M/S. JAGMAG MERCANTILES PRIVATE LIMITED,KOLKATA V. ITO, WARD 12(1), , KOLKATA

ITA 709/KOL/2025

AI Insights

The case involves M/s Jagmag Mercantiles Private Limited appealing against the reassessment orders for the assessment years 2013-14 and 2014-15. The reassessment was initiated by the Income Tax Officer (ITO) based on information received from the DDIT (Investigation) that the assessee had received substantial funds in their bank account, which were treated as unexplained and added to the assessee's income under section 68 of the Income Tax Act. The primary legal contention was the validity of the unsigned notice issued under section 148, which was central to the reassessment proceedings. The Tribunal, referencing several judicial precedents, concluded that the absence of a signature on the notice rendered it invalid, thereby nullifying the reassessment proceedings.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 828853 (ITAT-KOLKATA)
• Duration Of Justice: 9 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-01-2026
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Kolkata
• Assessment Year: misc
• Appeal Filed On: 04-04-2025
• Other Referred Cases: Prakash Krishnavtar Bhardwaj vs. Income-tax Officer, M/s. Yeshoda Electricals Vs. ACIT, Panjos Builders (P.) Ltd. vs. Income-tax Officer, CIT Vs. Aparna Agency (P.) Ltd., Foramer France vs. CIT, Principal Commissioner of Income-tax- 2 vs. L&T Ltd., Deputy Commissioner of Income Tax vs. Pandesara Infrastructure Ltd., G.N. Shaw (Wine) (P.) Ltd. vs. Income-tax Officer
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PRABHAKAR PRAKASH RANJAN
• Assessee Lawyers: ABHISHEK BANSAL
• Keywords: Set aside; Reassessment proceedings; Reopening of assessment; Bogus
• Section: 147; 148; 143(3); 142(1); 68

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH, KOLKATA BEFORE SHRI RAJESH KUMAR, AM AND SHRIPRADIP KUMAR CHOUBEY, JM ITA No.708 & 709/KOL/2025 (Assessment Years: 2013-14 & 2014-15) M/s Jagmag Mercantiles Private Limited 8/1/1A, Keyatalla Road, Ground Floor, Kolkata-700029, West Bengal Vs. ITO, Ward 12(1) Aaykar Bhawan, 7 th Floor P-7, Chowringhee Square, Kolkata-700069, West Bengal (Appellant) (Respondent) PAN No. AAACJ8512D Assessee by : Shri Abhishek Bansal, AR Revenue by : Shri Prabhakar Prakash Ranjan, DR Date of hearing: 07.01.2026 Date of pronouncement: 14.01.2026 O R D E R Per Rajesh Kumar, AM: These are appeals preferred by the assessee against the order of the National Faceless Appeal Centre, Delhi (hereinafter referred to as the “Ld. CIT(A)”] even dated 05.02.2025 for the AY 2013-14 & 2014- 15. 708/KOL/2025 for A.Y. 2013-14 2. The issue raised in ground no.1 is against the order of ld. CIT (A) upholding the reassessment proceedings-initiated u/s 147 of the Act despite the fact that the notice issued u/s 148 of the Act was unsigned and therefore, the same is invalid and void ab initio. Printed from counselvise.com Page | 2 ITA No. 708 & 709/KOL/2025 M/s Jagmag Mercantiles Private Limited; A.Ys. 2013-14 & 2014-15 2.1. The facts in brief are that the return of income was filed by the assessee on 17.10.2013, declaring the total income at ₹nil. The assessment was framed u/s 143(3) vide order dated 30.09.2015, accepted the return of income. Thereafter, the case of the assessee was reopened u/s 147 of the Act by issuing notice u/s 148 of the Act on 20.03.2020, after the ld. AO received information from DDIT (Investigation), Unit 1(3), Kolkata vide letter dated 23.03.2017, that assessee has a bank account with Axis Bank, Tollygunge Branch, Kolkata in which the assessee received ₹53.95 lacs on transfer from two entities namely; ETL Infrastructure Finance Ltd. and Continental Fiscal Management Pvt. Ltd. of ₹26 lacs and ₹27,95,000/- on 10.01.2013 and 11.01.2013 respectively. The assessee filed the return of income on 02.07.2020, declaring nil income. Thereafter, the notice u/s 143(2) and 142(1) of the Act along with questionnaire were issued. Finally, the addition of ₹53,95,000 was made by treating the money received as share capital as bogus unexplained u/s 68 of the Act and added the same to the income of the Assessee. 