M/S. SHROFF TRADELINK PVT. LTD. ,KOLKATA vs. ITO, WARD 1(1), , KOLKATA
PER SONJOY SARMA, JUDICIAL MEMBER:
These two appeals being
ITA
Nos.
1016/Kol/2025
and 1017/Kol/2025 have been filed by the same assessee against two separate orders passed by NFAC dated 22.04.2025 and 04.04.2025 for assessment years 2014-15 and 2015-16 respectively. Since the issues involved in both appeals are common except for the figures and assessment years, they were heard together and are being disposed of by this consolidated order, for the sake of convenience.
M/s Shroff Tradelink Pvt. Ltd.
First we take up ITA No. 1016/Kol/2025 for A.Y. 2014-15
2. The brief facts of the case are that the assessee-company filed its original return of income declaring total income of ₹ 13,160 for the year under consideration. Information was later received from the office of the DDIT (Investigation), Kolkata, that concerns like M/s. Arya Traders and M/s. Infinity Enterprise were shell entities controlled by one Shri
Anand Mohan Roy. It was found that the entities were engaged in large- scale rotation of funds without genuine business activity. The investigation further revealed that one Shri Mukesh Banka was the key person controlling various paper-concern companies, which were being used for providing accommodation entries in the nature of unsecured loans. The present assessee was found to be one of the beneficiaries of such entries. On the basis of the material collected, the Assessing Officer
(AO) recorded reasons to believe that income of ₹ 12 lakh had escaped assessment. Accordingly, after obtaining the necessary approval, notice under Section 148 of the Act was issued. In response, no valid return was filed. During the course of assessment, the assessee submitted that it had merely facilitated accommodation entries aggregating to ₹ 12 lakh in favour of M/s. Arya Traders and M/s. Infinity Enterprise, and earned commission at 0.25% (₹ 3,000), which was already accounted for in the profit and loss account. Similarly, for the previous year relevant to A.Y.
2015-16, the assessee claimed to have provided accommodation entries of ₹ 13 lakh to entities of the Banka Group and earned commission of ₹
3,250/-. The AO did not accept the explanation and completed the assessment under Section 147 read with Section 144 of the Act by treating ₹ 25 lakh as unexplained money under Section 69A and assessed the total income at ₹ 25,13,160/-.
M/s Shroff Tradelink Pvt. Ltd.
The assessee preferred appeal before the Ld. CIT(A). During appellate proceedings, the Ld. CIT(A) observed that the assessment order was framed ex parte under Section 144 of the Act and the assessee was granted only two working days time to respond to notice dated 18.04.2023. Accordingly, the CIT(A), relying on the newly inserted proviso to Section 251(1)(a) of the Act (effective from 1 October 2024), exercised his power to set aside the ex parte assessment and restore the matter to the file of the AO for fresh adjudication after giving proper opportunity of hearing to the assessee. 4. The assessee has now come in appeal before this Tribunal, inter alia contending that— (i) the notice issued under Section 148A(d) and consequently under Section 148 was barred by limitation in view of the decision of the Hon’ble Supreme Court in Union of India v. Rajesh Bansal (2024) 167 taxmann.com 70 (SC) (ii) the order of the CIT(A) was bad in law without due opportunity to the assessee of being heard on the merit of the case. 5. We have considered the rival submissions and perused the record. The learned DR supported the order of the CIT(A), submitting that the CIT(A) rightly exercised power under Section 251(1)(a) (inserted by Finance (No. 2) Act, 2024 w.e.f. 1-10-2024), which empowers the CIT(A) to set aside an ex parte assessment framed under Section 144 of the Act and remit the matter to the file of AO for fresh adjudication after affording due opportunity to the assessee. However, the primary contention of the assessee relates to the validity of the notice under Section 148A(d) and limitation in light of the Hon’ble Supreme Court judgment in Rajesh Bansal (supra). The assessee submitted that in terms of the said judgment, the extended limitation for issuance of notice M/s Shroff Tradelink Pvt. Ltd.
under Section 148 expired on 15th June 2022, whereas in the present case, the AO issued notice under Section 148A(d) only on 3 July 2022, which is clearly beyond the permissible time limit. This view finds support from various judicial pronouncements including coordinate Bench as in the case of G.D. Mother Educational Society v. ITO (ITA No. 309-
312/Pat/2023, order dated 20.11.2024). All these authorities hold that any notice issued beyond the extended time-limit computed in terms of Rajesh Bansal (supra) is invalid in law. In the present case, therefore, we deem it appropriate to set aside the matter to the file of the AO to verify and determine whether the impugned notice under Section 148A(d) was issued within the limitation period prescribed in light of the above judgment. The AO shall thereafter decide the matter afresh on merits in accordance with law after giving the assessee a reasonable opportunity of being heard.
ITA No. 1017/Kol/2025 – A.Y. 2015-16
6. The facts and issues involved in this appeal are identical to those considered in ITA No. 1016/Kol/2025. Following our findings therein, we similarly set aside this matter to the file of the AO for fresh adjudication in line with our directions above.
7. In the result, both appeals filed by the assessee are allowed for statistical purposes.
Order pronounced on 18.11.2025 (Sanjay Awasthi) (Sonjoy Sarma)
Accountant Member Judicial Member
Dated: 18.11.2025
AK, Sr. P.S.
M/s Shroff Tradelink Pvt. Ltd.
Copy of the order forwarded to:
Appellant 2. Respondent 3. Pr. CIT 4. CIT(A)
CIT(DR)
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By order