GANGES TIEUP PVT. LTD.,KOLKATA V. I.T.O., WARD - 9(1), , KOLKATA

ITA 2570/KOL/2024

AI Insights

Ganges Tieup Pvt. Ltd. appealed against the orders of the National Faceless Appeal Centre, Delhi, for the assessment year 2012-13, which had confirmed an addition of \\u20b97,50,00,000 as unexplained cash credit under section 68 of the Income Tax Act. The Tribunal admitted the appeal despite a delay of 658 days, finding sufficient reasons for the delay. The primary legal issues revolved around the validity of the assessment order due to the absence of a mandatory notice under section 143(2) and improper jurisdictional transfer of the case file between different Income Tax Officers (ITOs). The Tribunal referenced several precedents, including decisions from the Apex Court and the Calcutta High Court, to support its findings.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 778682 (ITAT-KOLKATA)
• Duration Of Justice: 9 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-10-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2012-2013
• Appeal Filed On: 17-12-2024
• Other Referred Cases: Jute Corporation of India Ltd. Vs CIT, National Thermal Power Co. Ltd v. CIT, PCIT vs. Britannia Industries Ltd, Kusum Goyal Vs. ITO
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SANAT KUMAR RAHA
• Assessee Lawyers: S SOUMITRA CHOUDHURY; PRANABESH SARKAR; ARS
• Keywords: Condonation of delay; Set aside; Unexplained cash credit; Gift; Assessment record; Competent authority
• Section: 143(3); 142(1); 271(1)(c); 68; 131

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL “D” BENCH, KOLKATA BEFORE SHRI GEORGE MATHAN, JM AND SHRI RAJESH KUMAR, AM ITA No.2570/KOL/2024 (Assessment Year:2012-13) Ganges Tieup Pvt. ltd. 127, 1st Floor, Netaji Subhash road, Kolkata-700001, West Bengal Vs. ITO Ward 9(1), P-7, Chowringhee Square, Kolkata-700069, West Bengal (Appellant) (Respondent) PAN No. AAECG6645G Assessee by : S/Shri Soumitra Choudhury & Pranabesh Sarkar, ARs Revenue by : Shri Sanat Kumar Raha, DR Date of hearing: 27.08.2025 Date of pronouncement: 14.10.2025 O R D E R Per Rajesh Kumar, AM: This is an appeal preferred by the assessee against the orders of the National Faceless Appeal Centre, Delhi (hereinafter referred to as the “Ld. CIT(A)”] dated 21.12.2022for the A.Y. 2012-13. 02. The appeal of the assessee is barred by 658 days. In this regard, the assessee has filed an application for condonation of delay stating therein the reasons for delayed filing of appeal. We note that the assessee was not been knowing about the appellate order having been passed by the ld. CIT(A). It is only when the ld. AO started pressing hard for the deposit of demand, the assessee came to know about it upon accessing the ld. CIT(A) portal. Thereafter immediately the appeal was filed with a delay of 658 days. In our opinion there are sufficient reasons for delay, which are plausible and bonafide. Printed from counselvise.com Page | 2 ITA No. 2570/KOL/2024 Ganges Tieup Pvt. ltd; A.Y. 2012-13 Accordingly, delay of 658 days in filing the present appeal by the assessee is condoned and the appeal is admitted for hearing. 03. At the outset, the ld. Counsel for the assessee drew our attention of the bench to the letter dated 22.08.2025, wherein an additional ground has been raised by the assessee, for the sake of ready reference the same is extracted below: - “1. For that on the facts of the case, the assessment order is void ab initio in as much as, no mandatory notice u/s. 143(2) of the IT. Act Issued by ITO Ward-9(2), Kolkata before he framed to assessment stage, hence the assessment proceedings and assessment order was bad in law and hence the same be quashed. 2. For that on the facts of the case, ITO Ward-35(4)), Kolkata was not issued notice as per Jurisdictional Transfer Provision of the IT Rules to ITO Ward-6(2), Kolkata and then ITO Ward-9(2), Kolkata and not intimated to the assessee transfer order u/s. 120 or 127, therefore, he did not enjoy the jurisdiction to frame the assessment u/s. 143(3) of the Act and order passed by the AO, as well as the CIT(A) is null in the eyes of law and it has to be quashed. 3. For that the competent authority has not passed any transferred order u/s 127 of transferring the assessee's file from ITO Ward-35(4), Kolkata to ITO Ward-6(2), Kolkata, and then ITO Ward-9(2), Kolkata. As such, without transferred order u/s 127 the ITO Ward-9(2), Kolkata cannot assume the jurisdiction over the assessee. Hence, the assessment order passed u/s. 143(3) dated 26.03.2015 by the ITO Ward-9(2), Kolkata without jurisdiction over the assessee is invalid, bad-in-law and ab-initio-void, and liable to be quashed. 4. For that on the facts of the case, that ITO Ward-9(2), Kolkata should not automatically assume jurisdiction over the case, the inter charge change of jurisdiction between two regions of requires concurrence of the concerned both the Commissioners, in exercise of powers under sub section (2) of section 127 of the Income Tax Act needs to passed specific order u/s. 127 of the Income Tax Act, therefore, the assessment order passed is bad in law and should be quashed. 