ARS FINANCIAL CONSULTANTS PVT. LTD.,KOLKATA V. ITO, WARD-4(3), KOLKATA

ITA 816/KOL/2024

AI Insights

The case involves ARS Financial Consultants Pvt. Ltd., which appealed against the order of the National Faceless Appeal Centre, Delhi, concerning the assessment year 2012-13. The primary contention was the validity of the assessment order passed under section 143(3) of the Income-tax Act, 1961, without a notice under section 143(2) issued by the appropriate Assessing Officer. The Tribunal examined the procedural adherence in issuing notices and found discrepancies in the jurisdictional authority of the officer who issued the notice under section 143(2). The Tribunal referenced decisions such as PCIT Vs. Nopany & Sons and PCIT Vs. Cosmat Traders (P) Ltd. to support its conclusion that the assessment was invalid due to the lack of a properly issued jurisdictional notice.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 772205 (ITAT-KOLKATA)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-08-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Assessment Year: 2012-2013
• Other Referred Cases: PCIT Vs. Nopany & Sons (2022) 136 taxmann.com 414 (Cal), PCIT Vs Cosmat Traders (P) Ltd. (2023) 146 taxmann.com 207 (Cal)
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJA SENGUPTA
• Assessee Lawyers: SOMNATH GHOSH
• Section: 143(3); 142(1); 68; 131

