LIPIKA BERA,HOOGHLY vs. ACIT, CIRCLE 23(1), HOOGHLY,, HOOGHLY

IN THE INCOME TAX APPELLATE TRIBUNAL ‘B” BENCH, KOLKATA SHRI GEORGE MATHAN, JUDICIAL MEMBER SHRI LAXMI PRASAD SAHU, ACCOUNTANT MEMBER

ITA Nos. 1858 & 1859/KOL/2026 Assessment Year : 2018-19 & SA Nos. 28 & 29 /KOL/2026 Assessment Year : 2018-19

Lipika Bera, Vs. ACIT, Circle-23(1), Flat No. A4, 1st Floor, 144, Hooghly, Netaji Subhas Road, P.O. & Aayakar Bhawan, P.S.- Uttarpara, Hooghly - Khadina More, 712258 Chinsurah, Hooghly - [PAN: AFWPB4241H] 712102 APPELLANT RESPONDENT

Assessee by : Shri Soumitra Choudhary, Advocate Shri Pranabesh Sarkar, Advocate Revenue by : Shri Sanjit Kumar Das, CIT-DR

Date of hearing : 12.06.2026 Date of Pronouncement : 22.06.2026

O R D E R PER LAXMI PRASAD SAHU, ACCOUNTANT MEMBER

These two appeals and stay petitions filed by the assessee against the order passed u/s 250 of the Income Tax Act, 1961

2 ITA Nos. 1858 & 1859/KOL/2026 SA Nos. 28 & 29/KOL/2026 Lipika Bera (hereinafter referred to as “the Act”) by the Ld. Commissioner of Income Tax (Appeals)-National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as “the Ld. CIT(A)] dated 14.05.2026, DIN & order No. ITBA/NFAC/S/250/2026-27/1089005588(1) and ITBA/NFAC/S/250/2026-27/1089005982(1) on the following grounds of appeal:

ITA No. 1858/Kol/2026

“1. For that on the facts of the case, the order passed by the Ld. C.I.T.(A) on 14.05.2026 is completely arbitrary, unjustified and illegal. 2. For that on the facts of the case, the assessee has relied upon Prasant Kumar Roy Barman, Chartered Accountant and this order passed on 23.04.2021 in Covid Period, and the said CA passed away on 29.05.2023 after suffering from Covid at the age of 75 years. It come to the notice of the assessee on 06.11.2025 when Recovery demand notice was sent by the A.O. and Immediately the appeal has been filed on 24.12.2025, therefore, the default of filing the appeal was not intentional. 3. For that on the facts of the case, the assessment order u/s. 143(3) on 23.04.2021 is beyond barred by limitation, therefore, the whole assessment should be quashed. 4. For that on the facts of the case, the assessee has issued final show cause notice on 18.04.2021 and reply to be submitted on 19.04.2021 and has passed the order on 23.04.2021wherein 5 days of difference of issuing notice which is against the Provision of natural justice, therefore, whole assessment should be quashed. 5. For that on the facts of the case, the A.O. was wrong in framing the assessment without rejecting the books of accounts u/s. 145(3) of the IT Act, therefore, whole addition should be quashed. 6. For that on the facts of the case, the A.O. was both erred that he accepted the balance sheet and also accepted the turnover and method of accounts is 'Mercantile', therefore, disallowance made without application if mind in the basis of surmise, suspicion and conjecture. 7. For that at the time of assessment proceeding produced the certificate of Chartered account on 28.01.2019 wherein mentioned "Therefore, the amount of Rs.6,27,60,264/- mentioned in Clause 44 may kindly be

3 ITA Nos. 1858 & 1859/KOL/2026 SA Nos. 28 & 29/KOL/2026 Lipika Bera ignored and treated as NIL. The said amount does not represent inadmissible, non-genuine or unverifiable expenditure and no adverse inference should be drawn on the basis of the said mistaken reporting', but the A.O. has passed the order ignoring the Chartered Accountant Certificate dated 28.01.2019, but relying on Tax Audit Report dated 13.09.2018 which is completely arbitrary, unjustified and illegal. 8. For that on the facts of the case, the total turnover of the assessee Rs.6,81,20,496/- and the assessment order passed on 23.04.2021 by disallowing at Rs.6.27.60,264/-which is completely arbitrary, unjustified and illegal. 9. For that on the facts of the case, the A.O. was wrong in not considering the facts that in Balance sheet the appellant had claimed various expenses Le. Employer's contribution to ESIC, EPF, Rates and Taxes, salaries, interest expenses, depreciation, bank charges, bad debt, puja expenses, security expenses, security expenses, insurance charges etc. and GST not applicable on most of the expenses, so entities not registered in GST related to total expenses incurred cannot be the basis for making such disallowance, therefore assessment made only for high-pitched assessment ignoring the supporting evidences is an arbitrary, unreasonable and disproportionate tax demand raised by the A.O. far beyond the returned income which is confirmed by the Ld. CIT(A), as such the action of the Ld. CIT(A) which is completely arbitrary, unjustified and illegal. 10. For that the charging interest u/s. 234B at Rs.80,49,683/- which is mechanical wrong and illegal. 11. That the appellant reserves the right to adduce any further ground or grounds, if necessary, at or before the hearing of the appeal.” ITA No. 1859/Kol/2026

“1. For that on the facts of the case, the order passed 270A of the I.T. Act dated 14.05.2026, which is completely arbitrary, unjustified and illegal. 2. For that on the facts of the case, the assessee has relied upon Prasant Kumar Roy Barman, Chartered Accountant and this order passed on 16.03.2022 and the said CA passed away on 29.05.2023 after suffering from Covid at the age of 75 years. It come to the notice of the assessee on 06.11.2025 when Recovery demand notice was sent by the A.O. and immediately the appeal has been filed on 27.12.2025, therefore, the default of filing the appeal was not intentional. 3. For that on the facts of the case, the A.O. was wrong in levying a penalty @200% of tax under the provisions of section 270A amounting to Rs.4,41,89,144/ which is confirmed by the Ld. CIT(A), as such the appellate order is completely arbitrary, unjustified and illegal.

