Principal Commissioner Of Income Tax vs M/S Krishna Nirman Pvt Ltd on 31 July, 2025

Calcutta High Court

Principal Commissioner Of Income Tax vs M/S Krishna Nirman Pvt Ltd on 31 July, 2025

Author: T.S. Sivagnanam

Bench: T.S Sivagnanam

OD-16

                          IN THE HIGH COURT AT CALCUTTA
                        SPECIAL JURISDICTION [INCOME TAX]
                                   ORIGINAL SIDE


                                     ITAT/126/2025
                                   IA NO: GA/2/2025

               PRINCIPAL COMMISSIONER OF INCOME TAX 1, KOLKATA
                                      VS
                          M/S KRISHNA NIRMAN PVT LTD


BEFORE :
THE HON'BLE THE CHIEF JUSTICE T.S SIVAGNANAM
              -A N D-
HON'BLE JUSTICE CHAITALI CHATTERJEE (DAS)
DATE : 31st July, 2025.
                                                                                      Appearance :
                                                                              Mr. Tilak Mitra, Adv.
                                                             Mr. Amit Sharka, Adv. ...for appellant.

                                                                        Mr. Saurabh Bagaria, Adv.
                                                             Mr. Rites Goel, Adv. ...for respondent.

The Court : – This appeal filed by the revenue under Section 260A of the Income

Tax Act, 1961 (the Act) is directed against the order dated August 27, 2024 passed by

the Income Tax Appellate Tribunal, “C” Bench, Kolkata (the Tribunal) in

ITA/155/Kol/2023 for the assessment year 2008-09.

The revenue has raised the following substantial questions of law for

consideration :

“1. Whether in the facts and circumstances of the case the Learned
Tribunal has substantially erred in law in quashing the reopening
proceeding under Section 147 of the Income Tax Act, 1961 on the ground
that the reopening was based on borrowed satisfaction and lacked
application of mind by the Assessing Officer ?

2. Whether on the facts and circumstances of the case, the Learned
Tribunal was justified in law to delete the addition of Rs.93,50,000/- made
by the Assessing Officer under Section 68 of the Income Tax Act, 1961 on
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account of accommodation entries in the form of share application and
share premium as unexplained cash despite the respondent assessee
failing to establish the creditworthiness of the investors as well as
genuineness of the transactions ?”

We have heard Mr. Tilak Mitra, learned senior standing counsel assisted by Mr.

Amit Sharma, learned advocate for the appellant/department and Mr. Saurabh

Bagaria, learned advocate for the respondent/assessee.

The short issue which falls for consideration is whether the reopening of the

assessment was bad in law on account of the fact that the Assessing Officer did not

independently apply his mind to the information provided by the Investigation Wing.

As could be seen from the assessment order this objection appears to have not been

raised by the assessee but nonetheless the Assessing Officer though referred to the

information received from the Investigation department, while completing the

assessment under section 147 read with section 143(3) has clearly abandoned those

reasons and proceeded on a different footing. Before the first appellate Authority, the

assessee specifically raised the issue that the notice which was issued for reopening is

merely based on information from the Investigation Wing and there is no incriminating

evidence against the assessee company so as to assume jurisdiction to re-assess the

income of the assessee. Though such a ground canvassed, the appellate Authority did

not agree with the assessee and dismissed the appeal. Before the learned Tribunal the

same ground was urged by the assessee. The learned Tribunal carefully examined the

factual position and found that the Assessing Officer recorded the reasons without

application of mind on the information received from the Investigation Wing. Apart

from that the learned Tribunal also found that the reasons recorded by the Assessing

Officer are vague, non-specific and non-essential to form the belief that income was
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escaped assessment. The learned Tribunal took note of the decision of the High Court

in the case of PCIT vs. G & G Pharma, ITA/545/2015 as well as the decision in the

case of PCIT vs. Shodiman Investments [P] Ltd., [2018] 93 taxmann.com 153[Bombay]

and allowed the assessee’s appeal on the ground that the reopening of the assessment

was clearly in breach of the settled position of law.

Thus, the learned Tribunal has arrived at such a finding upon re-appreciation

of the factual finding and we find no question of law much less substantial question of

law arises for consideration in this appeal.

Accordingly, the appeal fails and the same is dismissed.

Consequently, the application, IA NO: GA/2/2025 also stands dismissed.

(T.S. SIVAGNANAM, CJ.)

(CHAITALI CHATTERJEE (DAS), J.)

Pkd/S.Das.

AR(CR)