AVINANDAN FASHIONS PRIVATE LIMITED,KOLKATA vs. DCIT, CIRCLE 7(1), KOLKATA

IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH, KOLKATA Before Shri Rajesh Kumar, Accountant Member and Shri Pradip Kumar Choubey, Judicial Member ITA No 2688 /KOL/2025 Assessment Year- 2013-14 Avinandan Fashions Private Limited......................................................................Appellant Sikaria’s Pride, 95A, Park Street, 7th Floor, Kolkata- 700016 [PAN No. AAFCA3467M]

Vs. Deputy Commissioner of Income Tax.....................,..……………....……….Respondent Kolkata- 700069 Appearances by: A.K. Tibrewal, FCA, appeared on behalf of the Appellant. Sallong Yaden, Addl. CIT, Sr. DR, appeared on behalf of the Respondent. Date of concluding the hearing: July 09, 2026 Date of pronouncing the order: September 03 ,2026 ORDER Per Pradip Kumar Choubey, Judicial Member: This appeal filed by the assessee is directed against the order dated 15.09.2025 of the Office of the National Faceless Appeal Centre (NFAC), Delhi passed under Section 147 of the Assessment Year 2013-14 of the Income-Tax Act, 1961 (hereinafter referred to as “the Act”).

At the very outset, the Ld. Counsel of the assessee raised additional grounds challenging the jurisdiction of National Faceless Appeal Centre (NFAC) to frame assessment order dated 29.09.2021 is without

ITA No.2688/Kol/2025 jurisdiction therefore, invalid and may be quashed. The additional grounds raised by the assessee are abstracted below:-

That the provisions of Section 151A of the Act came on the statute book on 01.11.2020 and the same was notified on 29.03.2022, vide notification No. 18/2022 on the e-Assessment of Income Escaping Assessment Scheme, 2022. Thus, the National Faceless Assessment Centre had no authority to assume jurisdiction to make assessment on 29.09.2021. Thus, the impugned assessment order passed by National Faceless Assessment Centre, Delhi was without jurisdiction, illegal and bad in law. 2. Since the assessee has raised additional ground of appeal challenging the jurisdiction of AO to make addition, the issue raised as purely a legal issue and assessee is at liberty to raise any legal issue before any appellate authority. The case of the assessee is squarely covered by the decision of the Apex Court in the case of Jute Corporation of India in 187 ITR 688A.

ITA No.2688/Kol/2025 National faceless assessment centre was without valid jurisdiction as the

provisions of Section 151A of the Act had not come into operation on the date

29.3.2022 when these were notified and therefore, the assessment is without jurisdiction and not sustainable in law. The Ld. AR brought the following

decisions:-

SL. No Notice dated 04.03.2020 issued u/s 148 of the Income Tax Act, 1961 1. Shiv Shakti Traders – vs- Income Tax Officer [2026] 184 taxmann. Com 171 (Delhi Tribunal) 2. Gautam Kumar Sarkar –vs- Income Tax Officer ITA Nos. 1103 & 1297/Kol/2025 (Kolkata ITAT) 3. Albatross Investment Pvt. Ltd. –vs- Income Tax Officer ITA No.400/Kol/2025(Kolkata ITAT) 4. Tia Enterprises (P) Ltd. –vs- Income Tax Officer [2024] 167 taxmann.com 56(Supreme Court) 5. Income Tax Officer- vs- Tia Enterprises (P) Ltd. [2024 167 taxmann.com 56(Supreme Court) 6. Smita –vs- Income Tax Officer ITA No.266/RAN/2025 (Ranchi ITAT) 7. Commissioner of Income Tax –vs- Nagendra Prasad [2023] 1556 taxmann.com 19 (Patna High Court) 8. Principal Commissioner of Income Tax-vs-Silver Line [2016] 65 taxmann.com 137 (Delhi High Court) 9. DCIT –s- Sudarshan paper & Board (P) Ltd. ITA No. 130/Kol/2017 10. Bharat Kumar Changede-vs-ITO ITA No. 1902/2025

framed by the NFAC after issuing notice u/s 143(2) of the Act and show cause

ITA No.2688/Kol/2025 notice as the Provisions of Section 151A of the Act was brought on the statute book with effect from 01.11.2020. Therefore, the legal issue raised by the assessee may kindly be dismissed.

