BIRENDRA NATH SAHA,MALDA V. I.T.O., WARD - 3(1), MALDA

ITA 1772/KOL/2024

AI Insights

The case involves appeals by Birendra Nath Saha against the orders of the Commissioner of Income Tax (Appeals) for the assessment years 2014-15 and 2015-16. The primary issue was the reassessment of the assessee's income, which was significantly higher than declared, based on unverified turnover figures. The assessee argued that the reassessment was invalid as no notice under section 148 of the Income Tax Act was served through email within the limitation period, and that the business had transitioned from a proprietorship to a partnership, which was not properly updated in the bank's records. The Tribunal found merit in the assessee's arguments and remitted the case back to the AO for a thorough examination of the facts and legal contentions.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 36471 (ITAT-KOLKATA)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-03-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2015-2016
• Laws Referred To: Income Tax Act
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Set aside; Reassessment proceedings; Period of limitation; Assessment record; Time period of passing order
• Section: 148

Judgement Text

"आयकर अपीलȣय अͬधकरण, कोलकाता पीठ “बी’’, कोलकाता IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH: KOLKATA Įी राजेश क ुमार, लेखा सटèय एवं Įी Ĥदȣप क ुमार चौबे, ÛयाǓयक सदèय क े सम¢ [Before Shri Rajesh Kumar, Accountant Member &Shri Pradip Kumar Choubey, Judicial Member] I.T.A. Nos. 1771 & 1772/Kol/2024 Assessment Year: 2014-15 & 2015-16 Birendra Nath Saha (PAN: ALHPS 3475 P) Vs. ITO, Ward-3(1), Malda Appellant / ) अपीलाथȸ ( Respondent / Ĥ×यथȸ Date of Hearing / सुनवाई कȧ Ǔतͬथ 20.02.2025 Date of Pronouncement/ आदेश उɮघोषणा कȧ Ǔतͬथ 17.03.2025 For the assessee / Ǔनधा[ǐरती कȧ ओर से Shri Sunil Surana, A.R For the revenue / राजèव कȧ ओर से Shri Sailen Samadder, Addl. CIT Sr. D.R ORDER / आदेश Per Pradip Kumar Choubey, JM: These are the appeals preferred by the assessee against the separate orders of Commissioner of Income Tax (Appeal)- NFAC, Delhi (hereinafter referred to as the Ld. CIT(A)] dated 26.07.2024 for AY 2014-15. In both the appeal the issues are common so taken up together for disposal. We shall take in ITA NO. 1771/Kol/2024 for AY 2014-15 as a lead case. 2 I.T.A. Nos. 1771 & 1772/Kol/2024 Assessment Years: 2014-15 & 2015-16 Birendra Nath Saha 2. Brief facts of the case of the assessee are that the assessee filed its return of income by declaring total income of Rs. 16,68,790/-. The case of the assessee was reopened as the information received that the assessee made turnover of Rs. 36,48,32,670/- for the FY 2013-14 but accounts are not audited. A notice u/s 148 of the Act was issued to the assessee, the assessee furnished the return of income. In compliance with the notice the assessee was requested to furnish the information but there was no compliance from the side of the assessee, as a result of which, the case of the assessee was assessed on the material available of the record. The assessee furnished explanation after receiving notice of the show cause but the AO did not find any response to be tenable and accordingly assessed the total income at Rs. 2,91,86,613/-. 3. Aggrieved by the said order, the assessee preferred an appeal before the Ld. CIT(A) wherein also the appeal of the assessee has been dismissed. Being aggrieved and dissatisfied the assessee has preferred an appeal before us. 4. In course of argument the Ld. Counsel also took an additional ground being legal ground by submitting that no notice u/s 148 was served on the assessee through email within limitation period. Hence the notice issued u/s 148 is barred by limitation and entire reassessment is bad in law and liable to be quashed. Further he submits that the AO erred by making addition ignoring the fact that the business of the assessee was initially in proprietorship firm and it was converted into partnership firm on 01.04.2010 and on 19.05.2011, information regarding the conversion to the bank has been given in writing but the bank updated the system on 01.08.2015. The Ld. Counsel submits that the assessee has shown all the transaction in