CHEVIOT DEVCON PVT LTD,KOLKATA vs. ITO WARD-8(2), KOLKATA

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ITA 1999/KOL/2026Status: DisposedITAT Kolkata25 August 2026AY 2017-186 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the reasons for reopening were erroneous as the assessee had indeed replied to the notice issued under Section 133(6) and provided relevant documents. Following the precedent of the Punjab and Haryana High Court, the assessment order and the CIT(A)'s order were quashed.

What were the facts?

The assessee's case was reopened under Section 147 based on information that it received Rs. 3,00,000/- through an intermediary account. The reopening notice stated that no compliance was received from the assessee. The Assessing Officer made an addition under Section 68, which was upheld by the CIT(A).

What were the issues?

Whether the reopening of assessment under Section 147 was valid when the reason recorded (non-compliance with Section 133(6) notice) was factually incorrect. Whether the assessment order is sustainable if based on erroneous reasons.

Which sections of the Income-tax Act were involved?

Section 147,Section 144B,Section 68,Section 133(6),Section 148

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘SMC’ BENCH,

Before: SHRI YOGESH KUMAR U.S. & SHRI GOPALAN GURUSAMY

For Appellant: Shri J.M. Thard, AR
For Respondent: Shri Debasish Biswas, JCIT
Hearing: 20.08.2026Pronounced: 25.08.2026

IN THE INCOME TAX APPELLATE TRIBUNAL ‘SMC’ BENCH, KOLKATA BEFORE SHRI YOGESH KUMAR U.S., JUDICIAL MEMBER AND SHRI GOPALAN GURUSAMY, ACCOUNTANT MEMBER ITA No.1999/KOL/2026 Assessment Year:2017-18

Cheviot Devcon Private Vs. ITO, Ward-8(2), Kolkata Limited Ground Floor, Akshara Petals, 19B, Broad Street, Ballygunge, Kolkata-700019 [PAN: AAFCC3452Q] APPELLANT RESPONDENT Appellant by : Shri J.M. Thard, AR Respondent by : Shri Debasish Biswas, JCIT Date of hearing : 20.08.2026 Date of Pronouncement : 25.08.2026 O R D E R PER YOGESH KUMAR U.S., JUDICIAL MEMBER: This Appeal is filed by the Assessee against the order of the NFAC, Delhi (‘Ld. CIT(A)’ for short) dated 30.12.2025, passed u/s 250 of the Income Tax Act, 1961 ('Act' for short) for the Assessment Year 2017-18. 2. Brief facts of the case are that, Assessee filed return of income, which has been processed u/s 143(1) of the Act. Subsequently, the case of the Assessee was reopened u/s 147 of the Act. An Assessment Order came to be passed u/s 147 r.w.s. 144B of the Act on 24.03.2022 by making an addition of Rs.3,00,000/- u/s 68 of the Act.

ITA No.1999/Kol/2026 Cheviot Devcon Private Limited; A.Y: 2017-18 Aggrieved by the order dated 24.03.2022, Assessee preferred an Appeal before the Ld. CIT(A). The Ld. CIT(A) vide Order dated 30.12.2025, dismissed the Appeal of the Assessee. As against the order of the Ld. CIT(A) dated 30.12.2025, Assessee preferred the present Appeal.

3.

Learned Counsel for the Assessee vehemently submitted that the reason for reopening was ‘based on the credible information that Assessee company has received a sum of Rs.3,00,000/- through an intermediatory account of M/s Rational Dealers Private Limited. For verification of the said alleged transactions, a notice u/s 133(6) of the Act was issued, but no compliance has been received from the Assessee’. Based on the said reasons, An Assessment Order has been framed. The Ld. AR submitted that, Assessee has indeed replied to the notice issued u/s 133(6) of the Act by producing relevant documents. However, based on the wrong facts, reasons has been recorded and assessment has been framed. Thus, relying on the various judicial precedents sought for setting aside the order impugned.

4.

Per contra, the Ld. DR relying on the orders of the Lower Authorities sought for dismissal of the Appeal.

5.

We have heard the parties and perused the material available on record. The solitary ground for reopening was that, the Assessee has

ITA No.1999/Kol/2026 Cheviot Devcon Private Limited; A.Y: 2017-18 not replied to the notice issued u/s 133(6) of the Act. For the sake of ready reference, the portion of the reasons recorded is reproduced as under:-

“In this case credible information has been received that during the Financial Year 2016-17 relevant to A.Y. 2017-18 assessee company has received a sum of Rs. 3,00,000/- in the Bank Account No. HDFCR52016110285652625 through intermediary account of M/s Rational Dealers Pvt Ltd maintained with HDFC Bank (Account No. 00082320025400). For verification of the stated alleged transactions, a notice u/s 133(6) vide DIN ITBA/AST/S/133(6)/2020-21/1030656474(1) dated 15/02/2021 of the act was issued. But no compliance has been received from the assessee till date.”

6.

