M/S. AMRITLAXMI VINCOM PVT. LTD.,KOLKATA V. I.T.O., WARD - 4(3), KOLKATA

ITA 2553/KOL/2024

AI Insights

The case involves Amrit Laxmi Vincom Pvt. Ltd., which appealed against the reassessment order for the Assessment Year 2012-2013. The reassessment was initiated following a search and seizure operation related to the Banka Group, which uncovered a network of shell companies involved in providing accommodation entries. The Income Tax Officer (ITO) issued a notice under section 148, leading to a reassessment that included an addition of Rs. 13,00,000 as unexplained money. The CIT(Appeals) upheld the ITO's decision, leading to the appeal at the ITAT. The ITAT found procedural lapses in the reassessment process, particularly the lack of proper approval for the reassessment notice, and thus allowed the appeal, setting aside the lower orders.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 712889 (ITAT-KOLKATA)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-07-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Assessment Year: 2012-2013
• Other Referred Cases: Reliable Finhold Limited -vs.- Union of India & Anr.
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Set aside; Opportunity of being heard; Reassessment proceedings; Accommodation entries; Tangible material; Bogus
• Section: 147; 148; 144; 143(3); 142(1)

Judgement Text

" ITA No. 2553/KOL/2024 (A.Y. 2012-2013) Amrit Laxmi Vincom Pvt. Limited 1 IN THE INCOME TAX APPELLATE TRIBUNAL, ‘SMC’ BENCH, KOLKATA Before Shri Duvvuru RL Reddy, Vice-President (KZ) I.T.A. No. 2553/KOL/2024 Assessment Year: 2012-2013 Amrit Laxmi Vincom Pvt. Ltd.,…………….…Appellant 23A, Netaji Subhash Road, Dalhousie, Room No. 10, 1st Floor, Kolkata-700001, West Bengal [PAN:AAICA5974A] -Vs.- Income Tax Officer,…………………..…………..Respondent Ward-4(3), Kolkata, Aayakar Bhawan, P-7, Chowringhee Square, Kolkata-700069 Appearances by: Shri Sunil Surana, A.R., appeared on behalf of the assessee Shri L.N. Dash, Addl. CIT(DR), appeared on behalf of the Revenue Date of concluding the hearing: May 07, 2025 Date of pronouncing the order: July 28, 2025 O R D E R The present appeal is directed at the instance of assessee against the order of Id. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi dated 25.11.2024 passed for Assessment Year 2012-2013. Printed from counselvise.com ITA No. 2553/KOL/2024 (A.Y. 2012-2013) Amrit Laxmi Vincom Pvt. Limited 2 2. The brief facts of the case are that the assessee company filed its return of income for the assessment year 2012-13 on 10.09.2012 declaring total income of Rs.2,640/-. A search & seizure/ survey was conducted in the case of Banka Group on 21.05.2018. Shri Mukesh Banka is the key person, who looks after day-to-day financial affairs and accommodation entry business of Banka Group. During verification of impounded materials, various paper/shell companies were identified which were controlled and managed by Shri Mukesh Banka for the purpose of providing accommodation entries in the nature of bogus unsecured loans or in other forms. Further verification of the bank accounts of paper/shell companies of Banka Group, various beneficiaries had been identified, who obtained accommodation entry in the nature of bogus unsecured loan or in other forms, from the paper /shell companies of Banka Group. Financial analysis of the paper/shell companies were carried out to ascertain their financial creditworthiness. On enquiry it was found that the paper/shell companies were non-existence. Huge withdrawal of cash from the bank accounts of paper/shell companies of Banka Group clearly established the fact that withdrawal of unaccounted cash was one of the main features of modus operandi. During the relevant year, the assessee has escaped the assessment within the meaning of section 147 of the Act. Accordingly, notice under section 148 of the Act was issued on 25.03.2019 after taking necessary approval of ld. Pr. CIT-2, Kolkata. The said notice was duly served upon the assessee. The assessee was asked to file return of its true income for the relevant year. In compliance, the assessee submitted its return of income on 