5. For that the appellant reserves the right to adduce any further ground or grounds, if necessary, at or before the hearing of the appeal.” 04. After hearing the rival contentions and perusing the material on record, we find that the assessee has raised an additional ground of appeal challenging the jurisdiction of the AO to make addition. In our opinion the issued raised in the additional ground is a purely a legal Printed from counselvise.com Page | 3 ITA No. 2570/KOL/2024 Ganges Tieup Pvt. ltd; A.Y. 2012-13 issue qua which all the facts are available in the appeal folder and no further verification of facts are required from any quarter whatsoever. In our considered view the assessee is at liberty to raise any legal issue before any appellate authority for the first time even when the same has not been raised before the lower authorities. The case of the assessee is squarely covered by the decisions of the Apex court in the case of i) Jute Corporation of India Ltd. Vs CIT in 187 ITR 688 , ii) National Thermal Power Co. Ltd v. CIT [1998] 229 ITR 383 and also by the decision of Hon’ble Calcutta High Court in PCIT vs. Britannia Industries Ltd. [2017] 396 ITR 677 (Cal). Therefore, we are inclined to admit the same for adjudication. 05. The ld. Counsel for the assessee at the outset submitted that in this case the assessee filed the return of income on 22.03.2013, with ITO Ward 35(4), Kolkata, declaring total loss of ₹12,435/-. The notice u/s 143(2) of the Income-tax Act, 1961 (the Act) was issued by ITO Ward 35(4), Kolkata on 08.08.2013, a copy of which is available at page no.1. Thereafter, the notice u/s 142(1) of the Act was issued by ITO Ward 6(2), Kolkata, on 30.07.2014, copy of which is available at page no.2 of the Paper Book. Again, notice u/s 142(1) of the Act dated 09.01.2015 was issued by ITO Ward 9(2), Kolkata, copy of which is available at page no.3 of the Paper Book. Finally, the assessment was framed by ITO Ward-9(2), Kolkata by making an addition of ₹7,50,00,000/- vide order dated 26.03.2016, passed u/s 143(3) of the Act. Pertinent to state that the assessee has raised the share capital / share premium of ₹7,50,00,000/- by issuing equity shares during the year and accordingly, the AO called upon the assessee to prove the identity and creditworthiness of the investors and genuineness of the transaction. The assessee accordingly furnished all the details and evidences before the AO. The AO however Printed from counselvise.com Page | 4 ITA No. 2570/KOL/2024 Ganges Tieup Pvt. ltd; A.Y. 2012-13 not satisfied with the reply of the assessee added Rs. 7,50,00,000/- as unexplained cash credit u/s 68 of the Act. 06. In the appellate proceedings, the ld. CIT (A) affirmed the order of the ld. AO on the ground that the assessee has not complied with the summons issued u/s 131 of the Act to the director of the assessee company. 07. The ld. AR vehemently submitted before us that the assessment order passed by the ITO Ward 9(2), Kolkata, is invalid and nullity in the eyes of the law as the ITO Ward 9(2) has not issued the mandatory notice u/s 143(2) of the Act, after the case of the assessee was transferred to him. In this case, the ld. AR submitted that the notice u/s 143(2) of the Act dated 8.8.2013 was issued by ITO Ward 35(4), Kolkata, who is a non-jurisdictional AO and that correct jurisdictional AO was ITO Ward 9(2), Kolkata. The ld. AR assailed the order passed by the ld. AO on two counts; firstly, that notice u/s 143(2) of the Act, which is mandatory/ statutory requirement under the Act, was not issued; secondly, that the file was transferred from one AO to another AO without any order passed by the PCIT. The ld. AR argued that the file cannot be transferred without there being an administrative order of the PCIT, who is authorized to transfer the cases intra AOs falling under his administrative charge and therefore, the assessment framed is ex-facie, nullity and voidab-initio. Hefurther contended that no assessment can be framed by the ld. AO without issuing notice u/s 143(2) of the Act. So far as second contention is concerned that the file cannot be transferred by one AO to another AO in the same jurisdiction without an order of PCIT u/s 127(3) of the Act the ld. counsel relied on the decision of the Hon'ble High Court in case of Kusum Goyal Vs. ITO reported in (2010) 329 ITR 283 (Calcutta). Printed from counselvise.com Page | 5 ITA No. 2570/KOL/2024 Ganges Tieup Pvt. ltd; A.Y. 2012-13 08. The ld. DR vehemently supported the order of the lower authorities. The ld. DR argued that if the assessee has any objection to the jurisdiction of the AO who framed the assessment, then the assessee should have objected to it within 30 days of the issue of notice. In defense of the argument of the ld. Counsel for the assessee relied on the decision of Hon'ble Apex Court in case of Deputy Commissioner of Income (Exemption) Vs Kalinga Institute of Industrial Technology Vs. DCIT (2023) 151 taxmann.com 434 (SC).The ld. DR submitted that since the assessee has not filed any objections to issuance of notice by non-jurisdictional AO, therefore he should not be allowed to rake up this issue at this stage and the ground raised may be dismissed. 