SHARAD CHHAIYA,INDORE vs. ITO 2(1), INDORE

आदेश/ O R D E R

Per B.M. Biyani, A.M.:

Feeling aggrieved by order of first appeal dated 04.07.2025 passed by learned Commissioner of Income-Tax (Appeals)-NFAC, Delhi [“CIT(A)”] which in turn arises out of assessment-order dated 24.03.2024 passed by learned ITO-2(1), Indore [“AO”] u/s 147 of Income-tax Act, 1961 [“the Act”] for Assessment-Year [“AY”] 2019-20, the assessee has filed this appeal.

Sharad Chhaiya ITA No. 677/Ind/2025 – AY 2019-20 authorities in a search conducted upon “Omaxe Group” of Indore, the AO

came to know that the assessee booked Unit No. DHBI/246 and paid cash

amounting to Rs. 4,35,000/- to the Omaxe/seller. Accordingly, the AO

formed a belief that the payment of Rs. 4,35,000/- represented undisclosed

income of assessee which had escaped assessment. On this basis, the AO

issued notice dated 31.03.2023 u/s 148 to re-open assessee’s case u/s 147.

In response to notice, the assessee filed return repeating the original income

of Rs. 8,22,720/-. Thereafter, the AO issued notices u/s 143(2)/142(1) in

response to which the assessee made submissions. The assessee denied

making any such payment as alleged by AO. However, the AO rejected

assessee’s submission and treated the alleged payment of Rs. 4,35,000/- as

unexplained investment u/s 69 r.w.s. 115BBE, accordingly made addition

and completed assessment. Aggrieved, the assessee went in first-appeal and

raised several objections challenging the legality of assessment framed by

AO as well as the merit of addition. However, the assessee did not get any

relief from CIT(A). Now, the assessee has come in next appeal before us.

preliminary objection that the AO issued notice u/s 148 dated 31.03.2023

without first following the mandatory procedure of section 148A, therefore

the notice issued u/s 148 and consequent assessment-order passed u/s

147 are invalid and liable to be quashed. The assessee raised following

ground in first-appeal before CIT(A):

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Sharad Chhaiya ITA No. 677/Ind/2025 – AY 2019-20 “4. That the notice issued under section 148 of the Income Tax Act, 1961, dated 31.03.2023 is bad in law and liable to be quashed, as the mandatory procedure laid down under section 148A of the Act has not been followed. The notice so issued being illegal and wrong. The same require to be quashed.” However, the CIT(A) has not decided above ground of assessee, therefore the

order of CIT(A) deserves to be set aside.

addition alleging the material found in the search of “Omaxe Group”. The AO

has re-produced the material alleged to have been found in search on Page 5

of assessment-order, which is basically an excel sheet containing the details

of cash collected by Omaxe/seller from different buyers of housing units,

but the said material extracted by AO is not readable. Further, just below

such excel sheet, the AO has quoted names of (i) Kartikey Singh, (ii) Ashok

Singh Yadav, and (iii) Rajneesh Jain, as the buyers whose names appear in

the excel sheet and notably, the assessee's name does not figure anywhere.

Ld. AR also drew our attention to a Certificate dated 15.04.2024 placed at

Page 57 of Paper-Book as an additional evidence. This certificate is issued

by Omaxe/seller confirming that no payment is cash was made by assessee.

It was accordingly submitted that the foundational premise of the re-

assessment that the seized material implicates present assessee, appears to

be without any basis.

appropriate to restore this case to the file of Jurisdictional Assessing Officer

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Sharad Chhaiya ITA No. 677/Ind/2025 – AY 2019-20 (JAO) for a fresh adjudication. He assured that the assessee shall extend full

co-operation to JAO and make an effective representation.

authorities but ultimately, considering the objections raised by Ld. AR, left

the matter to the wisdom of bench without raising any objection against

remand to JAO.

on record. In so far as the preliminary legal issue is concerned, we note that

the mandatory nature of the procedure prescribed in section 148A,

introduced by the Finance Act, 2021 w.e.f. 01.04.2021, has been

consistently affirmed by various High Courts and by Tribunal. The scheme

of section 148A requires the AO to, inter alia, conduct enquiry with prior

approval of the specified authority; provide the assessee an opportunity to

be heard by way of a show-cause notice; and thereafter pass a reasoned

order u/s 148A(d) before issuing notice u/s 148. Non-observance of this

mandatory procedure ordinarily vitiates the entire re-assessment

proceedings. We note that the assessee had specifically raised this grievance

before Ld. CIT(A) but the Ld. CIT(A) has not given adjudication. This is a

lapse on the part of CIT(A). The order of the CIT(A) is, therefore,

unsustainable on this ground alone. Additionally, on merits, we find force in

submission of Ld. AR that the material allegedly seized from Omaxe/seller,

re-produced in assessment order, is not legible. Furthermore, the AO's own

enumeration of the buyers' names appearing in the seized excel sheet, does

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Sharad Chhaiya ITA No. 677/Ind/2025 – AY 2019-20 not include assessee's name. This raises a significant doubt about whether

the seized material actually implicates assessee at all and whether the

foundational "information" for re-opening the assessment satisfied the

threshold required u/s 148/148A of the Act. Considering the facts and

circumstances in their entirety, particularly the undecided legal ground

regarding non-compliance with section 148A; the illegibility of the seized

material as reproduced; the additional evidence filed by assessee; and given

that both sides are agreeable to a remand, we deem it appropriate to set

aside the orders of both the lower authorities and restore this matter to the

file of the Jurisdictional Assessing Officer (JAO) for a fresh consideration in

accordance with law. We direct the JAO to afford the assessee a fair and

reasonable opportunity of being heard and pass a reasoned order dealing

with all submissions made by assessee. The assessee is directed to extend

full and effective co-operation to the JAO and appear/respond promptly in

response to all notices issued by the JAO.

Order pronounced in open court on 17/04/2026

Sd/- Sd/-

(PARESH M. JOSHI) (B.M. BIYANI) JUDICIAL MEMBER ACCOUNTANT MEMBER Indore

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Sharad Chhaiya ITA No. 677/Ind/2025 – AY 2019-20

िदनांक/Dated : 17/04/2026

Patel/Sr. PS Copies to: (1) The appellant (2) The respondent (3) CIT (4) CIT(A) (5) Departmental Representative (6) Guard File By order E COPYAssistant Registrar Income Tax Appellate Tribunal Indore Bench, Indore

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