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH, KOLKATA BEFORE SHRI RAJESH KUMAR, AM AND SHRI PRADIP KUMAR CHOUBEY, JM ITA No.816/KOL/2024 (Assessment Year: 2012-13) ARS Financial Consultants Pvt. Ltd. C/o. S.N. Ghosh & Associates, Advocates 2, Garstin Place, 2 nd Floor, Suite No.203, Off Hare Street, Kolkata-700001, West Bengal Vs. Income Tax Officer, Ward 4(3) Aayakar Bhavan, P-7, Chowringhee Square, Eighth Floor, Kolkata-700069, West Bengal (Appellant) (Respondent) PAN No. AAICA6647E Assessee by : Shri Somnath Ghosh, AR Revenue by : Shri Raja Sengupta, DR Date of hearing: 13.08.2025 Date of pronouncement: 28.08.2025 O R D E R Per Rajesh Kumar, AM: 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 19.02.2024 for the AY 2012-13. 2. The assessee vide ground no.1, has challenged the order passed by the ld. CIT (A) National Faceless Appeal Centre, Delhi [the learned CIT (A)], failing to appreciate that the assessment was framed u/s 143(3) of the Income-tax Act, 1961 (the Act) dehors any notice u/s 143(2) of the Act being issued by the AO and accordingly, the assessment Printed from counselvise.com Page | 2 ITA No.816/KOL/2024 ARS Financial Consultants Pvt. Ltd.; A.Y. 2012-13 framed dated 20.03.2025, u/s 143(3) of the Act is invalid, void ab initio and ex-facie null in law. 2.1. The facts in brief are that the assessee filed the return of income on 29.11.2012, declaring total income at ₹2,070. The case of the assessee was selected for scrutiny under Computer Assisted Scrutiny Selection (CASS) and notice u/s 143(2) of the Act was issued on 29.08.2013. Thereafter the ld. AO issued notice u/s 142(1) of the Act along with questionnaire and called upon the assessee to furnish the details and evidences to prove the identity, creditworthiness of the subscribers and genuineness of the transactions with regard to raising of share premium to the tune of ₹34,64,17,830/-. The assessee accordingly, furnished before the ld. AO the evidences qua the share subscribers. The assessee furnished the details containing the names, addresses, copies of ITRs, audited balance sheets and profit and loss accounts with the ld. AO. The ld. AO also issued summons u/s 131 of the Act to the Directors of the assessee company as well as to the share subscribers. The ld. AO directed the directors of the assessee company to produce the subscribers so that these transactions could be verified. However, none complied with the summons issued u/s 131 of the Act. Finally, the assessment was framed by order dated 20.03.2015, passed u/s 143(3) of the Act, wherein the ld. AO made an addition of ₹34,64,17,830/- on account of fake share premium which was also affirmed by the ld. CIT (A) by just discussing the four subscribers out of the total of 19 subscribers namely; Mukesh Kumar Agarwal, Rajesh Kumar Agarwal, Sandeep Kumar Agarwal and Sri Ram Avtar and coming to the conclusion that assessee failed to prove the ingredients to Section 68 of the Act and thus, dismissed the appeal. Printed from counselvise.com Page | 3 ITA No.816/KOL/2024 ARS Financial Consultants Pvt. Ltd.; A.Y. 2012-13 2.2. The ld. AR vehemently submitted before us that the assessee filed the return of income for the impugned assessment year on 29.11.2012, with ITO, Ward 4(1)/ Kol. However, the notice u/s 143(2) of the Act was issued by ITO, Ward 34(1), Kolkata on 29.08.2013, a copy of which is available at page no.431 of the Paper Book. Thereafter the assessee wrote to the Commissioner of Income Tax, Kolkata-XII, Aayakar Bhawan Poorva, Kolkata, informing that the jurisdiction of the assessee has been allotted to ITO Ward-34(1)/ Kolkata, whereas being a private limited company jurisdiction lies with ITO Ward 4(1), Kol under CIT -II/Kol and accordingly, requested the commissioner to migrate the PAN in proper jurisdiction. However, thereafter the notice u/s 142(1) dated 10.02.2015, was issued by ITO Ward 4(3), Kolkata calling upon the assessee to furnish the various details and information which were accordingly, submitted also before the ld. AO. The ld. AR vehemently submitted that since the ITO, Ward 4(3), Kolkata has not issued the jurisdictional notice u/s 143(2) of the Act, therefore, this is a vital lapse on the part of the AO which goes to the root of the matter rendering the assessment framed u/s 143(3) of the Act by the ld. AO to be nullity and invalid in the eyes of law. In defense of his arguments the ld. AR relied on the following decisions namely i) PCIT Vs. Nopany & Sons (2022) 136 taxmann.com 414 (Cal) and ii) PCIT Vs Cosmat Traders (P) Ltd. (2023) 146 taxmann.com 207 (Cal). 2.3. The ld. DR on the other hand submitted that there is no need to issue notice u/s 143 of the Act when the same was issued by the proceeding AO i.e. ITO, ward 34(1), Kolkata. The ld. DR heavily relied on the order of the lower authorities and submitted that the issue raised by the assessee may kindly be dismissed. Printed from counselvise.com Page | 4 ITA No.816/KOL/2024 ARS Financial Consultants Pvt. Ltd.; A.Y. 2012-13 2.4. After hearing the rival contentions and perusing the materials available on record, we find that the notice that the assessee filed the return of income for the impugned assessment year on 29.11.2012, with ITO, Ward 4(1)/ Kol while the notice u/s 143(2) of the Act was issued by ITO, Ward 34(1), Kolkata on 29.08.2013, a copy of which is available at page no.431 of the Paper Book. Thereafter the assessee wrote to the Commissioner of Income Tax, Kolkata-XII, Aayakar Bhawan Poorva, Kolkata, informing that the jurisdiction of the assessee has been allotted to ITO Ward-34(1)/ Kolkata, whereas being a private limited company jurisdiction lies with ITO Ward 4(1), Kol under CIT -II/Kol and accordingly, requested the commissioner to migrate the PAN in proper jurisdiction. The notice u/s 142(1) dated 10.02.2015, was issued by ITO Ward 4(3), Kolkata calling upon the assessee to furnish the various details and information which were accordingly, submitted also before the ld. AO and the assessment was accordingly framed by ITO Ward 4(3) Kolkata. Thus, we note that the ITO, Ward 4(3), Kolkata has not issued the jurisdictional notice u/s 143(2) of the Act which is a serious lapse on the part of the AO which goes to the root of the matter rendering the assessment framed u/s 143(3) of the Act by the ld. AO to be nullity and invalid in the eyes of law. The case of the assessee s squarely covered by the following decisions namely i) PCIT Vs. Nopany & Sons (supra) and ii) PCIT Vs Cosmat Traders (P) Ltd. (supra). In both the above decisions, the Hon’ble Kolkata High Court has held that the assessment framed by the jurisdictional AO without issuing notice 8u/s 143(2) of the Act is invalid while notice u/s 143(2) was issued by the non-jurisdictional AO. Therefore we, accordingly, hold that the assessment framed by Printed from counselvise.com Page | 5 ITA No.816/KOL/2024 ARS Financial Consultants Pvt. Ltd.; A.Y. 2012-13 the AO Ward -4(3) Kolkata is invalid and is accordingly quashed. The ground no. 1 is allowed. 3. In the result, the appeal of the assessee is allowed. Order pronounced in the open court on 28.08.2025. Sd/- Sd/- (PRADIP KUMAR CHOUBEY) (RAJESH KUMAR) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) Kolkata, Dated: 28.08.2025 Sudip Sarkar, Sr.PS Copy of the Order forwarded to: BY ORDER, True Copy// Sr. Private Secretary/ Asst. Registrar Income Tax Appellate Tribunal, Kolkata 1. The Appellant 2. The Respondent 3. CIT 4. DR, ITAT, 5. Guard file. Printed from counselvise.com "