ASCENT AGENCY PVT. LTD.,KOLKATA vs. I.T.O., WARD - 1(1), KOLKATA

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ITA 197/KOL/2026Status: HeardITAT Kolkata01 September 2026AY 2013-20144 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the re-opening of assessment was bad in law because the addition made was not based on the information that formed the basis for re-opening. Therefore, the AO lacked the jurisdiction to make such an addition.

What were the facts?

The Assessing Officer (AO) re-opened the assessment based on information about high-value transactions. The AO later made an addition of Rs. 50,00,000/- as unexplained cash credit from a loan, even though the original reasons for re-opening did not lead to this specific addition.

What were the issues?

Whether the re-opening of assessment is valid when the addition made is not based on the original reasons for re-opening. Whether the AO has the jurisdiction to make an addition unrelated to the information that led to the re-opening.

Which sections of the Income-tax Act were involved?

Section 148,Section 68,Section 147,Section 144

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, KOLKATA ‘A’ BENCH, KOLKATA

Before: SHRI RAJESH KUMAR & SHRI PRADIP KUMAR CHOUBEY

For Appellant: Shri S. K. Tulsiyan, Advocate
For Respondent: Ms Kasturi Chakraborty, Sr. DR
Hearing: 23.07.2026Pronounced: 01.09.2026

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA ‘A’ BENCH, KOLKATA BEFORE SHRI RAJESH KUMAR, ACCOUNTANT MEMBER AND SHRI PRADIP KUMAR CHOUBEY, JUDICIAL MEMBER I.T.A. No.197/KOL/2026 Assessment Year: (2013-14) Ascent Agency Private Limited, ITO, 14, Netaji Subhas Road, Dalhousi, Vs. Ward – 1(1), Kolkata – 700001, West Bengal Kolkata [PAN:AAICA1766G] (Appellant) .. (Respondent) Appellant by : Shri S. K. Tulsiyan, Advocate Respondent by: Ms Kasturi Chakraborty, Sr. DR Date of Hearing 23.07.2026 Date of Pronouncement 01.09.2026 O R D E R PER RAJESH KUMAR, ACCOUNTANT MEMBER: This appeal preferred by the assessee is against the order of the learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi(hereinafter referred to as the “ld.CIT(A)”], dated 10.09.2025 for Assessment Year (AY) 2013-14.

2.

The appeal has been filed by the revenue with a delay of 47 days. The assessee has filed petition for condonation of delay along with affidavit and explained the reasons for the delay. After taking into account the petition and affidavit for condonation of delay, we find that delay was neither deliberate nor intentional. We note that the circumstances attributable for delay are beyond the control of the assessee. Consequently, the delay in filing the appeal is hereby condoned and appeal is admitted for hearing.

ITA No.197/Kol/2026/A.Y.2013-14 Ascent Agency Pvt. Ltd. vs. ITO 3. The assessee has raised additional ground of appeal, which is as under: “That the reasons which lead to re-opening of assessment having not survived in the assessment framed by the AO and therefore there was no information to uphold the re-opening u/s 148 of the Act.” 4. After hearing the rival contentions and perusing the material on record, we find that the assessee has raised the above additional ground of appeal. In our opinion, the issue raised in the additional ground is a purely a legal issue qua which all the facts are available on records and no further verification of facts are required from any quarter whatsoever. In our considered view, the assessee is at liberty to raise the legal issue before any appellate authority for the first time even when the same had not been raised before any of the lower authorities. The case of the assessee is squarely covered by the decisions of the Hon'ble Supreme Court in the cases of (i) Jute Corporation of India Ltd. vs.CIT, 187 ITR 688(SC), (ii) National Thermal Power Co. Ltd v. CIT, [1998] 229 ITR 383 (SC) and (iii) also by the decision of Hon’ble Calcutta High Court in PCIT vs. Britannia Industries Ltd. [2017] 396 ITR 677 (Cal).Therefore, we are inclined to admit the additional ground for adjudication.

5.

