NM ESTATES PRIVATE LIMITED,KOLKATA V. ITO, WARD 5(1), KOLKATA

ITA 1511/KOL/2025

AI Insights

The case involves NM Estates Private Limited, which appealed against the orders of the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi. The appeals were related to the assessment years 2016-17, 2017-18, and 2018-19. The core issue was the validity of the reopening of assessments under section 148 following a search and seizure operation on the Banka Group, which included the assessee. The Tribunal examined whether the reopening should have been conducted under section 148 or section 153C, given the circumstances of the case.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 848054 (ITAT-KOLKATA)
• Duration Of Justice: 8 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-03-2026
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Kolkata
• Assessment Year: 2017-2018
• Appeal Filed On: 14-07-2025
• Other Referred Cases: PCIT vs. Abhisar Buildwell Pvt. Ltd. [2023] 149 taxmann.com 399 (SC)
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ADITYA BIKRAM
• Assessee Lawyers: SOUMITRA CHOUDHARY; JAYDEEP CHAKRABORTY
• Keywords: Documents seized; Search and seizure
• Section: 148

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL “C” BENCH KOLKATA BEFORE SHRI GEORGE MATHAN, JUDICIAL MEMBER AND SHRI LAXMI PRASAD SAHU, ACCOUNTANT MEMBER ITA Nos. 1510-1512/KOL/2025 Assessment Years: 2016-17, 2017-18 & 2018-19 NM Estates Private Limited, 14B, Everest Building, 46C, Chowringhee Road, Kolkata - 700071 (PAN: AAECN4473H) Vs ITO, Ward 5(1), Aayakar Bhawan, P-6, Chowringhee Square, Kolkata - 700069 (Appellant) (Respondent) Appellant by : Shri Soumitra Choudhary, Advocate & Shri Jaydeep Chakraborty, AR Respondent by : Shri Aditya Bikram, Sr. DR Date of Hearing : 24.03.2026 Date of Pronouncement : 24.03.2026 O R D E R PER GEORGE MATHAN, JM: This is a batch of three appeals filed by the same assessee against the orders of the Ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as “the Ld. CIT(A)”] passed u/s 250 of the Income Tax Act, 1961 (hereinafter referred to as “the Act”) in appeal Nos. NFAC/2015-16/10156039, NFAC/2016- 17/10156040 and NFAC/2017-18/10156044 all dated 06.12.2024 for the Assessment Years 2016-17, 2017-18 and 2018-19 respectively. 2. Shri Soumitra Choudhary, Advocate and Shri Jaydeep Chakraborty, AR represented on behalf of the assessee and Shri Aditya Bikram, Sr. DR, represented on behalf of the revenue. 3. The ld. AR has filed additional grounds of appeal which reads as follows: Printed from counselvise.com 2 ITA Nos. 1510-1512/Kol/2025 NM Estates Private Limited 3.1 It was the submission that this technical ground is purely legal ground. The ld. AR drew our attention to the reasons recorded which reads as under: Printed from counselvise.com 3 ITA Nos. 1510-1512/Kol/2025 NM Estates Private Limited 3.2 It was the submission that there was a search and seizure/survey action in the case of Banka Group was conducted on 21.05.2018. It was the submission that in the case of search in Banka Group, incriminating material has been found against the assessee. The assessee was part of the said group and notice u/s 148 was issued by the Assessing Officer on 29.03.2021. The ld. AR also drew our attention to the show-cause notice issued by the Assessing Officer/NFAC dated 22.03.2022 which reads as follows: Printed from counselvise.com 4 ITA Nos. 1510-1512/Kol/2025 NM Estates Private Limited Printed from counselvise.com 5 ITA Nos. 1510-1512/Kol/2025 NM Estates Private Limited Printed from counselvise.com 6 ITA Nos. 1510-1512/Kol/2025 NM Estates Private Limited Printed from counselvise.com 7 ITA Nos. 1510-1512/Kol/2025 NM Estates Private Limited Printed from counselvise.com 8 ITA Nos. 1510-1512/Kol/2025 NM Estates Private Limited 3.3 It was the submission that show-cause notice also clearly refers to incriminating materials which have been found in the case of search relating to the assessee. It was the submission that the search took place on 21.05.2018, the provisions of section 153C specifically applies in so far as the provisions specifically provides that any search cases where the search has took place before 01.04.2021, the