SANDIP KUMAR KESHARI,ASANSOL V. ITO, WARD-3(1), ASANSOL

ITA 349/KOL/2024

AI Insights

The case involves Sandip Kumar Keshari, the appellant, who appealed against the order of the National Faceless Appeal Centre, Delhi, for the assessment year 2017-18. The primary legal issue was the validity of the assessment order passed under section 147 read with section 144B of the Income Tax Act, 1961, without issuing a notice under section 143(2). The Assessing Officer had reopened the case based on financial transaction information and issued notices under sections 148 and 142(1), but did not issue a notice under section 143(2). The Tribunal found that the absence of this notice rendered the assessment order invalid, referencing a decision by the Calcutta High Court in the case of Principal Commissioner of Income Tax Vs Oberoi Hotels (Pvt) Ltd.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 474017 (ITAT-KOLKATA)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-03-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2017-2018
• Other Referred Cases: Principal Commissioner of Income Tax Vs Oberoi Hotels (Pvt) Ltd. (2018) 96 taxmann.com 104(Cal)
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUBHRO DAS
• Assessee Lawyers: SOMNATH GHOSH
• Keywords: Period of limitation; Time period of passing order
• Section: 147; 148; 142(1); 143(2); 69A

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH, KOLKATA BEFORE SHRI RAJESH KUMAR, AM AND SHRI PRADIP KUMAR CHOUBEY, JM ITA No. 349/KOL/2024 (Assessment Year: 2017-18) Sandip Kumar Keshari Rajpara, P.O. Raniganj, Paschim Bardhman-713347 West Bengal Vs. ITO, Ward 3(1) Aaykar Bhavan, Opposite-Ramakrishna School P.O. Asansol, Asansol-713305, West Bengal (Appellant) (Respondent) PAN No. CQUPK2724F Assessee by : Shri Somnath Ghosh, AR Revenue by : Shri Subhro Das, DR Date of hearing: 13.02.2025 Date of pronouncement : 11.03.2025 O R D E R Per Rajesh Kumar, AM: This is an appeal preferred by the assessee against the order of the National Faceless Appeal Centre, Delhi (hereinafter referred to as the “Ld. CIT(A)”] dated 30.11.2023 for the AY 2017-18. 02. At the time of hearing, the ld. Counsel for the assessee pressed the issue raised in ground no.6, which is extracted as under:- “6. For that, the Assessment Order u/s 147 read with section 144B is unlawful having been passed without the issue of Notice u/s 143(2) of the Act;” 03. The facts in brief are that the assessee did not file any return of income for the instant assessment year. The proceeding u/s 147 of the Act were initiated by issuing notice u/s 148 of the Act, which were Page | 2 ITA No.349/KOL/2024 Sandip Kumar keshari; A.Y. 2017-18 duly served upon the assessee on 24.03.2021. The case of the assessee was reopened on the basis of information received on financial transactions/ activities relating to the assessee. According to the ld. AO, the assessee did not file any return of income in response to Section 148 of the Act. Subsequently, the notice u/s 142(1) of the Act, along with questionnaire was issued on 07.10.2021, fixing the date of hearing on 22.10.2021. When there was no compliance, another notice u/s 142(1) of the Act was issued fixing the date of hearing on 17.01.2022 and again there was no compliance. Finally, the case was adjourned to 14.02.2022, which again remained uncompiled with. The ld. AO finally added the sum of ₹2,89,97,000/- as unexplained money u/s 69A of the Act as the source of investment was not explained, which was deposited in the bank account besides making one more addition of ₹1,196. However, in the assessment order, the ld. AO noted that the assessee’s income as per return filed u/s 148 of the Act was ₹3,92,650/-, thereby assessing the total income of ₹2,93,80,846/- in the assessment framed u/s 147 read with section 144B of the Act dated 27.03.2022. 04. In the appellate proceedings, the ld. CIT (A) dismissed the appeal of the assessee when the assessee failed to file any written submission/ documents in support of the grounds of appeal. 