CIT(A) Cannot Ignore Reopening Jurisdiction and Decide Wrong Grounds: ITAT Kolkata

Samyak Towers (P) Ltd. Vs ITO (ITAT Kolkata)

CIT(A) Cannot Decide Incorrect Grounds While Ignoring Jurisdictional Challenge to Reopening: ITAT Restores Appeal for Speaking Order

Summary: The Kolkata Bench of the Income Tax Appellate Tribunal has set aside an appellate order where the CIT(A) failed to adjudicate the assessee’s jurisdictional grounds challenging the reopening of assessment and instead proceeded on grounds that did not correctly correspond with those actually raised by the assessee. The Tribunal restored the entire appeal to the CIT(A), directing him to decide all the grounds on merits through a reasoned and speaking order after granting the assessee a reasonable opportunity of hearing.

Facts of the case

The assessee-company filed its original return of income on 25 September 2013, declaring a total income of merely ₹1,227. The return was processed under Section 143(1).

The assessment was subsequently reopened by issuing a notice under Section 148 on 16 March 2021. In response, the assessee filed its return on 9 October 2021, once again declaring income of ₹1,227.

The Assessing Officer completed the reassessment under Sections 143(3) read with 147 on 28 March 2022, assessing total income at ₹5,01,227 after adding ₹5 lakh as unexplained cash credit.

The addition arose from information that the assessee had allegedly received an accommodation entry from M/s Capable Dealers Pvt. Ltd., an entity stated by the Investigation Wing to be engaged in providing accommodation entries.