SHIVANGI AGRAWAL,KOLKATA V. I.T.O., WARD - 33(1), KOLKATA

ITA 3128/KOL/2025

AI Insights

The case involves Shivangi Agrawal, who appealed against the orders of the Commissioner of Income Tax (Appeals)-NFAC, Delhi, concerning the assessment year 2018-19. The primary issues revolved around the validity of the assessment order under section 143(3) of the Income Tax Act, 1961, and the subsequent penalty under section 271AAC(1). The assessee contested that the notices were sent to an incorrect email address, leading to a violation of the principles of natural justice. The Tribunal found merit in the assessee's argument regarding the incorrect email communication and thus remanded the case for a fresh assessment.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 844256 (ITAT-KOLKATA)
• Duration Of Justice: 3 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-03-2026
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: D
• Assessment Year: 2018-2019
• Appeal Filed On: 17-12-2025
• Other Referred Cases: Kale Khan Mohammad Hanif Vs Commissioner of Income-Tax, M.P and Bhopal in 50 ITR 1 (SC)
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Set aside; Opportunity of being heard; Corroborative evidences; Principle of natural justice
• Section: 143(3); 142(1); 68; 234B

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA ‘D’ BENCH AT KOLKATA [Virtual Court] Before SHRI PRADIP KUMAR CHOUBEY, JUDICIAL MEMBER & SHRI RAKESH MISHRA, ACCOUNTANT MEMBER ITA No(s). 3127 & 3128/KOL/2025 Assessment Year(s) 2018-19 Shivangi Agrawal Vs. ITO, Ward-33(1), Kolkata (Appellant) (Respondent) PAN: BBRPA0717R Appearances: Assessee represented by : Gaur Saran Kedia, Adv. and Ankita Lohia, CA. Department represented by : S.B. Chakraborthy, Addl. CIT, Sr. DR. Date of concluding the hearing : 09-March-2026 Date of pronouncing the order : 19-March-2026 ORDER PER BENCH: Both these appeals filed by the assessee are against the common order of the Commissioner of Income Tax (Appeals)-NFAC, Delhi [hereinafter referred to as Ld. 'CIT(A)'] passed u/s 250 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) for AY 2018-19 dated 13.10.2025. 2. The assessee is in appeal before the Tribunal raising the following grounds of appeal: I. ITA No. 3127/KOL/2025: “1. That on the facts and in the circumstances of the case, and in law, the Ld. CIT(A) erred in upholding the assessment order passed u/s 143(3) of the Income-tax Act, 1961, without appreciating that the same is bad in law, void ab initio, and hence liable to be quashed. 2. That the Ld. CIT(A) erred in upholding the assessment order without appreciating that all statutory notices during the assessment proceedings Printed from counselvise.com Page | 2 ITA No(s). 3127/KOL/2025 Assessment Year(s) 2018-19 Shivangi Agrawal. were issued to a non-existent/wrong e-mail ID, resulting in denial of proper and effective opportunity to the assessee to furnish explanations and documentary evidences in respect of the alleged loans. The assessment was framed in violation of the mandatory CBDT Guidelines and the principles of natural justice. Consequently, the assessment so made is void, bad in law, and liable to be quashed. 3. That the Ld. CIT (A) as well as Ld. AO erred in making an addition of Rs.3,32,40,000/- under section 68 on account of unsecured loans without conducting any proper enquiry or verification. The AO failed to appreciate that all the lenders were identifiable, regular income-tax assessees with valid PANs, and the loan amounts were received through normal banking channels. The addition has been made purely on assumptions and conjectures without bringing any adverse material on record. The addition is unjustified, contrary to law, and liable to be deleted in full. 4. Without prejudice to the foregoing grounds, the Ld. CIT(A) further erred in not appreciating that the additions made under section 68 were factually and legally unsustainable. The requisite evidences could never be examined by the Ld. AO owing to improper service of notices and denial of effective opportunity. The Appellant, therefore, submits that, without admitting the correctness of the impugned addition, the matter may kindly be restored to the file of the Assessing Officer for fresh adjudication in accordance with law after granting proper and adequate opportunity of being heard. 5. That your Appellate Assessee Company craves leave to add, alter, amend, modify, substitute, withdraw any of the ground or grounds of this Appeal petition on or before or at the time of hearing.” II. ITA No. 3128/KOL/2025: “1. That on the facts and in the circumstances of the case, and in law, the Ld. CIT(A) erred in upholding the Penalty order passed u/s 271AAC(1) of the Income-tax Act, 1961, without appreciating that the same is bad in law, void ab initio, and hence liable to be quashed. 2. That the Ld. CIT(A) erred in upholding the Penalty order without appreciating that all statutory notices during the penalty proceedings were issued to a non-existent/wrong e-mail ID, resulting in denial of proper and effective opportunity to the assessee to furnish explanations and documentary evidences. That quantum assessment order was framed in violation of the mandatory CBDT Guidelines and the principles of natural justice. Consequently, the penalty order is void, bad in law, and liable to be quashed. 