It is the case of the Assessee that the said reasons recorded is erroneous as Assessee has indeed replied to the notice dated 15.02.2021 issued u/s 133(6) of the Act and also submitted the relevant documents in reply to the said notice. The Assessee has produced the reply dated 7/17.02.2021 and the acknowledgment for having uploaded are produced at Page No.15 & 16 respectively in the Paper Book filed before us. It is evident that the Assessee has replied to the notice u/s 133(6) of the Act. Thus, the reasons has been wrongly recorded that ‘Assessee has not replied to the notice’. In an identical situation, in Hon’ble High Court of Punjab and Haryana at Chandigarh in CWP No.18951 of 2021 (O&M) vide Order dated 19.09.2024 in the case of Vishal Garg Vs. Assistant Commissioner of

ITA No.1999/Kol/2026 Cheviot Devcon Private Limited; A.Y: 2017-18 Income Tax and others, quashed the assessment order in following manners:-

“16. While the petitioner was served with a notice under Section 133(6)) of the Act in the present case and reply was filed, the reply was stating that the same has not been filed. In circumstances where the information may not have been received in the electronic mechanism system which is also prone pro to errors, once it has come on record that reply had actually been filed, it would be wholly unjustified to allow the Revenue to make the assessee face the cumbersome proceedings under Section 148 of the Act. 17. Having proceeded on a presumption that reply not having been filed and the amount having escaped from income tax assessed, we are satisfied that the said amount was already recorded and included in the ITR for the AY 2020-21 2020 21 and the same was duly processed by the Assessing Officer and it was offered for tax as part of business turnover. We are satisfied that the impugned notice under Section 148 of the Act in the present case has been issued without application of mind and stands vitiated on that count. The proceedings initiated, therefore, are not sustainable in law. 18. We also find that the notice dated 31.03.2024 has been issued by the ACIT Central Karnal and the notices issued under Section 133 (6) and Section 148 of the Act were issued by the jurisdictional Assessing Officer. He, therefore, was also not competent to issue the same in view of the judgment passed in CWP No.21509 of 2023 - Jasjit Singh vs. Union of India and others, others decided on 29.07.2024, wherein it has been held as under: “16.We are in agreement with the view taken by the Coordinate Bench and hold that such circular or instructions by the Board could not have been issued to override statutory provisions or to make them otiose or obsolete. Legislative enactments having financial implications are required to be followed strictly and mandatorily. By exercising the powers contained in Sections 119 and 120 of the Act, 1961 as well as Section 144B (7 & 8), the authorities cannot be allowed to usurp the legal provisions to their own satisfaction and convenience causing hardship to the assessees. It also leaves confusion in the minds of the taxpayers. In the opinion of this Court, instructions and circulars can be issued only for the purpose of supplementing the statutory provisions and for their implementation. 17. In view of the aforesaid discussion, there is no occasion to distinguish or take a different view as suggested by the learned counsel for the revenue from what has already been held by the Coordinate Bench. Page | 4

ITA No.1999/Kol/2026 Cheviot Devcon Private Limited; A.Y: 2017-18 18. Keeping in view the law laid down by the Coordinate Keeping in Bench (supra), notices issued by the JAO under Section 148 of the Act, 1961 and the proceedings initiated thereafter without conducting the faceless assessment as envisaged under Section 144B of the Act, 1961, have been found to be contrary to the provisions of the Act, 1961 and accordingly notices dated 28.02.2023, 16.03.2023, 20.03.2024 and 30.03.2023 and order dated 30.03.2023, are set aside for want of jurisdiction. 19. The respondents-revenue revenue would be, however, r, at liberty to follow the procedure as laid down under the Act, 1961 and proceed accordingly, if so advised. 20. All the writ petitions are allowed. The interim order passed by the Court shall stand merged with the present order.” Therefore, on both the counts, we find the notices are not sustainable in law. We, accordingly, quash the impugned notice notices dated 16.12.2022, 26.12.2022 and 06.01.2023 issued under Section 133 (6) of the Act, consequential notice dated 31.03.2024 issued under Section 148 of the Act and any further proceedings which the respondents may have undertaken on the basis of the same.” In the present case, based on the wrong facts mentioned in 6. reasons recorded, i.e., Assessee has not replied to the notice issued u/s 133(6) of the Act, addition came to be made by the Assessing Officer, which has been upheld by the Ld. CIT(A). Therefore, by respectfully following the Judgment of Hon’ble High Court of Punjab and Haryana in the case of Vishal Garg (supra), we quash the assessment order and the impugned order of the Ld. CIT(A).

7.

In the result, Appeal of the Assessee is allowed. Order pronounced on 25.08.2026. Sd/- Sd/- (GOPALAN GURUSAMY) (YOGESH KUMAR U.S.) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 25.08.2026 DP, PS Page | 5

ITA No.1999/Kol/2026 Cheviot Devcon Private Limited; A.Y: 2017-18

Copy of the order forwarded to: 1. Appellant 2. Respondent 3. Pr. CIT 4. CIT(A) 5. CIT(DR) //TRUE COPY//

DEPUTY REGISTRAR ITAT KOLKATA BENCHES, KOLKATA

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