30.04.2019 declaring total income of Printed from counselvise.com ITA No. 2553/KOL/2024 (A.Y. 2012-2013) Amrit Laxmi Vincom Pvt. Limited 3 Rs.2,640/-. Thereafter notices under sections 143(2) and 142(1) were issued along with questionnaire and duly served upon the assessee, but no compliance was made by the assessee in response to the notices. It was found that the assessee during the relevant year received an amount of Rs.13,00,000/- on 23.02.2012 from Rootstar Builders Pvt. Limited. Rootstar Builder Pvt. Ltd. is one of the shell-company managed and controlled by Mukesh Banka, an entry operator of Kolkata. He is involved in business of providing accommodation entries. Thereafter a show-cause notice was issued by the ld. Assessing Officer to the assessee mentioning that the reply must reach to the Office of AO and in case of non- compliance, the order will be passed under section 144 of the Act after taking into account all relevant material available on record. But again, no compliance was made by the assessee. As the assessee could not produce any supporting/ corroborative evidence in support of its claim, the ld. Assessing Officer treated the amount of Rs.13,00,000/- received from Rootstar Builders Pvt. Limited as unexplained money of the assessee. The ld. Assessing Officer assessed the total income of the assessee at Rs.13,02,640/- . On being aggrieved, the assessee preferred an appeal before the ld. CIT(Appeals). 3. The ld. CIT(Appeals) observed that the ld. Assessing Officer passed the ex-parte assessment order as the assessee could not explain the source and nature of transaction. The ld. Assessing Officer has added back an amount of Rs.13,00,000/- to the total income of the assessee merely on account of non-submission of information along with relevant documentary evidence. The ld. Printed from counselvise.com ITA No. 2553/KOL/2024 (A.Y. 2012-2013) Amrit Laxmi Vincom Pvt. Limited 4 CIT(Appeals) relying on the judgment of Hon’ble Supreme Court as well as the judgment of various Hon’ble High Courts set aside the order of ld. Assessing Officer and remit back the issue to the file of ld. Assessing Officer for fresh assessment after providing reasonable opportunity of being heard to the assessee. The ld. CIT(Appeals) opined that ld. Assessing Officer did not adjudicate the grounds of appeal on merits filed by the assessee. Thus the ld. CIT(Appeals) allowed the appeal of the assessee for statistical purposes. 4. On being aggrieved, the assessee preferred an appeal before the ITAT and raised the following grounds:- (1) For that the reassessment completed is invalid and bad in law since no DIN was mentioned in the order and reasons for generating DIN separately was also not mentioned in the order. (2) For that the Ld. CIT(A) erred in confirming the order of the AO in reopening the assessment simply on the basis of information received from the DDIT(Inv), Unit-2(1), Kolkata, on completely vague reasons without bringing any tangible material on record or applying his own mind to believe that income of the assessee chargeable to tax has escaped assessment. (3) For that the Ld. CIT(A) erred in confirming the reassessment proceedings is not in accordance with law since no sanction from the higher authority u/s 151 was taken before issuing of notice u/s 148. (4) For that the reassessment completed u/s. 147 was not in accordance with law as the objection filed against the reasons recorded for reopening the assessment was not disposed off ignoring the principal laid by the Hon’ble Supreme Court in the case of GKN Driveshaft (India) (5) For that the reassessment proceedings u/s 147 was not in accordance with law and the same is liable to be quashed. Printed from counselvise.com ITA No. 2553/KOL/2024 (A.Y. 2012-2013) Amrit Laxmi Vincom Pvt. Limited 5 (6) For that the Ld. CIT(A) erred in confirming the order of the Ld. AO erred in invoking the provisions of section 69A and adding back Rs 13, 00,000/- received from Rootstar Builders Pvt Ltd as unexplained money when the said amount is duly recorded in the books of the assessee and therefore, section 69A is not applicable in this