INDRAJIT KAR,SILIGURI vs. I.T.O., WARD-3(2),, DARJEELING

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ITA 2304/KOL/2025Status: DisposedITAT Kolkata28 April 20266 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the assessment proceedings were undertaken without jurisdiction, particularly as the reassessment under Section 147 read with Section 144B was done through NFAC prior to the notification of Section 151A and without proper sanction under Section 151. Therefore, the assessment order was invalid.

What were the facts?

The assessee deposited cash of Rs. 5,05,000/- during the demonetization period. The Assessing Officer treated this as unexplained income, and the CIT(Appeals) partly upheld the addition, taxing Rs. 75,000/- and Rs. 1,80,000/- under Section 115BBE. The assessee appealed to the ITAT.

What were the issues?

The primary issue was whether the reassessment proceedings and the consequential assessment order were valid and conducted with proper jurisdiction, considering the procedural requirements and the role of the NFAC.

Which sections of the Income-tax Act were involved?

Section 147,Section 144B,Section 151,Section 151A,Section 115BBE,Section 69

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘SMC’ BENCH, KOLKATA

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

ITA No. 2304/KOL/2025 (A.Y. 2017-2018) Indrajit Kar IN THE INCOME TAX APPELLATE TRIBUNAL, ‘SMC’ BENCH, KOLKATA Before Shri Duvvuru RL Reddy, Vice-President (KZ) I.T.A. No. 2304/KOL/2025 Assessment Year: 2017-2018 Indrajit Kar,…………....……………………….…Appellant House No. 9, Asha Bhawan, Sector Office Road, Milanpally, Siliguri-734005, West Bengal [PAN:BTJPK3770J] -Vs.- Income Tax Officer,……………………………..Respondent Ward-3(2), Darjeeling, I.T. Office, 15, Dr. Yen Singh Road, Darjeeling-734101, West Bengal Appearances by: Shri A.K. Tibrewal, FCA, appeared on behalf of the assessee Shri Susanta Saha, Sr. D.R., appeared on behalf of the Revenue Date of concluding the hearing: March 17, 2026 Date of pronouncing the order: April 28, 2026 O R D E R

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 23.07.2025 passed for Assessment Year 2017-2018.

ITA No. 2304/KOL/2025 (A.Y. 2017-2018) Indrajit Kar 2. The appeal is time barred by 13 days in filing the appeal by the assessee before the Tribunal. However, the assessee filed an affidavit dated 7th October, 2025 before the ITAT in support of condonation of delay of 13 days mentioning that the prescribed period for filing the appeal expired during the Durga Puja holidays in West Bengal, when the offices of the company and its authorized representatives remained closed and due to the festive holidays, the appeal papers and challans could not be finalized and filed within the limitation period. When the assessee came to know about the order passed by the ld. CIT(Appeals), the assessee approached the ld. A.R. to prepare filing work and other statutory compliance obligations as well as prefer an appeal, due to that there was a delay of 13 days in filing the appeal before the Tribunal and there was no fault or in action on his part in filing the appeal in time. Therefore, he pleaded to condone the delay.

3.

Considering the facts and circumstances of the case, I am of the view that the assessee was prevented in filing the appeal within the stipulated time. Therefore, I am inclined to condone the delay of 13 days. Hence the delay is condoned.

4.

Facts in brief are that the assessee is an individual, who filed his return of income for AY 2017-18 on 29.03.2018 declaring total income of Rs.3,45,490/- comprising of business income at Rs.2,46,882/-, income from other sources at Rs.1,07,015/- and after claim of deduction under Chapter VI-A at Rs.8,194/-. As per information available the assessee had deposited cash of Rs.5,05,000/- in his Bank account maintained with HDFC Bank

ITA No. 2304/KOL/2025 (A.Y. 2017-2018) Indrajit Kar during demonetization period. The case was reopened under section 147 of the Income Tax Act after recording reasons and obtaining necessary approval from the concerned authority. Accordingly, notice under section 148 issued on 30.03.2021 requesting the assessee to file income tax return within 30 days from the receipt of the notice, but no compliance was made from the assessee. Notice under section 142(1) was issued by the jurisdictional Assessing Officer on 12.07.2021 for compliance, however, no compliance to this notice was made by the assessee. Plea of the assessee was that Rs.3,25,000/- relates to his past savings and Rs.1,80,000/- has been received from the flying customers, but it has not been made clear by the assessee that what was the nature of his accountancy services whether it was writing of books giving consultation or anything else despite of sufficient opportunities provided to him. No other details such as ledger of the clients, total charges received etc. have been given by the assessee. No household details to justify his saving has been furnished by the assessee. As the assessee failed to substantiate the source of cash deposit, the ld. Assessing Officer treated the deposited money as unexplained and added to the total income of the assessee. Finally, ld. Assessing Officer assessed the total income of the assessee at Rs.8,50,490/-.

