Ajitnath Suppliers Private Limited Vs PCIT-1 (Calcutta High Court)
The Calcutta High Court partly allowed an appeal under Section 260A challenging the ITAT’s order dated 23 June 2025 concerning AY 2018–19. The assessee had faced an ex-parte assessment under Sections 147, 144 and 144B, with an addition of ₹1,23,50,000 under Section 68 and aggregate tax demand of ₹1,81,74,868. The CIT(A) subsequently dismissed the assessee’s appeal ex parte. The ITAT found that the CIT(A) had violated principles of natural justice and remanded the matter for de novo adjudication, but made the remand conditional upon payment of ₹1,00,000 as costs within 60 days, providing that failure would automatically confirm the CIT(A)’s order.
The High Court held that while the ITAT may impose procedural costs, such costs cannot become a condition for the survival of a statutory appeal or trigger automatic confirmation of an order already found to suffer from violation of natural justice. It also noted the CIT(A)’s obligation under Section 250(6) to pass a reasoned order. The Court condoned the 154-day delay in filing the appeal. It reduced the cost from ₹1,00,000 to ₹25,000 and quashed the automatic confirmation clause. The assessment proceedings were restored unconditionally to the CIT(A) for fresh adjudication on merits. The CIT(A) was directed to consider the documentary evidence and pass a speaking order within 12 weeks. No coercive recovery of the demand arising from the ₹1,23,50,000 addition was permitted until the fresh appellate order.
