Adidarshan Tradewing Private Limited Vs. I.T.O., Ward -12(2), Kolkata

Parties Involved

Facts Summary

The assessment proceedings were initiated against the assessee company under sections 143(3) and 263 of the Income Tax Act, 1961, following a notice issued on July 5, 2019. Despite multiple opportunities provided for compliance, the assessee failed to respond or substantiate the high share premium of Rs. 999/- per share, which was deemed unjustified given the company's lack of a track record or substantial financial standing. The assessment order observed that the share subscribers were likely paper companies, and the burden of proof lay with the assessee to demonstrate the legitimacy of the share capital introduced. Judicial precedents emphasized the importance of examining the surrounding circumstances and the credibility of the documents submitted, ultimately leading to a best judgment assessment due to the assessee's non-compliance and failure to provide satisfactory explanations regarding the source of the funds. Aggrieved with the assessment order, the assessee filed an appeal before the Ld. CIT(A), wherein notices for hearing were issued on various dates for furnishing written submissions, but the assessee did not respond to any of the notices. However, perusing the order of the Ld. AO, the Ld. CIT(A) dismissed the order ex-parte. Aggrieved with the order of the Ld. CIT(A), the assessee is in appeal before this Tribunal.…

Legal Issues

• 1. Whether the ex-parte order passed by the Ld. CIT(A) is valid.
• 2. Whether the Ld. CIT(A) had jurisdiction to pass the second order under section 263 of the Act.

Judgment Outcome

Decided in favour of Assessee.

Precedents Relied Upon

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