09. The ld AR in the rebuttal submitted the decision of the Hon’ble Apex Court is not applicable to the present facts as in the present case the notice was issued by non-jurisdictional AO who was not having any jurisdiction and thereafter transferred to another AO who was having the jurisdiction over the assessee but the notice u/s 143(2) was not issued by the jurisdictional AO and assessment was framed sans issuing notice u/s 143(2) of the Act. The counsel further argued that the said transfer was also invalid as there was no order passed by the jurisdictional principal commissioner transferring the file from one AO to another. Whereas in the case before the Hon’ble Apex Court, the notice was issued by the non-jurisdictional AO and thereafter the case records were transferred to AO having jurisdictional who framed the assessment sans issuing any notice u/s 143(2). 010. We have heard the rival contentions and perused the materials available on record. We note that the assessment order was passed by Printed from counselvise.com Page | 6 ITA No. 2570/KOL/2024 Ganges Tieup Pvt. ltd; A.Y. 2012-13 the ld. ITO Ward 9(2), Kolkata, without issuing the mandatory notice u/s 143(2) of the Act after the case records of the assessee was transferred to him by ITO Ward 35(4), Kolkata, who issued the notice u/s 143(2) of the Act because he was not having any jurisdiction over the assessee. We note that the case file was transferred from one AO to another AO without any administrative order passed by the PCIT having the administrative control over both the AOs. Therefore, on this count also the assessment framed cannot be sustained. After considering the facts of the assessee case in the light of the above decisions, we are inclined to hold that the assessment framed by the ITO Ward 9(2), Kolkata is bad in law and nullity in the eyes of the law on the ground that the case has been transferred from one AO to another AO without order u/s 127(3) of the Act. We have also called for the assessment records from the SR DR who produced the assessments records and examined thoroughly however he could not produce any order of the jurisdictional PCIT u/s 127 of the Act transferring the assessment file from one to another as stated above. The case of the assessee is squarely covered by the decision of the Hon’ble Calcutta High Court in case of Kusum Goyal Vs. ITO reported in (supra) wherein the jurisdictional High Court held as under:- “10. It is evident that respondent No. 2 had sought to justify his action by stating that the jurisdiction automatically gets vested with the jurisdictional officer and no order under section 127 is required to be passed. In my view, the letter/notice dated October 21, 2009 is patently illegal since it has been held in this judgment that in case of transfer within the same city, locality or place although the opportunity of hearing as postulated in section 127(1) and (2) has been dispensed with, other statutory formalities which includes issuing an order are required to be complied with. Similarly transfer of files for the assessment years 2007-08, 2008-09 and the earlier years as intimated in the letter/notice dated July 30, 2009 issued by respondent No. 1 is also bad in law. The argument of the respondents that in case of intra city transfer no order is required to be passed, cannot be accepted in view of the settled position of law in KashiramAggarwalla [1965] 56 ITR 14 (SC) and in S.L. Singhania [1992] 193 ITR 275 (Delhi) wherein the validity of the orders were under challenge, meaning thereby an order recording transfer has to be on the records. The Printed from counselvise.com Page | 7 ITA No. 2570/KOL/2024 Ganges Tieup Pvt. ltd; A.Y. 2012-13 judgment in Subhas Chandra Bhaniramka [2010] 320 ITR 349 (Cal) where it has been held that in case of transfer of file under section 158BD resort has to be made to section 127 also applies in the instant case. The judgment in M. A. E. K. K. Varma [1981] 129 ITR 31 (AP) relied on by the Revenue is not applicable as it dealt with the question whether in case of intra city transfer notice is required to be served and whether separate orders of transfer are required under the Wealth-tax Act, 1957 and the Gift-tax Act, 1958. Therefore, since it has been held in this judgment that it is imperative on part of the respondents to issue order under section 127(3), the letters/notices under challenge are set aside and quashed. The writ petition is allowed. Consequential proceedings are also set aside and quashed. Accordingly, the notice dated 6th January, 2010 regarding the penalty proceedings under section 271(1)(c) for the assessment year 2006-07 is also set aside and quashed. The application being G. A. No. 81 of 2010 is also allowed.” 011. Therefore, considering the facts of the instant case in the light of the ratio laid down in the above decision, we hereby quash the assessment framed by the AO. 012. In the result, the appeal of the assessee is allowed. Order pronounced in the open court on 14.10.2025. Sd/- Sd/- (GEORGE MATHAN) (RAJESH KUMAR) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) Kolkata, Dated:14.10.2025 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 "