After hearing the rival contentions and perusing the materials available on record, we find that the Section 151A of the Act deals with the faceless assessment or income escaping assessment and was brought on the statue book by taxation and other law (relaxation and amendment of certain provisions) Act, 2020, with effect from 01.11.2020 which was 29.03.2022 vide notification no.18/2022/F. No. 370142/16/2022-TPL(Part)]. Therefore, the issuance of notice u/s 143(2) of the Act and show cause notice prior to 29.3.2022 and thereafter farming of assessment by the NFAC are, in our opinion, without jurisdiction as the Provisions of Section 151A of the Act were with effective from 29.03.2022 In considered opinion, the assessment framed is without jurisdiction and cannot be sustained. The case of 4

ITA No.2688/Kol/2025 the assessee is squarely covered by the decision of the co-ordinate in case of MD Mahimud SK Vs. ITO in ITA no. 2230 & 2229/KOL/2024 vide order dated 04.03.2025 wherein the co- ordinate Bench has decided the issue by observing and holding as under:-

ITA No.2688/Kol/2025

Ms/Mr/M/s, 1. We appreciate the anxiety and uncertainty that is facing all of us in the times of Covid-19. This communication is to assist you in ending one uncertainty, which is pending e-Assessment in your case for the Assessment Year 2015-16. 2. The variations as per the draft assessment order may be seen which are proposed to be made in your case:- Credible information had been received for the FY 2014-15 relevant to AY 2015-16, that the assessee had aggregated credit turnover is Rs. 16.99 lacs and debit turnover is 16.99 lacs during the period 01.04.2014 to 31.03.2015 in the bank accounted maintained in Bank of Baroda bearing a/c no. 39920100006975. Prima facie there was reason to believe that the assessee had total credit/deposit in bank account during the FY 2014-15 relevant to AY 2015- 16 is Rs. 38,65,557/-, which has escaped assessment within the meaning of section 147 of the Act. Assessment proceedings u/s 147 were initiated after recording reasons and seeking prior approval of Pr. Commissioner of Income-tax. Accordingly statutory notice Uls 148 of the Act was issued & sent to the assessee by DIN & Document No. ITBA/AST/S/148/2020- 6

ITA No.2688/Kol/2025 21/1032066973(1) dated 31.03.2021 through E-mail requiring the assessee to file his Income Tax Return for the A.Y 2015-16 within 30 days of service of the said notice. In compliance of notice u/s 148, the assessee filed her relum of income vide acknowledgement No. 345878730280421 dated 28.04.2021 declaring an income of Rs. 2,25,800/-. During the year under consideration the assessee earned income under the Head Income from Business and Income from other Sources. Statutory notices u/s 143(2), 142(1) alongwith questionnaire were issued to assessee. 2. During the course of assessment proceedings it has been noticed that assessee had deposited cash in Bank of Baroda bearing a/c no. 39920100006975 and in State Bank of India bearing Alo No. 31561107456. In response to notice u/s 143(2) dated 29.06.2021, assessee submitted his reply dated 11.08.2021 stating that he has filed his return of Income for the AY 2015-16 showing a turnover of Rs. 25,46,080/- and Net Profit u/s 44AD of Rs. 2,25,780/- besides this assessee receives S/B interest of Rs. 3,280/- during the A.Y. 2015-16. He is doing mainly labour Contract business on the different partof the country and sometimes in local basis. He receives cash from different contractee and paid to the daily workers on cash basis. Whenever, he does not receive any contract he deposited the cash in the bank accounts and later on he again withdraws cash from Bank and pay the daily workers if he receive any contract work. Notice u/s 142(1) dated 29.12.2021 was issued to the assessee to furnish detailed computation of income, brief note indicating the nature of business/professional activities carried out by him and explain the source of cash deposit in the above said accounts. In response to notice u/s 142(1) dated 29.12.2021, assessee did not submit his reply. After that, again a notice u/s 142(1) dated 09.02.2022 was issued to furnish detailed computation of income, copy of cash flow statement, details of contract made with documentary evidence and details of payment to the labour with documentary evidence. But, assessee again did not submit his reply. 3. A final show cause notice u/s 144 of the IT Act, 1961 was issued to the assessee on 23.02.2022 for the sake of natural justice and providing one more and last opportunity to explain requesting him to furnish the requisite details on or before 25.02.2022. The assessee again failed to fumish any reply. 4. It is a part of record that during the course of assessment proceedings sufficient opportunity and reasonable time was granted to the assessee but he did not bother to comply with the notices and to provide the vital information/documents so as to enable the assessing officer to complete the assessment. Needless to mention here that when a statutory notice has been issued, it is the duty of the assessee to respond and to furnish the required information. Further, while scrutinizing the case it would be of great importance to have an idea about assessee's intention behind the non co-operation. The immediate idea that can be formed is that the assessee might have taken it beneficial to evade the proceedings rather than to co-operate in furnishing the information to avoid further investigation in the matter. Therefore, in the absence of relevant reply from the assessee the matter is being decided as per the record available. 5. After pursing the reply of the assessee and the retum of the income filed u/s 148 that the assessee is driving income from the business and income from other sources. After considering the reply of the assessee, the reply is not found tenable because the assessee has not produced proper books of account coupled with non-production of documentary evidence of contract business. Hence, cash deposited in Bank of Baroda bearing a/c no. 39920100006975 amounting to Rs. 16,96,682/- and in State Bank of India bearing A/c No. 31561107456 amounting to Rs. 4,09,500/- totaling to Rs. 21,06,182/-is treated as unexplained credit entries in book of the assessee and accordingly, addition of Rs. 21,06,182/- is proposed to be added back to the income of the assessee u/s 69A r.w.s. 115BBE of the 7

