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Income Tax Appellate Tribunal, “B” BENCH KOLKATA
Before: SHRI GEORGE MATHAN & SHRI RAKESH MISHRA
Indarsen Shamlal Pvt. ltd. Income Tax Officer, 27, Sarat Bose Road Vs. Aaykar Bhavan, circle 1(1), Kolkata-700020 P-7, Chowringhee Square, West Bengal Kolkata-700069, West Bengal (PAN: AAACI6553R) (Appellant) (Respondent) Present for: Appellant by : Shri Ayush Gupta, AR Respondent by : Shri Kapil Mandal, DR Date of Hearing : 16.06.2025 Date of Pronouncement : 01.07.2025 O R D E R
PER RAKESH MISHRA, ACCOUNTANT MEMBER:
1. This appeal filed by the assessee is against the order of National Faceless Appeal Centre (NFAC), Delhi (hereinafter referred to as “the Ld. CIT(A)”) passed u/s. 250 of the Income Tax Act, 1961 (hereinafter referred to as “the Act”) for AY 2015-16 dated 07.02.2025.
The grounds of appeal raised by the assessee are reproduced as un- der:
“1. That the Hon'ble CIT(A) has erred in confirming the additions made by the Ld. Assessing Officer vide order U/s 147 dated 26.05.2023.
2. That the Learned Assessing Officer erred by assuming the Jurisdiction pur- suant to the order passed u/s 148A(d) of the Act with the approval/sanction of the competent authority prescribed u/s 151 of the Act. However, there was nothing on record to show that the document of communication of the said approval/sanction was DIN generated document. Hence such approval/sanction without DIN is not a legal approval and therefore the entire reassessment proceedings were illegal and without jurisdiction.
That the Learned Assessing Officer erred by Issuing the notice u/s 148 manually whereas the same was required to be issued in a faceless manner through the mechanism of NFAC as directed to be issued by virtue of Notifi- cation S.O. 1466(E) [No.18/2020/F. No. 37014/16/2022-TPL(Part 1] dated 29.03.2022. Therefore, the impugned Notice issued under section 148 of the Act in this case is illegal and contrary to the provisions of law. The subsequent proceeding in pursuance to the said notice is also illegal and void ab initio.
That the Learned Assessing Officer erred by issuing notice under Section 148 of the Income Tax Act, 1961 without obtaining the mandatory approval under section 151(ii) from the prescribed specified authority and thus the im- pugned reassessment proceedings are liable to be annulled. The reassess- ment proceedings initiated by the Learned Assessing Officer in the instant case is nullity, without jurisdiction and void ab-initio as at the sanction re- quired to be obtained from the appropriate/specified authority under section 151 of the Act was not obtained from the prescribed specified/appropriate authority. The impugned notice issued on 28.06.2021 under Section 148 of the Act mentions that approval was obtained from Principal Commissioner of Income, Kolkata- 1.
It is respectfully submitted that Principal Commissioner of Income, Kolkata-1 has no jurisdiction to grant such approval in view of the specific provisions of Section 151 of the Act, as the case of the Assessee Com- pany for the Assessment Year 2015-16 is beyond 3 years and less than 10 years, therefore the Appropriate Authority as specified in Section 151(ii) of the Act is Principal Chief Commissioner of Income Tax, West Bengal & Sikkim and not Principal Commissioner of Income, Kolkata-1, 5. That the notice u/s 148 dated 28.06.2021 issued by the Learned ACIT, Circle 1(1), Kolkata was not accompanied by the reasons and the sanction of Learned PCIT- Kolkata - 1 and/or competent authority as specified under sec- tion 151(ii) of the Act. The same were also not furnished to the assessee Com- pany in course of assessment proceedings. Hence, the subsequent proceed- ings in pursuance to the said notice is also illegal and void ab initio.
6. That the Learned Assessing Officer erred by not making any independent enquiry before drawing the adverse inference against the assessee company that the assessee company is a beneficiary of accommodation entry provided by the alleged entry operators whose names have been repeatedly mentioned in the notices issued by the Learned Assessing Officer. The Learned As- sessing Officer solely relied on the information of the Investigation Wing. The Learned Assessing Officer ought to have conducted independent enquiry to draw any adverse inference against the assessee company and thereupon issue the notice u/s 148A(b) of the Act. The Learned Assessing Officer just accepted the Information uploaded in the Insight portal and refrained from conducting any enquiry u/s 148A(a) of the Act.
That the notice u/s 143(2) of the Act was not issued as per the revised format provided by the CBDT vide F.No.225/157/2017/ITA-II dated 23.06.2017. In the notice issued u/s 143(2) of the Act dated 13.02.2023, there was no mention of the type of scrutiny under which the case of the as- sessee company was selected. Hence the notice Issued u/s 143(2) is not valid as per law accordingly all subsequent proceedings are void and invalid.
That the Learned Assessing Officer has erred in law by making addition of aggregate amount of Rs.1,45,59,616/ to the total income of the assessee com- pany as addition u/s 68 of the Income Tax Act, 1961 as fictitious loss by way of trading of illiquid derivative/equity trading without considering the submis- sions made by the assessee company in course of assessment proceedings. The Hon'ble CIT(A) has also erred in confirming the said addition.
That the written submissions and explanations furnished by the assessee company were not given due cognizance at the time of passing assessment order U/s 147, in gross violation of principles of natural justice.
That the appellant craves leave to add, alter, delete, modify, substitute, or withdraw any ground or grounds of appeal
before or at the time of hearing.”
03. At the outset, it was the submission of the Ld. AR that the impugned order passed by the Ld. CIT(A) is an ex parte order without giving suffi- cient opportunity of being heard to the assessee. It was also submitted that the assessee may be given one more opportunity to represent its case before the Ld. CIT(A), so that the assessee could be able to provide the details to substantiate its case for the year under consideration before the Ld. CIT(A).
4. In reply, Ld. Sr. DR supported the orders of the Ld. CIT(A) and the Ld. AO. It was the submission that restoring the matter to the file of CIT(A) would be, in fact, giving the assessee a second round which should not be granted.
5. A perusal of the impugned order passed by the Id. CIT(A) at para 6, shows that the assessee has not cooperated in the appellate proceedings However, Ld. AR before us requested for one more opportunity to produce the documents before the Ld. CIT(A) to file all the details as required. In such circumstances, in the interest of justice, we restore the issues to the file of Id. CIT(A) for re-adjudicating the issues afresh after granting the assessee adequate opportunity of being heard, subject to a payment of cost of Rs.50,000/-(Rupees Fifty Thousand only) by the assessee to the Legal Aid Services, 3rd Floor of the Centenary Building, High Court, Cal- cutta-700001, within sixty days from the date of this order and receipt of the same shall be produced before the Ld. CIT(A) at the first hearing and in case the assessee fails to do so, the order of the Ld. CIT(A) shall stand confirmed. The assessee is also directed to cooperate with the Ld. CIT(A) in the readjudication proceedings, positively.
In the result, the appeal of the assessee is allowed for statistical purposes.
Order pronounced in the open court on 1st July, 2025.