2.2. After hearing the rival contentions and perusing the materials available on record, we find that notice u/s 148 of the Act dated 28.03.2020, is unsigned. The copy of the notice is available at page no. 132 of the Paper Book and is extracted below for the sake of ready reference:- Blank Printed from counselvise.com Page | 3 ITA No. 708 & 709/KOL/2025 M/s Jagmag Mercantiles Private Limited; A.Ys. 2013-14 & 2014-15 2.3. It is apparent from the above that the notice issued u/s 148 of the Act has not been signed by the ld. AO either digitally or manually and therefore, the unsigned notice is bad in law. The case of the assessee squarely covered by the decision of Hon'ble Bombay High Court in case of Prakash Krishnavtar Bhardwaj vs. Income-tax Officer [2023] 451 ITR 27 (Bombay)[09-01-2023], wherein it has held as under:- “21. We are, therefore, of the considered opinion that in the present case, the notice u/s.148 dated 2-4-2022 having no signature affixed on it, digitally or manually, the same is invalid and would not vest the Assessing Officer with any further jurisdiction to Printed from counselvise.com Page | 4 ITA No. 708 & 709/KOL/2025 M/s Jagmag Mercantiles Private Limited; A.Ys. 2013-14 & 2014-15 proceed to reassess the income of the petitioner. Consequently, the notice dated 2-4- 2022 u/s.148 of the Act issued to the petitioner being invalid and sought to be issued after three years from the end of the relevant assessment year 2015-16 with which we are concerned in this petition, any steps taken by the respondents in furtherance of notice dated 21-3-2022 issued under clause (b) of section 148A of the Act and order dated 2-4-2022 issued under clause (d) of section 148A of the Act, would be without jurisdiction, and therefore, arbitrary and contrary to Article 14 of the Constitution of India. Consequently, we quash and set aside the notice dated 2-4-2022 issued by the respondents u/s.148 of the Act, order dated 2-4-2022 under clause (b) of section 148A of the Act and notice dated 21-3-2022 issued under clause (b) of section 148A of the Act.” 2.4. Similarly, the co-ordinate Bench of Bangalore in case of M/s. Yeshoda Electricals Vs. ACIT in ITA No. 1175/Bang/2016 and Ors. vide order dated 03.02.2021. The case of the assessee is also covered by the decision of the Hon'ble Karnataka High Court in case of Panjos Builders (P.) Ltd. vs. Income-tax Officer [2024] 161 taxmann.com 573 (Karnataka)[08-01-2024], wherein it has held as under:- “8. In the instant case, it is an undisputed fact that the Notice at Annexure - A dated 21-3-2022 is not signed either physically or digitally but the impugned notice also prescribes a period of six days, which is lesser than the minimum prescribed period of seven days as contemplated under section 148A(b) of the IT Act. Under these circumstances, in the light of the judgment of this Court in Begur's case and the judgment of the Bombay High Court in Mukesh's case supra, I am of the considered opinion that the impugned notice at Annexure - A and also consequential proceedings, orders, notices, etc., deserves to be quashed by reserving liberty in favour of the respondents to take recourse to such remedies as available in law.” 2.5. Similarly, the Hon'ble Jurisdictional High Court in case of CIT Vs. Aparna Agency (P.) Ltd. reported in [2004] 139 TAXMAN 132 (CAL.), wherein it has held as under:- “9. The service of a valid notice, as already noticed, is a condition precedent to the assumption of jurisdiction by the Assessing Officer. The existence of a valid notice is, therefore, a jurisdictional fact. The question, therefore, is not to be looked at from the perspective that the decision to issue notice was by an authority competent in that behalf under the Act and, therefore, submitting to his jurisdiction without objection, the inference of waiver arises. The question being one of jurisdiction, to be more specific the condition precedent to the assumption of jurisdiction what has to be seen is that the person that purported to exercise the jurisdiction vested in him had in fact exercised that jurisdiction and signed the said notice. The said test has not been Printed from counselvise.com Page | 5 ITA No. 708 & 709/KOL/2025 M/s Jagmag Mercantiles Private Limited; A.Ys. 2013-14 & 2014-15 satisfied in the case on hand. Unlike the judgment of this court in Anand & Co.’s case (supra) relied upon by the Revenue the case on hand is not one where the authenticity of the show-cause notice is in question. In the case on hand as held by the fact-finding authority the show-cause notice has not been signed by any person and the place intended for signature was kept blank. 