POONAM BALASARIA,KOLKATA V. ITO, WARD - 6(1), KOLKATA

ITA 42/KOL/2025

AI Insights

The case involves Poonam Balasaria, the appellant, who was accused of providing accommodation entries and was subjected to reassessment under section 148 of the Income Tax Act, 1961. The Assessing Officer (AO) added an unexplained transaction of Rs. 30,00,000 under section 69A of the Act. The appellant contested the reassessment, arguing that the reopening of the assessment was not in accordance with the law, particularly citing issues with the approval for the original notice under section 148 and the lack of compliance with procedural requirements. The Tribunal, after considering the arguments and the relevant legal provisions, ruled in favor of the appellant, quashing the reassessment proceedings.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 33201 (ITAT-KOLKATA)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-03-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2016-2017
• Other Referred Cases: Ratan Bej Vs. PCIT, Venkateswar Medicare Pvt. Ltd, Manish Financial, Sakshi Ratneshchand Jain, Rajeev Bansal, Alpesh Hasmukh Sheth, Deekay Pine Board (P.) Ltd.
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Set aside; Reopening of assessment; Tangible material; Borrowed satisfaction
• Section: 148; 142(1); 250; 69C; 69A

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL “D” BENCH KOLKATA SHRI GEORGE MATHAN, JUDICIAL MEMBER SHRI SANJAY AWASTHI, ACCOUNTANT MEMBER I.T.A. No. 42/Kol/2025 (Assessment Year 2016-17) Poonam Balasaria, 17 Elgin Road, Bhawanipur, Kolkata - 700020 [PAN: AOOPB8525M] ..............…...…………….... Appellant vs. Income Tax Officer, Ward 6(1), Kolkata, P-7, Chowringhee Square, Aayakar Bhawan, Kolkata - 700069 ..….............................. Respondent Appearances by: Assessee represented by : Sunil Surana, A.R. Department represented by : Sailen Samadder, Sr. DR Date of concluding the hearing : 11.03.2025 Date of pronouncing the order : 19.03.2025 O R D E R PER BENCH 1. This appeal arises from order passed u/s 250 of the Income Tax Act, 1961 [hereafter ‘the Act] by the Ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi [hereafter “the Ld. CIT(A)], vide order dated 25.11.2024. 1.1 In this case, the Ld. AO received information from the Investigation Wing that the assessee was allegedly engaged in providing accommodation entries. Thereafter, the Ld. AO issued a notice u/s 148 of the Act, followed by several notice u/s 142(1) of the Act. Admittedly, there was no response to these notices. Thereafter, the Ld. AO added Rs. 30,00,000/- by way of 2 ITA No. 42/Kol/2025 Poonam Balasaria unexplained transaction u/s 69A of the Act with one M/s Ritupara Distributors Pvt. Ltd. 1.2 This matter was carried in appeal before the Ld. CIT(A), where also the assessee could not succeed as there was no compliance to notices issued for hearing in the case. 1.3 Aggrieved, the assessee has approached the ITAT with the following grounds of appeal: “1. For that the Ld CIT(A) erred in dismissing the appeal ex-parte without dealing with the facts of the case. 2. For that the reopening is bad in law since the approval obtained for issuing the original notice u/s 148 dated 19/04/2021 was not in accordance with law and therefore all subsequent proceedings are bad in law. 3 For that the reopening of assessment and issue of notice u/s 148 is bad in law since the case was neither covered u/s 149(1)(a) as three years from the end of relevant asst year was already expired and nor u/s 149(1)(b) as the case was reopened only for alleged escapement of Rs 30 lakhs. 4 For that the order passed u/s 148A(d) as ex-parte was not valid when the notice u/s 148A(b) was never served on the assessee which was also intimated to him and no proof of service of notice was provided inspite of specific request. 5. For that the Ld AO erred in not providing the tangible material relied upon as directed by the Hon'ble Apex Court. 6. For that the reopening is otherwise bad in law since the approval obtained from specified authorities was not in accordance with law and approval was not provided in spite of specific request. 7. For that the notice u/s 148 dated 21.07.2022 is bad in law as the DIN was not generated as per CBDT circular no. 19/2019. 8. For that the notice u/s 148 is bad in law as the charge specified did not suggest any escapement of income. 9. For that the assessment reopened on the basis of vague information and vague reasons without any tangible material or making any enquiry or independent application of mind simply on suspicion surmises and borrowed satisfaction is not maintainable. 