KAMAL PAREKH,KOLKATA vs. DCIT, CIRCLE 32, , KOLKATA

ITA 1301/KOL/2026Status: DisposedITAT Kolkata30 September 2026AY 2016-201711 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the notice under section 148A(b) was issued without providing the assessee with the relevant information and material relied upon by the Assessing Officer. This non-compliance with the mandatory requirement of furnishing supporting documents along with the show-cause notice renders the notice bad in law. The Tribunal relied on the Supreme Court's decisions in Union of India v. Ashish Agarwal and Union of India v. Rajeev Bansal, which emphasize that a show-cause notice under Section 148A(b) is effectively issued only when accompanied by the relevant information and material. Since the Assessing Officer failed to provide the 'Rukkas' or any other supporting material along with the notice, the condition for issuing the notice under Section 148A(b) was not met. Consequently, the Tribunal quashed the notice under section 148A(b) and, by implication, all subsequent proceedings, including the reassessment order. The appeal of the assessee was allowed on this legal issue.

What were the facts?

The assessee, Kamal Parekh, an individual engaged in trading and investment in securities, filed his return for AY 2016-17 declaring an income of Rs. 14,67,500/-. Information from the Investigation Wing indicated the assessee had allegedly taken a cash loan of Rs. 1,00,00,000/- from a finance broker. This was based on seized materials including 'Rukkas' and communications. On March 18, 2023, a notice under section 148A(b) was issued, to which the assessee objected, denying the loan and claiming the reassessment was time-barred. An order under section 148A(d) was passed on March 31, 2023, permitting reassessment. The assessee filed a revised return. During reassessment proceedings, notices under section 142(1) and 143(2) were issued. The assessee provided some financial details but not specific transaction-wise details or confirmations for the alleged loan. A show cause notice was issued on February 20, 2024, regarding the Rs. 1,00,00,000/-. The assessee reiterated denial and requested cross-examination. The Assessment Unit added Rs. 1,00,00,000/- under section 69A as unexplained money. The CIT(A) dismissed the assessee's appeal.

What were the issues?

1. Whether the reassessment proceedings under Section 147 are without jurisdiction and in violation of principles of natural justice, as the order upholding it by the NFAC disregarded express provisions of the Act. (Assessee's contention: The notice under Section 148A(b) was issued without enclosing material evidence, making the entire proceedings bad in law, relying on Supreme Court decisions in Rajeev Bansal and Piyush Agarwala. Revenue's contention: Not recorded. 2. Whether the NFAC erred in upholding reassessment under Section 147 without appreciating that the appellant was not given an opportunity to cross-examine documents, statements, or other information relied upon for reassessment. (Assessee's contention: Lack of cross-examination denied natural justice. Revenue's contention: Not recorded. 3. Whether the NFAC erred in upholding reassessment under Section 147 initiated on the basis of unsubstantiated material found in a third party's diary, disregarding that loose sheets/diaries do not per se constitute tangible information. (Assessee's contention: Reliance on third-party diary entries without corroboration is invalid. Revenue's contention: Not recorded. 4. Whether the NFAC erred in upholding the addition of Rs. 1,00,00,000/- under Section 69A on account of cash loan, despite the appellant not having obtained such a loan. (Assessee's contention: No cash loan was taken. Revenue's contention: Not recorded. 5. Whether the NFAC erred in confirming the addition made under Section 69A on account of alleged 'cash loan' as the provisions of Section 69A do not apply to loan transactions. (Assessee's contention: Section 69A is not applicable to loan transactions. Revenue's contention: Not recorded. 6. Whether the NFAC erred in confirming the AO's order by relying on the incorrect finding that the appellant had not furnished details of unsecured loans, despite the requisite details being furnished. (Assessee's contention: Details were provided on 16.02.2024. Revenue's contention: Not recorded. 7. Whether the Notice under Section 148 was issued in gross violation of Section 151A read with the 'e-Assessment of Income Escaping Assessment Scheme, 2022', making it invalid. (Assessee's contention: Procedural violation. Revenue's contention: Not recorded.)

Which sections of the Income-tax Act were involved?

Section 147,Section 148A,Section 148,Section 142(1),Section 143(2),Section 69A,Section 151A

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “B” BENCH, KOLKATA

Before: Shri Rajesh Kumar & Shri Pradip Kumar Choubey

Per Pradip Kumar Choubey, Judicial Member:

This appeal filed by the assessee is directed against the order dated 13.02.2026 of the Office of the National Faceless Appeal Centre (NFAC), Delhi passed under Section 147 of the Assessment Year 2016-17 of the Income-Tax Act, 1961 (hereinafter referred to as “the Act”).

2.

The brief facts of the case of the assessee is that the assessee is an individual engaged in the business of

The order continues below.

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