AMEY MADHAV BAITULE,INDIA vs. ITO WARD 3(1), KALYAN, KALYAN

The CIT (Appeal) has failed to consider Appellant’s stand that the Jurisdictional Officer has no authority to pass the order.

The Assessment is void ab initio even though notice was served on the Assessee u/s 143(2) on 27/06/2024, how the order was passed u/s 147 and not read with 143(3)

The assessment is bad in law in so far as the date of order mention is 22/03/2025. So also on DIN, however, the same was digitally sign only on 24/03/2025 that means it was not digitally sign as on 22/03/2025

The CIT (Appeal) has erred in ignoring the legal point raised by the Appellant that the order was not digitally signed as on 22.03.2025 i.e. on the date of order (and it was signed on 24.03.2025)

The Assessment is bad in law and void ab intio as computation sheet is not available on Income Tax Portal and it's not attached with the Assessment Order.

The assessment be declared void ab initio and bad in law as the addition ofRs. 1,13,49,682/- was not part of any notice u/s 148, 143(2), 142(1) or part of approval u/s 151. 4. The addition of Rs. 46,90,000/- u/s 69 towards alleged cash payment be deleted being not proved. 5. The addition of Rs. 1,13,49,682/- u/s 69 be deleted since it is illegal addition. 6. The penalty may please be dropped at the initiation stage itself. 7. The demand of Rs. 2,00,38,417/- be quashed/deleted 2. Brief facts of the case are that assessee is an individual filed his return of income for A.Y. 2020-21 on 23.12.2020 declaring total income at Rs. 17,32,540/-. Case was not selected for scrutiny; intimation under section 143(1) was issued on 04.01.2021. Subsequently, the case of assessee was reopened on the basis of information in the insight portal that a search action was carried out in case of GNP Group, Mumbai. The GNP Group in Mumbai was engaged in the construction of industrial and commercial shops in certain part of Dombivali and Ambernath area of Thane in the name of Roshini Enterprises, Ganadhish GNP and GNP Infracon. During search action on GNP Group certain incriminating evidence was found and seized indicating receipt of on-money. Such evidence disclosed that GNP Group was accepting on-money on sale of various units in their projects. The assessee has purchased commercial premises in Ganadhish GNP Group for a total consideration of Rs. 55.00 lacs. As per information with the AO, the assessee has paid Rs. 50.00 lacs as ‘on-money’ to builder. On the basis of such information, the AO recorded reasons for reopening. Notice under section 148 dated 29.03.2024 was issued by Jurisdictional Assessing Officer (JAO). In response to notice under section 148, the assessee filed return of income on 07.05.2024 declaring income of Rs. 17,32,540/-. The AO proceeded for reassessment and recorded that various show cause notice was issued to the assessee during reassessment proceedings and that assessee responded to various show cause notices. In the show cause notice the AO proposed addition of Rs. 55.00 lacs on account of payment of ‘on-money. The copy of reply filed by assessee is also scanned on various pages of assessment order. The assessee in his reply denied of having paid any on-money on purchase of commercial unit. The assessee also explained that stamp duty value of the unit/ property purchased by the assessee is Rs. 18,32,032/- and the assessee has purchased the property for a sale consideration of Rs. 55.00 lacs. The assessee has paid stamp duty of Rs. 3.30 lacs plus registration charges of Rs. 30,000/-. Thus, the assessee incurred total cost of Rs. 58,60,000/- for purchase of such property. The assessee explained that payments were made as per payment schedule recorded in agreement dated 10.04.2019. The assessee requested for cross-examination of the person on the statement of which the reasons for reopening was recorded and addition of ‘on money’ was proposed. The assessee also relied on various case laws that non allowing cross-examination will be violation of principle of natural justice. The reply of assessee was not accepted by AO. On page 9 of assessment order, the AO rejected request of cross- examination by referring certain case laws and recorded that assessee has not filed any submission in response to show cause notice.

