RANJIT SINGH KUNDALIA,KOLKATA vs. ITO, WARD 62(1), KOLKATA, KOLKATA

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ITA 2132/KOL/2026Status: DisposedITAT Kolkata10 September 2026AY 2017-20187 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal condoned the delay, holding that the assessee's reasons were justifiable. On merits, the Tribunal found that the cash deposit addition was not supported by evidence, and the unexplained credit was satisfactorily explained by capital infusion and a loan from the assessee's wife.

What were the facts?

The assessee's appeal was delayed by 217 days due to notices being sent to an incorrect email address. The Assessing Officer made additions for cash deposits during demonetization and unexplained credits, citing discrepancies in the cash book and lack of corresponding entries.

What were the issues?

Whether the reopening proceedings were valid due to incorrect approval under Section 151, and whether the additions for cash deposits and unexplained credits were justified.

Which sections of the Income-tax Act were involved?

Section 147,Section 148,Section 148A,Section 151,Section 68,Section 44AD

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “SMC” BENCH,

Before: SHRI YOGESH KUMAR U.S. & SHRI GOPALAN GURUSAMY

For Appellant: Shri Abhishek Bansal, AR
For Respondent: Shri Mana Mondal, Sr. DR
Hearing: 05.08.2026Pronounced: 10.09.2026

IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH, KOLKATA BEFORE SHRI YOGESH KUMAR U.S., JUDICIAL MEMBER AND SHRI GOPALAN GURUSAMY, ACCOUNTANT MEMBER ITA No.2132/KOL/2026 Assessment Year: 2017-18

Ranjit Singh Kundalia Vs. ITO, Ward-62(1), Kolkata 29, Megna Enclave, Biswas Nursery Lane, Phoolbagan, Kolkata-700085 [PAN: AKGPK3353E] APPELLANT RESPONDENT Appellant by : Shri Abhishek Bansal, AR Respondent by : Shri Mana Mondal, Sr. DR Date of hearing : 05.08.2026 Date of Pronouncement : 10.09.2026 O R D E R PER GOPALAN GURUSAMY, ACCOUNTANT MEMBER: This Appeal is filed by the Assessee against the order of the NFAC, Delhi (‘Ld. CIT(A)’ for short) dated 21.08.2025, passed u/s 250 of the Income Tax Act, 1961 (“the Act”, for short) for the Assessment Year 2017-18.

2.

There is a delay of 217 days in filing the Appeal. The Assessee filed an application for condonation of delay narrating the reasons which are reproduced as under:-

“5. That immediately thereafter, I contacted my tax professional who logged into the e-filing portal and upon verification, it appears that the Demand is raised against the Appellate order which was allegedly communicated through email. However, n such email was every

ITA No.2132/KOL/2026 Ranjit Singh Kundalia; A.Y: 2017-18 received or delivered to me. It is reasonable apprehended that nay such email, if sent, may have gone into the junk/spam folder and consequently got auto-deleted after expiry of the retention period. 6. That upon further verification, it was noticed that my correct and updated email address is ranjit.kundalia@gmail.com which stood duly updated on the e-filing portal and was also correctly mentioned in Form No.35. However, the hearing notices issued under Section 250 were sent to the old email ID, namely chiragbhansali@gmail.com belonging to the erstwhile accountant. I reasonably believe that the appellate order dated 21.08.2015 was also communicated to the same old email ID. 7. That due to the notices and communications being sent to an incorrect/old email address, I remained completely unaware of the passing of the appellate order, which ultimately resulted in the delay in filing the present appeal before this Hon’ble Bench of Tribunal.” 3. The Ld. DR submitted that, there is no sufficient cause to condone the inordinate delay, thus sought for dismissal of the present appeal on delay in latches.

4.

We have heard the Ld. DR and perused the material. The Hon'ble Supreme Court time and again clarified that the delay in filing the appeal with sufficient cause should be looked into in a liberal way and shall condone the delay. In the landmark decision in Collector, Land & Acquisition vs. Mst. Katiji & Others (1987) 167 ITR 471 (SC), the Hon'ble Supreme Court settled the law that the delay when supported by justifiable reasons, must make way for the cause of substantial justice. Considering the above facts and circumstances, we condone the delay of 217 days in filing the present Appeal.

5.

Brief facts of the case are that, Assessee is an individual filed its return of income for the assessment year 2017-18 on 17.01.2018, Page | 2

ITA No.2132/KOL/2026 Ranjit Singh Kundalia; A.Y: 2017-18 declaring total income of Rs.3,35,620/-. The Assessing Officer based on the information that the assessee has deposited cash to the tune of Rs.2,15,000/- in the bank account during the demonetisation period- initiated proceedings u/s 147 of the Act. Notice u/s 148 of the Act was initially issued on 25.06.2021. In response to which, the assessee did not file any return. Subsequently, based on the decision of the Hon’ble Supreme Court in the case of Union of India Vs. Ashish Agarwal [(2022) 444 ITR 1 (SC), notice was issued to the assessee in terms of Section 148A(b) of the Act on 25.05.2022 and order u/s 148A(d) of the Act was passed on 27.07.2022. Notice u/s 148 of the Act was also issued on 27.07.2022. After considering the assessee’s response and reply, the Assessing Officer added an amount of Rs.50,000/- towards cash deposited during the demonetisation period and also added an amount of Rs.2,50,000/- as unexplained credits noted in the cash book vide assessment order dated 13.05.2023.

