Principal Commissioner Of Income Tax Central 1 Kolkata v. M/S. Magnetic Niryat Pvt Ltd

IN THE HIGH COURT AT CALCUTTASPECIAL JURISDICTION (INCOME TAX)ORIGINAL SIDE ITAT/206/2023IA NO: GA/2/2023 PRINCIPAL COMMISSIONER OF INCOME TAX CENTRAL 1 KOLKATAVS M/S. MAGNETIC NIRYAT PVT LTD BEFORE :THE HON’BLE THE CHIEF JUSTICE T.S. SIVAGNANAMAndTHE HON’BLE JUSTICE HIRANMAY BHATTACHARYYADate : 22[nd] January, 2024 Appearance : Mr. Prithu Dudhoria, Adv.…for appellant The Court:- Heard Learned Counsel appearing on behalf of the appellant. This appeal filed by the revenue under section 260A of the Income Tax Act,1961 is directed against the order dated December 23, 2022 passed by theIncome Tax Appellate Tribunal B Bench, Kolkata [Tribunal] in ITANo.347/Kol/2022 for the assessment year 2012-13. The revenue has raised thefollowing substantial questions of law for consideration : [I]WHETHER on the facts and in the circumstances of the case theLearned Income Tax Appellate Tribunal has erred in law, by deletingthe addition made under Section 68 of the Act, 1961 withoutconsidering the fact that Assessee had failed to discharge his onus,of proving creditworthiness and identities of the creditors andgenuineness of transactions with regard to Sundry Creditors duringthe previous year 2011-2012 relevant to the Assessment Year 2012-2013? WHETHER on the facts and in the circumstances of the case theLearned Income Tax Appellate Tribunal has erred in law byupholding the order Commissioner of Income Tax [Appeals] (A) videwhich he had submitted the addition of Sundry Creditors underSection 68 of the Act, 1961 as deemed income with the estimation ofincome @5% of turnover ?Learned Income Tax Appellate Tribunal has erred in law byupholding the order Commissioner of Income Tax [Appeals] (A) videwhich he had submitted the addition of Sundry Creditors underSection 68 of the Act, 1961 as deemed income with the estimation ofincome @5% of turnover ? WHETHER on the facts and in the circumstances of the case theLearned Income Tax Appellate Tribunal has erred in law byupholding the order of Commissioner of Income Tax [Appeals] (A) inrestricting the addition of Rs.2,15,85,391/- without taking duecognizance to the fact that the identity of the assessee company andcreditors could not be proved as the assessee did not appear duringthe appellate proceedings ?Learned Income Tax Appellate Tribunal has erred in law byupholding the order of Commissioner of Income Tax [Appeals] (A) inrestricting the addition of Rs.2,15,85,391/- without taking duecognizance to the fact that the identity of the assessee company andcreditors could not be proved as the assessee did not appear duringthe appellate proceedings ? Notice has been served on the respondent but none appears for therespondent. We have perused the order passed by the learned Tribunal by whichthe appeal filed by the revenue was dismissed. Before learned Tribunal, noneappeared for the assessee. On perusal of the order passed by the Income Tax(Appeals) (CITA) dated 29.10.2021, we find that none appeared for the assesseeand the CIT(A) partly allowed the appeal fixing the net income of the assesseecompany at 5% of the turnover and addition to the extent of Rs.2,15,85,391/-alone was confirmed. The learned Tribunal in paragraph 8 of the impugnedorder wherein the learned Tribunal found that there could be some certainspecific instances point out as to how only the purchases are required to beadded and that the CIT(A) has estimated the element of income in whole basedon the details made in by the assessee. We find that the Tribunal has notelaborately given any reasons for rejecting the department’s appeal, more sowhen none appeared for the assessee. The same is the position before the CIT(A) where none appeared for the assessee despite service of notice and it is also thecase before us where in spite of service of notice none appears for therespondent/assessee. Considering the peculiar facts and circumstances of thecase, we are of the view that the appeal has to be reheard by the CIT(A) afterserving notice on the assessee. where none appeared for the assessee despite service of notice and it is also thecase before us where in spite of service of notice none appears for therespondent/assessee. Considering the peculiar facts and circumstances of thecase, we are of the view that the appeal has to be reheard by the CIT(A) afterserving notice on the assessee. For the above reasons, the appeal is allowed. The order passed by thelearned Tribunal is set aside as well as the order passed by the CIT(A) dated29.10.2011 is set aside and the matter stands remanded to the CIT(A) for freshconsideration of the matter on merits in accordance with law. Consequently, the substantial questions of law are left open. (T.S. SIVAGNANAM) CHIEF JUSTICE (HIRANMAY BHATTACHARYYA, J.)