ANSAR RAHAMAN,KOLKATA V. ITO, WARD 49(1), KOLKATA

ITA 1190/KOL/2025

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The case involves Ansar Rahaman, the appellant, contesting the validity of a notice and subsequent assessment order issued by the Income Tax Officer (ITO), Ward 49(1), Kolkata, under Sections 147 and 148 of the Income Tax Act, 1961. The ITO had reopened the assessment for the assessment year 2017-2018 based on information that the appellant had deposited a significant amount of cash during the demonetization period. The Commissioner of Income Tax (Appeals) upheld the ITO's actions, which led to the appellant's appeal to the Income Tax Appellate Tribunal. The Tribunal found procedural lapses in the reopening of the assessment and the issuance of the notice, leading to the quashing of both.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 775709 (ITAT-KOLKATA)
• Duration Of Justice: 3 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-09-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2017-2018
• Appeal Filed On: 30-05-2025
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained cash credit; Reopening of assessment; Competent authority; Tangible material
• Section: 147; 148

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH,KOLKATA SHRI RAJESH KUMAR, ACCOUNTANT MEMBER I.T.A. No.1190/Kol/2025 (Assessment Year 2017-2018) Ansar Rahaman, C/o S.N. Ghosh & Associates, Advocates 2, Garstin Place, 2nd Floor, Suite No. 203, Off Hare Street, Kolkata - 700001 [PAN: ACYPR1355H] ……..…...……………....Appellant vs. ITO, Ward 49(1), Kolkata, DS-4, Uttarapan Complex, Ultadanga, Maniktala Civic Centre, Kolkata – 700054 ................................ Respondent Appearances by: Assessee represented by : Somnath Ghosh, Adv. Sarnath Ghosh, Adv. Department represented by : Shankar Naskar, Sr. DR Date of concluding the hearing : 09.09.2025 Date of pronouncing the order : 12.09.2025 O R D E R 1. This appeal arises from order dated 09.10.2023, passed u/s 250 of the Income Tax Act, 1961 (hereafter “the Act”) by the Ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi [hereafter “the Ld. CIT(A)]. 2. The assessee has raised the following grounds of appeal: “1. FOR THAT the Id. Commissioner of Income Tax (Appeals)-NFAC. failed to appreciate that none of the conditions precedent existed and/or have been complied with and/or fulfilled by the Ld. Income Tax Officer. Ward 49(1), Kolkata for his alleged assumption of jurisdiction u/s 147 of the Income Tax Act, 1961 in the facts and circumstances of the instant case and the alleged assessment order dated 31-03-2022 passed u/s. 147 of the Act in pursuance to notice dated 31-03-2021 issued u/s 148 of the Act is therefore ab initio void. ultra vires and null in law. Printed from counselvise.com 2 ITA No.1190/Kol/2025 Ansar Rahaman 2. FOR THAT the Id. Commissioner of Income Tax (Appeals)-NFAC erred in upholding the validity of the impugned notice dated31-03-2021 issued u/s. 148 of the Income Tax Act, 1961 and the consequential assessment order framed u/s 147 of the Income Tax Act. 1961 by the Ld. Income Tax Officer, Ward 49(1). Kolkata in absolute infringement of the CBDT. Instruction No. 1/2011 dated 31-01-2011 and the purported action on that behalf is altogether unfounded, unjustified and untenable in law. 3. FOR THAT on a true and proper interpretation of the scope and ambit of the provisions of s. 147 of the Income Tax Act. 1961, the Ld. Commissioner of Income Tax (Appeals)-N.F.A.C. was absolutely in error in upholding the action of the Ld. Income Tax Officer, Ward 49(1), Kolkata of issuing notice u/s. 148 of the Act without adducing any tangible material on record in support of such illegitimate exercise and the purported conclusion reached on that behalf is completely unfounded, unlawful and untenable in law. 4. FOR THAT the spurious action of the Id. Commissioner of Income Tax (Appeals)-N.F.A.C. in upholding the initiation of proceedings u/s. 147 of the Income Tax Act. 1961 by the Id. Income Tax Officer, Ward 49(1). Kolkata without any proper application of mind on the specious information received is invalid for want of jurisdiction as the pre-conditions for initiation of the proceedings as stipulated therein are not fulfilled in the circumstances of the case. 5. FOR THAT the Ld. Commissioner of Income Tax (Appeals)-N.F.A.C. acted unlawfully in upholding the validity of notice u/s. 148 of the Income Tax Act. 