MAHADEB SAHA,MAJDIA RAILBAZAR vs. ITO, WARD 41(1),, NADIA

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ITA 1890/KOL/2025Status: DisposedITAT Kolkata28 April 2026AY 2017-187 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal found that the CIT(Appeals) had not discussed the issue on merits and simply upheld the AO's order. To ensure natural justice, the matter was remitted back to the Assessing Officer for verification of all documents and to provide the assessee with another opportunity to be heard.

What were the facts?

The assessee, Mahadeb Saha, failed to file an Income Tax Return for AY 2017-18. Information received indicated escaped income due to cash deposits/withdrawals and commission income. The assessee claimed to be a sub-agent for money transfer services but failed to provide agreements and party-wise details of commission earned.

What were the issues?

Whether the assessee provided sufficient documentary evidence to explain the money transfer business transactions and commission income. Whether the CIT(Appeals) properly adjudicated the grounds of appeal on merits.

Which sections of the Income-tax Act were involved?

Section 148,Section 142(1),Section 133(6),Section 44AB,Section 270A,Section 271B,Section 147,Section 144B

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘SMC’ BENCH, KOLKATA

Before: Shri Duvvuru RL Reddy, Vice-(KZ)

The present appeal is directed at the instance of assessee against the order of Id. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi, dated 30.06.2025 passed for Assessment Year 2017-2018.

ITA No. 1890/KOL/2025 (A.Y. 2017-2018) Mahadeb Saha 2. Brief facts of the case are that an information was received over the Insight Portal, which suggested that the income chargeable to tax has escaped assessment in the case of the assessee for the relevant assessment year. The information received by this office was within the explanation 1(1) of proviso sec.148 of the Act and information in the instant case is categorized under head ‘any information flagged in the case of the assessee’ for the relevant assessment year. Assessee has cash deposits or cash withdrawals (including through bearer’s cheque) in current account no. 913020035419577, maintained with Axis Bank Ltd. Further, assessee has received Commission or brokerage from Wall Street Finance Ltd. amounting to Rs.89,058/- and Rs. 108/- from Spice Digital Ltd. The assessee has not filed ITR for A.Y. 2017-18. The above transactions remained unexplained and chargeable to tax has escaped assessment. After approval of the competent authority, a notice under Sec.148 of the Income-tax Act, 1961 dated 27.03.2024 was issued and delivered to the assessee through registered e-mail requiring him to filing of ITR for the above A.Y. within 30 days from the service of notice. In compliance to the notice u/s 148, assessee filed return of income u/s 148 amounting to Rs. 3,35,820/- on 06.11.2024. Further notices u/s 142(1) of the I.T. Act, 1961 dated 16.08.2024 and 20.09.2024 have been issued with specific questionnaire and delivered to the assessee through e-mail for furnishing its details/documents but assessee has not submitted any reply/documents. Further, notice has been issued to assessee on 18.10.2024. The assessee has submitted his reply along with documentary evidences in support of above transactions. The

ITA No. 1890/KOL/2025 (A.Y. 2017-2018) Mahadeb Saha assessee has submitted copy of bank account statements, computation of income, audit report, western bank certificate, balance sheet and P&L account and other relevant documents. From the submission of the assessee, it is seen that the assessee claimed to be an authorized sub-agent of Wall Street Finance Limited for Western Union money transfer. The assessee submitted a copy of "CERTIFICATE OF APPOINTMENT" regarding his claim to be an authorized sub-agent of Wall Street Finance Limited for Western Union money transfer. The assessee produced Bank Statement of the Axis Bank Ltd bearing A/c. No. 913020035419577 regarding the transaction amount of Rs.3,02,33,166/-. Notice u/s 133(6) issued to Wall Street Finance Limited on 13.12.2024. The reply received from Wall Street Finance Ltd. on 06.01.2025 for wrong A.Y. 2020-21, Further notice u/s 133(6) issued on 15.01.2025 but reply not received. Assessee has operated money transfer business during the F.Y. 2016-17 through two platforms: WSFX Global Pay Limited and Spice Money Limited but assessee has not provided agreement copies with these entities and only submit certificate of appointment in the name of Ma Durga Distributors. The assessee did not provide any supporting documents regarding money transfer except certificate of appointment. Hence, a flat rate 8% of total transactions of amounting of Rs. 24,18,653/ (8% of 3,02,33,166/- was added to the income of the assessee for the A.Y. 2017-18. Penalty proceedings u/s 270A of the Income tax Act, 1961 were initiated separately for under reporting of income. Further, the assessee was required to file his return of income u/s 139(1) but assessee has not filed his return of income for the A.Y. 2017-18. The

ITA No. 1890/KOL/2025 (A.Y. 2017-2018) Mahadeb Saha threshold limit of the assessee for the purpose of section 44AB was over hence, assessee was liable to get his account audited u/s 44AB. The assessee has not audited his account nor filed audit report on e-filing portal for the A.Y. 2017-18. Thus, penalty proceedings u/s 271B for non-audited his account was to be initiated separately. The ld. Assessing Officer assessed the total income of the assessee at Rs. 27,54,473/- for the A.Y. 2017-18. Accordingly, penalty proceedings u/s 270A for under reporting of income was initiated separately.

