AMIT KANDHARI,BARAKAR vs. DCIT, CENTRAL CIRCLE 4(3),, KOLKATA

ITSSA 51/KOL/2026Status: DisposedITAT Kolkata17 September 2026AY 2019-202017 pages
AI SummaryDismissed

What were the facts?

The assessee, Amit Kandhari, filed two appeals before the Income Tax Appellate Tribunal (ITAT) challenging the orders of the CIT(A) for assessment years 2019-20 and 2020-21. The appeals arose from assessments made under Section 153C read with Section 143(3) of the Income Tax Act, 1961. A key issue was the validity of the notice issued under Section 143(2) beyond the prescribed time limit. The assessee also disputed the addition of Rs. 20,00,000 as unaccounted income and the application of Section 115BBE for assessment year 2019-20, claiming it was business income. For assessment year 2020-21, the dispute involved peak credit from seized documents, with similar arguments regarding the nature of income and tax rates.

What did the Tribunal hold?

The Tribunal held that the notice under Section 143(2) is not a prerequisite for an assessment under Section 153C. Relying on the decisions of the Kerala High Court in CIT vs. Promy Kuriakose, the Delhi High Court in Ashok Chaddha v. Income Tax Officer, and the Punjab and Haryana High Court in Tarsem Singla v. Deputy Commissioner of Income Tax, the Tribunal found that the non-obstante clause in Section 153C(1) read with Section 153A excludes the requirement of Section 143(2). The Tribunal distinguished the Supreme Court's decision in Hotel Blue Moon, noting it applied to Section 158BC, which explicitly mentions the application of Section 143(2), unlike Section 153C. Therefore, the issuance of a time-barred notice under Section 143(2) does not invalidate the assessment under Section 153C, and the additional ground raised by the assessee was dismissed. Regarding the merits, the Tribunal found that the assessee failed to substantiate the claim that the unaccounted income of Rs. 20,00,000 (AY 2019-20) and the peak credit (AY 2020-21) were derived from brokerage and trading of iron and iron-related products. The Tribunal noted the lack of supporting evidence, the low profit offered by a related firm despite significant turnover, and the fact that the income was not offered in the return. Consequently, the findings of the Assessing Officer and CIT(A) in upholding the addition and the levy of tax under Section 115BBE were confirmed.

What were the issues?

1. Whether the assessment made under Section 153C read with Section 143(3) is void ab initio due to the issuance of a notice under Section 143(2) beyond the mandatory time limit of three months from the end of the financial year in which the return was furnished, thereby challenging the validity of the assessment procedure under Section 153C. Assessee's contention: The assessment is void because the notice under Section 143(2) was time-barred, making the entire assessment liable to be quashed. They relied on the Supreme Court decision in Rajeev Bansal (469 ITR 46) and general principles regarding notice issuance. Revenue's contention: The provisions of Section 153C(1) and 153A start with a non-obstante clause that excludes Section 149, and therefore, a notice under Section 143(2) is not required in assessments under Section 153C. They relied on the Kerala High Court decision in CIT vs. Promy Kuriakose (386 ITR 597). 2. Whether the admitted unaccounted income of Rs. 20,00,000 (for AY 2019-20) and peak credit (for AY 2020-21), claimed to be earned from brokerage and trading of iron and iron-related products, should be taxed at regular rates as business income or at the higher rate under Section 115BBE as unexplained income. Assessee's contention: Since the source of income (brokerage and trading) is admitted, it should be treated as business income and taxed at regular rates, not under Section 115BBE. They offered the income as speculation in their computation. Revenue's contention: The assessee has not shown the source of earning of the unaccounted income and has not explained or produced proof of the said source, thus justifying the application of Section 115BBE.

Which sections of the Income-tax Act were involved?

Section 153C,Section 143(3),Section 143(2),Section 149,Section 153A,Section 115BBE,Section 139,Section 144,Section 145,Section 158BC,Section 271AAB

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “A” BENCH, KOLKATA

Before: SHRI GEORGE MATHAN & SHRI GOPALAN GURUSAMY

For Appellant: Shri S. S. Gupta, AR
For Respondent: Shri Lalmalsawma Pachuau, CIT-DR
Hearing: 17.09.2026Pronounced: 17.09.2026

Per George Mathan, JM: These are the two appeals filed by the assessee against the orders of the CIT(A)-27, Kolkata [hereinafter referred to as the ‘CIT(A)’] in appeal

IT(SS)A No.51/Kol/2026 & ITA 1402/Kol/26 no.CIT(A), Kolkata-21/10752/2018-19 dated 06.03.2026 and in appeal no.CIT(A), Kolkata-21/10632/2019-20 dated 23.02.2026 for the assessment years 2019-20 and 2020-21 respectively.

2.

Shri S. S. Gupta, AR represented on behalf of the assessee and Shri Lalmalsawma Pachuau, CIT-DR represented on behalf of the reven

The order continues below.

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