GENESIS ADVERTISING PVT. LTD.,KOLKATA V. A.C.I.T., CC - 4(1), KOLKATA

ITSSA 81/KOL/2025

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Genesis Advertising Pvt. Ltd appealed against the orders of the Commissioner of Income Tax (Appeals)-27, Kolkata, which confirmed the additions made by the Assessing Officer under section 40A(3) of the Income Tax Act for the assessment years 2016-17 and 2018-19. The primary legal contention was that no new addition or disallowance could be made as the regular assessments were completed before the initiation of action under section 143(2) of the Act, and no incriminating material was found during the search. The Tribunal, referencing several precedents, including a decision by the Hon'ble Supreme Court, agreed with the appellant's position, leading to the allowance of both appeals.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 782372 (ITAT-KOLKATA)
• Duration Of Justice: 2 month(s) 22 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 27-10-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2016-2017
• Appeal Filed On: 05-08-2025
• Other Referred Cases: Vipin Khanna vs. CIT, Jai Lokenath Oil Extractions (P) Ltd. vs. DCIT, Exhibit India Pvt. Ltd. vs. ACIT, PCIT vs. M/s Abhisar Buildwell Pvt. Ltd.
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 143(3); 142(1); 153A; 40A(3)

Judgement Text

"आयकर अपीलȣय अͬधकरण, कोलकाता पीठ, कोलकाता IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH KOLKATA Before Shri Rajesh Kumar, Accountant Member and Shri Pradip Kumar Choubey, Judicial Member IT(SS).A Nos.81 & 82/Kol/2025 Assessment Years: 2016-17 & 2018-19 Genesis Advertising Pvt. Ltd …………..…………………………….…….……Appellant 2A, Dwarka, 7 Sarat Bose Road, Kol- 700020. [PAN: AABCG0780D] vs. ACIT, Central Circle-4(1), Kolkata …………..………………...……...…..…..Respondent Appearances by: Shri S.K. Tulsiyan, Advocate & Jyoti Duggar, AR, appeared on behalf of the appellant. Shri P N Barnwal, CIT-DR, appeared on behalf of the Respondent. Date of concluding the hearing : October 14, 2025 Date of pronouncing the order : October 27, 2025 ORDER Per Pradip Kumar Choubey, Judicial Member: Both the captioned appeals have been preferred by the assessee for the assessment years 2016-17 & 2018-19 against separate orders dated 19.07.2025 & 22.07.2025 of the Commissioner of Income Tax (Appeals)- 27, Kolkata [hereinafter referred to as ‘CIT(A)’] passed u/s 250 of the Income Tax Act (hereinafter referred to as the ‘Act’) respectively. Since, the issues involved in both the appeals are common and relate to the same assessee, therefore, these appeals have been heard together and are being disposed of by this consolidated order. ITA No.81/Kol/25 is taken as lead case for the sake of convenience and narrations of facts. 2. ITA No.81/Kol/2025 – The ld. AR challenges the very impugned order first of all taking the legal ground that no new addition or disallowance can be made where admittedly regular assessments were Printed from counselvise.com IT(SS)A Nos.81 & 82/Kol/2025 Genesis Advertising Pvt. Ltd 2 completed on the date of initiation of action u/s 143(2) of the Act where no incriminating material has been found during the course of search. 3. Brief facts of the case are that the assessee company had e-filed its return of income for the assessment year on 28/02/2017 declaring a total income of Rs.11,85,81,280/-. Thereafter, a search u/s 132(1) of the Act was conducted in the case of Genesis group of Companies on 10/02/2021. The assessee company was one of the related persons of the group and subsequently, notice u/s. 153A of the Act and in response to the same, the assessee company filed its return on 29/10/2021 and also notices u/s. 143(2) and 142(1) of the Act were duly issued and the Authorized Representative of the assessee company filed details, documents and explanation as called for from time to time in response to the said Notices. Subsequently, the learned A.O. passed the assessment order u/s. 143(3)/153A of the Act on 29/03/2022 wherein disallowance of Rs.16,62,829/- was made u/s. 40A(3) of the Act. 4. Being aggrieved by the said Order, the assessee filed an appeal before the ld. CIT(A), wherein the ld. CIT(A) vide his appellate order dated 19/07/2025 confirmed the said addition as made by the Assessing Officer. 5. Being dissatisfied, the assessee is in appeal before us raising the aforesaid legal ground which goes to the very root of the case contending that as this being unabated assessment on the date of search and there being no seized incriminating material found during the said search, therefore, the Assessing Officer was not justified in the said addition. The ld. AR stated that in the present case, search was conducted on 10.02.2021 and the last due date of issuing of notice u/s 143(2) of the Act was 30.09.2017 as the assessment year in question was A.Y 2016- 17. Therefore, no assessment is pending on the date of search in this Printed from counselvise.com IT(SS)A Nos.81 & 82/Kol/2025 Genesis Advertising Pvt. Ltd 3 case. He relied on the decisions of Hon’ble Punjab & Haryana High Court in the case of Vipin Khanna vs. CIT reported in 255 ITR 220 (P&H) and Jai Lokenath Oil Extractions (P) Ltd. vs. DCIT reported in 166 ITD 161 (Kol-Trib.) and a decision in the case of Exhibit India Pvt. Ltd. vs. ACIT in ITA No.2481/Kol/2024. 