1961 issued by the Id. Income Tax Officer, Ward 49(1). Kolkata without seeking any valid approval required u/s. 151 of the Income Tax Act. 1961 from the competent authority as required under the statute and the purported action on that behalf is thoroughly opposed to law. 6. FOR THAT the Ld. Commissioner of Income Tax (Appeals)-N.F.A.C. acted unlawfully in upholding the purported additions in the amounts of Rs. 5,60,700/- and Rs. 4.65.000/- made by the Id. Income Tax Officer. Ward 49(1). Kolkata alleging unexplained cash credits invoking the provisions of s. 69A read with s. 115BBE of the Income Tax Act, 1961 in the circumstances of the instant case and the specious finding on that issue is absolutely arbitrary. unwarranted, and perverse. 7. FOR THAT the Ld. Commissioner of Income Tax (Appeals)-NFAC. erred in upholding the purported addition of Rs. 10.25.700/- in aggregate made by the Ld. Income Tax Officer. Ward 49(1). Kolkata on account of alleged unexplained monies being the cash deposits made in Specified Bank Notes during Demonetization Period on extraneous considerations not germane to the issue and totally ignoring the cogent elucidation on record and the impugned finding on that issue is completely unfounded, unjustified, and untenable in law. 8. FOR THAT on the facts and in the circumstances of the instant case, the Ld. Commissioner of Income Tax (Appeals)-N.F.A.C. was wholly in error in upholding the addition in the aggregate of Rs. 10,25,700/- resorted to by the Ld. Income Tax Officer, Ward 49(1), Kolkata on account of alleged unexplained monies under the garb of the provisions of s. 69A read with s. 115BBE of the Income Tax Act, 1961 and the specious action on that behalf indulging in speculation, surmise, suspicion, and conjecture is wholly illegal, illegitimate, and infirm in law.” Printed from counselvise.com 3 ITA No.1190/Kol/2025 Ansar Rahaman 3. The issues in Ground No. 1 by the assessee is against the order of Ld. CIT(A) upholding the assessment order which has been passed by the Assessing Officer without satisfying the precedent conditions to section 147 read with section 148 of the Act. 4. The facts in brief are that the assessee filed return of income on 29.03.2018 declaring total income of Rs. 20,62,230/-. Subsequently, the Assessing Officer received information from the Investigation Wing that the assessee has deposited Rs. 4,67,000/- in his bank account No. 6622000100040 with Kolkata Branch of Karnataka Bank Ltd. Consequently, notice under Section 148 of the Act was issued on 31.03.2021 and the assessee filed return of income on 27.10.2021. Finally, the addition was made of Rs. 10,25,700/- in the cash deposit during demonetization period vide assessment order under Section 147 read with section 144B of the Act dated 31.03.2022. In the appellate proceedings, the CIT(A) dismissed the appeal of the assessee. 5. After hearing the rival submissions and the perusing the material on record including the reasons recorded under Section 148(2) of the Act copy of which is available at page no. 22 of the paper book which reveals that there is no recording of any satisfaction by the Assessing Officer qua escapement of income. The reasons recorded are extracted below. “As per information received, that the assessee Ansar Rahaman PAN ACYPR1355H has deposited cash of Rs.4,67,000/- during demonitisation on OHD noted. The assessee failed to provide any explanation regarding source of cash deposited. Therefore, the case was reopened u/s 147 of the Income- tax Act 1961. Approval was granted by the JCIT, Range-49, Kolkata for issuance of 6. Thus, we note that the reopening assessment has been by made invalidly without recording any findings that income has escaped by assessment during the year. In our opinion, the notice has been issued under Section 148 of the Act for reopening the assessment under Section Printed from counselvise.com 4 ITA No.1190/Kol/2025 Ansar Rahaman 147 of the Act is invalid as there are no valid reasons recorded by the Assessing Officer. Consequently, we quash the reopening of assessment as well as assessment framed. 7. In result, appeal of the assesseeis allowed. Order pronounced on 12.09.2025 Sd/- (Rajesh Kumar) Accountant Member Dated: 12 .09.2025 AK,Sr. P.S. Copy of the order forwarded to: 1. Appellant 2. Respondent 3. Pr. CIT 4. CIT(A) 5. CIT(DR) //True copy// By order Assistant Registrar, Kolkata Benches Printed from counselvise.com "