3. That the Ld. CIT(A) as well as the Ld. AO erred in levying penalty in respect of the addition of Rs. 3,32,40,000/- made under section 68, without establishing any concealment of income or furnishing of inaccurate particulars by the appellant. The penalty has been imposed mechanically Printed from counselvise.com Page | 3 ITA No(s). 3127/KOL/2025 Assessment Year(s) 2018-19 Shivangi Agrawal. and solely on the basis of the quantum addition, without any independent satisfaction or finding that the appellant had concealed income. All lenders were identifiable, regular income-tax assessees with valid PANs, and the loan amounts were received through normal banking channels, fully disclosed in the books of account. The penalty is unjustified, contrary to law, and liable to be deleted in full. 4. That your Appellate Assessee Company craves leave to add, alter, amend, modify, substitute, withdraw any of the ground or grounds of this Appeal petition on or before or at the time of hearing.” 2.1 We shall first take up the quantum appeal in ITA No. 3127/KOL/2025 for AY 2018-19 for adjudication. 3. Brief facts of the case as culled out from the order of the Ld. CIT(A) are that the assessee is an individual and had filed her return of income for the FY 2017-18 relevant to the AY 2018-19, showing total income of ₹30,37,600/-. The case was selected for limited scrutiny under the E- assessment Scheme, 2019 for the sole reason of verification of unsecured loans received during the FY 2017-18. Accordingly, notices u/s 143(2) and 142(1) of the Act were issued with the request to furnish confirmation letters from loan creditors, their bank account statements reflecting the loan transactions, and copies of their income tax returns for verification of identity, creditworthiness, and genuineness of the transactions; in response to which the assessee made only part compliance. In the absence of complete documentary evidence to conclusively establish all the three elements (viz., the identity and creditworthiness of the loan creditors and genuineness of the transactions) with respect to the unsecured loans, the Assessing Officer (hereinafter referred to as Ld. 'AO') completed the assessment u/s 143(3) r.w.s. 144B of the Act at the total income of ₹3,62,77,600/- after making an addition of ₹3,32,40,000/- on account of undisclosed income u/s 68 r.w.s. 115BBE of the Act, thereby raising demand of Printed from counselvise.com Page | 4 ITA No(s). 3127/KOL/2025 Assessment Year(s) 2018-19 Shivangi Agrawal. ₹3,58,73,208/-. Aggrieved with the assessment order, the assessee filed an appeal before the Ld. CIT(A) who, vide order dated 13.10.2025, dismissed the appeal of the assessee by giving his findings as under: “In this case, the appellant has taken total 5 grounds of appeal. These are discussed and adjudicated upon as under: - 9.1. Grounds of appeal 1 & 2 have been raised against the assessment order u/s 143(3) r.w.s 144B of the Act passed by the Assessing Officer without providing proper opportunity to the appellant for rebutting the show cause notice cum draft assessment order dated 12.04.2021, hence violating the principal of natural justice. It is contended that the Assessing Officer has made addition of Rs. 3,32,40,000/- on account of undisclosed income u/s 68 of the Act without making any proper enquiry or investigation, without considering the facts of the case that all the lenders are regular income tax assessee having valid PAN and the amount was received through proper banking channel. It has been further contended that the addition is based on surmises & conjectures and therefore, the order is unjustified, needs to be deleted and deserves to be quashed. 9.1.1. I have carefully gone through the material on record. Without prejudice to the appellant's contention regarding not providing proper opportunity during the assessment proceedings, it is observed that even during the course of the present appellate proceedings, the appellant has not produced any evidence or documents to rebut the findings recorded by the Assessing Officer. It is further observed that the appellant has neither substantiated the claim that sufficient opportunity was not granted nor provided any material to counter the addition made in the assessment order. 9.1.2. It is a settled principle of law that appellate proceedings are a continuation of the assessment proceedings, and the assessee is well within rights to furnish necessary documents or explanations during appellate stage, and even more so especially when appellant is aggrieved on account of violation of natural justice during assessment. 9.1.3. In absence of any such supporting evidence or submission from the appellant's side even during appellate stage, the claim of denial of natural justice becomes merely academic. 9.1.4. A perusal of assessment order shows that during the course of assessment proceedings, appellant was required to prove the identity and credit worthiness of the lenders as well as to establish the genuineness of transactions in respect of above unsecured loan of Rs. 3,32,40,000/- received by the appellant. As per the audit report for the F.Y. 2017-18, this Printed from counselvise.com Page | 5 ITA No(s). 3127/KOL/2025 Assessment Year(s) 2018-19 Shivangi Agrawal. unsecured loan of Rs. 3,32,40,000/- was received by the appellant from 5 parties as detailed in the assessment order. The Assessing Officer requested appellant to furnish confirmation letters from loan creditors, their bank account statements reflecting the loan transactions, and copies of their income tax returns for verification of identity, creditworthiness, and genuineness of the transactions. In compliance to this, the appellant submitted confirmation letters and bank account statements of two parties, namely M/s Star Rugs and M/s S.V. Exports. However, the ITRs of these lenders and details relating to the remaining three lenders were not submitted by the appellant. 