ITO, WARD-1(1), KOLKATA, KOLKATA V. EVEREST COMMERCE PRIVATE LIMITED, KOLKATA

ITA 1493/KOL/2025

AI Insights

The case involves the Income Tax Officer, Ward 1(1) as the appellant and Everest Commerce Private Limited as the respondent. The Revenue appealed against the order of the National Faceless Appeal Centre, Delhi, which had allowed the assessee's appeal on the grounds that the notice issued under section 148 for reassessment was time-barred. The reassessment was based on allegations of the assessee engaging in reversal trades in illiquid stock options, which allegedly resulted in non-genuine business losses. The tribunal's decision was influenced by the Supreme Court's ruling in Union of India vs. Ashish Agarwal and the specific guidelines issued by the CBDT, which were not adhered to in this case, leading to the dismissal of the Revenue's appeal.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 846101 (ITAT-KOLKATA)
• Duration Of Justice: 8 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-03-2026
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: Kolkata
• Assessment Year: 2014-2015
• Appeal Filed On: 10-07-2025
• Other Referred Cases: Union of India Vs. Ashish Agarwal, Union of India vs. Rajeev Bansal
• Laws Referred To: Income Tax Act
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SANJIB KUMAR PAUL
• Assessee Lawyers: ABHISHEK BANSAL
• Keywords: Reassessment proceedings; Unexplained investment
• Section: 147; 148; 69