10. We therefore, find no reason to differ with the view of the Tribunal.” 2.6. Therefore, respectfully following the decision of the above judicial forums, we are inclined to quash the reopening of assessment on the basis of unsigned notice issued u/s 148 of the Act to the assessee and also consequent assessment framed u/s 143/147 of the Act. The ground no. 1 is allowed. 3. At the time of hearing the assessee pressed ground no.2, which is extracted as under:- “2. The ld. CIT (A) ignored the fact that the reassessment proceedings were initiated after the expiry of 4 years from the end of the assessment year without establishing any failure on the part of the appellant to disclose material facts. ” 3.1. The facts of the case have been discussed supra. In the appellate proceedings, the ld. CIT (A) confirmed the reopening of addition made by the ld. AO. 3.2. After hearing the rival contentions and perusing the materials available on record, we find that in this case the assessment u/s 143(3) of the Act was framed vide order dated 30.09.2015. The reopening of assessment was made u/s 147 of the Act by issuing notice on 20.03.2020, which is apparently after a period of four years from the end of the relevant assessment year. Therefore, the reopening of assessment can only be made subject to the satisfaction of conditions as envisaged in Proviso to Section 147 of the Act. The proviso envisages that the reopening of assessment u/s 147 of the Act , where the assessment has been framed u/s 143(3) of the Act ,can only be made after a lapse of four years from the end of the Printed from counselvise.com Page | 6 ITA No. 708 & 709/KOL/2025 M/s Jagmag Mercantiles Private Limited; A.Ys. 2013-14 & 2014-15 relevant assessment year, if there is a failure on the part of the assessee to truly and materially disclose the information in the return of income or during the assessment proceedings which has resulted into the escapement of income and not otherwise. The ld. AR brought to our notice the copy of reason recorded which is available at page no.60 and 61 of the Paper Book and we find that in the reasons recorded the ld. AO has simply mentioned that the income has escaped assessment within the meaning of section 147 of the Act read with proviso thereto by reasons of reason of failure on the part of the assessee to disclose fully and truly all material facts necessary for the assessment. We observe that the assessee has fully disclosed all the information in the return of income as well as during the assessment proceedings as called for by the ld. AO from time to time and the ld. AO has not mentioned as to how there is a failure on the part of the assessee to disclose fully and truly all material facts necessary for the assessment of the income. We note that it is only on the information received from the DDIT (investigation) Unit-1 (3), Kolkata, vide letter dated 23.03.2017, the ld. AO received information that the assessee received funds of ₹53.95 lacs from two parties as stated hereinabove, which was duly disclosed by the assessee in the books of account. The case of the assessee is squarely covered by the decision of Hon'ble Apex Court in case of CIT vs. Foramer France (2003] 264 ITR 566 (SC)/[2003], wherein it has held that when there was no failure on part of petitioner to make return or to disclose fully and truly all material facts necessary for assessment, proviso to new section, which bars issue of notice under section 148 after expiry of four years from end of relevant assessment year, squarely applied to facts of instant case and, therefore, impugned notice was barred by limitation. Similarly, the Printed from counselvise.com Page | 7 ITA No. 708 & 709/KOL/2025 