PCIT Vs Rifle Factory Co Operative Society Ltd (Calcutta High Court)
Calcutta High Court has upheld a decision by the Income Tax Appellate Tribunal (ITAT), Kolkata, confirming the deletion of an addition of Rs. 3,77,62,052/- made on account of unexplained cash deposits in bank accounts of Rifle Factory Co-operative Society Ltd. during the demonetization period. The High Court dismissed the revenue’s appeal, finding no substantial question of law arose for its consideration, primarily due to the Assessing Officer’s (AO) failure to furnish a remand report and the revenue’s subsequent inability to rebut the assessee’s submissions at the appellate stages.
The appeal, filed by the Principal Commissioner of Income Tax (PCIT) under Section 260A of the Income Tax Act, 1961, challenged the ITAT’s order dated June 21, 2024, for the assessment year 2017-18. The High Court condoned a 104-day delay in filing the appeal, accepting the explanation provided.
The dispute centered on an addition of over Rs. 3.77 crore by the Assessing Officer, treated as unexplained cash deposits across various bank accounts of Rifle Factory Co-operative Society Ltd., including those with Axis Bank, West Bengal State Co-operative Bank, and State Bank of India, during the demonetization period.
The revenue presented two main arguments for the High Court: first, that the ITAT erred by upholding the CIT(A)’s deletion, alleging that no remand report was received from the AO and that new evidence was accepted by the CIT(A) contrary to Section 46A; and second, that the ITAT failed to recognize the addition applied to all bank accounts, not just one.
