UMANG WEBTECH PRIVATE LIMITED,KOLKATA V. ITO, WARD 15(4), , KOLKATA

ITA 710/KOL/2025

AI Insights

The case involves Umang Webtech Private Limited, which appealed against the order of the National Faceless Appeal Centre, Delhi, concerning the assessment year 2012-13. The primary legal issue was the validity of the reopening of the assessment under section 147 of the Income Tax Act, 1961, which the assessee challenged on grounds of vagueness and lack of specific details in the recorded reasons. The Tribunal also examined the merits of the case, where it was found that the assessee had provided all necessary details regarding the transactions in question, and the AO had not conducted further investigations to substantiate the claims of unexplained cash credits.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 783428 (ITAT-KOLKATA)
• Duration Of Justice: 7 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-11-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2012-2013
• Appeal Filed On: 04-04-2025
• Other Referred Cases: CIT Vs. Insecticides (India) Ltd. (2013) 357 ITR 330 (Delhi)
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: BONNIE DEBBARMA
• Assessee Lawyers: AMIT AGARWAL
• Keywords: Question of law; Unexplained cash credit; Reopening of assessment; Accommodation entries; Bogus
• Section: 147; 148; 143(3); 68; 133(6)

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL “D” BENCH, KOLKATA BEFORE SHRI RAJESH KUMAR, AM AND SHRIPRADIP KUMAR CHOUBEY, JM ITA No.710/KOL/2025 (Assessment Year: 2012-13) Umang Webtech Private Limited 196/C, C.R. Avenue, Kolkata-700007, West Bengal Vs. Income Tax Officer, Aayakar Bhawan Poorva, 110 Shantipally, E.M. Bypass Kolkata-700107, West Bengal (Appellant) (Respondent) PAN No. AAACU9656P Assessee by : Shri Amit Agarwal, AR Revenue by : Shri Bonnie Debbarma, DR Date of hearing: 29.10.2025 Date of pronouncement: 06.11.2025 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 06.02.2025 for the AY 2012-13. 02. The first issue raised by the assessee in ground no.1 to 4 is a legal issue challenging the reopening of assessment u/s 147 of the Act on the ground that the reasons recorded were vague, ambiguous, and scanty therefore, reopening is itself nullity and invalid in the eyes of law. Printed from counselvise.com Page | 2 ITA No. 710/KOL/2025 Umang Webtech Private Limited; A.Y. 2012-13 03. The facts in brief are that the assessee filed the return of income on 30.09.2012, declaring total income at ₹5,43,834/-. The case of the assessee was reopened u/s 147 of the Act by issuing notice u/s 148 of the Act on 28.03.2019, which was complied with by the assessee by filing the return of income on 01.04.2019. Thereafter statutory notices along with questionnaire were issued and duly served upon the assessee. The learned AO noted that in the assessment order that one credible information was received in respect of M/s Umang Webtech Pvt. Ltd. that it is a beneficiary of financial activities of ₹35 lacs received from M/s Starlight Vintrade Pvt. Ltd., ₹40 lacs, received from M/s Evershine Dealtrade Pvt. Ltd. The assessee replied the questionnaire issued by the learned AO during the assessment proceedings. The learned AO also issued notice u/s 133(6) of the Act which was responded by these persons and finally the learned AO added ₹1,21,00,000/- to the total income of the assessee as unexplained cash credit u/s 68 of the Act as the assessee has failed to satisfy the conditions as envisaged u/s 68 of the Act. 04. The learned Authorized Representative vehemently submitted before us that the reasons recorded by the learned AO for reopening of assessment are vague, scanty, mentioning no details such as date of the transactions , amount received, name of the parties, etc. Therefore, the reasons are invalid and so is the consequent assessment framed u/s 143(3) / 147 of The Act. The learned Authorized Representative relied on the decision of Hon'ble Delhi High Court in case of CIT Vs. Insecticides (India) Ltd. (2013) 357 ITR 330 Printed from counselvise.com Page | 3 ITA No. 710/KOL/2025 Umang Webtech Private Limited; A.Y. 2012-13 (Delhi). The learned Authorized Representative therefore, prayed that the reopening of assessment may be quashed. 05. The learned DR on the other hand relied on the order of learned AO heavily by submitting that the assessment has been validly reopened and the maximum details as to the transactions carried out by the assessee were given therefore, it is not necessary to record each and every information/details in the reasons recorded. The learned Authorized Representative therefore prayed that the ground raised by the assessee may be dismissed. 06. After hearing the rival contentions and perusing the materials available on record, we find that undisputedly the reasons recorded by the learned AO were not containing the details of the transactions, date of the transactions from whom the amounts were received and accordingly, the reasons recorded by the learned AO are vague, scanty and ambiguous. In our opinion, the learned AO has to apply his mind to the information received and then specify all the details in the said reasons, however were not recorded. Therefore reasons recorded are not in consonance with the ratio laid down by the Hon'ble Delhi High Court in case of CIT Vs. Insecticides (India) Ltd. (2013) 357 ITR 330 (Delhi) vide order dated 20.05.2013, wherein the Hon'ble Court has held as under:- “8. The Tribunal gave detailed reasons for concluding that the proceedings under Section 147 were invalid. Instead of adding anything to the said reasons, we think it would be appropriate if the same are reproduced:— \"In the case at hand, as is seen from the reasons recorded by the AO, we find that the AO has merely stated that it has been informed by the Director of Printed from counselvise.com Page | 4 ITA No. 710/KOL/2025 Umang Webtech Private Limited; A.Y. 2012-13 Income-tax (Inv.), New Delhi, vide letter dated 16.06.2006 that the above named company was involved in giving and taking bogus entries/transactions during