WELSOME FINANCE PVT. LTD., ,KOLKATA V. ITO, WARD 6(4), , KOLKATA

ITA 788/KOL/2025

AI Insights

The case involves Welsome Finance Pvt. Limited, which appealed against the order of the Commissioner of Income Tax (Appeals)-2, Kolkata, concerning the assessment year 2015-16. The primary issue arose from a significant discrepancy in the opening and closing stock values reported in the company's Profit & Loss Account, which led to a scrutiny assessment. The Assessing Officer, due to non-compliance by the assessee in providing necessary documents, assessed the income substantially higher than declared. The CIT(Appeals) dismissed the appeal due to lack of cogent material evidence. The ITAT, after hearing both parties, decided to set aside the CIT(Appeals)'s order and remand the case for a fresh assessment, highlighting the importance of natural justice.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 669284 (ITAT-KOLKATA)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-06-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2015-2016
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Set aside; Opportunity of being heard; Principle of natural justice
• Section: 142(1); 271(1)(c)

Judgement Text

" ITA No. 788/KOL/2025 (A.Y. 2015-2016) Welsome Finance Pvt. Limited 1 IN THE INCOME TAX APPELLATE TRIBUNAL, ‘D’ BENCH, KOLKATA Before Shri Duvvuru RL Reddy, Vice-President (KZ) & Shri Rakesh Mishra, Accountant Member I.T.A. No. 788/KOL/2025 Assessment Year: 2015-2016 Welsome Finance Pvt. Limited,……..………Appellant 74, Bentinck Street, Chandni Chowk, Kolkata-700001 [PAN:AAACL4260E] -Vs.- Income Tax Officer,……………….…..….…....Respondent Ward-6(4), Kolkata, Aayakar Bhawan, P-7, Chowringhee Square, Kolkata-700069 Appearances by: Shri Miraz D. Shah, A.R., appeared on behalf of the assessee Shri S.B. Chakraborthy, Addl. CIT, Sr. D.R., appeared on behalf of the Revenue Date of concluding the hearing: June 17, 2025 Date of pronouncing the order: June 24, 2025 O R D E R Per Duvvuru RL Reddy, Vice-President (KZ):- The present appeal is directed at the instance of assessee against the order of ld. Commissioner of Income Tax (Appeals)-2, Kolkata dated 2nd April, 2019 passed for Assessment Year 2015- 16. ITA No. 788/KOL/2025 (A.Y. 2015-2016) Welsome Finance Pvt. Limited 2 2. Brief facts of the case are that the assessee is a Private Limited Company, which filed its original income tax return for the assessment year 2015-16 declaring total income of Rs.31,570/-. The case was selected for scrutiny under CASS stating reason “large difference in the opening stock of current year and closing stock of previous year shown in P&L A/c as per return of income”. Notice under section 143(2) of the Act was issued on 11.04.2016. Thereafter notice under section 142(1) was issued to the assessee along with questionnaire on 07.02.2017, which was served to the e-mail of the assessee-company asking to produce and submit certain details and documents to substantiate its return of income, but the assessee failed to make any compliance. As the assessee failed to comply with the notices/letters issued, the ld. Assessing Officer assessed the total income of the assessee at Rs.12,50,76,570/- including opening stock for the assessment year 2015-16 amounting to Rs.12,50,44,996/- and penalty proceeding under section 271(1)(c) was initiated. 3. Being not satisfied, the assessee preferred an appeal before the ld. CIT(Appeals). 4. The ld. CIT(Appeals) has given several opportunities to the assessee to substantiate its claim, but the appellant neither filed the cogent material evidence nor represented the case with evidences against the findings of ld. Assessing Officer before the ld. CIT(Appeals). Therefore, the ld. CIT(Appeals) dismissed the ITA No. 788/KOL/2025 (A.Y. 2015-2016) Welsome Finance Pvt. Limited 3 appeal of assessee on 2nd April, 2019 in absence of cogent material evidence. 5. On being aggrieved, the assessee preferred an appeal before the ITAT. 6. We have heard both the sides. At the time of hearing, ld. Counsel for the assessee prayed before the Bench that the impugned order be set aside and remitted back to the file of ld. CIT(Appeals) for deciding it afresh. 7. At the outset, ld. D.R. brought to our notice that the assessee did not produce the relevant documents as asked by the ld. Assessing Officer during the assessment proceedings. Therefore, the ld. Assessing Officer passed the assessment order assessing the taxable income at Rs.12,50,76,570/- . Thereafter the assessee preferred an appeal before the ld. CIT(Appeals). The ld. CIT(Appeals) has given many opportunities to the assessee and the assessee neither filed written submission in support of its claim nor any cogent material evidence before the ld. CIT(Appeals). He further submitted that before the ITAT, the assessee did not substantiate its claim. Therefore, he pleaded to uphold the order passed by the JCIT(Appeals). 8. We have perused the material available on record. Considering the facts and circumstances of the case, we are inclined to set aside the order passed by the ld. CIT(Appeals) in order to meet the principle of natural justice, and remit the matter ITA No. 788/KOL/2025 (A.Y. 2015-2016) Welsome Finance Pvt. Limited 4 back to the file of ld. CIT(Appeals) with a direction to provide one more opportunity of being heard to the assessee. At the same breath, we also hereby caution the assessee to promptly co-operate with the proceedings before the Ld. CIT(Appeals) failing which the Ld. CIT(Appeals) shall be at liberty to pass appropriate order in accordance with law and merits based on the materials available on the record. Thus, the grounds raised by the assessee are allowed for statistical purposes. 9. In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open Court on 24/06/2025. Sd/- Sd/- (Rakesh Mishra) (Duvvuru RL Reddy) Accountant Member Vice-President (KZ) Kolkata, the 24th day of June, 2025 Copies to :(1) Welsome Finance Pvt. Limited, 74, Bentinck Street, Chandni Chowk, Kolkata-700001 (2) Income Tax Officer, Ward-6(4), Kolkata, Aayakar Bhawan, P-7, Chowringhee Square, Kolkata-700069 (3) CIT(Appeals)-2, Kolkata; (4) CIT - ; (5) The Departmental Representative; (6) Guard File TRUE COPY By order Assistant Registrar, Income Tax Appellate Tribunal, Kolkata Benches, Kolkata Laha/Sr. P.S. "