ANSHUL SINGH,KOLKATA V. ITO, WARD 49(1), , KOLKATA

ITA 935/KOL/2025

AI Insights

The case involves an appeal by Anshul Singh against the order of the CIT(A), National Faceless Appeal Centre, Delhi, concerning the assessment year 2017-18. The primary issue was the reopening of the assessment by the Assessing Officer based on information from the DDIT(INV), UNIT-2(1), Kolkata, which alleged that the assessee had deposited a significant amount of cash during demonetization. The Tribunal examined whether the reopening was justified under Sections 147 and 148 of the Income Tax Act, considering the lack of further investigation by the Assessing Officer and the principles laid down by the Delhi High Court in a similar case.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 705841 (ITAT-KOLKATA)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-07-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Assessment Year: 2017-2018
• Other Referred Cases: Well Trans Logistics India (P) Ltd. vs. DDIT
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S.B. CHAKRABORTHY
• Assessee Lawyers: SOMNATH GHOSH
• Keywords: Set aside; Reopening of assessment; Reason to believe; Tangible material
• Section: 147; 148

Judgement Text

" आयकर अपीलीय अधिकरण, “एस.एम.सी” न्यायपीठ, कोलकाता IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH KOLKATA श्री जाजज माथन, न्याययक सदस्य क े समक्ष । BEFORE SHRI GEORGE MATHAN, JUDICIAL MEMBER आयकर अपील सं/ITA No.935/KOL/2025 (नििाारण वर्ा / Assessment Year :2017-2018) Anshul Singh C/o S.N. Ghosh & Associates, Advocates, 2, Garstin Place, 2nd floor, Suite No.203, Off hare Street, Kolkata-700001, West Bengal Vs ITO, WD 49(1), Kolkata Ds-4, Uttarapan Complex, Ultadanga, Maniktala Civic centre, Kolkata-700054, West Bengal PAN No. :CSRPS9550G (अपीलार्थी /Appellant) .. (प्रत्यर्थी / Respondent) नििााररती की ओर से /Assessee by : Shri Somnath Ghosh, AR राजस्व की ओर से /Revenue by : Shri S.B. Chakraborthy, Addl. CIT-Sr.DR सुनवाई की तारीख / Date of Hearing : 03/07/2025 घोषणा की तारीख/Date of Pronouncement : 03/07/2025 आदेश / O R D E R This is an appeal filed by the assessee against the order of the ld CIT(A), National Faceless Appeal Centre (NFAC), Delhi, dated 12.02.2025, passed for the assessment year 2017-18. 2. Shri Somnath Ghosh, ld. AR appeared on behalf of the assessee and Shri S.B.Chakraborthy, ld.Sr. DR appeared on behalf of the revenue. 3. Ld.AR drew my attention to the reasons recorded for reopening which is mentioned in para 2 of the assessment order, reads as follows :- “2. As per the information available that- Credible information was received from the office of DDIT(INV.), UNIT-2(1), Kolkata that the assessee has deposited cash of Rs.7,46,000/- during demonetization on OHD notes. From the details available it was found that the assessee has deposited the said cash during demonetization in the bank account maintained by him with Corporation Bank, Baguiati branch. The same details is also available in ITS details of the ITA No.935/KOL/2025 2 assessee. However, the source of such huge cash in OHD notes is not ascertained as per financials of the assessee.” 4. It was the submission that no further verification has been done by the Assessing Officer before issuing notice u/s.148 of the Act and in view of the principle laid down by the Hon’ble Delhi High Court in the case of Well Trans Logistics India (P) Ltd., reported in [2024] 166 taxmann.com 72 (Delhi), as no further investigation has been done by the Assessing Officer in respect of the information received from the DDIT(INV) UNIT-2(1), Kolkata being reopening held to be quashed. 5. In reply, ld. Sr. DR submitted that the availability of the information is enough for the purpose of reopening. It was the submission that the assessee has also not provided all the details in regard to the source of cash deposits even though the assessee is showing that the amounts are out of his cash book of the assessee. It was the submission that the addition made by the Assessing Officer and confirmed by the ld. CIT(A) is liable to be upheld. 6. I have considered the rival submissions. A perusal of the decision of the Hon’ble Delhi High Court in the case of Well Trans Logistics India (P) Ltd., referred to supra, clearly shows that in pra 24 to 27, the Hon’ble High Court has held as follows :- 24. We may note that the Assessing Officer after reproducing the information received from DDIT, (Investigation) Unit, drew the conclusion of escapement of income. In the case of Asst. CIT v. Rajesh Jhaveri Stock Brokers Pvt. Ltd. (2007) 291 IR 500 (SC), the Supreme Court had explained that expression \"reason to believe\" would mean justification to know or suppose that income had escaped assessment. While, it is correct that it is not necessary for the Assessing Officer to finally ascertain whether income had ITA No.935/KOL/2025 3 escaped assessment, nonetheless, the Assessing Officer must have sufficient cause to believe that it has. 25. In the present case, as may be seen, there is no \"close nexus\" or \"live link\" between tangible material and the reason to believe that income has escaped assessment. The information received from the Investigating Unit of the Revenue cannot be the sole basis for forming a belief that income of the assessee has escaped assessment. Having received information from the Investigating Wing, it was incumbent upon the Assessing Officer to take further steps, make further enquiries and garner further material and if such material indicate that the income of the assessee has escaped assessment and then form a belief that the income of the assessee has escaped assessment. 26. Clearly, in this case, the Assessing Officer has not acquired any material to form such belief. There is not even a line of reason which may justify the formation of the belief. Consequently, we are satisfied that reopening of assessment for the assessment year in question by the Assessing Officer does not satisfy the requirement of law in terms of Section 147 & 148 of the Act. 27. Consequently, the writ petition is allowed. The impugned reassessment notice dated 22.03.2018 issued under Section 148 of the IT Act and further proceedings, if any, initiated pursuant to the said notice dated 22.03.2018 are set aside. 7. In the present case also, the facts are similar. This being so, respectfully following the decision of the Hon’ble Delhi High Court in the case of Well Trans Logistics India (P) Ltd.(supra), the notice issued u/s.148 of the Act is held to be bad in law and the same is hereby quashed and consequential assessment order is also quashed. 8. In the result, appeal of the assessee is allowed. Order dictated and pronounced in the open court on 03/07/2025. Sd/- (जाजज माथन) (GEORGE MATHAN) न्यानयक सदस्य / JUDICIAL MEMBER कोलकाता Kolkata; ददनाांक Dated 03/07/2025 Prakash Kumar Mishra, Sr.P.S. ITA No.935/KOL/2025 4 आदेश की प्रनतललपप अग्रेपर्त/Copy of the Order forwarded to : sआदेशािुसार/ BY ORDER, (Assistant Registrar) Income Tax Appellate Tribunal, Kolkata 1. अपीलाथी / The Appellant- 2. प्रत्यथी / The Respondent- 3. आयकर आयुक्त(अपील) / The CIT(A), 4. आयकर आयुक्त / CIT 5. विभागीय प्रविविवि, आयकर अपीलीय अविकरण, कोलकाता / DR, ITAT, Kolkata 6. गार्ज फाईल / Guard file. सत्यापपत प्रयत //True Copy// "