5.

On being aggrieved, the assessee preferred an appeal before the CIT(Appeals). The ld. CIT(Appeals) observed that that out of total addition of Rs.5,05,000/- as made by the ld. Assessing Officer, the deposited amount of Rs.3,25,000/- represented past personal and parental savings and by following the CBDT

ITA No. 2304/KOL/2025 (A.Y. 2017-2018) Indrajit Kar instruction dated 21.02.2017, cash deposit upto Rs.2,50,000/- per person need not be questioned in the case of non-business individuals, and, therefore, treated the amount of Rs.2,50,000/- as explained and the balance amount of Rs.75,000/- out of Rs.3,25,000/- is liable to be taxed under section 115BBE as the assessee failed to discharge the burden being unexplained under section 69 of the Act. In so far as the balance amount of Rs.1,80,000/- out of total addition of Rs.5,05,000/- is concerned, the assessee failed to furnish any supporting evidence such as ledgers, names of clients, nature of services rendered or any tax invoices, therefore, ld. CIT(Appeals) treated the amount of Rs.1,80,000/- as unexplained under section 69 of the Act and taxed under section 115BBE of the Act. Thus the ld. CIT(Appeals) partly allowed the appeal of the assessee.

6.

On being aggrieved, the assessee preferred an appeal before the ITAT. It was the submission of the ld. Counsel for the assessee that the assessment framed by the ld. Assessing Officer under section 147 read with section 144B of the Act is without jurisdiction and required to be quashed. Ld. Counsel drew my attention on the issuance of show cause notice which was duly served on and asked the assesesee to furnish explanation on or before 28.02.2022, it means without giving the assessee any opportunity before framing of the assessment order. Ld. Counsel relied on the order of ITAT, Delhi Bench in the case of Shiv Shakti Traders -vs.- ITO dated March, 06,2026 in ITA No. 5450/DEL/2025. Ld. Counsel pleaded to set aside the order of ld. CIT(Appeals).

ITA No. 2304/KOL/2025 (A.Y. 2017-2018) Indrajit Kar

7.

On the other hand, ld. Departmental Representative submitted that the proceeding under the NFAC was a continuous proceeding and there was nothing wrong in it and, therefore, the legal issue raised by the assessee before the Bench be dismissed. Therefore, he pleaded to uphold the order of ld. CIT(Appeals).

8.

I have heard the rival submissions and perused the material available on record. I find from the record that the assessment proceedings were taken by the ld. Assessing Officer/NFAC, Delhi by issuing notice under section 142(1) and thereafter the assessment was framed accordingly after issuing show-cause notice which, in my opinion, is without jurisdiction. Consequently, the whole assessment is without jurisdiction and unsustainable in law. Accordingly, the assessment order passed by the ld. Assessing Officer is invalid in the eyes of law since reassessment proceedings and consequential assessment order under section 147 read with section 144B were undertaken through NFAC prior to notification of section 151A w.e.f. 29.03.2022, said proceedings were without jurisdiction. The case of the assessee find force from the decision of ITAT, Kolkata dated 15.10.2024 in the case of Nabiul Industrial Metal Pvt. Ltd. -vs.- ITO in ITA No. 1328/KOL/2024 for AY 2017- 18, wherein the similar issue has been decided in favour of assessee. I find force from the record that the reassessment is invalid and without jurisdiction as the sanction/approval under section 151 was not furnished to the assessee, therefore, the order of ld. CIT(Appeals) suffers from inherent lack of jurisdiction and is liable to be quashed. Respectfully following the order of coordinate

ITA No. 2304/KOL/2025 (A.Y. 2017-2018) Indrajit Kar Bench of this Tribunal, I find infirmity in the order of ld. CIT(Appeals) and allow the grounds of appeal raised by the assessee.

9.

In the result, the appeal of the assessee stands allowed.

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) Indrajit Kar, House No. 9, Asha Bhawan, Sector Office Road, Milanpally, Siliguri-734005, West Bengal (2) Income Tax Officer, Ward-3(2), Darjeeling, I.T. Office, 15, Dr. Yen Singh Road, Darjeeling-734101, West Bengal (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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