DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE - 4(1), KOLKATA, INCOME TAX KOLKATA vs. LAKHOTIA TRANSPORT CO. PRIVATE LIMITED, KOLKATA

The cross-objection field by the assessee in CO No. 25/KOL/2024 arising in for A.Y. 2015-16. The assessee has challenged by way of cross objection the validity of proceedings u/s 147 read with section 148 of the Act, on the ground that sanctioned was taken from Pr. Commissioner of Income-tax, Kolkata-5 (PCIT), instead of Joint Commissioner of income-tax (JCIT), in terms of Section 151(2) of the Income-tax Act, 1961 (the Act).

The facts in brief are that the return of income was filed on 24.09.2015, declaring total income at ₹1,87,85,430/-, which was processed u/s 143(1) of the Act, on 22.12.2017. Thereafter, the case of the assessee was selected for scrutiny and the assessment was accordingly completed u/s 143(3) of the Act vide order 22.12.2017, assessing the total income at ₹1,96,81,110/-. Thereafter, the assessment was reopened u/s 147 of the Act by issuing notice us/ 148 of the Act on 31st March, 2021, which was issued after obtaining the approval of Pr. Commissioner of Income Tax, Kolkata-5 (ld. PCIT). The said notice was complied with by the assessee by filing the return of income on 16.11.2021, declaring income at ₹1,87,85,430/-. Thereafter, the statutory notices were issued along with questionnaires and duly served upon the assessee. Finally, the addition of ₹20,00,000/- was made by the ld. AO in respect of loan raised from M/s Sarvottam Finvest Limited on the ground of being unexplained u/s 68 of the Act in the assessment framed u/s 143(3) / 147 of the Act dated 04.03.2022. Aggrieved, assessee preferred the appeal before the ld. CIT (A).

The ld. DR on the other hand relied on the order of ld. CIT (A) and the ld. AO so far as the legal issue is concerned.

After hearing the rival contentions and perusing the materials available on record, we find that the impugned assessment year is A.Y. 2015-16 and four years from the end of the relevant assessment order expires on 31.03.2020. In this case, the impugned notice u/s 148 of the Act was issued on 31.03.2021, after obtaining the approval of PCIT. We have carefully perused the decision passed by the Hon'ble Apex court in the case Rajeev Banal (supra), wherein Hon'ble court in Para 114 has concluded as under:-

In other words, the Hon'ble Court has held that in case of Section 151 of old regime if the time limit of four years from the end of assessment years falls between 20.03.2020, and 31.03.2021, then the specified authority u/s 151(2) of the Act has extended the time till 31.03.2021 to grant the approval. In the present case, the four years from the end of the relevant assessment years expires on 31.03.2020, which falls between the dates as mentioned by the Hon'ble Apex Court in Para 114 (e). Therefore,

The appeal of the Revenue in has become infructuous, as we have already quashed the assessment order in the cross objections no.25/KOL/2024 arising in filed by the assessee. Besides needless to say, that the Revenue involved in the impugned appeal is only ₹6,06,000/-, which is apparently below the threshold limit of ₹60,00,000/- in terms of CBDT Instruction bearing No. 9 of 2024 issued on 17th September, 2024issued by CBDT and therefore, the appeal is not also maintainable under the said circular and is liable to be dismissed as non-maintainable as it is not cover in any of the exceptions provided in that Circular. Accordingly, the appeal of the Revenue is dismissed as infructuous.

In the Cross Objection No. 24/KOL/2024 arising in the assessee has challenged the validity of proceeding u/s 147 of the Act, which were upheld by the ld. CIT (A).

The facts in brief are that the assessee filed the return of income u/s 139(1) of the Act on 29.09.2013, declaring the income of ₹94,61,950/-, which was processed u/s 143(1) of the Act on 10/02/2015. The case of the assessee was selected for scrutiny and assessment was accordingly framed

In the appellate proceedings, the ld. CIT (A) has dismissed the appeal of the assessee on legal issue on the validity of reopening of assessment u/s 147 of the Act, however, the relief was allowed to the assessee on merit. The ld. CIT (A) by allowing the relief on merit held that the assessee has discharged its onus by furnishing all the documents before the ld. AO and the ld. AO has not brought on record any substantive material while conducting the necessary enquiries in the matter.

The ld. AR vehemently submitted before us that in this case the assessment was framed u/s 143(3) of the Act vide order dated 30.03.2016. During the course of original assessment proceedings, the assessee has furnished all the documents comprising names, addresses, confirmations, bank statements, audited annuals, MCA data, etc. before the ld. AO and even notice issued u/s 133(6) of the Act were issued to all the share subscribers. The ld. AR stated that the notice to one subscriber u/s 133(6) of the Act could not be served because of change of name from Zevlin Agencies Pvt Ltd. to SNRK Creation private Limited as evidence by the data

The ld. DR on the other hand, relied on the order of ld. AO by submitting that it is enough if the ld. AO has referred to the failure of the assessee to disclose any material fact truly and material necessary for his assessment for that assessment year and no specific mention of failure of the assessee is required to be made in the reasons recorded.

After hearing the rival contentions and perusing the materials available on record, we find that in this case, assessment was framed u/s

The appeal of the Revenue in has become infructuous, as we have already quashed the assessment order in the cross objections no.24/KOL/2024 arising in filed by the assessee. Accordingly, the appeal of the Revenue is dismissed as infructuous.

In the result, both the appeals of the Revenue are dismissed and the Cross Objections of the assessee are allowed.