INCOME TAX OFFICER, KOLKATA V. HIGHLIGHT COMMOTRADE PRIVATE LIMITED, KOLKATA

ITA 646/KOL/2024

AI Insights

The case involves an appeal by the Income Tax Officer against the decision of the Commissioner of Income Tax (Appeals), which had deleted an addition made by the Assessing Officer treating share capital/share premium received by Highlight Commotrade Pvt. Ltd. as income from unexplained sources under section 68 of the Income Tax Act. The assessee, in its cross objection, argued that the original assessment order was void ab initio as the necessary prior sanction for reopening the assessment was not obtained from the Commissioner. The Tribunal focused on the procedural validity of the reassessment, particularly the lack of approval under section 151, leading to the conclusion that all subsequent orders were also void.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 33039 (ITAT-KOLKATA)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-02-2025
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Competent authority
• Section: 147; 148; 143(3); 250; 263; 68

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH, KOLKATA Before SRI SANJAY GARG, JUDICIAL MEMBER & SHRI RAKESH MISHRA, ACCOUNTANT MEMBER I.T.A. No.: 646/KOL/2024 Assessment Year: 2009-10 Income Tax Officer, Ward-1(4), Kolkata ………….. Appellant Vs. Highlight Commotrade Pvt. Ltd. .............. Respondent P-27, Princep Street, Kolkata-700072. (PAN: AACCH0877P) & C.O. No. 6/Kol/2024 In I.T.A. No.:646/KOL/2024 Assessment Year: 2009-10 Highlight Commotrade Pvt. Ltd. ……….. Cross Objector Vs. Income Tax Officer, Ward-1(4), Kolkata ……… Respondent Appearances: Assessee represented by: Shri Miraj D. Shah, AR Revenue represented by: Shri P. N. Barnwal, CIT, DR Date of concluding the hearing : 12.02.2025 Date of pronouncing the order : 12.02.2025 ORDER Per Sanjay Garg, Judicial Member: The captioned appeal by the revenue and the corresponding Cross Objection by the assessee have been directed against the order dated 21.11.2023 of the Ld. Commissioner of Income Tax (Appeal), National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as Ld. ‘CIT(A)’] u/s. 250 of the Income Tax Act, 1961 (hereinafter referred to as the “Act”) for Assessment Year (AY) 2009-10. 2. The revenue in this appeal is aggrieved by the action of the Ld. CIT(A) in deleting the addition of Rs.13,21,00,000/- made by the Assessing Officer I.T.A. No.: 646/KOL/2024 & CO 6/Kol/2024 Highlight Commotrade P. Ltd. AY : 2009-10 Page 2 of 4 by treating the share capital/share premium received by the assessee as income of the assessee from unexplained sources u/s. 68 of the Act. 3. The assessee, on the other hand, has filed the Cross Objection stating that the base assessment order passed u/s. 147 dated 13.04.2012 was void ab initio on the ground that the Assessing Officer had not taken the requisite prior sanction of the Ld. Commissioner before issuing notice of reopening of the assessment u/s. 148 of the Act. It has been pleaded that since the basic assessment order was void ab initio, hence, further corresponding order dated 27.02.2015 of the Ld. Pr. Commissioner of Income Tax passed u/s. 263 of the act was also void and that further consequential assessment order passed u/s. 143(3) of the Act dated 31.03.2016 (impugned assessment order) was also void. Both the Ld. Representatives have submitted that since the Cross Objections raised by the assessee hit at the very jurisdiction of the Assessing Officer to reopen the assessment, hence, the same may be adjudicated first. 4. Heard on the Cross Objections. At the outset, the Ld. Counsel for the assessee has invited our attention to page 63 of the paper book, which is a copy of notice issued u/s. 148 of the Act. He inviting our attention to the last line of the notice has submitted that it has been mentioned by the Assessing Officer that the said notice has been issued after obtaining the necessary satisfaction of the Commissioner of Income Tax, Kolkata. 4.1. The Ld. Counsel for the assessee has further invited our attention to page 65 of the paper book, which is a copy of reply by the Assessing Officer to the assessee, wherein, the Assessing Officer has referred to letters dated 21.11.2022 and 23.01.2023 vide which the assessee had requested the Assessing Officer to provide it the approval from competent authority obtained u/s. 151 of the Act. The Assessing Officer in this respect has replied that the copy of the said approval was not readily available from record. 4.2. The Ld. Counsel has further invited our attention to page 66 of the paper book which is a certified copy of the order sheet to show that even in I.T.A. No.: 646/KOL/2024 & CO 6/Kol/2024 Highlight Commotrade P. Ltd. AY : 2009-10 Page 3 of 4 the order sheet there is no order recorded by the Assessing Officer of obtaining any approval u/s. 151 of the Act from the competent authority. 5. The Ld. DR has fairly conceded that in this case, there is no approval on record from the Commissioner of Income Tax u/s. 151 of the Act. As per the settled law for reopening of the assessment, as is in this case, the Assessing Officer was required to obtain approval from the competent authority u/s. 151 of the Act to reopen the assessment before issuing notice u/s. 148 of the Act. In view of this, the very initiation of reassessment proceedings in this case is void ab initio and consequently, the assessment order passed by the Assessing Officer is not sustainable and the same is also void. Since the base order dated 13.04.2012 is void, hence, the corresponding revision order passed u/s. 263 of the Act and consequential assessment order passed u/s. 143(3) of the Act are also void. Accordingly, the impugned assessment order is not legally sustainable and hence, the same is hereby quashed. 6. Since we have decided the legal issue in favour of the assessee, at this stage, we are not inclined to adjudicate the revenue’s appeal on merits as the issues involved therein have been rendered academic in nature. With the above observation, the appeal of the revenue is hereby dismissed, whereas, the Cross Objection of the assessee stands allowed. 7. In the result, appeal of revenue is dismissed and the cross objection of the assessee is treated as allowed. Order pronounced in the open Court. Sd/- Sd/- [Rakesh Mishra] [Sanjay Garg] Accountant Member Judicial Member Dated: 12.02.2025 J.Dey (Sr. P.S.) I.T.A. No.: 646/KOL/2024 & CO 6/Kol/2024 Highlight Commotrade P. Ltd. AY : 2009-10 Page 4 of 4 Copy of the order forwarded to: 1. Assessee : ITO, Ward-`1(4), Kolkata 2. Revenue : Highlight Commotrade Pvt. Ltd. 3. CIT(A), NFAC, Delhi. 4. CIT 5. CIT(DR), ITAT, Kolkata 6. Guard File. //True copy // By order Assistant Registrar ITAT, Kolkata Benches Kolkata "