GADADHAR MERCANTILE PRIVATE LIMITED,BANGAON vs. ITO, WARD 14(1), KOLKATA

IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH, KOLKATA Before Shri Rajesh Kumar, Accountant Member and Shri Pradip Kumar Choubey, Judicial Member ITA No.1304/KOL/2025 Assessment Year: 2018-19 Gadadhar Mercantile Private Limited....................................................................Appellant C/o. Sri Jitendra Kaushik, Advocate, 19-D, Muktaram Babu Street, Kolkata- 700007 [PAN No. AAECG5395D] Vs. ITO, Ward 14(1) ..…………..…………………....…….................................….Respondent West Bengal- 700069 Appearances by: Siddharth Agarwal, Advocate,appeared on behalf of the Appellant. Sandeep Kumar Mehta, Addl. CIT, Sr. DR ,appeared on behalf of the Respondent. Date of concluding the hearing : July 09 , 2026 Date of pronouncing the order :August 17 ,2026 ORDER Per Pradip Kumar Choubey, Judicial Member: This appeal filed by the assessee is directed against the order dated 31.12.2024 of the National Faceless Appeal Centre (NFAC), passed under Section 147r.w.s144B of the Assessment Year 2018-19 of the Income-tax Act, 1961 (hereinafter referred to as “the Act”). At the very outset, it appears from the report of the Registry that the appeal of the assessee has been filed after a delay of 108 days. The assessee filed a petition supported with an affidavit to condone the delay. Going over the contents of the petition delay is hereby condoned. 2. The brief facts of the case of the assessee is that the assessee being a company filed the Return of income for assessment year 2018- 2019 on 18.8.2018, declaring total income of Rs.11580/-. The

ITA No.1304/Kol/2025 Assessment Year- 2018-19 assessment was reopened u/s 147 of the Act 1961 and notice u/s 148 dated 6.4.2022 was issued on the reason as per the information received from Investigation Unit, the DDIT, Unit 5, Kolkata has identified beneficiaries who have availed transfer of funds from the shell company i.e. M/s Silverpoint Infratech Pvt Ltd., having PAN AAECG5395D. The assessee is identified as one of such beneficiaries which had received unexplained cash credit from Silverpoint Infratech Pvt Ltd., during the F.Y. 2017-2018 relevant to the A.Y. 2018-2019 amounting to Rs.3650000/-. In response to the notice u/s 148 of the Act, the appellant had filed its return of income on 16.10.2023 vide Ack. No. 412327441161023 declaring total income of Rs.11580/-. The Income-tax Assessing Authority has added a sum of Rs.36,50,000/- from Silverpoint Infratech Pvt. Ltd. invoking the provision u/s 68 as unexplained cash credit. Similarly, The Income-tax Assessing Authority has added a sum of Rs.3,73,00,000/- being unsecured loans taken from Biki Overseas Pvt. Ltd., R.A. Tradeline Pvt. Ltd. And SanrhyExim Pvt.Ltd amounting to Rs. 1,73,00,000/-Rs. 7500000/- and of Rs. 1,25,00,000/-respectively during the relevant year invoking the provision u/s 68 as unexplained cash credit. Aggrieved by the said order assessee preferred appeal before the CIT(A) wherein appeal of the assessee has been dismissed. 3. The Ld. AR challenges the very impugned order by taking additional grounds that the sanction of the approval before issuance of notice dated 06.04.2022 u/s 148 has been obtained from the authority not specified as per provisions of Section 151 of the Act. The Ld. AR submits that in the present case approval was granted by PCIT KOL5, however, after amendment with effect from 01.04.2021 new regime into being forced and sanction should be granted by PCCIT. The ld. Counsel placed reliance on the following judgment-

ITA No.1304/Kol/2025 Assessment Year- 2018-19 i} Supreme Court judgment passed in Union of India & Ors. Vs. Rajib Bansal reported in 469 ITR 46, ii} Order passed by the ITAT, Ahmedabad Bench in the case of DalpatBalariya in ITA No. 1692/Ahd/2024, iii} Delhi High Court in the case of Ashok Kr. Vs. Union of India in [2024] 162 taxmann.com, iv} ITAT, Mumbai Benches in ITA No. 1406/Mum/2024 &ors. V} and order passed by this Tribunal in Satish Kumar Birdika Versus ITO, Ward-49 (1), Kolkata. Contrary to that Ld. DR supports the impugned order thereby submitting that assessee did not raise this issue before the lower authority. 4. Upon hearing the submission of the counsel of the respective parties and on perusal of the records, we find that notice u/s 148 of the IT Act was issuedon 06.04.2022 after obtaining prior approval of the PCIT KOL5. Looking into the fact there is no dispute that under old regime it was the PCIT who was authorized to grant approval however, after the amendment with effect from 01.04.2021 the new regime came into force and sanction should be granted by PCCIT. In this context we have gone through the order passed by the Tribunal in Satish Kumar Birdika Versus ITO, Ward-49 (1), Kolkata in which Tribunal has held thus: -

Looking into the above facts there is no dispute that under old regime it was the PCIT who was authorized to grant approval however after the amendment w.ef 01.04.2021 the new regime came into being force and sanction should be granted by PCCIT We have gone through

ITA No.1304/Kol/2025 Assessment Year- 2018-19 the order passed by Hon'ble Supreme court in Rajib Bansal case and the relevant portion of the case is hereby reproduced: 73. Section 151 imposes a check upon the power of the Revenue to reopen assessments. The provision imposes a responsibility on the Revenue to ensure that it obtains the sanction of the specified authority before issuing a notice under section 148. The purpose behind this procedural check is to save the assesses from harassment resulting from the mechanical reopening of assessments Sri krishna (P) Ltd. v. ITO [1996] 87 Taxman 315/221 ITR 538 (SC)/(1996) 9 SCC 534. A table representing the prescription under the old and new regime is set out below: 4.1. Admittedly, in the present case assessment year 2018-19 the approval has been granted u/s 148 by the PCIT KOL5 though it ought to be PCCIT KOL. 5. Keeping in view the facts of the case as well as considering the judgment passed by the Tribunal, we do not have any hesitation to hold that approval is bad in law, hence entire assessment proceeding is hereby quashed. In the result, the appeal of the assessee is allowed on legal issue. Kolkata, the 17th August , 2026.

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

DC Dated:. 17 .08.2026.

ITA No.1304/Kol/2025 Assessment Year- 2018-19 Copy of the order forwarded to: 1. Appellant - 2. Respondent - 3. CIT(A)- 4. CIT- 5. CIT(DR)

//True copy// By order Deputy Registrar, Kolkata Benches