M/S. SHREE PRAKASH TRACON PVT. LTD.,KOLKATA vs. I.T.O., WARD - 5(1), , KOLKATA

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ITA 1873/KOL/2024Status: DisposedITAT Kolkata28 November 2024AY 2018-2019Bench: SHRI RAJESH KUMAR (Accountant Member), SHRI SONJOY SARMA (Judicial Member)4 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that since the AO did not make any additions regarding the specific items of escaped income that formed the basis for reopening the assessment, the entire reopening proceedings and the consequent assessment were bad in law and without jurisdiction. The foundation of the proceedings was demolished.

What were the facts?

The Assessing Officer (AO) reopened the assessment for AY 2018-19 based on information about time deposits and rent/interest received. The AO issued a notice under Section 148A(b) and passed an order under Section 148A(d) stating income had escaped assessment. However, in the assessment order, the AO made additions under Section 69C for unexplained expenses, not for the items mentioned in the reopening notice.

What were the issues?

Whether the assessment order is valid when the additions made are not in respect of the specific items of escaped income that formed the basis for reopening the assessment under Section 147/148A.

Which sections of the Income-tax Act were involved?

Section 147,Section 148,Section 148A,Section 69C

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “B” BENCH, KOLKATA

For Appellant: Shri Sunil Surana, AR
For Respondent: Shri Pradip Biswas, DR
Hearing: 29.10.2024Pronounced: 28.11.2024

This is an appeal preferred by the assessee against the order of the National Faceless Appeal Centre, Delhi (hereinafter referred to as the “Ld. CIT(A)”] dated 21.08.2024 for the AY 2018-19.

2.

Though the assessee has raised various grounds of appeal in the memorandum of appeal but during the course of hearing, the counsel of the assessee only pressed a legal issue that the order passed by the ld. AO is bad in law and addition made without jurisdiction as no addition was made for those items which were subject matter of reasons recorded u/s 148(2) of the Act.

a. Time deposit of ₹1,44,31,436 in bank account maintained with IDBI Bank b. Rent Received from BNP Paribas of ₹66,61,536/- and interest received of ₹12,30,357/- in IDBI Bank.

4.

The order u/s 148A(d) of the Act was passed by the AO and notice u/s 148 of the was issued on 7.4.2022. The assessee filed the return ofm income in compliance thereto on 6.6.2023 declaring total income of Rs. 30,64,820/-. The statutory notices were duly issued and served on the assessee. The assessee complied with the said notices. The ld. AO on the basis of the said reply did not make any addition qua item as was subject matter of the notice issued u/s 148A(b) of the Act, copy of which is available at page no.2 of the Paper Book. However, he made disallowance of expenses u/s 69C of the Act being unexplained to the tune of ₹28,33,609/-. The appeal of the assessee was partly allowed by the ld. CIT (A) by confirming the addition to the tune of ₹50% of expenses and deleting the remaining 50%.

5.

After hearing the rival contentions and perusing the documents available on record, we find that the ld. AO undisputedly did not make any addition in respect of the items of income which were subject matter of the notice u/s 148A(b) and order u/s 148A(d) of the Act . The copy of the notice issued u/s 148A of the Act in clause (b) with annexure is available at paper book page no.1-2. We note that the

6.

In the result, the appeal of the assessee is allowed.

Order pronounced in the open court on 28.11.2024.

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