05. The ld. AR vehemently argued that the case of the assessee was reopened u/s 147 of the Act by issuing notice u/s 148 of the Act on 24.03.2021, directing the assessee to file the return of income within 30 days, which expired on 23.04.2021. The ld. AR submitted that this was a Covid Period and in view of the order of the Hon'ble Supreme Court in the case of Miscellaneous Application No.665 of 2021 in SMW(c) No. 3 of 2020, the period of limitation for filing the return of Page | 3 ITA No.349/KOL/2024 Sandip Kumar keshari; A.Y. 2017-18 income stood extended. However, the assessee filed the return of income on 01.03.2022, which was never declared invalid by the ld. AO and in fact , while computing the income in the assessment order page no.6, the income was taken as per return filed u/s 148 of the Act of ₹3,92,650/- and thereafter, the addition was made and total income was assessed at ₹2,93,90,846/-. Therefore, the ld. AO has grossly erred in not issuing notice u/s 143(2) of the Act and framing the assessment u/s 147 read with section 144B of the Act vide order dated 27.03.2022, which is invalid and void ab initio. The ld. AR therefore prayed that the ground no.6 of the grounds of appeal may kindly be allowed by quashing the assessment framed by the ld. Assessing Officer. 06. The ld. DR, on the other hand, submitted that assessee has not filed any return of income within 30 days from the issuance of notice u/s 148 of the Act on 23.04.2021. The ld. DR further submitted that even the due date of filing the return was not extended by the ld. AO and therefore, any return filed beyond the period of 30 days from the issue of notice is invalid and so righty not considered by the ld. Assessing Officer. The ld. DR stated that once the assessee has not filed any return of income in response to notice u/s 148 of the Act then it is not necessary under the Act to issue notice u/s 143(2) of the Act. The ld. DR therefore prayed that the appeal of the assessee may kindly be dismissed on this ground. 07. After hearing the rival contentions and perusing the materials available on record, we find that the case of the assessee was reopened u/s 147 of the Act by issuing notice u/s 148 of the Act on 24.03.2021, directing the assessee to file the return within 30 days which expired on 23.04.2021. The assessee has filed the return of Page | 4 ITA No.349/KOL/2024 Sandip Kumar keshari; A.Y. 2017-18 income on 01.03.2022, which has not been treated as invalid by the ld. AO. Further while framing the assessment, in the computation portion on page no.6, the income, while assessing the income as per return filed u/s 148 of the Act, was taken at ₹3,92,650/- and after making an addition of ₹2,89,97,000/- qua cash deposited in the current account and ₹1,196/- in respect of income appearing in firm 26AS, which was estimated by the ld. AO at the rate of 10% and added to the return of income of the assessee thereby assessing the total income at ₹2,93,90,846/-. We also note that the Hon'ble Supreme Court has extended all the limitation under the Income Tax Act and also under the other Acts in case of Miscellaneous Application No. 665 of 2021 in SMW(C) No. 3 of 2020, which excluded the period till 31st May, 2022, from the period of limitation. Therefore, the arguments of the ld. DR that return was filed on 01.03.2022, is devoid of any merit as the assessee has filed the return even during the period which was order to be excluded from the limitation period. Therefore, in our opinion, the issuance of notice u/s 143(2) of the Act was mandatory for the ld. AO to assume jurisdiction under the Act and framed the assessment accordingly. It was also pertinent to state that the ld. DR admitted during the course of hearing that no notice u/s 143(2) of the Act was issued by the ld. AO. Under these circumstances, we are inclined to quash the order of the ld. Assessing Officer as without jurisdiction. The case of the assessee is squarely covered by the decision of the Hon’ble Calcutta High Court in the case of Principal Commissioner of Income Tax Vs Oberoi Hotels (Pvt) Ltd. (2018) 96 taxmann.com 104(Cal) wherein it has been held that assessment framed without issuing notice u/s 143(2) was legally unstainable and same could not be justified by invoking the provisions Page | 5 ITA No.349/KOL/2024 Sandip Kumar keshari; A.Y. 2017-18 of section 2912BB of the Act. The appeal of the assessee is accordingly allowed on legal issue. 08. Since, we have allowed the appeal of the assessee on legal and technical ground, the other grounds raised by the assessee on merit are not being adjudicated at this stage and being left open to be adjudicated at the later stage if need arises for the same. 09. In the result, the appeal of the assessee is allowed. Order pronounced in the open court on 11.03.2025. Sd/- Sd/- (PRADIP KUMAR CHOUBEY) (RAJESH KUMAR) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) Kolkata, Dated:11.03.2025 Sudip Sarkar, Sr.PS Copy of the Order forwarded to : 1. The Appellant 2. The Respondent 3. CIT 4. DR, ITAT, 5. Guard file. BY ORDER, True Copy// Sr. Private Secretary/ Asst. Registrar Income Tax Appellate Tribunal, Kolkata "