AMRIT CORPORATION,MUMBAI V. DCIT-CC-1(1), MUMBAI, MUMBAI

ITA 1656/MUM/2025

AI Insights

Amrit Corporation appealed against the orders of the Commissioner of Income Tax (Appeals), which had confirmed the additions made by the Assessing Officer under section 148 of the Income Tax Act, 1961, for the assessment years 2016-17 and 2017-18. The primary contention was the legality of the notice issued under section 148, which was challenged on the grounds that it was issued without any material evidence and violated the principles of natural justice. The Tribunal found that the notice was issued beyond the permissible time frame and without meeting the statutory requirements, leading to the quashing of the reassessment orders.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 652795 (ITAT-MUMBAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-06-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2016-2017
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: ADITYA RAI
• Assessee Lawyers: JAYANT BHATT
• Keywords: Reassessment proceedings; Unexplained expenditure; Retraction; Principle of natural justice; Search and seizure
• Section: 148; 143(3); 69C

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH, MUMBAI BEFORE SHRI SANDEEP GOSAIN, (JUDICIAL MEMBER) & SHRI PRABHASH SHANKAR, (ACCOUNTANT MEMBER) I.T.A. Nos.1656 & 1657/Mum/2025 Assessment Year: 2016-17 & 2017-18 Amrit Corporation K-225/226, Ansa Industrial Estate, Saki Vihar Road, Sakinaka, Andheri (E) – 400072. PAN: AAFFA1022R Vs. DCIT-CC-1(1), Mumbai (Appellant) (Respondent) Appellant by Shri. Jayant Bhatt Respondent by Shri. Aditya Rai, SR. D.R. Date of Hearing 11.06.2025 Date of Pronouncement 18.06.2025 ORDER Per: SHRI. SANDEEP GOSAIN, J.M.: The present appeals have been filed by the assessee challenging the impugned order dated 24.01.2025, passed u/s. 250 of the Income Tax Act, 1961 ('the Act'), by the learned Commissioner of Income Tax (Appeals), 47, Mumbai ('Ld. CIT(A)'), for the assessment year 2016-17 and 2017-18. ITA No.1656 & 1657/Mum/2025; A.Y. 2016-17 & 2017-18 Amrit Corporation 2 2. Since all the issues involved in these appeals are common and identical, therefore, they have been clubbed, heard together and consolidated order is being passed for the sake of convenience and brevity. We shall take ITA No. 1656/Mum/2025, A.Y 2016-17 as lead case and facts narrated therein. ITA No. 1656/Mum/2025, A.Y. 2016-17 3. The assessee has raised the following grounds of appeal: “1. Under the facts and circumstances of the case and in law the Ld. CIT (A) has erred in conforming the AO action in completing the Assessment u/s 148 of the Income Tax Act, 1961 without any material evidences on records thereby rendering the assessment is bad-in-law. 2. Under the facts and circumstances of the case and in law the Ld. CIT (A) has erred in conforming an addition of Rs. 1,84,163/- being @ 8.36% of Rs.22,02,909/- of alleged purchase from M/s Ratnakala Exports Pvt. Ltd. 3. Under the facts and circumstances of the case and in law the Ld. CIT (A) has erred in ignoring the sworn affidavits of the Directors of Ratnakala Exports Pvt. Ltd. of retraction. 4. Under the facts and circumstances of the case and in law the Ld. CIT (A) has erred in ignoring the principles of natural justice for affording an opportunity to the appellant to cross examine the alleged evidences collated and relied upon in the reassessment proceedings.” 