RAM AWATAR BANKA,PURULIA vs. ITO, WARD 3(2),, PURULIA

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ITA 1938/KOL/2025Status: DisposedITAT Kolkata24 June 2026AY 2016-20176 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the assessment order was passed by the National Faceless Assessment Centre (NFAC) without proper jurisdiction, as the notification empowering NFAC to pass such orders was issued after the date of the assessment order. Therefore, the reassessment proceedings were considered bad in law.

What were the facts?

The assessee received Rs. 15,00,000/- as an unsecured loan from M/s Bhooteswar Sales Pvt. Ltd. during FY 2015-16. The Assessing Officer (AO) initiated reassessment proceedings based on information suggesting this was an accommodation entry from a shell company.

What were the issues?

The primary issue was whether the NFAC had the jurisdiction to pass the assessment order on the date it was issued. Another issue concerned the validity of reassessment proceedings initiated based on information without independent application of mind by the AO.

Which sections of the Income-tax Act were involved?

Section 147,Section 143(3),Section 144B,Section 151A,Section 68

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “SMC” BENCH, KOLKATA

Hearing: 18.06.2026Pronounced: 24.06.2026

IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH, KOLKATA SHRI LAXMI PRASAD SAHU, ACCOUNTANT MEMBER

ITA No. 1938/KOL/2025 Assessment Year : 2016-2017

Ram Awatar Banka, Vs. The Income Tax Village- Balarampur, Post Officer, Ward-3(2), Office- Rangadih, Purulia, District – Purulia West Bengal - I.T. Office Building, 723143 Ranchi Road, Sough [PAN: ADUPB0416A] Lake Road, Purulia, West Bengal - 723101 APPELLANT RESPONDENT

Assessee by : Abhishek Bansal, FCA Revenue by : Archana Gupta, Addl. CIT, Sr. DR

Date of hearing : 18.06.2026 Date of Pronouncement : 24.06.2026

O R D E R This is an appeal filed by the assessee against the order passed u/s 250 of the Income Tax Act, 1961 (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 13.08.2025, DIN & order No. ITBA/NFAC/S/250/2025- 26/1079583886(1) on the following grounds of appeal:

“1. For that the reassessment proceedings have been initiated merely on the basis of information received without independent application of mind by the

2 ITA No. 1938/KOL/2025 Ram Awatar Banka Ld. AO establishing any live link or intelligible nexus between the information received and belief formed. Therefore the entire reassessment proceedings are bad in law and void ab initio. 2. For that the Ld. AO erred in initiating reassessment proceedings on the ground that the loan taken from Bhooteswar Sales Pvt Ltd. has not been disclosed in the return of income filed by the assessee whereas the return of income has no column to report the same. 3. For that the National Faceless Assessment Centre erred in having assumed jurisdiction u/s 151A r.w.s 144B of the Act from 07.01.2022 when they were not empowered under any notification about the applicability of the faceless scheme for making assessment in faceless manner prior to 29.03.2022 as held in the case of Nabiul Industrial Metal Pvt. Ltd. v ITO, IT Department, NFAC, Delhi in ITA No. 328/KOL/2024 decided on 15.10.2024 4. For that the Ld. CIT(A) erred in upholding the addition of Rs.15,00,000/- as unexplained cash credit u/s 68 whereas the assessee duly discharged the onus lying upon him by furnishing name, address and PAN of the lender and copies of its company master data, return of income, audited financial statement, bank statements, confirmation, statement explaining source of fund and also its assessment order proving the identity, creditworthiness, and genuineness of the lender 5. For that the Ld. CIT(A) erred in upholding the addition of Rs.15,00,000/- as unexplained cash credit u/s 68 despite the fact that the assessee adduced credible evidences in support of the evidences adduced which were rejected/brushed aside merely on the basis of information received without the AO himself carrying on any independent inquiry whatsoever. 6. For that the assessee craves leave to add, alter or withdraw any grounds of appeal on or before hearing of the appeal.” 2. Briefly stated the facts of the case are that the assessee filed return of income in ITR-4 for the year 2016-17 on 12.10.2016 declaring taxable income of Rs. 5,68,040/- which was processed u/s 143(1) of the Act on 16.11.2016. The AO received information from DDIT (Inv.), Unit 1(3), Kolkata, vide his letter No. DDIT (Inv.)/Unit- 1(3)/Kol/Banka/Information/2018-19/7983 dated 26.02.2019 from which it was observed that a search/survey action in the case of Banka Group was conducted on 25.05.2018. It was also involved that during the post search verification of seized/impounded materials various