6.

Against the said assessment order, assessee preferred appeal before the Ld. CIT(A). There was no compliance made by the assessee, to the hearing notices issued by the Ld. CIT(A). Therefore, the Ld. CIT(A) decided the matter ex-parte and confirmed the impugned addition made by the Assessing Officer.

7.

Before us, the Ld. AR argued that the order u/s 148A(d) of the Act dated 27.07.2022 and notice u/s 148 of the Act dated 27.07.2022 Page | 3

ITA No.2132/KOL/2026 Ranjit Singh Kundalia; A.Y: 2017-18 was issued with the approval of the Ld. PCIT, Kolkata-18, Kolkata instead of the Pr. CCIT in violation of Section 151(ii) of the Act and contended that the notice u/s 148 of the Act is bad in law and the consequent proceedings invalid. The Ld. AR also filed a paper book wherein the copy of the notices u/s 148 of the Act dated 27.07.2022 and order passed u/s 148A(d) of the Act dated 27.07.2022 were issued also enclosed. The Ld. AR also relied on the decision of the Co-ordinate Bench of the ITAT in the case of Sumunder Saree Centre Vs. DCIT Circle-46(1), Delhi in ITA No.558/DEL/2026, A.Y. 2017-18 and Amitabh Tayal Vs. ITO, Ward-61(1), Delhi in ITA Nos.636 & 637/DEL/2026, A.Y. 2017-18 and contended that the notice beyond three years would need to be issued with the approval of the Ld. PCCIT of Section 151(ii) of the Act. Besides various other legal pleas were raised as narrated in the Grounds of Appeal.

8.

The Ld. AR further argued that the Assessee failed to mention the cash deposits in the current account of his proprietorship firm M/s Kundalia Enterprises, under the bona fide impression that it related to its firm. Being a small time business man he was not aware of the legal requirements. The reopening was merely based on such non-disclosure, and as such there was no information with the Assessing Officer to suggest escapement of income. The Department cannot make assessment for such mistakes. The AR also submitted Page | 4

ITA No.2132/KOL/2026 Ranjit Singh Kundalia; A.Y: 2017-18 that the source for the cash deposits have been satisfactorily explained as during the year the Assessee had reported cash sales of Rs.10,29,736/- with opening cash balance as on 01.11.2016 of Rs.2,60,443/-. Again, the impugned addition of Rs.50,000/- was made taking into the account mistake by the Assessee in its cash book. The Assessing Officer made the impugned addition of Rs.50,000/- with reference to cash deposit in the bank account on 29.12.2016 u/s 68 for the reason that there was no corresponding entry in the cash book. It was contended that the impugned addition was not made with reference to credit in its books of account and invocation of Section 68 of the Act is illegal; and that the Assessing Officer failed to consider that the Assessee had declared income of Rs.3,00,000/- during the year which would form sufficient source. The Ld. AR also pointed out that the Assessee filed a revised cash book along with the sales invoices, purchase details and stock statements. The Assessing Officer did not mention any discrepancies in these documents filed but yet made the impugned addition without basis. The Ld. AR also challenged the addition made of Rs.2,50,000/- as the Assessing Officer ignored the explanation of the Assessee that it represents capital infusion of the Assessee and unsecured loan from his wife. Thus, it was pleaded that the impugned additions be deleted.

ITA No.2132/KOL/2026 Ranjit Singh Kundalia; A.Y: 2017-18 9. On the other hand, the Ld. DR relied on the orders of the lower authorities.

10.

We have considered the rival submissions. From the perusal of the return of income filed by the assessee, it is seen that the assessee had declared income u/s 44AD of the Act, in respect of gross receipts in cheque of Rs.65,55,616/- and Rs.10,29,736/- in cash. An inadvertent mistake in the cash book cannot be the basis for the impugned addition, as it cannot be overlooked that the source for the other cash deposits has been satisfactorily explained. Besides, it is seen that the assessee had furnished the purchase invoices, sale invoices, stock statements along with revised cash book, and the Assessing Officer did not find any discrepancy in any of these documents furnished before him. In such a factual scenario, we do not find merit in the impugned addition made of Rs.50,000/-. Accordingly, the Assessing Officer is directed to delete the same. In regard to the impugned addition relating to unexplained credits of Rs.2,50,000/-, we find that the assessee has given satisfactory explanation. The Assessing Officer failed to note that the assessee’s wife is also assessed to tax with PAN BYNPK0595C and has filed return of income for A.Y. 2017-18 declaring total income of Rs.1,59,540/-. The assessee has also declared a total income of Rs.3,35,620/- for the year. Considering all these, the source of the credits stands satisfactorily Page | 6

ITA No.2132/KOL/2026 Ranjit Singh Kundalia; A.Y: 2017-18 explained. Therefore, we direct the AO to delete the impugned addition of Rs.2,50,000/-. As relief is allowed on merits, the legal pleas raised become academic and are not adjudicated.

11.

In the result, appeal of the assessee is allowed. Order pronounced on 10.09.2026. Sd/- Sd/- (YOGESH KUMAR U.S.) (GOPALAN GURUSAMY) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated: 10.09.2026 DP, PS Copy of the order forwarded to: 1. Appellant 2. Respondent 3. Pr. CIT 4. CIT(A) 5. CIT(DR)

//True Copy// BY ORDER,

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