10. For that the addition made by the AO without providing an opportunity of video conferencing when the assessee specifically requested for the same was not in accordance with law. 11. For that the addition of Rs 30,00,000/-being alleged amount received from Ritupara Distributors Pvt Ltd u/s 69A was not valid when no sum was received from the party which was specifically submitted before the AO. 3 ITA No. 42/Kol/2025 Poonam Balasaria 12. For that the addition of Rs 60,000/- u/s 69C as alleged commission without any corroborating evidence was not called for.” 2. Before us, the Ld. AR challenged the assumption of jurisdiction by the Ld. AO with the help of written submissions as under: “The copy of the order passed u/s 148A(d) has been filed in the course of hearing. The case has been reopened only for alleged escapement of Rs. 30 lakhs. The reopening has been done under the new regime As per provisions of section 149(1)(b), the reopening is not permissible unless \"the AO has in his possession books of accounts or other documents or evidence which reveal that the income chargeable to tax, represented in the form of asset, which has escaped assessment amounts to or is likely to amount to fifty lakhs rupees or more for that year\" The reassessment has finally been done adding back the sum of Rs. 30 lakhs. Hence the reopening is invalid and bad in law and the entire reassessment is liable to be quashed. The issue is covered by the judgement of Hon'ble Jharkhand High Court in the case of Ratan Bej Vs. PCIT in WP(T) No. 3589 of 2023 dated 24.01.2024 wherein the Hon'ble Court has decided the same in favour of the assessee. The said judgement has been followed by Coordinate Bench of Kolkata ITAT in the case of Venkateswar Medicare Pvt. Ltd in ITA No. 1416 & 1417/Kol/2023, copy of which is enclosed. The relevant finding is in page 18 para 6.4. It is further submitted that the sanction for issue of Notice has been taken from the PCIT instead of PCCIT. This is evident from both the copy of order passed u/s 148A(d) and notice u/s 148 filed in the course of hearing. Hence as per the judgement of Hon'ble Supreme Court in the case of Rajeev Bansal reported in 469 ITR 46 the sanction should have been given by PCCIT. Therefore, the reopening is bad in law on this count as well. The issue is squarely covered by the judgement of Mumbai Tribunal in the case of Manish Financial in ITA No. 5050/Mum/2024 pronounced on 02.12.2024, for the same Asst Year 2016-17, copy of which has been filed in the course of hearing. The relevant finding is in from page 7 para 11 which has relied on the judgement of the Hon'ble Apex Court in the case of Rajeev Bansal. The issue is also squarely covered by the judgement of Mumbai Tribunal in the case of Sakshi Ratneshchand Jain in ITA No. 1741/Mum/2024 pronounced on 10.02.2025, for the same Asst Year 2016-17, copy of which is enclosed. The tribunal has also relied on the judgement of the Hon'ble Apex Court referred above.” 2.1 The Ld. DR supported the orders of authorities below and relied on the cases of Alpesh Hasmukh Sheth [170 taxmann.com 629 (SC] and also the case of Deekay Pine Board (P.) Ltd. reported in 167 taxmann.com 732 (SC). The Ld. DR stated that in both these cases the Hon’ble Apex Court had directed the Assessing Officers concerned to dispose off the objections regarding the notices being barred by limitation in light of the Rajeev Bansal case [1678 taxmann.com 70 (SC]. The Ld. DR pleaded that this matter deserved to be remanded back to Ld. AO for this purpose. 3. We have carefully considered the rival arguments and also gone through the records. We find that indeed the notice u/s 148 of the Act has 4 ITA No. 42/Kol/2025 Poonam Balasaria not been issued in line with the mandate u/s 149(1)(b) of the Act. In this regard, the findings in the case of Ratan Bej [467 ITR 288 (Jhar)] may be summarized. In this case the petitioner had argued that the proceedings were beyond jurisdiction and time-barred under Section 149, as the income escaping assessment was less than Rs 50 lakhs. The property was jointly owned by the petitioner and his brother, with each having a 50% share, making the petitioner's share Rs. 32,68,000, which is below the Rs. 50 lakhs threshold. The respondents admitted this fact, acknowledging that only half of the consideration was chargeable to tax. The court noted that Section 149(1)(b) could not be invoked as the income escaping assessment was less than Rs. 50 lakhs, rendering the proceedings barred by limitation and beyond jurisdiction. The court concluded that the assessment proceedings were barred by limitation and beyond jurisdiction. Consequently, the entire enquiry proceedings, the order under Section 148A(d), and the notices issued under Sections 148A(a). 148A(b), and 148 were quashed and set aside. The application was allowed, and any pending interlocutory applications were closed. 3.1 Considering the facts, as evident from the records before us it deserves to be held that the Ld. AO assumed jurisdiction illegally. Thus, the assessment proceedings are treated as null and void. It also needs to be held that since the necessary facts are already on record, we do not see any reason to remand this matter back to the Ld. AO for following the Rejeev Bansal case (supra). 4. In the result, appeal filed by the assessee is allowed. Order pronounced in the court on 19.03.2025 Sd/- Sd/- (George Mathan) (Sanjay Awasthi) Judicial Member Accountant Member Dated: 19.03.2025 AK, P.S. 5 ITA No. 42/Kol/2025 Poonam Balasaria Copy of the order forwarded to: 1. Poonam Balasaria 2. Income Tax Officer, Ward 6(1), Kolkata 3. CIT(A)- 4. CIT- 5. CIT(DR) //True copy// By order Assistant Registrar, Kolkata Benches "