9.1.5. It is further observed that the Assessing Officer made the additions after considering the failure of the appellant to satisfactorily discharge the onus cast upon her under the provisions of Section 68 of the Act. 9.1.6. It is a settled principle of law that the appellant must establish all three components: identity of the creditor, creditworthiness of the creditor, and genuineness of the transaction. In this case, although PANs and bank statements were submitted in two cases, the appellant failed to provide any further supporting documentary evidence such as confirmation letters, income tax returns of the lenders, audited financial statements etc. In the remaining three cases, no documents were submitted by the appellant either during assessment or appellate stage. 9.1.7. Further, the Hon'ble Supreme Court in case of Kale Khan Mohammad Hanif Vs Commissioner of Income-Tax, M.P and Bhopal in 50 ITR 1 (SC) held that it is well established that the onus of proving the source of a sum of money found to have been received by the assessee is on him. If assessee disputes liability for tax, it is for him to show either that the receipt was not income or that if it was, it was exempt from taxation under the provisions of the Act. In the absence of such proof, the Income Tax Officer is entitled to treat it as taxable income. 9.1.8 Therefore, in view of the discussion made in the assessment order and in absence of any evidence submitted by the appellant during appellate stage, I find no reason to interfere with the findings of the assessing officer. Therefore, I upheld the addition of Rs. 3,32,40,000/- on account of unsecured loan received during the year under consideration, made by the Assessing Officer. Accordingly, grounds of appeal 1 and 2 are dismissed. 9.2 Grounds of appeal 3 challenges the levy of interest u/s 234A, 234B & 234C of the Act. Levy of interest being consequential in nature does not require separate adjudication. Accordingly, this ground of appeal is dismissed. Printed from counselvise.com Page | 6 ITA No(s). 3127/KOL/2025 Assessment Year(s) 2018-19 Shivangi Agrawal. 9.3 Grounds of appeal 4 challenges the Penalty Proceedings u/s 271AAC(1) of the Act, which are premature at this stage. Accordingly. this ground of appeal is dismissed. 9.4 Grounds of appeal 5, being residual ground does not require separate adjudication. Accordingly, this ground of appeal is dismissed. 10. In the result, appeal of the appellant is dismissed.” 4. Aggrieved with the order of the Ld. CIT(A), the assessee has filed the appeal before the Tribunal. 5. Rival contentions were heard and the submissions made have been examined. The Ld. AR submitted that the case was selected for limited scrutiny, the notices were sent to the e-mail ID mentioned in the last return of income filed and were not sent on the registered e-mail ID and therefore, the compliance could not be made before the Ld. AO and requested that the matter may be remanded to the Ld. Assessing Officer. 6. We have considered the facts of the case, the submissions made and the documents filed. Since there was no proper compliance before the Ld. AO as the e-mails were sent to a non-existent/incorrect e-mail ID, therefore, in the interest of justice and fair play it was considered that the request of the assessee to set aside the case before the Ld. AO may be allowed so that a proper opportunity of being heard may be provided. Hence, after examining the facts of the case, we deem it appropriate to set aside the order of the Ld. CIT(A) and remand the matter to the Ld. AO for making the reassessment de novo. Needless to say, the assessee shall be given a reasonable opportunity of being heard to make any further submission it wants to make in support of the grounds of appeal and shall not seek unnecessary adjournments. Accordingly, the grounds taken by the assessee in this appeal are partly allowed for statistical purposes. Printed from counselvise.com Page | 7 ITA No(s). 3127/KOL/2025 Assessment Year(s) 2018-19 Shivangi Agrawal. 7. In the result, the appeal filed by the assessee in ITA No. 3127/KOL/2025 is partly allowed for statistical purposes. 8. Now, we will take up the ITA No. 3128/KOL/2025 for adjudication. 9. Since the quantum appeal has been set aside to the Ld. AO, the penalty order is also remanded to the Ld. AO to be done afresh after the assessment order is made de novo. 10. In the result, both the appeals filed by the assessee in ITA Nos. 3127 and 3128/KOL/2025 are partly allowed for statistical purposes. Order pronounced in the open Court on 19th March, 2026. Sd/- Sd/- [Pradip Kumar Choubey] [Rakesh Mishra] Judicial Member Accountant Member Dated: 19.03.2026 Bidhan (Sr. P.S.) Printed from counselvise.com Page | 8 ITA No(s). 3127/KOL/2025 Assessment Year(s) 2018-19 Shivangi Agrawal. Copy of the order forwarded to: 1. Shivangi Agrawal, Flat No.10(1st Floor), Middleton Mansions, 9 & 9/1, Middleton Street, Kolkata, West Bengal, 700071. 2. ITO, Ward-33(1), Kolkata. 3. CIT(A)-NFAC, Delhi. 4. CIT- 5. CIT(DR), Kolkata Benches, Kolkata. 6. Guard File. //True copy // By order Assistant Registrar ITAT, Kolkata Benches Kolkata Printed from counselvise.com "