4. The brief facts of the case are that the assessee is a partnership Firm. The assessee had filed its return of income u/s. 139(1) of the Act on 23/09/2017, declaring total income at Rs. 2,03,57,546/-. The return of income was processed u/s 143(1) of the Act. The case was selected for scrutiny under CASS and the assessment order was passed u/s 143(3) on 03/12/2018 ITA No.1656 & 1657/Mum/2025; A.Y. 2016-17 & 2017-18 Amrit Corporation 3 assessing total income at Rs. 96,67,240/-. The assessee’s case was reopened vide notice u/s. 148, dated 13/03/2023, pursuant to the search and seizure action carried out in the case of Ratnakala Group, dated 22/09/2021. In response to the notice u/s 148, the assessee filed its return of income on 20/03/2023 declaring total income at Rs. 96,67,243/-. Hence, notice u/s 143(2) was issued to the assessee on 25.03.2023. The AO then passed the assessment order u/s. 147, dated 15/12/2023, determining total income at Rs. 1,18,70,152/- after making addition of Rs. 22,02,909/- u/s. 69C of the Act as unexplained expenditure. 5. Aggrieved by the said addition, assessee preferred appeal, but the same was partly allowed by Ld. CIT(A). 6. Aggrieved by the order of Ld. CIT(A) assessee has preferred the present appeal before us, on the grounds mentioned above. 7. At the outset, the learned Authorised Representative (‘ld. AR’) appearing on behalf of the assessee pressed its legal ground to the effect that the orders passed by the ld. AO u/s. 148 of the Act are bad in law, as the notice issued u/s. 148 is in violation of the mandatory provisions of the Act. In this regard, our attention was drawn to the facts of the case herein we found that the notice u/s. 148 of the Act for the year under consideration was issued by the ITA No.1656 & 1657/Mum/2025; A.Y. 2016-17 & 2017-18 Amrit Corporation 4 department on 13.03.2023 and which is at paperbook page no. 1 and moreover as per the allegations of the department, the income of Rs. 22,02,909/- has escaped assessment in the case of the assessee. 8. After having heard the Counsels for both the parties, perusing the materials placed on record and the orders passed by the revenue authorities, we noticed that the facts in the present case are undisputed. The notice in question u/s. 148 of the Act for the year under consideration has been issued after more than 3 years and the amount of escaped assessment is less than Rs. 50,00,000/-. As per the provisions of Section 149 of the Act, it clearly mandates that no notice u/s. 148 of the Act shall be issued for the relevant assessment year, if 3 years have elapsed from the end of the relevant assessment year, if the income chargeable to tax which has escaped assessment is less than Rs. 50,00,000/-. 9. Therefore, considering the totality of the facts and circumstances, we are of the view that the impugned notice issued u/s. 148 of the Act which is at paperbook page no. 1 is in clear violation of Section 149 of the Act. Therefore, the entire proceedings initiated on the basis of the impugned notice are bad in law and accordingly we hold that the action of ld. AO in ITA No.1656 & 1657/Mum/2025; A.Y. 2016-17 & 2017-18 Amrit Corporation 5 completing the assessment u/s. 148 of the Act in violation of Section 149 of the Act is bad in law and thus, we quash the same. 10. Since we have quashed the assessment u/s. 148 of the Act on legal grounds, therefore, other grounds raised by the assessee are not being adjudicated and left open. Consequently, the appeal filed by the assessee is partly allowed. 11. In the result, the appeal filed by the assessee stands partly allowed. ITA No. 1657/Mum/2025, A.Y. 2017-18 12. As the facts and circumstances in this appeal are identical to ITA No. 1656/Mum/2024 for the A.Y 2016-17 (except variance in figures) would apply ‘mutatis mutandis’ for this appeal also. Accordingly, the grounds of appeal of the assessee are partly allowed. 13. In the result, both the appeals filed by the assessee are partly allowed. Order pronounced in the open court on 18/06/2025 Sd/- Sd/- (PRABHASH SHANKAR) (SANDEEP GOSAIN) Accountant Member Judicial Member ITA No.1656 & 1657/Mum/2025; A.Y. 2016-17 & 2017-18 Amrit Corporation 6 Mumbai: Dated: 18/06/2025 Karishma J. Pawar, Stenographer Copy of the order forwarded to: (1)The Appellant (2) The Respondent (3) The CIT (4) The CIT (Appeals) (5) The DR, I.T.A.T. True Copy By order (Asstt. Registrar) ITAT, Mumbai "