DALMIA IMPEX PRIVATE LIMITED,KOLKATA V. DCIT, CIRCLE 11.1, KOLKATA

CO 33/KOL/2025

AI Insights

The case involves an appeal by the Deputy Commissioner of Income Tax against M/s Dalmia Impex Private Limited concerning the reassessment of income for the assessment year 2014-2015. The reassessment was based on transactions with a paper company, which the Assessing Officer deemed to have booked a bogus loss. The CIT(A) had earlier deleted these additions, leading to the revenue's appeal. Simultaneously, the assessee filed a Cross Objection challenging the validity of the reassessment notice on legal grounds, specifically the adherence to the limitation period for issuing such notices under the revised legal framework post-2021. The tribunal's decision focused on the procedural validity of the notice under section 148A(d), ultimately finding it to be issued beyond the permissible time frame, thus invalidating the entire reassessment process.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 785649 (ITAT-KOLKATA)
• Duration Of Justice: 6 month(s) 29 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 27-10-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2014-2015
• Appeal Filed On: 28-03-2025
• Other Referred Cases: Union of India v. Rajesh Bansal & Ors., ADM Agro Industries Latur & Vizag Pvt. Ltd., Ram Balaram Build Home Pvt. Ltd., G.D. Mother Educational Society v. ITO
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Reassessment proceedings; Period of limitation; Accommodation entries; Time period of passing order; Bogus
• Section: 148; 143(3)

