BLAZING STAR MARKETING PRIVATE LIMITED,KOLAKATA vs. INCOME TAX OFFICER WARD 11(1), KOLKATA

At the time of hearing, the ld. Counsel for the assessee referred to the application dated 03.04.2026, filing the additional ground of appeal which is extracted as under:-

The facts in brief are that the assessee filed its return of income for AY 2013-14 on 23.12.2013 declaring total income of Rs. 2,27,100/-, which was processed u/s 143(1). Notice u/s 148 was issued on 30.03.2021 by the Jurisdictional Assessing Officer, ITO Ward-11(1), Kolkata on the basis of information received from the investigation Wing that the Appellant had allegedly credited Rs. 3,24,90,000/- in its bank account from seven entities during FY 2012-13. In response, the Appellant filed return on 27.04.2021 declaring the same income of Rs. 2,27,100/-. Notice u/s 143(2) was issued by the JAO on 18.11.2021 and the case was assigned to the Faceless Assessing Officer on 10.12.2021. Notices u/s 142(1) were issued by the National Faceless Assessment Centre (NFAC), Delhi on 29.12.2021, 17.02.2022, Show Cause Notice cum Draft Assessment Order was issued on 23.03.2022 and the impugned assessment order was

The ld. AR vehemently submitted before us that the order passed by the NFAC is without jurisdiction as though the provisions dealing with the faceless assessment of income escaping the assessment u/s 151A of the Act was brought on statute book by Taxation and Other Law (Relaxation and Amendment of Certain Provisions) Act, 2020, with effect from 01.11.2020, however, the counsel of the assessee vehemently submitted before us that though the provisions of Section 151A of the Act came on the statute book on 01.11.2020 but the same were notified on 29.03.2022 vide notification no. 18/2022 on e-assessment of income escaping income of 2022. Therefore, the ld. Counsel for the assessee submitted that the assumption of jurisdiction by the National faceless assessment centre was without valid jurisdiction as the provisions of Section 151A of the Act had not come into operation on that date when the jurisdiction was assumed by the National Faceless Appeal Centre, Delhi [the learned CIT (A)] The ld. AR submitted that the notice u/s 142(1) of the Act was issued by NFAC on 17.2.2022 even prior to 29.3.2022 and therefore, the whole of assessment is without jurisdiction and not sustainable in law.

The ld. DR on the other hand submitted that the assessment have been framed by the NFAC after issuing notice as the Provisions of Section 151A of the Act which were brought on the statute book with effect from 1.11.2020. Therefore, the legal issue raised by the assessee may kindly be dismissed.

So far as the merits of the case is concerned the assessee has challenged two additions confirmed by the ld. CIT(A) as made by the AO i) in ground nos. 3 & 4 of ₹ 1,87,50,000/- in respect of sale of

The facts were already discussed while deciding the additional ground raised by the assessee(supra).So far as the ground nos. 3 and 4 are concerned the AO added the same for sale of unlisted investments during the year to three parties namely M/s Axisline Agencies Pvt. Ltd. Rs.19,50,000/-,M/s ShivashivDealtrade Pvt. Ltd. Rs.1,23,00,000/- and ) M/s PanghatVincom Pvt. Ltd. Rs.45,00,000/-. The reasons assigned by the Ld. AO for the additions u/s 68 are (a) the counter-parties are stated to be shell/strike-off companies with no real source of income as per Investigation Wing reports; (b) the unquoted shares were sold at Rs. 500/- per share which according to the AO "unquoted shares by no means can fetch in market"; (c) entry-providers Shri Ashok Kumar Kayan and Shri Bikash Sureka are alleged to have admitted in their statements u/s 131 that their accounts were used for accommodation entries and the Appellant's name figures in the beneficiary list; and (d) the Appellant allegedly did not produce evidence of acquisition of the shares and justification of price. The Ld. CIT(A) has simply affirmed these findings.

We have heard the rival contentions and perused the materials on records. We note that Rs. 1,87,50,000/- represented sale consideration of unlisted equity investments held by the Appellant as Investments. The said investments /hares were originally purchased by the Appellant at Rs. 500/- per share in FY 2007-08 (AY 2008-09) and were reflected in the audited Balance Sheet as at 31.03.2008 (Page No. 215, 217 and 221 of the Paper Book) and continuously thereafter shown in all the successive audited balance sheets. We also note that these investments were accepted by the department in

As far as the addition of Rs. 1,02,90,000/- is concerned , we note that the same was made in respect of undisclosed receipts from M/s PanghatVincom Pvt. Ltd. Rs.50,00,000/-,M/s Ambika Steel House Rs.12,90,000/- and M/s Zenith Commosales Rs.40,00,000/-. We the reasons for the additions of Rs. 1,02,90,000/- that the assessee submitted bank statement of its Union Bank of India A/c No. 441601010036879 from 17.09.2012 onwards (and not from 01.04.2012), and hence the AO disbelieved the assessee's claim of non-receipt of the aggregate sum of Rs. 1,02,90,000/- alleged by the Investigation Wing to have been credited prior to 17.09.2012. We note that AO made addition on the basis of presumption and assumption that the additions of Rs. 50,00,000/- (PanghatVincom), Rs. 12,90,000/- (Ambika Steel House) and Rs. 40,00,000/- (Zenith Commosales) - aggregating Rs. 1,02,90,000/- that the assessee

We note that the said bank account bearing A/c No. 441601010036879 with Union Bank of India was itself opened on 17.09.2012 which is evident from the bank statement on the very first page. The AO has not brought any materials on records substantiating that the assessee had any other bank account.

We note that the information acted upon by the Department itself revealed that the alleged credit of Rs. 12,90,000/- from Ambika Steel House was traced in the HDFC Bank A/c of Ambika Steel House and the alleged Rs. 40,00,000/- from Zenith Commosales in the HDFC Bank A/c of Zenith Commosales neither of which is the assessee’s account. Therefore onus to prove receipt by the Appellant rests on the Revenue and has not been discharged.

We also note that the additions is based upon information/reports of thethe DDIT (Inv.) Kolkata which are in turn based on statements recorded u/s 131 of Shri Ashok Kumar Kayan, Shri Bikash Sureka, Shri Prakash Sonkar and Shri Prasant Bhatt. We note that the assessee specifically requested to supply of the said reports and statements and opportunity of cross-examination vide its reply dated 25.03.2022. Neither the reports/statements were supplied nor cross- examination afforded. Use of third-party material against an assessee without affording opportunity of rebuttal and cross- examination is a fatal violation of the principles of natural justice. The case of the assessee is squarely covered by the decisions of

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