The facts of the case in brief are that the assessee-company has filed the return of income on 28.09.2013, declaring total income of Rs.4,450/-. The Assessing Officer (In short, ‘the AO’) re-opened the assessment after receiving credible information that assessee had been benefited from high value transaction to the tune of Rs.1,00,50,000/- with M/s Atul Mercantile Ltd. Accordingly, the notice u/s 148 of the Act was issued on 18.03.2020. The assessee did not file any return of income in compliance to the said notice. During the course of assessment, the AO after taking into the account the submissions of the assessee noted that transactions of the assessee with M/s

ITA No.197/Kol/2026/A.Y.2013-14 Ascent Agency Pvt. Ltd. vs. ITO Atul Mercantile Ltd. amounting to Rs.50,00,000/-, representing the loan received by assessee was not genuine and accordingly added the same to the income of the assessee as unexplained cash credit u/s 68 of the Act.

6.

Aggrieved by the order of AO, the assessee preferred appeal before the ld. CIT(A) and the ld. CIT(A) accepted the plea of the assessee that re- opening of assessment proceedings is bad in law as the alleged escaped income as per the reasons recorded u/s 148(2) of the Act for selection of scrutiny did not find place in the assessment order as no addition was made but addition was made in respect of unsecured loan taken from M/s Atul Mercantile Ltd. However, ld. CIT(A) despite accepting the legal plea of the assessee restored the issue back to the AO for verification as the AO passed order u/s 147 r.w.s. 144 of the Act. 7. We have heard the rival submissions and perused the materials available on record. We find that addition was made by the AO in respect of loan transaction to the tune Rs.1,00,50,000/- taken by the assessee from M/s R.K. Almal & Co. The AO issued show cause notice on 23.09.2021, which is available at page 12 of the paper book – II proposing the addition of Rs.1,00,50,000/-. The assessee replied the said show cause notice and the AO after taking into account the submissions of the assessee in response to the show cause noticed dated 27.09.2021, made an addition of Rs.50,00,000/- received from M/s Atul Mercantile Ltd. by passing order u/s 144 of the Act. The assessee has taken additional ground before us challenging the jurisdiction of the AO to make any other addition when the alleged income as per reasons recorded was not added after assessee explained the same with evidences. Therefore, we find merit in the contention of the assessee that since no addition was made on the basis of information, which formed the

ITA No.197/Kol/2026/A.Y.2013-14 Ascent Agency Pvt. Ltd. vs. ITO basis for re-opening proceedings, therefore, the entire re-opening becomes bad in law and AO has no power to make addition. The issue is squarely covered by the decisions in the case of (i) CIT vs. Jet Airways (I) Ltd. (2011) 331 ITR 236 (Bom.), (ii) Ranbaxy Laboratories Ltd. vs. CIT, (2011) 336 ITR 236 (Delhi), (iii) CIT(E) vs. B. P. Poddar for Education (2022) 448 ITR 695 (Cal.) and (iv)Manju Devi Baid vs. CIT, ITA No.393 & 394/Kol/2019).

8.

Considering the facts and circumstances in the light of aforesaid decisions, we are inclined to set aside the appellate order and direct the AO to delete the addition. Accordingly, the additional ground no is allowed.

9.

Ground Nos. 1 and 4 are not being adjudicated at this stage and are being left open to be decided if need arises for the same in future.

10.

In the result, appeal of the assessee is allowed.

The order is pronounced in the open Court on 01/09/2026.

Sd/- Sd/- (Pradip Kumar Choubey) (Rajesh Kumar) JUDICIAL MEMBER ACCOUTANT MEMBER Kolkata, Dated: 01/09/2026 SAMANTA आदेश �ȧ ĤǓ�ͧ �ͪ �\ Ē ȯͪ��/Copy of the Order forwarded to: 1. \ �Ȣ�ȡ�ȸ/ The Appellant 2. Ĥ×��ȸ/ The Respondent. 3. Ȳ�Ȳͬ��आयकर] �ǕÈ�/ Concerned CIT 4. आयकर] �ǕÈ�(अपील) / The CIT(A) 5. ��ȡ�Ȣ�ĤǓ�Ǔ�ͬ �, आयकर\ �Ȣ�ȣ�\ͬ ����,/ DR, ITAT, Kolkata 6. �ȡ�[ फाईल/ Guard file.

BY ORDER, // TRUE COPY // Deputy Registrar, ITAT, Kolkata

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