partnership firm in PAN NO. AAKFB 1340A. The Ld. AR submits that the fault was on the part of the bank that the bank updated the system belatedly. The Ld. AR submits that the contention of the assessee has been rejected by the AO by stating that the assessee continued to operate the bank account of 10 long years and claimed to be converted into partnership account way back 2011, hence in absence of verifiable evidence, the same is not tenable. The AO has further held that the assessee has not informed the Department about the same. The Ld. A.R submits that it is the duty of the AO to verify the assessment records of the 3 I.T.A. Nos. 1771 & 1772/Kol/2024 Assessment Years: 2014-15 & 2015-16 Birendra Nath Saha partnership firm. The Ld. Counsel submits that fund operated by the partnership firm has been evidenced form the assessment records of the partnership firm’s balance sheet and all were in the possession of the AO. The Ld. A.R further submits that mistake was on the part of the bank that he did not correct the PAN of the partnership even after the intimation. The prayer of the Ld. Counsel of the assessee is that the matter should be remitted back to the file of AO to verify the same on the factual and legal grounds. 5. The Ld. D.R supports the impugned order. 6. Upon hearing the submission of the counsel of the respective parties, we have perused the assessment order as well as the appellate order. On perusal of the AO’s order, it appears to us that the contention of the assessee has been rejected by the AO by observing thus: “2.2 From the above mentioned response of the assessee, it appears that the business of the assessee was converted from proprietorship way back in 2011. Assessee continued to operate his bank account (claimed to be converted into partnership account) for 10 long years and only submitted these facts during the reassessment proceedings. Thus, in the absence of any verifiable evidence in this regard, assesse’s contentions are hereby rejected. Also, the assessee has not informed the department about the same before the reassessment proceedings, and has neither submitted any proof of the same for the correspondence of the matter with the department. Therefore, in view of proper evidences and submissions, the assessment is completed as per the additions in subsequent paras and entire turnover is treated as business receipts of the assessee.” 7. We have also gone through the order of Ld. CIT(A) and find that the Ld. CIT(A) has confirmed the order of the AO by holding that that the claim of the assessee has not been supported with any documentary evidences nor he has submitted any cash flow statement, reconciliation statement showing that the deposit made in the two banks have been completed covered while filing income tax report of the partnership firm. The Ld. CIT(A) has further held that the assessee has failed to provide account opening partnership firm or any other details to show that the bank account truly get reflected in the ITR of the partnership firm. 8. Keeping in view the submission and going over the order passed by the Ld. CIT(A) and facts of the case of the assessee, we are inclined to restore the case of the assessee to the file of AO with this direction to verify the contentions raised by the 4 I.T.A. Nos. 1771 & 1772/Kol/2024 Assessment Years: 2014-15 & 2015-16 Birendra Nath Saha assessee and then pass a fresh order. The above both appeal of the assessee is restored into the file of AO for fresh adjudication. The order passed by the AO confirmed by the Ld. CIT(A) are hereby set aside. In the result, both the appeals filed by the assessee are allowed for statistical purposes. Order is pronounced in the open court on 17th March, 2025 Sd/- Sd/- (Rajesh Kumar/राजेश क ुमार) (Pradip Kumar Choubey /Ĥदȣप क ुमार चौबे) Accountant Member/लेखा सदèय Judicial Member/ÛयाǓयक सदèय Dated: 17th March, 2025 SM, Sr. PS Copy of the order forwarded to: 1. Appellant- Birendra Nath Saha, Jadupur P.O. Jadupur, Dist.- Malda, West Bengal-731204 2. Respondent – ITO, Ward- 3(1), Malda 3. Ld. CIT(A)-NFAC, Delhi 4. Ld. Pr. CIT- , Kolkata 5. DR, Kolkata Benches, Kolkata (sent through e-mail) True Copy By Order Assistant Registrar ITAT, Kolkata Benches, Kolkata "