On page -14 of assessment order, the AO scanned copy of information (notice to AO) by DCIT-Central Circle-6(1)letter dated 12.01.2024. As per information in letter dated 12.01.2024, the AO by scanned the copy of seized material and various abbreviations in the seized material. In para- 2.2 said letter it is recorded that during search action contents of sheet was confronted to Kapil Talreja, Accountant of GNP Group and he was asked to explain the contents. In the statement recorded under section 132(4) he stated that documents appear to be related to Real Estate Project by GNP Group, it contains the list of buyer-wise receipt and balance to be received. During search action statement of Kapila Talreja was confronted with Girish Pawer of the Promoter of the GNP Group. Girish Pawar stated about various abbreviations “T”, “S” and “N”. As per letter “T” means the total consideration for the sale of unit in the project, ‘S’ shows the part of which agreement is prepared and amount is received through banking channel and “N” mean total consideration which is to be received in cash. 4. On page-18 of the assessment order, the AO recorded that as per seized document Unit F-10 admeasuring 384.70 sq. ft. was purchased by assessee wherein against Column “T” is written Rs. 1.05 crore wherein agreement value decided between the builder and assessee shown in Column “S” is Rs. 55.00 lacs and balance amount receivable as ‘on-money’ is Rs. 50.00 lacs shown in Column “N”. The AO further noted that Rs. 52.00 lacs shown in Column “N” of receipt side. Therefore, Rs. 50.00 lacs was paid as ‘on-money’ to GNP Group as on 23.08.2019. This amount was paid in FY 2019-20 (AY 2020-21). The AO further recorded that as per reply of the assessee the total value of property is Rs. 58,60,000/- which includes sale consideration of Rs. 55.00 lacs, Rs. 3.30 lacs as stamp duty and Rs. 30,000/- registration charges. The AO reduced the amount of Rs. 58.60 lacs from Rs. 1.05 Crore and thereby remaining amount of Rs. 46,40,000/-(Rs.1,05,00,000/- - Rs. 58,60,000/-) was added as ‘on-money’. 5. The AO further noted that as per information available in AS-26, the assessee has purchased one more property for a consideration of Rs. 1.13 crore registered with Sub-Registrar, Thane on 09.04.2019. The assessee was asked to furnish details of transaction of purchase / sale of property. The assessee filed reply to show cause notice. However, no explanation was furnished. The AO thereby added Rs. 1.13 crore as unexplained investment. Thus, AO made addition on account of on-money of Rs. 46,40,000/- and unexplained investment of Rs. 1.13 crore in the assessment order dated 22.03.2005. 6. Aggrieved by the additions in the assessment order, the assessee filed before ld. CIT(A). Before ld. CIT(A), the assessee challenged the validity of notice under section 148, approval of reasons recorded under section by Pr. CIT. The assessee also challenged both the additions i.e. addition of ‘on-money’ as well as unexplained investment. The assessee filed detailed written submission on ITBA portal. The submission of assessee is recorded in para 5 of order of ld. CIT(A). The assessee in his submission submitted that he is a Doctor by profession. He is earning salary from Christian Medical College being Assistant Professor. The assessee is also having income from profession which is taxable under section 44ADA. During the relevant period, the assessee purchased property by making investment from his own savings, savings of his wife, gift from parents and partial withdrawals from Bajaj Allianz Policy. The assessee furnished copy of statement of Bank of Maharashtra, HDFC Bank and IDBI Bank. The assessee further stated that approval of reasons recorded was made in a mechanical manner. While approving the reasons recorded for AY 2020-21 there is no reference of investment in purchase of property of Rs. 1.13 crore. Similar reasons were approved for A.Y. 2019-20 wherein return income was accepted. The assessee also objected that addition is not justified. Notice under section 143(2) was not served in time. The assessee was denied cross-examination of the persons whose statement was relied for making addition of on-money. The ld. CIT(A) after considering the submission of assessee upheld the validity of notice under section 148, upheld the action of PrCIT in approving the reasons recorded as well as upholding both the additions on merit. While upholding validity of reopening the ld CIT(A) relied on the decision of Supreme Court in Raymond Woolen Mills Vs ITO ( 236 ITR 34 SC) and ACIT Vs Rajesh Jhaveri Stock Broker (P) Limited (291 ITR 500 SC). The additions of ‘on- money’ was upheld by holding that no evidence was filed by the assessee to show that alleged cash payment was not paid. On the objection of cross examination of builder/ search person, the ld CIT(A) held that right of cross examination is not absolute but depend on the facts of the case and relied on the decision of Delhi Tribunal in Nokia India (P) Limited Vs DCIT (59 taxmann.com 212). On the addition of unexplained investment under section 69, the ld CIT(A) held that the assessee not filed any evidence either before AO nor during the appellate stage. Further aggrieved the assessee has filed present appeal before Tribunal. 