KUSH TRADING & COMMERCE PRIVATE LIMITED,RAIPUR vs. ITO, WARD 4(4), KOLKATA, KOLKATA

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ITA 2098/KOL/2026Status: DisposedITAT Kolkata01 September 2026AY 2013-20144 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the reopening of assessment was invalid because the AO failed to record satisfaction in the order passed under Section 148A(d) and did not mention if the escaped income was represented in the form of an asset. This decision followed a coordinate bench ruling and a Delhi High Court judgment.

What were the facts?

The assessee's case was reopened for AY 2013-14 based on information of fictitious losses. The Assessing Officer (AO) disallowed these losses and added them to the assessee's income. The CIT(A) restored the appeal to the AO, stating the AO did not consider the assessee's response.

What were the issues?

Whether the reopening of assessment was valid due to the AO's failure to record satisfaction and mention the nature of escaped income as an asset.

Which sections of the Income-tax Act were involved?

Section 147,Section 148,Section 148A,Section 144,Section 149

AI-generated summary — verify with the full judgment below

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

Before: SHRI RAJESH KUMAR & SHRI PRADIP KUMAR CHOUBEY

For Appellant: Shri Sunil Surana, AR
For Respondent: Shri Ambrish Mishra, Sr. DR
Hearing: 17.08.2026Pronounced: 01.09.2026

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA ‘B’ BENCH, KOLKATA BEFORE SHRI RAJESH KUMAR, ACCOUNTANT MEMBER AND SHRI PRADIP KUMAR CHOUBEY, JUDICIAL MEMBER I.T.A. No.2098/KOL/2026 Assessment Years: (2013-14) Kush Trading & Commerce Pvt. ITO, Ltd., Vs. Ward – 4(4), C/o RR Industrial Corporation, Kolkata Station Road, Telghani Naka, Raipur – 492001, Chhattisgarh [PAN: AABCK2078G] (Appellant) .. (Respondent) Appellant by : Shri Sunil Surana, AR Respondent by: Shri Ambrish Mishra, Sr. DR Date of Hearing 17.08.2026 Date of Pronouncement 01.09.2026

O R D E R PER RAJESH KUMAR, ACCOUNTANT MEMBER:

This appeal filed by the assessee is directed against order dated 28.04.2026by the learned Commissioner of Income-tax (Appeals), National Faceless Appeal Centre, Delhi(hereinafter referred to as the “ld. CIT(A)”) passed u/s 250 of the Income-tax Act, 1961 (hereinafter referred to as “the Act”) for the assessment year (A.Y.) 2013-14.

2.

At the time of hearing, the learned Authorized Representative (ld. AR) pressed Ground No.1 which is against the order of ld. CIT(A) setting aside the appeal of the assessee since the AO did not provide complete information and

ITA No.2098/Kol/2026/A.Y. 2013-14 Kush Trading & Commerce Pvt. Ltd. vs. ITO materials along with the notice issued u/s 148A(b) of the Income-tax Act, 1961 (In short, ‘the Act’).

3.

The facts of the case in brief are that the assessee filed its return of income on 30.09.2013, declaring total income of Rs.3,40,440/-. The case of the assessee was re-opened u/s 147 of the Act by issuing notice u/s 148 of the Act on 28.07.2022. Thereafter, the Assessing Officer (In short, ‘the AO’) received information that the assessee had incurred fictitious losses of Rs.70,38,700/- in equity/derivative trading during the A.Y. 2013-14. There was no compliance in response to the notice u/s 148 of the Act. Therefore, notice u/s 142(1) of the Act along with the questionnaire was issued, which were not complied by the assessee as tabulated in Para 2 of the assessment order. Finally, the AO disallowed the said amount of fictitious losses on equity or derivatives and added to the income of the assessee in the assessment framed u/s 147 r.w.s. 144 r.w.s. 144B of the Act, dated 11.05.2023.

4.

In the appellate proceedings, the ld. CIT(A) restored the appeal to the file of AO on the ground that AO has passed the order without taking into account the response of the assessee.

5.

