MOUL SHREE JHUNJHUNWALA,KOLKATA vs. ITO, WARD-12(3), KOLKATA
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Income Tax Appellate Tribunal, ‘C’ BENCH, KOLKATA
Before: Shri Rajpal Yadav, Vice-(KZ) & Dr. Manish Borad
Per Rajpal Yadav, Vice-President (KZ):- The present appeal is directed at the instance of assessee against the order of ld. Commissioner of Income Tax (Appeals)-4,
ITA No. 426/KOL/2021 (A.Y. 2012-2013) Moul Shree Jhunjhunwala Kolkata dated 19th March, 2020 passed for Assessment Year 2012- 13.
The appeal was presented before the Tribunal on 11.10.2021. The Registry has pointed out that the appeal is time barred by 116 days. The assessee has filed an application for condonation of delay. She has submitted that such delay has already been condoned by the Hon’ble Supreme Court in suo motu Writ Petition (Civil) No. 3 of 2020. It is pertinent to observe that Hon’ble Supreme Court has condoned the delay in filing appeal before the different authorities across India during COVID period and the period of the assessee do fall in that period, which has been excluded by the Hon’ble Supreme Court in the above Writ Petition as well as Miscellaneous Application No. 665 of 2021 considered in suo motu Writ Petition No. 3 of 2020. Both the judgments of the Hon’ble Supreme Court are placed on record by the assessee. In view of the Hon’ble Supreme Court’s directions, this appeal is being treated as within the time limit.
The assessee has taken eighteen grounds of appeal. However, her grievances revolve around two issues, namely-
(a) ld. CIT(Appeals) has erred in upholding the reopening of assessment;
ITA No. 426/KOL/2021 (A.Y. 2012-2013) Moul Shree Jhunjhunwala (b) ld. CIT(Appeals) has erred in confirming the addition of Rs.1,17,74,670/-, which was added by the ld. Assessing Officer by denying exemption under section 10(38) of the Income Tax Act.
Brief facts of the case are that the assessee is an individual. She has filed her return of income on 31.08.2012 declaring total income of Rs.4,84,750/-. This return was accepted under section 143(1). There was no scrutiny assessment in her case. The ld. Assessing Officer has sought to reopen the assessment by issuance of a notice under section 148 of the Income Tax Act dated 29.03.2019. The assessee is challenging this reopening of assessment. The reasons for reopening of assessment are being placed by the Revenue on the directions of the Tribunal. The reasons read as under:-
ITA No. 426/KOL/2021 (A.Y. 2012-2013) Moul Shree Jhunjhunwala
ITA No. 426/KOL/2021 (A.Y. 2012-2013) Moul Shree Jhunjhunwala 5. On these reasons, approval of ld. Principal Commissioner of Income Tax was obtained. The copy of the letter written by Shri Bikash Ranjan Gain, ITO, Tech.-4, Kolkata, reads as under:-
Ld. Counsel for the assessee while taking us through these reasons has submitted that firstly the reasons do not disclose any live nexus between the information possessed by the ld. Assessing Officer, vis-à-vis formation of his belief that income has escaped.
ITA No. 426/KOL/2021 (A.Y. 2012-2013) Moul Shree Jhunjhunwala He further submitted that the Department has started the inquiry for collection of information under section 133(6) on 05.03.2019. It is highly improbable that information for A.Y. 2012-13 will be readily available with the assessee as well as CSE platform, which can be submitted to it within 15 days. Such information was sought to be collected after a long period of roughly six years. In his next fold of contention, he submitted that copy of approval was forwarded by ITO, Tech.-4, Kolkata (for PCIT-4, Kolkata) to Addl. CIT, Range-12, Kolkata for information on 31.03.2019, but by the time, he already issued notice under section 148 on 29.03.2019, which is contrary to the procedure.
On the other hand, ld. D.R. was unable to controvert the contention. He simply submitted that Revenue was possessing information that assessee has earned alleged long-term capital gain by trading in penny stock. Therefore, the ld. Assessing Officer has rightly undertaken this exercise.
We have duly considered the rival contentions and gone through the record carefully. A perusal of the reasons to believe would reveal that in the first four lines, ld. Assessing Officer is discussing the issue regarding undisclosed TDS of Rs.1,05,000/-. Thereafter he referred quantum of bogus long-term capital gain. What was the information possessed by him, which has unable him to believe that this transaction was of a bogus long-term capital gain. He has neither referred any such information possessed by him nor has supplied any copy to the assessee, rather perusal of these reasons would indicate that it is simply an
ITA No. 426/KOL/2021 (A.Y. 2012-2013) Moul Shree Jhunjhunwala exercise to issue notice under section 148 without possessing any information. The ld. Assessing Officer has alleged that he has issued notice under section 133(6) to CSE platform, but this notice was issued on 05.03.2019. Had a sufficient time given by the ld. Assessing Officer to CSE to reply it? All of a sudden, information is being sought of six-seven years old, which might have not readily been available and the Exchange would have not submitted it but can that would authorize the ld. Assessing Officer to reopen? There is no constructive effort at the end of the ld. Assessing Officer to collect the material and that too make out a case for reopening. He was simply fulfilling the formality, which is not to be upheld by the Tribunal. Apart from the above, we are of the view that a perusal of the letter dated 31.03.2019 by ITO, Tech.-4, Kolkata, who has issued this letter on behalf of ld. Principal CIT-4, Kolkata. Ld. PCIT-4, Kolkata who has approved the proposal of reopening. This letter did not travel to the ld. Assessing Officer before he has issued notice, because a copy of this letter is marked to Addl. CIT, Range- 12, Kolkata. It means that it had not reached to the Addl. CIT, Ward-12, Kolkata for taking action against the assessee. Without this information, he already issued notice on 29.03.2019. The ld. PCIT has not put date under his signature while giving the approval. Therefore, we are of the view that the 148 notice was issued without any valid approval possessed by the ld. Assessing Officer. Accumulative setting of both the reasons assigned by us, namely– (a) insufficiency of material possessed by the ld. Assessing Officer in forming the belief that
ITA No. 426/KOL/2021 (A.Y. 2012-2013) Moul Shree Jhunjhunwala income has escaped for reopening of the assessment;
(b) The ld. Assessing Officer has issued the notice without approval of the Competent Authority because such approval did not travel to him before issuance of notice. The reopening is not sustainable and accordingly quashed.
Since we have quashed the reopening of assessment, therefore, we do not deem it necessary to deal with the issues on merit. Accordingly, the present appeal of the assessee is allowed.
In the result, the appeal of the assessee is allowed. Order pronounced in the open Court on 23/08/2024.
Sd/- Sd/- (Manish Borad) (Rajpal Yadav) Accountant Member Vice-President (KZ) Kolkata, the 23rd day of August, 2024
Copies to :(1) Moul Shree Jhunjhunwala, 58/3, Kutir Udyog Kendra, Biplabi Rash Behari Basu Road, Canning Street, Kolkata-700001 (2) Income Tax Officer, Ward-12(3), Kolkata, Aayakar Bhawan, P-7, Chowringhee Square, Kolkata-700069
ITA No. 426/KOL/2021 (A.Y. 2012-2013) Moul Shree Jhunjhunwala (3) Commissioner of Income Tax (Appeals)-4, Kolkata; (4) CIT - , Kolkata; (5) The Departmental Representative; (6) Guard File TRUE COPY By order Assistant Registrar, Income Tax Appellate Tribunal, Kolkata Benches, Kolkata Laha/Sr. P.S.