case. (7) For that the addition of Rs 13,00,000/- was not justified since the loan creditor was duly assessed u/s 143(3) and the source being share capital money raised by the loan creditor was duly added back u/s 68. (8) For that the addition of Rs.13,00,000/- was not justified since the assessee was not required to prove the source of source of loans taken for the year under consideration and further when the party had substantial net worth. (9) For that on the facts and in the circumstances of the case, the addition of Rs.13,00,000/- was not justified and uncalled for. 5. It was the submission of the ld. Counsel for the assessee that the re-assessment proceeding is not in accordance with law since the ld. Assessing Officer has not obtained approval from the higher authorities before issuance of notice under section 148 of the Act. He further submitted that the said issue was raised before the ld. CIT(Appeals), but he has not adjudicated the issue. Therefore, ld. Counsel pleaded to set aside the orders passed by the lower authorities since issuance of notice under section 148 itself is illegal since the ld. Assessing Officer has not obtained valid approval from the higher authorities as required under section 151 of the Income Tax Act. On this aspect, Ld. Counsel relied on the decision of the Hon’ble Allahabad High Court dated 15th September, 2014 in Writ Tax No. 498 of 2014 in the case of Reliable Finhold Limited -vs.- Union of India & Anr. And pleaded to set Printed from counselvise.com ITA No. 2553/KOL/2024 (A.Y. 2012-2013) Amrit Laxmi Vincom Pvt. Limited 6 aside the orders passed by the ld. Assessing Officer and ld. CIT(Appeals). 6. On the other hand, ld. Departmental Representative submitted that the ld. CIT(Appeals) has remitted the matter back to the file of ld. Assessing Officer since the ld. Counsel for the assessee has not appeared before the ld. Assessing Officer. He pleaded to uphold the order passed by the ld. CIT(Appeals). 7. I have heard both the sides. It is an admitted fact that the ld. CIT(Appeals) has not adjudicated this issue and the issue involved in this case is purely legal issue. I have also perused the order passed by the Hon’ble High Court of Allahabad referred (supra), wherein it was held that – “In this view of the matter, the entire exercise of reopening of the assessment under section 148 fails to meet the basic jurisdictional requirement under the proviso to sub-section (1) of section 151 since under the proviso no notice can be issued except on the satisfaction of the Commissioner, or as the case may be, the Chief Commissioner and admittedly there was no such satisfaction in the present case. The re-assessment notice would have to be quashed and set aside”. 7.1. In the present case on hand, admittedly there is no such approval/satisfaction from the higher authorities before issuance of notice under section 148 of the Act. Therefore, as per the ratio laid down by the Hon’ble High Court of Allahabad, the re- assessment proceeding under section 148 fails to meet the basic jurisdictional requirement under the proviso to sub-section (1) of Printed from counselvise.com ITA No. 2553/KOL/2024 (A.Y. 2012-2013) Amrit Laxmi Vincom Pvt. Limited 7 section 151 covered with the issue raised by the assessee. Therefore, I have no hesitation to come to the conclusion that the notice issued under section 148 is not valid under the eyes of law. Hence, the grounds raised by the assessee are allowed. 8. In the result, the appeal filed by the assessee is allowed. Order pronounced in the open Court on 28/07/2025. Sd/- (Duvvuru RL Reddy) Vice-President (KZ) Kolkata, the 28th day of July, 2025 Copies to :(1) Amrit Laxmi Vincom Pvt. Ltd., 23A, Netaji Subhash Road, Dalhousie, Room No. 10, 1st Floor, Kolkata-700001, West Bengal (2) Income Tax Officer, Ward-4(3), Kolkata, Aayakar Bhawan, P-7, Chowringhee Square, Kolkata-700069 (3) CIT(A), NFAC, Delhi; (4) CIT - , Kolkata; (5) The Departmental Representative; (6) Guard File TRUE COPY By order Assistant Registrar, Income Tax Appellate Tribunal, Kolkata Benches, Kolkata Laha/Sr. P.S. Printed from counselvise.com "