provisions of section 153C are to apply and not provisions of section 148. It was the submission that admittedly, in the decision of the Hon’ble High Court in the case of PCIT Printed from counselvise.com 9 ITA Nos. 1510-1512/Kol/2025 NM Estates Private Limited vs. Abhisar Buildwell Pvt. Ltd. [2023] 149 taxmann.com 399 (SC) dated 24.04.2023, the Hon’ble High Court in para 14(iv) provides that in the event, there is no incriminating material found in the course of search, the provisions of section 153C would not apply and liberty is granted to the Assessing Officer to initiate proceedings u/s 148 if so required. It was the submission that in the assessee’s case, the Assessing Officer in the reasons recorded and in the show-cause notice specifically referred to incriminating materials which have been found during the search. It was the submission that as incriminating materials have been found in the course of search on Banka Group and the assessee is part of the said group, the provisions of section 153C are to apply. It was the submission that the provisions of section 153C refer the word ‘shall’. It was the submission that consequently, the notice u/s 148 is liable to be quashed and consequently assessment is bad in law. 4. In reply, the ld. Sr. DR submitted that provisions of section 148 apply and the incriminating materials which have been referred to by the Assessing Officer was available only on the analysis of the documents seized in the course of search on Banka Group. It was the submission that reasons to believe is the purpose of reopening which was recorded after analysing the evidences found in the course of search on Banka Group. It was the submission that there is no specific search conducted on the assessee exclusively. It was the submission that reopening should be upheld. It was the submission that if the reopening is quashed, there will be substantial loss of revenue. He vehemently supported the orders of the Assessing Officer and ld. CIT(A). 5. We have considered the rival submissions. A perusal of the facts in the present case clearly shows that the Assessing Officer in the reasons recorded has categorically referred to materials seized in the course of search from Sri Mukesh Banka which related to the assessee’s company Printed from counselvise.com 10 ITA Nos. 1510-1512/Kol/2025 NM Estates Private Limited and on which analysis, the Assessing Officer has done the reopening u/s 148. A perusal of the show-cause notice on 22.03.2022 which has been extracted above also refers to seized materials and clearly shows the incriminating materials related to the assessee has been found in the course of search on Banka Group. A perusal of the provisions of section 153C specifically shows that if incriminating materials have been found in the course of search on a third party, then such incriminating materials shall be handed over to the Assessing Officer and the provisions of section 153C shall apply. We are of the view that admittedly incriminating materials related to the assessee have been found in the course of search on Banka Group and the provisions of section 153C is to be applied and not the provisions of section 148. This being so, as it is noticed that the Assessing Officer has not done the assessment u/s 153C but has reopened the assessment u/s 148, the reopening of the assessment is found to be invalid and the same stands quashed. Consequently, assessments as a consequence of the notice issued u/s 148 also stands quashed. The appeal of the assessee stands allowed in Ground no.1 of additional ground filed by the assessee and other grounds have not been argued by the assessee and those grounds are not being adjudicated. 6. In the result, appeals of the assessee are allowed. Order pronounced in the open court on 24.03.2026. Sd/- Sd/- (Laxmi Prasad Sahu) (George Mathan) Accountant Member Judicial Member Dated: 24.03.2026 RS Printed from counselvise.com 11 ITA Nos. 1510-1512/Kol/2025 NM Estates Private Limited Copy to: 1. The Assessee 2. The Respondent. 3. CIT(A) 4. The CIT 5. DR, ITAT, Kolkata Bench, Kolkata //True Copy// By Order Assistant Registrar ITAT, Kolkata Benches, Kolkata Printed from counselvise.com "