VDR CONSULTANTS PVT. LTD., KOLKATA,KOLKATA V. ITO, WARD 11(1), KOLKATA, KOLKATA

ITA 338/KOL/2025

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VDR Consultants Pvt. Ltd. appealed against the order of the National Faceless Appeal Centre, Delhi, which upheld the reassessment proceedings initiated by the Income Tax Officer under section 148 of the Income-tax Act, 1961. The reassessment was based on information that the assessee was a beneficiary of accommodation entries, leading to the addition of ₹88,40,000 as income from a bogus unsecured loan. The primary legal contention was the validity of the notice issued for reassessment, which was argued to be time-barred and procedurally improper. The Tribunal found that the notice did not adhere to the procedural safeguards mandated by the Supreme Court and the CBDT, leading to its quashing.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 360827 (ITAT-KOLKATA)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-05-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Assessment Year: 2015-2016
• Other Referred Cases: Union of India Vs. Ashish Agrawal 444 ITR 1 (SC)
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RANU BISWAS
• Assessee Lawyers: DEVESH PODDAR; EMAIL
• Keywords: Reopening of assessment; Accommodation entries; Bogus
• Section: 147; 148

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL “D” BENCH, KOLKATA BEFORE SHRI RAJESH KUMAR, AM AND SHRI PRADIP KUMAR CHOUBEY, JM ITA No.338/KOL/2025 (Assessment Year: 2015-16) VDR Consultants Pvt. Ltd. 401, Ashok Road, Near Kings Bakery, Ganguly Bagan, Kolkata-700084, West Bengal Vs. ITO, Ward 11(1) Kolkata Aaykar Bhavan, P-7, Chowringhee Square, Kolkata-700069 West Bengal (Appellant) (Respondent) PAN No. AAACV8920H Assessee by : Shri Devesh Poddar, AR Revenue by : Ms. Ranu Biswas, DR Date of hearing: 13.05.2025 Date of pronouncement : 19.05.2025 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 24.12.2024 for the AY 2015-16. 02. The issue raised in ground no.1 is a legal issue and against the initiation of reassessment proceeding u/s 148 of the Income-tax Act, 1961 (the Act) vide notice dated 31.03.2021, which was served upon the assessee on 02.04.2021 and accordingly barred by limitation. 03. The facts in brief are that the assessee filed the return of income on 29.09.2015, declaring total income of ₹50,08,024/-, which was processed u/s 143(1) of the Act. Thereafter, the ld. AO received Page | 2 ITA No.338/KOL/2025 VDR Consultants Pvt. Ltd.; A.Y. 2015-16 information from the investigation wing vide letter dated 07.01.2019, that assessee is a beneficiary of accommodation entries and accordingly, the case of the assessee was reopened u/s 147 of the Act by issuing notice u/s 148 of the Act dated 31.03.2021. Thereafter the assessee was issued statutory notices along with questionnaire which were complied with. Finally, the ld. AO made an addition of ₹88,40,000/- to the income of the assessee on account of unsecured loan which was treated by the ld. AO as bogus and non-genuine. 04. In the appellate proceedings, the ld. CIT (A) dismissed the appeal of the assessee by simply upholding the order of the ld. Assessing Officer. 05. The ld. AR vehemently submitted before us that the notice issued u/s 148 of the Act dated 31.03.2021, was singed on 02.04.2021, as is apparent from the notice itself and issued to the assessee by e-mail, which was also served on 02.04.2021. The ld. AR submitted that the said notice is invalid and bad in law as the assessment has not been framed as per the direction of Hon'ble Apex court in case of Union of India Vs. Ashish Agrawal 444 ITR 1 (SC), which laid down the procedure to be followed for assessment in cases of notice u/s 148 of the Act issued between 01.04.2021 to 30.06.2021. As such the order passed is bad in law and may be quashed. The ld. AR submitted that the notice dated 31.03.2021, is bad in law to the extent that same is not in terms of instruction issued by CBDT dated 04.03.2021 and clarification dated 12.03.2021, which specified the potential cases for reopen u/s 148 of the Act. 06. The ld. DR on the other hand relied on the orders of authorities below. Page | 3 ITA No.338/KOL/2025 VDR Consultants Pvt. Ltd.; A.Y. 2015-16 07. After hearing the rival contentions and perusing the materials available on record, we find that the notice issued u/s 148 of the Act dated 31.03.2021, was singed on 02.04.2021 and sent by the AO on 02.04.2021, and also dispatched to the assessee, which was delivered on 02.04.2021 at 10.05 am, the copy of the notices and the receipt of the mail is extracted below:- 08. We note that in this case the ld. AO has not follow the procedure laid down by the Hon'ble Apex Court in the case of Union of India Vs. Ashish Agrawal(supra) which prescribed the procedure to be followed Page | 4 ITA No.338/KOL/2025 VDR Consultants Pvt. Ltd.; A.Y. 2015-16 while issuing notice u/s 148 of the Act between 01.04.2021 to 30.06.2021. Accordingly, the notice is nullity and bad in law. The said notice is also against the instruction of CBDT circular dated 04.03.2021 and clarification dated 12.03.2021, which specified the potential cases for reopening u/s 148 of the Act. The said instruction and clarification is also extracted below:- Blank Page | 5 ITA No.338/KOL/2025 VDR Consultants Pvt. Ltd.; A.Y. 2015-16 09. Considering all these facts and also legal infirmity in issuing the notice u/s 148 of the Act, we are inclined to quash the reopening of assessment as well as the assessment framed by the ld. Assessing Officer. Page | 6 ITA No.338/KOL/2025 VDR Consultants Pvt. Ltd.; A.Y. 2015-16 010. In the result, the appeal of the assessee is allowed. Order pronounced in the open court on 19.05.2025. Sd/- Sd/- (PRADIP KUMAR CHOUBEY) (RAJESH KUMAR) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) Kolkata, Dated: 19.05.2025 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 "