We have heard rival submissions and perused the materials available on record. We note that the order u/s 148A(d) of the Act, dated 26.07.2022 was passed by the AO. It is pertinent to note that notice u/s 148A(b) of the Act was issued by giving more than two weeks’ time to file the reply, which was complied with by assessee and the reply of the assessee was also considered by the AO while passing order u/s 148A(d) of the Act. We note that in the order passed u/s 148A(d) of the Act, the AO only noted that assessee’s is a beneficiary of fictitious losses, which has escaped assessment. We note that

ITA No.2098/Kol/2026/A.Y. 2013-14 Kush Trading & Commerce Pvt. Ltd. vs. ITO the AO, thereafter, issued notice u/s 148 of the Act on the same date, i.e., 28.07.2022. A perusal of the order passed u/s 148A(d) of the Act reveals that AO has not recorded the reasons/satisfaction in the order which is required for a valid order u/s 148A(d) of the Act for re-opening of assessment. Therefore, the re-opening of assessment by issuing notice u/s 148 of the Act, dated 28.07.2022 is invalid. Moreover, the AO has not mentioned in the order passed u/s 148A(d) of the Act the amount of escaped income was represented in the form of asset. In view of these facts, we are inclined to hold that notice issued u/s 148 of the Act and consequent order u/s 147/144 of the Act are invalid and cannot be sustained. The issue is squarely covered by the decision of Co- ordinate Bench of this Tribunal in assessee’s own case in ITA No.1015/Kol/2025 for A.Y.2014-15, dated 30.07.2025, wherein the same facts are as under:

“7. After hearing the rival contentions and perusing the materials available on record, we observe that undisputedly, the assessee’s case was reopened u/s 148 of the Act vide notice dated 12.04.2021, after passing the order u/s 148A(d) of the Act dated 26.07.2022, a copy of which is available at page no. 65 to 69 of the Paper Book of the assessee. A perusal of the said order shows that the ld. AO has extracted the information received and thereafter has not recorded any satisfaction which is per- requisite for a valid order u/s 148A(d) of the Act for reopening of the assessment. Therefore, the reopening of the assessment was by issuing notice u/s 148 dated 12.04.2021 is invalid and cannot be sustained. Moreover, we note that nowhere the ld. AO has noted that income escaped is represented in the form of asset. The case of the assessee is squarely covered by the decision of the Hon'ble Delhi High Court in case of Ratnagiri Gas and Power Private Limited (supra), wherein the Hon'ble Delhi High Court has observed and held as under: - “25. Thus, the first and foremost question to be addressed is whether the conditions as specified under Section 149(1)(b) of the Act are satisfied. As is apparent from the plain language of the said clause that, essentially, three conditions are required to be satisfied. First, that the Assessing Officer has in his possession books of account or other documents or evidence, which reveal that the income chargeable to tax has escaped assessment. Second, that the said evidence is to the effect that the income chargeable to tax that has escaped assessment is represented in

ITA No.2098/Kol/2026/A.Y. 2013-14 Kush Trading & Commerce Pvt. Ltd. vs. ITO the form of an asset. And third, that the amount of income that has escaped assessment is or is likely to amount to 250 lakhs or more. 26. Explanation to Section 149(1) of the Act further explains that for the purposes of Clause (b) of Sub-section (1) of Section 149 of the Act, the expression 'asset' would include immovable property, being land or building or both, shares and securities, loans and advances and deposits in bank. 27. If we now examine the reasons for re-opening of the assessment as set out in the order passed under Section 148A(d) of the Act, we find that there is no evidence to support that the income, which has allegedly escaped assessment is represented in the form of an asset.” 8. Consequently, following the order of the Hon'ble Delhi High Court, we quash the reopening of assessment as made by the ld. AO. 9. In the result, the appeal of the assessee is allowed.” 6. Since the facts of the present case are materially same vis a vis the case as discussed above, we, therefore, respectfully following the order of the coordinate bench, quash the notice u/s 148 of the Act as well as consequent order u/s 147/144 of the Act. The ground no.1 is allowed.

7.

The other grounds raised by the assessee are being adjudicated at this stage are left open to be decided if need arises in future.

8.

In the result, appeals filed by the assessee are allowed.

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

Sd/- Sd/- (Pradip Kumar Choubey) (Rajesh Kumar) JUDICIALMEMBER ACCOUNTANT 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

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