4 ITA Nos. 1858 & 1859/KOL/2026 SA Nos. 28 & 29/KOL/2026 Lipika Bera 4. For that in passing the penalty order, the A.O. & Ld. CIT(A) have failed to appreciate in its true perspective in disallowing expenditure to the tune of Rs.6,27,60,264/-, relating to entities not registered under GST, as compared to total expenses as reported in the Tax Audit Report in Form 3CD, although at the time of assessment proceeding produced the certificate of Chartered account on 28.01.2019 wherein mentioned Therefore, the amount of Rs.6,27,60,264/ mentioned in Clause 44 may kindly be ignored and treated as NIL. The said amount does not represent inadmissible, non-genuine or unverifiable expenditure and no adverse inference should be drawn on the basis of the said mistaken reporting', but the A.O. has passed the order ignoring the Chartered Accountant Certificate dated 28.01.2019, but relying on Tax Audit Report dated 13.09.2018 and the penalty imposed without establishing the concealment of income, hence the penalty order is liable to be cancelled and/or quashed. 5. For that on the facts of the case, the order passed by the A.O. & Ld. CIT(A) were bad in law as in any case, the case of the Appellant did not fall under any of the criteria as envisaged u/s. 270A of the Act and hence the penalty should not be levied upon the Appellant u/s. 270A of the Act for misreporting of income. 6. For that the A.O. imposing penalty has not brought any other material on record to justify the imposition of penalty u/s. 270A of the I.T. Act. 7. For that the appellant reserves the right to adduce any further ground or grounds, if necessary, at or before the hearing of the appeal.” 2. The assessee has also filed stay petition for the disputed demand of Rs. 3,02,81,688/- for the AY 2018-19 and Rs. 4,41,89,144/- for AY 2018-19 against the order passed u/s 143(3)/144B and 270A of the Act. The assessee filed appeal filed before the ITAT on 21.05.2026. The case was fixed for hearing on 12.06.2026 before the ITAT. The assessee was also issued demand as u/s 156 of the Act vide notice of demand dated 06.11.2025, DIN No. ITBA/COM/F/17/2025-26/1082337793(1) in which the assessee was directed to pay 20% of the total demand within five

5 ITA Nos. 1858 & 1859/KOL/2026 SA Nos. 28 & 29/KOL/2026 Lipika Bera days from the date of receipt of the letter . The assessee filed early fixation of hearing for both the appeals stating as under:

6 ITA Nos. 1858 & 1859/KOL/2026 SA Nos. 28 & 29/KOL/2026 Lipika Bera 3. As per the above, the stay petition was fixed for hearing before the Bench. The case was completed u/s 143(3)/144B determining total income at Rs. 6,69,43,050/- after making disallowance of expenses of Rs. 6,27,60,264/- that the AO made addition amounting to Rs. 6,27,60,264/- on the basis of tax audit report wrongly filed by the Chartered Accountant, wherein column-44 of Form 3CD the tax auditor mentioned expenditure in respect of entities registered under GST and penalty order was passed u/s 270A of the Act. The tax auditor, Mr. Prasanta Kumar Roy Barman issued certificate on 28.01.2019, wherein he has clarified that “this is to certify that the amount of Rs. 6,27,60,264/- as showing column -44 of Form 3CD for the AY 2018-19 in the case of the assessee was reported inadvertently due to typographical and arithmetical error.” The sole issue for making the addition is on the basis of tax audit report in Form 3CD. Later on, the Chartered Accountant clarified in its letter issued by the concerned Tax Auditor is as under:

7 ITA Nos. 1858 & 1859/KOL/2026 SA Nos. 28 & 29/KOL/2026 Lipika Bera

8 ITA Nos. 1858 & 1859/KOL/2026 SA Nos. 28 & 29/KOL/2026 Lipika Bera India, Ministry of Finance Department of Revenue, Central Board of Direct Taxes, TPL Division in Circular No. 6/2018, F.No. 370142/9/2018-TPL, dated 17.08.2018 issued u/s 119 of the Income Tax Act is not applicable for the year under consideration. On going through the said Circular No. issued by the Govt. of India, Ministry of Finance, we observed that in which it has been clearly mentioned that there is no reporting requirement under clause 3C and proposed clause-44 of the tax audit report shall be kept in abeyance till 31.03.2019. For the sake of convenience, we are reproducing the same:

9 ITA Nos. 1858 & 1859/KOL/2026 SA Nos. 28 & 29/KOL/2026 Lipika Bera 5. We also gone through the clause -44 of Form 3CD, the tax auditor has reported as total amount expenditure in respect of entities not registered under GST of Rs. 6,27,60,264/- reported by tax auditor. We also found from the assessment order that the sole basis for making addition is for the same which are not required for the impugned assessment year. Accordingly, we delete the addition and penalty imposed by the AO is a consequential in nature. Therefore, the assessment order and penalty order passed are quashed.

Order pronounced on 22.06.2026.

Sd/- Sd/- (George Mathan) (Laxmi Prasad Sahu) Judicial Member Accountant Member Dated: 22.06.2026 AK, Sr. P.S.

10 ITA Nos. 1858 & 1859/KOL/2026 SA Nos. 28 & 29/KOL/2026 Lipika Bera Copy of the order forwarded to: 1. Appellant 2. Respondent 3. Pr. CIT 4. CIT(A) 5. CIT(DR)

//True copy// By order

Assistant Registrar, Kolkata Benches