Nabiul Industrial Metal Pvt. Ltd Vs ITO (ITAT Kolkata)
In a recent ruling, the Income Tax Appellate Tribunal (ITAT) of Kolkata has allowed an appeal filed by Nabiul Industrial Metal Pvt. Ltd., nullifying a tax assessment and a demand of ₹15,00,000. The tribunal’s decision hinged not on the merits of the tax addition but on a legal challenge concerning the timing and jurisdiction of the National Faceless Assessment Centre (NFAC) in conducting the proceedings. The judgment has implications for the procedural application of the e-Assessment of Income Escaping Assessment Scheme, 2022.
The case originated in the Assessment Year 2017-18, when Nabiul Industrial Metal Pvt. Ltd. failed to file its return of income. Consequently, the Assessing Officer (AO) reopened the case under Section 147 of the Income Tax Act, 1961. The action followed information received from the Investigation Wing, Kolkata, suggesting a link between the assessee company and M/s. Darsh Coke Trading Pvt. Ltd., a company identified as a “paper company” used to provide bogus entries.
Further inquiry revealed a transaction involving ₹15,00,000, which Nabiul Industrial Metal Pvt. Ltd. had received from another concern, Tanishi Commotrades Pvt. Ltd., also alleged to be an entry operator. When questioned, the assessee company argued that the amount was a loan or advance received against the sale of goods, which would be subsequently completed in the following financial year. The company stated that the sales were indeed made in the next year (FY 2017-18), with the income duly credited to its Profit and Loss account and tax paid accordingly.