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH, KOLKATA SHRI RAJESH KUMAR, ACCOUNTANT MEMBER SHRI SONJOY SARMA, JUDICIAL MEMBER I.T.A. No. 2544/Kol/2024 Assessment Year : 2014-2015 Pramod Lakra, Deputy Commissioner of Income Tax, Circle 11(1), Kolkata, Aayakar Bhawan, 6th Floor, P-7, Chowringhee Square, Kolkata – 700069 ……..…...…………….... Appellant vs. M/s Dalmia Impex Private Limited, Ideal Plaza, 3rd Floor, 11/1, Sarat Bose Road, Kolkata - 700020 [PAN: AAACD8675M] ……..…...…………….... Respondent CO No. 33/Kol/2025 (Arising out of ITA No. 2544/Kol/2024) Assessment Year : 2014-2015 M/s Dalmia Impex Private Limited, Ideal Plaza, 3rd Floor, 11/1, Sarat Bose Road, Kolkata - 700020 [PAN: AAACD8675M] ……..…...…………….... Appellant vs. Deputy Commissioner of Income Tax, Circle 11(1), Kolkata, Aayakar Bhawan, 6th Floor, P-7, Chowringhee Square, Kolkata – 700069 ……..…...…………….... Respondent Appearances by: Assessee represented by : Sunil Surana, Advocate Department represented by : Manoj Kumar Pati, JCIT, Sr. DR Printed from counselvise.com 2 ITA No. 2544/Kol/2024 CO No. 33/Kol/2025 M/s Dalmia Impex Private Limited Date of concluding the hearing : 10.09.2025 Date of pronouncing the order : 27.10.2025 O R D E R PER SONJOY SARMA, JUDICIAL MEMBER: These two matters—one appeal filed by the Revenue and the corresponding Cross Objection filed by the assessee arise out of the same appellate order passed by the Ld. CIT(A) dated 06.08.2024. Hence, both are heard together and disposed of by this common order for the sake of convenience. 2. Brief facts of the case are that the assessee-company filed its return of income for the assessment year 2014–15 declaring a total income of ₹1,57,07,120, which was subsequently revised to ₹ 1,52,74,460/-. The case was selected for scrutiny and an assessment was framed under section 143(3) of the Act determining total income at ₹1,53,83,680. Subsequently, based on information received from the Directorate of Investigation, Mumbai under “Project Falcon,” it was noted that the assessee had entered into transactions with M/s Gee Bee Securities Pvt. Ltd. and booked a loss of ₹1,36,14,400/-. The said entity was identified as a paper company controlled by one Shri Pankaj Agarwal, a known entry operator. The Assessing Officer, being unsatisfied with the explanation of the assessee, treated the loss as bogus and further made an addition of ₹2,72,288 on account of alleged commission expenditure for obtaining accommodation entries. 3. On appeal, the Ld. CIT(A) deleted the additions, granting full relief to the assessee. Aggrieved, the Revenue has preferred the present appeal. The assessee, in turn, filed a Cross Objection challenging the very validity of the reassessment proceedings on legal grounds, contending that the notice issued under section 148 and the subsequent proceedings are barred by limitation and bad in law. Printed from counselvise.com 3 ITA No. 2544/Kol/2024 CO No. 33/Kol/2025 M/s Dalmia Impex Private Limited 4. At the outset, the Ld. Counsel for the assessee submitted that the reassessment notice under section 148 was issued on 26.06.2021 under the old regime. As per the judgment of the Hon’ble Supreme Court in Union of India v. Rajesh Bansal & Ors. [(2024) 469 ITR 321 (SC)], notices issued under the old provisions between 01.04.2021 and 30.06.2021 are to be treated as show-cause notices under section 148A(b) of the Act. The Court also clarified that the extended time limit allowed under the TOLA notification cannot be stretched beyond 30.06.2021. In the present case, though the original notice dated 26.06.2021 was issued within the permissible window, the subsequent notice under section 148A(b) was issued only on 28.05.2022, allowing the assessee 14 days to respond, i.e., up to 11.06.2022. Even after adjusting the remaining four days available within limitation as per Rajesh Bansal (supra), the last permissible date for issuance of a valid notice under section 148 would have been 15.06.2022. However, the Assessing Officer issued the fresh notice under section 148A(d) only on 29.07.2022, which is clearly beyond the limitation period prescribed under law. 5. This view finds support from the decisions of various High Courts, including the Hon’ble Delhi High Court in ADM Agro Industries Latur & Vizag Pvt. Ltd. (2025) and Ram Balaram Build Home Pvt. Ltd. [(2024) 171 taxmann.com 99 (Del)], as well as the coordinate benches of the Tribunal in G.D. Mother Educational Society v. ITO [ITA Nos. 309–312/Pat/2023, order dated 20.11.2024]. These authorities have consistently held that any notice issued under the new regime beyond the extended limitation period calculated in line with Rajesh Bansal (supra) is invalid and without jurisdiction. 6. The assessee’s cross objection raises a pure legal ground challenging the validity of the notice issued under section 148 read with section 148A of the Act, which goes to the root of the matter. As such, the legal issue deserves to be adjudicated first before going into the merits of the additions. Printed from counselvise.com 4 ITA No. 2544/Kol/2024 CO No. 33/Kol/2025 M/s Dalmia Impex Private Limited 7. On the other hand, the Ld. DR stated that the notice u/s 148A(d) of the Act was issued within time frame prescribed under law. Therefore, CO filed by the assessee liable to be dismissed. 8. We after hearing the rival submission of parties and respectfully following the ratio laid down by the Hon’ble Supreme Court in Rajesh Bansal (supra) and the consistent view of various High Courts and coordinate benches, we hold that the notice under section 148 A(d) issued on 29.07.2022 is time-barred and therefore, invalid in law. Consequently, the reassessment proceedings initiated and completed pursuant to such notice are void ab initio. Since the reassessment itself is held to be invalid, the additions made therein have no legal basis to survive. Accordingly, the Cross Objection filed by the assessee is allowed and the appeal filed by the Revenue is dismissed as infructuous. 9. In the result the Cross Objection No. 33/Kol/2025 filed by assessee is allowed and ITA No. 2544/Kol/2024 filed by revenue is dismissed. Order pronounced on 27.10.2025 Sd/- Sd/- (Rajesh Kumar) (Sonjoy Sarma) Accountant Member Judicial Member Dated: 27.10.2025 AK, Sr. P.S. Printed from counselvise.com 5 ITA No. 2544/Kol/2024 CO No. 33/Kol/2025 M/s Dalmia Impex Private Limited 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 "