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH, KOLKATA BEFORE SHRI RAJESH KUMAR, AM AND SHRI PRADIP KUMAR CHOUBEY, JM ITA No. 1493/KOL/2025 (Assessment Year: 2014-15) Income Tax Officer, Ward 1(1) Aaykar Bhawan, 7 th Floor, Room No.7/6, Chowringhee Square, Kolkata-700069 West Bengal Vs. Everest Commerce Private Limited 4th Floor, Room No.4A, P-27, Princep Street, Kolkata-700072, West Bengal (Appellant) (Respondent) PAN No. AAACE5393D Assessee by : Shri Abhishek Bansal, FCA, AR Revenue by : Shri Sanjib Kumar Paul, DR Date of hearing: 18.02.2026 Date of pronouncement: 27.03.2026 O R D E R Per Rajesh Kumar, AM: This is an appeal preferred by the Revenue against the order of the National Faceless Appeal Centre, Delhi (hereinafter referred to as the “Ld. CIT(A)”] dated 01.04.2025 for the AY 2014-15. 2. At the outset, we observe from the appeal folder that there is a delay of 10 days in filing the appeal by the department in support of which a condonation petition was filed. It was stated in the condonation petition that the delay has occurred due to obtaining the administrative approval from the competent authorities, which took quite a long time and accordingly, the delay may be condoned. The ld. AR, on the other hand, did not oppose the condonation of delay. Printed from counselvise.com Page | 2 ITA No. 1493/KOL/2025 Everest Commerce Private Limited; A.Y. 2014-15 Considering the reasons cited before us, we are inclined to condone the delay and admit the appeal for hearing. 3. The only issue raised by the Revenue is against the order of ld. CIT (A) in respect of A.Y. 2014-15, being time barred by limitation in consonance with the decision of the Hon'ble Apex Court in the case of Union of India Vs. Ashish Agarwal (Civil Appeal No. 3005/2022). 3.1. The facts in brief are that the assessee company engaged in the reversal trades in the illiquid stock options. The case of the assessee was reopened upon credible information has been received under Project Falcon from DGIT (Investigation), Mumbai that assessee is engaged in reversal trades in illiquid stock options resulting in non- genuine business loss. The order u/s 148A(d) of the Act was passed on 29.07.2022 and notice u/s 148 of the Act was issued on 31.07.2022. After following the guidelines laid by the Hon’ble Supreme Court order dated 04/05/2022 in the case of Union of India & Ors. Vs. Ashish Agarwal as well as the CBDT’s Instruction No. 01/2022 dated 11.05.2022, the JAO has passed the Order u/s. 148A(d) in this case. Accordingly, notice u/s 148 was issued to reopen the assessment after affording opportunity to the assessee and order u/s 148A(d) was passed on 29.07.2022. In response to the notice u/s 148 of the Act, the assessee filed its ITR on 11.02.2023 declaring total income of Rs.1,21,500/-. Accordingly, the assessment was framed u/s 147 read with section 144B of the Income tax Act, vide order dated 28.05.2023, assessed the total income at ₹71,35,000/-. 3.2. Aggrieved assessee preferred the appeal before the ld. CIT (A), who allowed the appeal of the assessee by observing and holding as under:- Printed from counselvise.com Page | 3 ITA No. 1493/KOL/2025 Everest Commerce Private Limited; A.Y. 2014-15 “7. Decision 7.1 I have carefully considered the submission of the appellant as reproduced in the preceding paragraphs and the facts emanating from the AO’s order, wherein addition has been made. In this regard, my observations are as under:- In this case, as per the data made available under Project Falcon, it is seen that the assessee has engaged in such reversal trades resulting in a fictitious loss during the year under consideration. the whole amount of fictitious loss booked by the assessee by trading in illiquid options to the tune of Rs.70,13,498.88/- is being treated as unexplained investment u/s 69 of the Act and added back to the income of the assessee for AY 2014-15. 7.2 Ground Nos.1 & 7: In these grounds, the assessee has challenged the validity of notice issued u/s.148 dated 25.06.2021 on the ground that it is barred by limitation, In this regard, assessee has made detailed submission as below: 1. Ground Nos.1 and 7 are against the validity of notice u/s 148 dated 25.06.2021 is barred by limitation. Therefore, all consequential proceedings are also bad in law. On the issue of the validity of the reassessment proceedings we refer to the decision of the Hon'ble Supreme Court in the case of Union of India vs. Rajeev Bansal reported in 167 taxmann.com 70 (SC) wherein at Para 112 the Hon9ble Supreme Court has held as under: - “112. Let us take the instance of a notice issued on 1 May 2021 under the old regime for a relevant assessment year. Because of the legal fiction, the deemed show cause notices will also come into effect from 1 May 2021. After accounting for all the exclusions, the assessing officer will have sixty-one days [days between 1 May2021 and 30 June 2021] to issue a notice under section 148 of the new regime. This time starts ticking for the assessing officer after receiving the response of the assessee. In this instance, if the assessee submits the response on 18 June 2022, the assessing officer will have sixty-one days from 18 June 2022 to issue a reassessment notice under section 148 of the new regime. Thus, in this illustration, the time limit for issuance of a notice under section 148 of the new regime will end on 18 August 2022.” The notice issues u/s.148 on 30/07/2022 is time barred in our case as per above para- No. 112 as under:- Particulars Date/ Days Notice issued u/s 148 which is deemed to be SCN u/s 148A (b) as per directions of the Hon’ble Supreme Court in UOI vs. Ashish Agarwal 2022 SCC Online SC 543) 25.06.2021 Pursuant to direction in the case of Ashish Agarwal, the Ld. AO issued a letter along with copies of information and material relied upon requiring assessee to submit response by 21.06.2022 01.06.2022 Assessee submitted reply in response to issue letter dated 01.06.2022 16.06.2022 Printed from counselvise.com Page | 4 ITA No. 1493/KOL/2025 Everest Commerce Private Limited; A.Y. 2014-15 Surviving period to pass order u/s 148A(d) and issuance of notice u/s 148 as per Para 112 of the order of the Hon9ble Supreme Court in the case of Rajeev Bansal (supra) because for A.Y. 2014-15 6 years ended on 31st March 2021 [30.06.2021 minus 25.06.2021] 5 days Time-barring date for issuing notice u/s 148 as per judgment of Hon'ble’ble Supreme Court Order in Rajeev bansal’s case is: Date of submission of reply by assessee + surviving period i.e. 16.06.2022+ 5 days 21.06.2022 Date of passing of order u/s 148A(d) and issuance of notice u/s 148 29.07.2022 Now, aggrieved Revenue is in appeal before us. 3.3. After hearing the rival contentions and perusing the materials available on record, we find that the notice u/s 148 of the Act in the present case could have been issued till 21.06.2022 whereas the notice was issued on 29.07.2022, therefore, the notice issued u/s 148 of the Act dated 29.07.2022 is time barred. The initiation of these proceedings stems from a notice issued u/s 148 of the Act on 01.05.2021. The Hon’ble Supreme Court in the case of Rajeev Bansal (supra) has categorically settled the legal position on the validity and the limitation of such notices. Therefore, the notice u/s 148 of the Act was issued beyond the time limit of 21.06.2022, therefore, the reassessment proceedings are not valid. Considering the facts of the assessee’s case in the light of the aforesaid decisions, we are inclined to uphold the order of ld. CIT (A) by dismissing the appeal of the Revenue. 4. In the result, the appeal of the Revenue is dismissed. Order pronounced in the open court on 27.03.2026. Sd/- Sd/- (PRADIP KUMAR CHOUBEY) (RAJESH KUMAR) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) Kolkata, Dated: 27.03.2026 Sudip Sarkar, Sr.PS Printed from counselvise.com Page | 5 ITA No. 1493/KOL/2025 Everest Commerce Private Limited; A.Y. 2014-15 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 "