the relevant year, which is actually unexplained income of the assessee company. The AO has further stated that the assessee company has failed to disclose fully and truly all material facts and source of these funds routed through bank account of the assessee company. In the reasons recorded, it is nowhere mentioned as to who had given bogus entries/transactions to the assessee or to whom the assessee had given bogus entries or transactions. It is also nowhere mentioned as to on which dates and through which mode the bogus entries and transactions were made by the assessee. What was the information given by the Director of Income-tax (Inv.), New Delhi, vide letter dated 16.06.2006 has also not been mentioned. In other words, the contents of the letter dated 16.06.2006 of the Director of Income-tax (Inv.), New Delhi have not been given. The AO has vaguely referred to certain communications that he had received from the DIT(Inv.), New Delhi; the AO did not mention the facts mentioned in the said communication except that from the informations gathered by the DIT (Inv.), New Delhi that the assessee was involved in giving and taking accommodation entries only and represented unsecured money of the assessee company is actually unexplained income of the assessee company or that it has been informed by the Director of Income-tax (Inv.), New Delhi vide letter dated 16.06.2006 that the assessee company was involved in giving and taking bogus entries/transactions during the relevant financial year. The AO did not mention the details of transactions that represented unexplained income of the assessee company. The information on the basis of which the AO has initiated proceedings u/s 147 of the Act are undoubtedly vague and uncertain and cannot be construed to be sufficient and relevant material on the basis of which a reasonable person could have formed a belief that income had escaped assessment. In other words, the reasons recorded by the AO are totally vague, scanty and ambiguous. They are not clear and unambiguous but suffer from vagueness. The reasons recorded by the AO do not disclose the AO's mind as to what was the nature and amount of transaction or entries, which had been given or taken by the assessee in the relevant year. The reasons recorded by the AO also do not disclose his mind as to when and in what mode or way the bogus entries or transactions were given or taken by the assessee. From the reasons recorded, nobody can know what was the amount and nature of bogus entries or transactions given and taken by the assessee in the relevant year and with whom the transaction had taken place. As already noted above, it is well settled that only the reasons recorded by the AO for initiating proceedings u/s 147 of the Act are to be looked at or examined for sustaining or setting aside a notice issued u/s 148 of the Act. The reasons are required to be read as they were recorded by the AO. No substitution or deletion is permissible. No addition can be made to those reasons. Therefore, the details of entries or amount mentioned in the assessment order and in respect of which ultimate addition has been made by the AO, cannot be made a basis to say that the Printed from counselvise.com Page | 5 ITA No. 710/KOL/2025 Umang Webtech Private Limited; A.Y. 2012-13 reasons recorded by the AO were with reference to those amounts mentioned in the assessment order. The reasons recorded by the AO are totally silent with regard to the amount and nature of bogus entries and transactions and the persons with whom the transactions had taken place. In this respect, we may rely upon the decision of Hon'ble jurisdictional Delhi High Court in the case of CIT v. Atul Jain [2000] 299 ITR 383, in which case the information relied upon by the AO for initiating proceedings u/s 147 of the Act did indicate the source of the capital gain and nobody knew which shares were transacted and with whom the transaction has taken place and in that case there were absolutely no details available and the information supplied was extremely scanty and vague and in that light of those facts, the Hon'ble Jurisdictional Delhi High Court held that initiation of proceedings u/s 147 of the Act by the AO was not valid and justified in the eyes of law. The recent decision of Hon'ble jurisdictional High Court of Delhi in the case of Signature Hotels (P.) Ltd. (supra) also supports the view we have taken above.\" 9. We do not see any reason to differ with the view expressed by the Tribunal. No substantial question of law arises for our consideration. The appeals are dismissed. There shall be no order as to costs.” 07. We therefore respectfully following the decision of Hon'ble Delhi High Court as cited above, quash the reopening of assessment as well as the consequent order framed by the learned AO. 08. Even on merit the case of the assessee is has merit. The assessee has sold shares purchased in the earlier years and thus received money from four parties which were credited in the bank account of the assessee. The assessee also filed all the details qua the said transactions before the AO and the learned AO has not carried out any further investigation into this matter to find out as to how the documents furnished by the assessee were not reliable. The learned AO simply relied on the report of the investigation wing. We note that the Revenue has accepted these investments in the earlier years when this were purchased. Therefore, same cannot doubted in the subsequent years when these investments were sold. Therefore, even Printed from counselvise.com Page | 6 ITA No. 710/KOL/2025 Umang Webtech Private Limited; A.Y. 2012-13 on merit the addition made by the learned AO and sustained by the learned CIT (A) cannot be sustained. 09. In the result, the appeal of the assessee is allowed. Order pronounced in the open court on 06.11.2025. Sd/- Sd/- (PRADIP KUMAR CHOUBEY) (RAJESH KUMAR) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) Kolkata, Dated: 06.11.2025 Sudip Sarkar, Sr.PS 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 "