6. Contrary to that, the ld. DR supports the impugned order of the ld. CIT(A). 7. Upon hearing the counsels of the respective parties and on perusal of the impugned order, we find that a search action was conducted on the assessee on 10.02.2021 and the assessment year involved is 2016- 17. Apparently, no proceedings were pending on the date of search and the time period to issue u/s 143(2) of the Act has also expired. Therefore, the assessment in unabated assessment on the date of search and in terms of provisions of Section 153A of the Act, the Assessing Officer has jurisdiction to make any addition to the income of the assessee only on the basis of sized incriminating material and not otherwise. We note that it is settled position of law that in respect of completed/unabated assessments, no addition can be made by the Assessing Officer in absence of any incriminating material found during the course of search u/s 132. We have gone through the decisions cited by the ld. AR wherein in the case of Exhibit India Pvt. Ltd. vs. ACIT (supra), the Coordinate Kolkata Bench of the Tribunal after relying the Hon'ble Apex Court decision in the case of Abhisar Buildwell P. ltd. in Civil Appeal No. 6580 Of 2021 dated 24/04/2023 has deleted an addition observing as under: “8. We, after hearing the rival submissions and perusing the materials available on record, find that original assessment for the assessment year 2016-17 was completed and no proceedings were pending on the date of search i.e. 10.02.2021 and the due date for issuance of notice u/s 143(2) had expired on 30.09.2017 to conclude the assessment proceedings. We note that as in the case of the assessee, no proceeding was pending on the Printed from counselvise.com IT(SS)A Nos.81 & 82/Kol/2025 Genesis Advertising Pvt. Ltd 4 date of search and there is no evidence of any incriminating material was found during the said search, thus the assessment u/s 153A is bad in law. We rely on the settled position of law laid down by the Hon’ble Supreme Court in the case PCIT vs. M/s Abhisar Buildwell Pvt. Ltd. (supra) that assessment order u/s 153A cannot be disturbed when the assessment was completed unless there is any incriminating material found during the search. We further note that even on merit, the disallowance of Rs.2,73,603/- made u/s 40A(3) of the Act is not sustainable as the assessee provided sufficient evidence by showing that the cash payments were in the nature of advance given to its project manager and no direct payments were made to any parties and also the payments were in fact made for organising exhibitions and for expenses at various locations where no banking facilities were available, which is an accepted exception under Rule 6DD of the I.T. Rules. Furthermore, the assessee produced supporting documents including cash books and ledger accounts which demonstrate that cash payments were below the prescribed threshold limit of Rs.20,000/- per day to a single person. We, therefore, find that the ld. CIT(A) and the Assessing Officer failed to consider the above facts properly. In view of the above, the assessment order u/s 153A r.w.s. 143(3) is quashed as it is not legally sustainable in the absence of any incriminating material found during the search. Accordingly, the addition of Rs.2,73,603/- is hereby deleted as the payments were advanced to project managers, duly accounted for in regular books of accounts and do not violate the provisions of Act.” 7.1 It is pertinent to mention here that the disallowance made u/s 40A(3) of the Act was duly accounted for in the regular books of accounts. Considering the above discussion and following the binding principles of law, we are of the opinion, that notice u/s 143(2) of the Act is time-barred for the relevant assessment year and the assessment for assessment year stood completed on the date of search i.e. 10.02.2021. Consequently, the assessment framed u/s 153A is held as bad in law and the addition made by the Assessing Officer is hereby deleted. ITA No.81/Kol/2025 is allowed. 8. ITA No.82/Kol/2025 – Since the facts and issues involved in both the appeals are identical, therefore, our findings/directions given above in ITA No.81/Kol/2025 will mutatis mutandis apply to ITA No.82/Kol/2025. Hence, ITA No.82/Kol/2025 is also allowed. Printed from counselvise.com IT(SS)A Nos.81 & 82/Kol/2025 Genesis Advertising Pvt. Ltd 5 9. In the result, both the appeals filed by the assessee are allowed. Kolkata, the 27th October, 2025. Sd/- Sd/- [Rajesh Kumar] [Pradip Kumar Choubey] Accountant Member Judicial Member Dated: 27.10.2025. RS Copy of the order forwarded to: 1. Appellant - 2. Respondent - 3. CIT(A)- 4. CIT- , 5. CIT(DR), //True copy// By order Assistant Registrar, Kolkata Benches Printed from counselvise.com "