7. We have heard the submissions of learned authorised representative (ld AR) of the assessee and the learned Senior departmental representative (Sr DR) for the revenue. The ld AR of the assessee submits that the assessee has challenged the validity of reopening on various issues and one of the main grievances of the assessee is against assumption of jurisdiction under section 47/148 without complying with mandatory procedure prescribed under section 148A of the Act. The ld AR of the assessee submits that the entire reopening proceedings are vitiated for violation of principles of natural justice as the material relied upon by the department was never furnished to the assessee despite specific request made. The AO has not supplied copies of statements of Girish Pawar, Kapil Talreja, alleged seized sheets and other incriminating materials forming basis of reopening proceedings. The AO has not allowed cross examination of concerned persons was ignored and violated principal of natural justice. The Ld.AR submitted that the assessee had specifically denied payment of any cash/on-money to GNP Group and had explained that the subject property was purchased through registered agreement and entire consideration was paid through banking channels. However, the AO proceeded merely on the basis of third-party information received from Investigation Wing without conducting any independent inquiry or confronting the assessee with the relied upon material.Thus, the assessment order passed under section 147 rws 144B is liable to be quashed. The ld CIT(A) has not given independent findings except confirming the action of AO. To support his contention, the Ld.AR relied upon the decision of Tribunal in Ashok Karusao Bokde in ITA No. 5190/Mum/2025, which is based exactly on same set of facts. 8. The ld AR of the assessee submits that on similar information the case of other similar persons who have purchased various units form same builder was reopened but no additions on account of ‘on-money’ were made in the assessment order, or the additions were deleted by first appellate authority/ CIT(A), copy of assessment order of following persons were furnished; (a) Barkha Jagdish Dusseja (PAN: ADNPD 2540A), (b) Nitin Ramesh Chand Kalambe( PAN: APVPK 8379 L), (c) Manju Kamal Nagdev (PAN: AAIPN 7865L). 9. The Ld.AR of the assessee submits that even on merit he has good case. The assessee furnished complete details of the investment in the second property in Thane which was registered with sub-registrar Thane-4. Before AO as well as before ld CIT(A) furnished complete details of the investment / payment schedule. The copy of registered agreement with payment schedule is filed at page No. 91 to 175 of the paper book. The copy of the details of source of investment in consonance with payment schedule recorded in the agreement if also filed at page No. 45 & 46 of paper book. The assessee and his wife made payment in accidence with the payment schedule. Entire amount as added by AO was not invested during the relevant financial year. The AO made addition simply on the basis of information, without appreciating the evidences furnished by the assessee. No on money was paid by the assessee while purchasing the unit from GNP Group. The additions are solely based on third party information, which is not sustainable in the eyes of laws. Thus, the assessee has good case on legal issue as well as on merits. The ld AR of the assessee prayed for deleting both the additions on merits. 10. On the other hand, the ld. Senior departmental representative (Sr DR) supported the orders of lower authorities. The ld SR DR for the revenue further submits that the reopening proceedings were initiated on the basis of information received from DCIT- Central Circle Mumbai regarding alleged payment of on-money by the assessee in purchase of property from GNP Group. During the assessment sufficient opportunity was granted to the assessee. The Ld. DR for the revenue submits that at the time of reopening the AO has sufficient information for reason to believed that income of assessee has escaped assessment. The assessee failed to substantiate his claim with cogent evidences so as to dislodge the information received by the department as incorrect. On merit, the ld SR DR for the revenue fully supported the order of AO/ ld. CIT(A). 11. We have considered the rival submissions of both the parties and have gone through various documentary evidence filed before Tribunal in support of investment in respect of Thane Property. We have also deliberated on the case laws relied by the assessee. We find that initially the case of assessee for AY 2019-20 was reopened on the basis of information received from investigation wing/ DCIT- Central Circle Mumbai. However, on filing response by the assessee the proceedings under section 147/148 for AY 2019-20 was dropped. We further find that case of assessee for AY 2020-21 was again reopened on the basis of similar information that in the search action carried out on GNP group, evidence regarding ‘on-money’ was found. We find that during assessment the assessee demanded the copy of statement of the person, on who’s