3 ITA No. 1938/KOL/2025 Ram Awatar Banka paper/sale deed companies controlled and managed by Shri Mukesh Banka were identified all these companies controlled and maintained by him for the purpose of providing accommodation entry in the nature of bogus unsecured loan are in other forms on verification of bank accounts of paper/shell companies of Banka Group, the name of the assessee was identified as a beneficiary who had obtained accommodation entry in the nature of bogus unsecured loan account from the paper/shell company which were controlled and managed by Shri Mukesh Banka.

3.

On perusal of the data, it was noticed that the assessee had received the amount of Rs. 15,00,000/- from the paper/shell company M/s Bhooteswar Sales Pvt. Ltd. during FY 2015-16 relevant to AY 2016- 17 from A/c No. 1900210026890 on 29.06.2015 which was credited in the bank A/c No. 141201501940 with ICICI Bank of the assessee. Accordingly, notice u/s 148 of the Act was issued on 31.03.2021 which was duly served upon the assessee. The assessee filed return of income in response to the notice u/s 148 of the Act on 24.04.2021 disclosed the same income which was disclosed u/s 139 of the Act. Accordingly, notice u/s 143(2) and other statutory notices were issued to the assessee. The assessee furnished reply after considering the entire submission of the assessee the income was assessed at Rs. 20,68,040/- u/s 143(3) r.w.s. 147 r.w.s. 144B of the Act and order was passed on 19.03.2022 by NFAC, Delhi.

4 ITA No. 1938/KOL/2025 Ram Awatar Banka 4. Aggrieved from the above order, the assessee filed appeal before the Ld. CIT(A). The Ld. CIT(A) considering the entire submission of the assessee, dismissed the appeal of the assessee.

5.

Aggrieved from the above order, the assessee filed appeal before ITAT.

6.

At the outset of hearing, the Ld. Counsel submitted that the assessment order passed by the NFAC, Delhi, order dated 19.03.2022 is beyond its jurisdiction because the Co-ordinate Bench has decided the similar issue in the following cases in favour of the assessee observing that the notification issued was issued on 29.03.2022 to get jurisdiction by the NFAC for passing assessment order .

1.

Anita Devi Bagadia Vs. ITO, Ward 1(1), Asansol, (ITA No. 1542/Kol/2025), dated 25.03.2026 2. Contemporary Industries Limited, Vs. ITO, Ward 4(4), Kolkata, [ITA No. 1820/KOL/2025] dated 24.03.2026 3. Harsh Kumar Lath, Vs. ITO Ward 49(1), Kolkata, [ITA No. 1605/KOL/2024] dated 27.03.2026 4. Indrajit Kar Vs. ITO, Ward-3(2), Darjeeling [ITA No. 716/KOL/2025] dated 28.04.2026 5. John Chhetri Vs. ITO, Ward 1(2), Ghy [ITA No. 139/GTY/2025] dated 02.09.2025

5 ITA No. 1938/KOL/2025 Ram Awatar Banka 6. Promising Developers Pvt. Ltd. Vs. ITO, Ward-12(1), Kolkata [ITA No.1713/Kol/2025] dated 05.05.2026

7.

On the other hand, the Ld. DR supported the order of lower authorities and submitted that the order passed by the AO is correct.

8.

Considering the rival submission and perusing the entire material available on record and orders of authorities below. I noted that the assessment order was passed by the NFAC, Delhi on 19.03.2022 since the Ld. Counsel has raised the issue that on the date of passing of order by the NFAC, the NFAC had no jurisdiction and it was notified on 29.03.2022 for passing the order by NFAC and relied on various judgment as cited above, I allow the appeal of the assessee.

9.

In the result, appeal of the assessee is allowed.

Order pronounced on 24.06.2026.

Sd/- (Laxmi Prasad Sahu) Accountant Member Dated: 24.06.2026 AK, Sr. P.S.

6 ITA No. 1938/KOL/2025 Ram Awatar Banka 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

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