Sr. Private Secretary/ Asst. Registrar Income Tax Appellate Tribunal, Kolkata "