the AO proposed additions and also sought cross examination of such persons. The AO as well as nowhere recorded that such statement was provided to the assessee, rather request of cross examination was rejected by holding that right to cross examination is not absolute. We also find that ls CIT(A) in his finding held that the assessee failed to finished evidence that no ‘on money’ was paid. It is settled position under law that onus cannot be discharged in negative. We find that on similar set of facts and on allegation of ‘on-money’ the case of Ashok Karusao Bokde was reopened by revenue and similar addition on account of on- money was made, however, on appeal before Tribunal in ITA No. 5190/Mum/2025, the assessment order was quashed on raising similar submissions. The relevant part of the decision of Tribunal in Ashok Karusao Bokde (supra) is extracted below; “We have perused the submissions advanced by both sides in light of the records placed before this Tribunal. 5. Though the assessee has raised various grounds of appeal, the primary grievance of the assessee is against the validity of proceedings-initiated u/s 147/148 of the Act on the ground that the mandatory procedure contemplated u/s 148A of the Act was not complied with and that the reassessment proceedings suffer from gross violation of principles of natural justice. 5.1. From the records placed before us, we observe that the reopening proceedings were initiated on the basis of information allegedly received from Investigation Wing regarding payment of on-money by the assessee to GNP Group in connection with purchase of immovable property. In response to notice issued u/s 148A(b), the assessee had specifically requested the Ld.AO to furnish copies of statements of concerned persons, alleged seized materials, coded sheets and other incriminating documents relied upon by the department. The assessee had also sought opportunity for cross examination of the persons whose statements were proposed to be relied upon against the assessee. 5.2. However, neither during proceedings u/s 148A nor during reassessment proceedings has the Revenue placed anything on record to establish that such relied upon materials/information were furnished to the assessee. Similarly, no material has been brought before us to demonstrate that opportunity of cross examination as specifically sought by the assessee was ever granted. 5.3. At this juncture, it is pertinent to refer to the decision of Hon’ble Bombay High Court in the case of Dada Akbarbhai Sindkhedawala v. ACIT in Writ Petition (L) No.30778 of 2023 dated 23/01/2024 wherein the Hon’ble High Court held that where reassessment proceedings are based upon materials gathered during search/survey/investigation proceedings, copies of such relied upon materials are required to be furnished to the assessee so as to enable effective rebuttal before passing order u/s 148A(d) of the Act. The Hon’ble High Court emphasized that failure to furnish the relied upon material would amount to violation of principles of natural justice. 5.4. We further find that coordinate bench of Mumbai Tribunal in the case of Gedalia Multitrading Pvt Ltd. v. NFAC/ITO in ITA No.6056/Mum/2025 order dated 06/02/2026 and in the case of Richa Finance & Investment Private Limited v. ITO in ITA No.4252/Mum/2023 order dated 26/11/2025 has also held that reassessment proceedings cannot be sustained where the assessee was not confronted with the underlying material/information forming basis of reopening proceedings. 5.5. In the present case, except making general reference to information received from Investigation Wing, no incriminating material forming basis of reopening was ever confronted to the assessee. In our considered opinion, non-furnishing of relied upon material strikes at the very root of jurisdiction assumed by the Ld.AO u/s 147/148 of the Act since the assessee was deprived of effective opportunity contemplated under section 148A(b) of the Act. 5.6. Accordingly, considering the facts of the present case and respectfully following the judicial precedents discussed hereinabove, we hold that the order passed u/s 148A(d), consequential notice issued u/s 148 and assessment framed u/s 147 r.w.s. 144B of the Act cannot be sustained and are herebyquashed. Since we have quashed the reassessment proceedings on legal grounds, adjudication on merits of additions made by the Ld.AO has become merely academic and therefore the same are left open.” 12. Considering the facts, that there is no much variation in the facts in case in hand and the decision in Ashok Karusao Badke (supra), wherein the coordinate bench of the decision has quashed the reopening as well as assessment order. Thus, following the principal of consistency, we hold that the order passed under section 147 on the basis of notice issued u/s 148 cannot be sustained and are hereby quashed. Further, considering the facts that we have quashed the assessment order, hence, adjudication on all other issues and the submissions of the assessee have become academic. 13. In the result, appeal filed by the assessee is allowed Order was pronounced in open court on 17/08/2026 Sd/- Sd/- GIRISH AGRAWAL PAWAN SINGH ACCOUNTANT MEMBER JUDICIAL MEMBER