M/s Jagmag Mercantiles Private Limited; A.Ys. 2013-14 & 2014-15 Hon'ble Apex Court in case of Principal Commissioner of Income-tax- 2 vs. L&T Ltd. [2020] 113 taxmann.com 48 (SC)/[2020] 268 Taxman 390 (SC)[22-11-2019], dismissed the SLP of the Revenue against the order of Hon'ble Bombay High Court in the case of PCIT Vs. L&T Ltd. (2020) 113 taxmann.47/268 Taxman 391 (Bom.) (HC), where the High Court upheld Tribunals’ order holding that in absence of any failure on part of assessee to disclose fully and truly all material facts at time of assessment, reassessment proceedings could not be initiated after expiry of four years from end of relevant year, SLP filed against said order was to be dismissed. Similarly, Hon'ble Supreme Court in case of Deputy Commissioner of Income Tax vs. Pandesara Infrastructure Ltd. [2019] 105 taxmann.com 182 (SC)/[2019] 263 Taxman 366 (SC)[11-03-2019] dismissed the appeal of the revenue against the order of the Hon'ble Bombay High Court in the case of Pandesara Infrastructure Ltd v. Dy.CIT [2019] 105 taxmann.com 181 (GUJ), wherein the Hon'ble High Court held that on absence of any failure on part of the assessee to disclose fully and truly all material facts at time of assessment-Reassessment proceedings is held to be bad in law. Similarly, jurisdictional High Court in case of G.N. Shaw (Wine) (P.) Ltd. vs. Income-tax Officer [2003] 133 Taxman 619 (Calcutta)/[2003] 260 ITR 513 (Calcutta)/[2003] 183 CTR 528 (Calcutta)[12-06-2002], wherein it has held as under:- “17. The statute is a fiscal statute. It is to be interpreted strictly. When a particular action has to be taken in a particular manner, the same has to be taken in that manner and not otherwise. When the proviso provides that it can be reopened only if there is a failure to disclose truly and fully all materials, then it is only on such failure, it can be reopened. But, there is nothing recorded in the order showing the satisfaction of the Joint Commissioner or the Assessing Officer that there was a failure on the part of the assessee as above. Simple escapement of notice will not confer jurisdiction to reopen the assessment, four years after the end of the assessment year. Printed from counselvise.com Page | 8 ITA No. 708 & 709/KOL/2025 M/s Jagmag Mercantiles Private Limited; A.Ys. 2013-14 & 2014-15 This is a question of jurisdiction to be assumed by the concerned officer. These are jurisdictional facts, which this Court can go into, even for the purpose of finding out as to whether such reason is present or not. The court could not have judged the sufficiency of the reason, but it can see whether such reason is present. Here no such reason has been disclosed that there was a failure on the part of the assessee. On the other hand, from the tenor of the order, it appears that the payment was made in contravention of the provision of section 40A(3), but there was no indication that this was because of failure to disclose. Thus, this case cannot be brought within the purview of the proviso to section 147 to reopen the assessment. Therefore, the notice issued appears to be without jurisdiction and no proceeding can be taken out of such notice.” 3.3. Consequently, considering the facts of the above case in the light of the aforesaid decisions, we are inclined to quash the reopening of assessment as well as the assessment order by allowing the ground no.2 of the assessee’s appeal. 709/KOL/2025 for A.Y. 2014-15 4. The issue raised in this appeal is similar to one as decided by us in ITA No. 708/KOL/2025 for A.Y. 2013-14. Accordingly, our decision would, mutatis mutandis, apply to this appeal of assessee in ITA No. 709/KOL/2025. Hence, the appeal of assessee in ITA No.709/KOL/2025 is allowed. 5. In the result, the both the appeals of the assessee are allowed. Order pronounced in the open court on 14.01.2026. Sd/- Sd/- (PRADIP KUMAR CHOUBEY) (RAJESH KUMAR) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) Kolkata, Dated: 14.01.2026 Sudip Sarkar, Sr.PS Printed from counselvise.com Page | 9 ITA No. 708 & 709/KOL/2025 M/s Jagmag Mercantiles Private Limited; A.Ys. 2013-14 & 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 "