ITA No.2688/Kol/2025 Income Tax Act, 1961 Penalty proceedings u/s 271(1)(c) of the Income tax act, 1961 for inaccurate particulars of the income are initiated separately Returned Income Rs. 2,25,800/- Add:- as per para 5 Rs. 21,06,182/- Assessed Income Rs. 23,31,982/- Issue Penalty notice u/s 271(1)(c) and 271(1)(b) of the Income Tax Act, 1961. Assessed issue requisite documents to the assessee. This order is being passed uls 147/143(3) ws. 1448 of the LT. Act, 1961.

You are hereby given an opportunity to show cause why proposed variation should not be made and the assessment should not be completed accordingly. 3. Kindly submit your response through your registered e-fang account at www.incometax.gov.in by 23:59 hours of 21/03/2022, whereby you may either:- a.accept the proposed variation, or b. file your written reply objecting to the proposed venation, or lf required, after täng written reply you may request for personal hearing so as to make oral submissions or present your case. The request can only be made by clicking the Beek Video Conferencing button available against the SCN in the view notices of this proceeding in the e proceedings tab on efting portal. The request can be made only before expiry of compliance date & time. On approval of request, personal hearing shall be conducted exclusively through video conference 4. In case no response is received by the given time and date, the assessment shall be finalized as per the draft assessment order. Yours faithfully, Additional/Joint/Deputy/Assistant Commissioner of Income Tax/ Income-tax Officer, National Faceless Assessment Centre Delhi 12. Considering the above facts and legal position, we are of the considered opinion that the order passed by the NFAC, Delhi is without juris diction and is hereby quashed. The appeal of the assessee is allowed. 13. The additional ground raised in ITA No. 2230/Kol/2024 Α.Υ.2017-18 is similar to one as decided by us in ITA No. 2229/Kol/2024 Α.Υ. 2015-16. Therefore, our decision would, mutatis mutandis, apply to this appeal as well. The appeal of the assessee is allowed. 14. In the result, the appeal of the assessee is allowed."

ITA No.2688/Kol/2025 7. Considering the above facts and legal position, we are of the considered opinion that the order passed by the NFAC, Delhi is without jurisdiction and is hereby quashed. The appeal of the assessee is allowed. 5. Admittedly in the present case assessment order was passed on 29-09- 21. Keeping in view the facts of the case and considering the order passed by the Tribunal we are in this view that order passed by the NFAC Delhi is without jurisdiction. Accordingly, it is hereby quashed.

In the result, the appeal of the assessee is allowed on the legal grounds.

Kolkata, the 3rd September, 2026.

Sd/- Sd/- [Rajesh Kumar] [Pradip Kumar Choubey] Accountant Member Judicial Member

DC Dated: 03 .09.2026.

Copy of the order forwarded to: 1. Appellant - 2. Respondent - 3. CIT(A)- 4. CIT- 5. CIT(DR)

//True copy// By order Manish Bhoi Deputy Registrar Kolkata Benches

ITA No.2688/Kol/2025

ITA No.2688/Kol/2025