RAJ KUMAR AGARWAL,KOLKATA vs. I.T.O., WARD - 37(1), KOLKATA

Per Rajesh Kumar, AM:

This is an appeal preferred by the assessee against the order of the National Faceless Appeal Centre, Delhi (hereinafter referred to as the “Ld. CIT(A)”] dated 31.10.2025 for the AY 2009-10.

“1. That the Ld. CIT(A) erred in law and on facts in confirming the addition of 1,23,20,000/- as unexplained cash deposits, without properly appreciating appellant's explanation that such deposits were sourced from earlier cash withdrawals from the same bank account and without establishing any nexus between alleged unaccounted income and the impugned deposits. 2. That the Ld. CIT(A) has erred both in law and on facts in confirming the reassessment order passed u/s 147 of the Income Tax Act, 1961, which is bad in law, void ab initio, and liable to be quashed, as the reasons recorded for

ITA No. 3126/KOL/2025 Raj Kumar Agarwal; A.Y. 2009-10 reopening u/s 148 were not properly communicated to the assessee before completion of assessment, thereby violating the settled principles of natural justice. 3. That the Learned CIT(A) has erred both in law and on facts and drew adverse inference merely because the appellant retained cash in hand for a certain period before redepositing the same, in the absence of any evidence suggesting that such cash was spent, lent, or invested elsewhere. 4. That the observation of the CIT(A) that the assessee did not furnish any reason for holding the withdrawn cash is wholly misconceived, since the assessee is not required under law to justify the purpose or time period of retention of his own lawful funds. 5. That the ld. CIT (A) erred in law and on facts in rejecting the appellant's explanation solely on the ground that a separate cash book was not produced, despite the fact that complete bank statements were furnished, which are more authentic and reliable evidence than any self-prepared cash book and also an independent record maintained by a third party (bank). 6. That the order of the learned CIT(A) is bad in law, contrary to facts and deserves to be set aside in its entirety For that the appellant craves leave to supplement, cancel or otherwise modify any of the above grounds before or at the time of hearing and on facts in rejecting the appellant's explanation solely on the ground that a separate cash book was not produced, despite the fact that complete bank statements were furnished, which are more authentic and reliable evidence than any self-prepared cash book and also an independent record maintained by a third party (bank). 6. That the order of the learned CIT(A) is bad in law, contrary to facts and deserves to be set aside in its entirety For that the appellant craves leave to supplement, cancel or otherwise modify any of the above grounds before or at the time of hearing.” 3. Brief facts of the case are that, the assessee is an individual who had filed his return of income on 13.11.2009 declaring total income of Rs.1,58,517/-.The AO had issued notice u/s 148 of the Act on 11.03.2016, pursuant to which the assessee had filed return of income on 03.09.2016. Subsequently statutory notices u/s 143(2) and 142(1) were issued to the assessee and in compliance to such notices, the assessee made time to time compliances and submitted details and explanations as called for. The AO completed the assessment u/s 147/143(3) of the

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ITA No. 3126/KOL/2025 Raj Kumar Agarwal; A.Y. 2009-10 Act vide order dated 29.12.2016 computing taxable income at Rs.1,24,78,510/-.

“2.For that on the facts and in the circumstances of the case, the approval obtained by the AO u/s 151 of the Act for reopening the assessment u/s 147 of the Act and issuance of notice u/s 148 of the Act, was incorrect in as much as the same was not obtained from the appropriate authority u/s 151(1) of the Act and in that view of the matter, the consequent order dated 29.12.2016 ought to be declared bad in law and accordingly be quashed.” 6. After hearing the rival contentions and perusing the materials available on record, we find that the assessee has raised a legal issue challenging the validity of approval granted by the ld. JCIT, Range 37 Kolkata u/s 151(2) of the Act on 09.03.2016, for issuance of notice u/s 148 of the Act for AY 2009-10. It was brought to our notice that the provisions of Section 151 of the Act as amended by the Finance Act, 2015 read as follows:-

“151. (1) No notice shall be issued under section 148 by an Assessing Officer, after the expiry of a period of four years from the end of the relevant assessment year, unless the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner is satisfied, on the reasons recorded by the Assessing Officer, that it is a fit case for the issue of such notice. (2) In a case other than a case falling under sub-section (1), no notice shall be issued under section 148 by an Assessing Officer, who is below the rank of Joint Commissioner, unless the Joint Commissioner is satisfied, on the reasons recorded by such Assessing Officer, that it is a fit case for the issue of such notice. (3) For the purposes of sub-section (1) and sub-section (2), the Principal Chief Commissioner or Chief Commissioner or the Principal Commissioner or Page 3 of 5

ITA No. 3126/KOL/2025 Raj Kumar Agarwal; A.Y. 2009-10 Commissioner or the Joint Commissioner, as the case may be, being satisfied on the reasons recorded by the Assessing Officer about fitness of a case for the issue of notice under section 148, need not issue such notice himself.” 7. A perusal of the above provision shows that no notice u/s 148 of the Act could be issued by the AO after the expiry of four years under the PCCIT, CCIT or PCIT or CIT, is satisfied on the reasons recorded by the AO that it is a fit case for issuance of notice u/s 148 of the Act. In the instant case, the notice u/s 148 of the Act was issued on 11.03.2016 which was admittedly beyond four years from the end of AY 2009-10 and therefore the AO was required to obtain approval from the authority prescribed u/s 151(1) of the Act i.e., PCIT or CIT and not the JCIT, Range-37, Kolkata, and thus the non-compliance of such statutory mandate vitiates the jurisdiction of Assessing Officer, rendering the notice u/s.148 liable to be quashed. Therefore, the approval granted obtained u/s 151(2), is held to be invalid and is hereby quashed. Consequently, the notice issued u/s 148 of the Act as well as the assessment framed vide order dated 29.12.2016, are also invalid and are hereby quashed.

Order pronounced on 11.09.2026.

Sd/- Sd/- (PRADIP KUMAR CHOUBEY (RAJESH KUMAR) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) Kolkata, Dated: 11.09.2026 Sudip Sarkar, Sr.PS Page 4 of 5

ITA No. 3126/KOL/2025 Raj Kumar Agarwal; A.Y. 2009-10 Copy of the Order forwarded to: 1. The Appellant 2. The Respondent 3. CIT DR, ITAT, 4. 5. Guard file. BY ORDER, True Copy//

(Manish Bhoi) Dy. Registrar Income Tax Appellate Tribunal, Kolkata

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