3.

On being aggrieved, the assessee preferred an appeal before the ld. CIT(Appeals). The ld. CIT(Appeals) in his appellate order dismissed the grounds of appeal saying that the onus lies on the appellant to prove that the transactions in the bank transactions of Rs.3,02,33,166/- in the Axis Bank Ltd bearing Account No.913020035419577. The appellant-assessee has failed to establish how the transactions in the said bank account have been accounted for in his books of account and offered to tax for the year under consideration. As the appellant-assessee has failed to explain the transactions, the AO was justified in making addition of Rs.24,18,653/- (being 8% of the total transactions of Rs.3,02,33,166/-).

4.

On being aggrieved with the order of ld. CIT(Appeals), the assessee preferred an appeal before the ITAT. It was the submission of the ld. Counsel for the assessee that during the assessment proceedings, the assessee filed all the details but ld. Assessing Officer did not consider it. He also pleaded that the ld.

ITA No. 1890/KOL/2025 (A.Y. 2017-2018) Mahadeb Saha CIT(Appeals) simply upheld the order of ld. Assessing Officer. He, therefore, prayed before the Bench to set aside the order of ld. CIT(Appeals) and to give one opportunity to substantiate his case.

5.

On the other hand, at the time of hearing, ld. Departmental Representative pleaded that at the time of assessment proceedings, the AO has examined all the documents submitted by the appellant such as copy of bank account statements, computation of income, audit report, western bank certificate, balance sheet and P&L account and other relevant documents. However, the appellant has failed to furnish copy of agreement with these entities. The appellant has given a very vague reply stating that no such agreements are made by the mother companies for this type of business. However, in the instant case, the appellant has failed to furnish party-wise details of commission earned on each transaction. As the appellant has failed to explain the transactions, the AO was justified in making addition of Rs.24,18,653/- (being 8% of the total transactions of Rs.3,02,33,166/-) and ld. CIT(Appeals) confirmed the same. He, therefore, pleaded before the Bench to uphold the order of ld. CIT(Appeals).

6.

I have heard both the sides and perused the material available on record. A perusal of the impugned order clearly shows that as there was no response to the notices to substantiate the claim with documentary evidences and submissions, ld. CIT(Appeals) confirmed the addition made by the ld. Assessing Officer. It is also evident that the ld. CIT(Appeals) has not

ITA No. 1890/KOL/2025 (A.Y. 2017-2018) Mahadeb Saha discussed the issue on merits and dismissed the appeal simply following the order of ld. Assessing Officer. I also find that the assessment order has been passed u/s.147 read with section 144B of the Income Tax Act. However, the assessee has operated money transfer business during the FY 2016-17 through two platforms, i.e. WSFX Global Pay Limited and Spice Money Limited, but the assessee has failed to furnish copy of agreement with the entities and only submit certificate of appointment in the name of Ma Durga Distributors and not provided any supporting documents regarding money transfer except certificate of appointment. The appellant has given a very vague reply before the ld. Assessing Officer stating that no such agreements are made by the mother companies for this type of business and the assessee failed to furnish party-wise details of commission earned on each transaction. Considering the facts and circumstances of the case, I am inclined to set aside the order passed by the ld. CIT(Appeals) and in order to meet the principle of natural justice, remit the matter back to the file of the ld. Assessing Officer to verify all the documents, i.e. copy of agreement with the entities from where the assessee has operated the money transfer business, certificate of appointment, party-wise details of commission earned on each transaction, Bank statement regarding the transaction amount of Rs.3,02,33,166/-, audit report and other supporting documents and also with a direction to provide one more opportunity of being heard to the assessee. At the same breath, I also hereby caution the assessee to promptly co-operate with the proceedings before the ld. Assessing Officer failing which the ld. Assessing Officer shall be at liberty to pass appropriate order in accordance with law

ITA No. 1890/KOL/2025 (A.Y. 2017-2018) Mahadeb Saha and merits based on the materials available on the record. Thus, the grounds raised by the assessee are partly allowed for statistical purposes.

7.

In the result, appeal of the assessee stands partly allowed for statistical purposes. Order pronounced in the open Court on 28/04/2026.

Sd/- (Duvvuru RL Reddy) Vice-President (KZ) Kolkata, the 28th day of April, 2026

Copies to :(1) Mahadeb Saha, Majdia Railbazar Krishnaganj, Nadia-741506, West Bengal (2) Income Tax Officer, Ward-41(1), Nadia (3) CIT(A), NFAC, Delhi; (4) CIT - , Kolkata; (5) The Departmental Representative; (6) Guard File TRUE COPY By order

Assistant Registrar, Income Tax Appellate Tribunal, Kolkata Benches, Kolkata Laha

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