ADITYA MULTIPACK SOLUTIONS PRIVATE LIMITED,AHMEDABAD vs. THE ITO, WARD-3(1)(1), AHMEDABAD

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ITA 978/AHD/2026Status: DisposedITAT Ahmedabad06 August 2026AY 2015-167 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the reopening under Section 147 was invalid as it was based on borrowed satisfaction and lacked independent application of mind. The addition under Section 69A was also quashed as the reassessment itself was invalid.

What were the facts?

The assessee's assessment was reopened under Section 147 based on information from the Investigation Wing alleging bogus accommodation entries. The Assessing Officer made an addition under Section 69A without providing independent evidence or allowing cross-examination.

What were the issues?

Whether the reassessment proceedings initiated under Section 147 were valid, and if the addition under Section 69A was sustainable without independent evidence and proper procedure.

Which sections of the Income-tax Act were involved?

Section 147,Section 153C,Section 69A,Section 143(3),Section 148,Section 142(1),Section 151,Section 274,Section 271(1)(c)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “B” BENCH, AHMEDABAD

For Appellant: Shri Sudhir Mehta, Advocate
For Respondent: Shri Abhijit, Sr. DR
Hearing: 15.06.2026Pronounced: 06.08.2026

IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH, AHMEDABAD BEFORE DR. B.R.R. KUMAR, VICE-PRESIDENT SHRI RAHUL CHAUDHARY, JUDICIAL MEMBER ITA No. 978/Ahd/2026 (Assessment Year: 2015-16) Aditya Multipack Solutions Income Tax Officer, Vs. Private Limited, Ward 3(1)(1), 402, Sheel Complex, Mayur Ahmedabad Colony, Mithakhali Six Roads, Navrangpura, Ahmedabad, Gujarat -380009 [PAN : AADCN 2518 C] (Appellant) .. (Respondent) Appellant represented by : Shri Sudhir Mehta, Advocate Respondent represented by: Shri Abhijit, Sr. DR Date of Hearing 15.06.2026 Date of Pronouncement 06.08.2026

O R D E R PER DR. B.R.R. KUMAR, VICE-PRESIDENT:-

This appeal has been filed by the assessee against the order dated 14.01.2026 passed by the Ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi (hereinafter referred to as ‘Ld. CIT (A)’ in short), under Section 250 of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’ in short) for Assessment Year 2015-16.

2.

The assessee has raised following grounds of appeal:- “I. JURISDICTION INVALID REOPENING UNDER SECTION 147 The reassessment proceedings are bad in law and liable to be quashed because: • The reopening is based on borrowed satisfaction, without independent verification. • There is absence of "reason to believe", as mandated under Section 147. • The AO has acted mechanically on external information. • If the very basis of reopening (reason to believe) is invalid, the entire reassessment collapses. "Sublato fundamento cadit opus" (When the foundation is removed, the structure falls) II NON-COMPLIANCE WITH SECTION 153C – FATAL JURISDICTIONAL DEFECT

ITA No. 978/Ahd/2026 Aditya Multipack Solutions Pvt Ltd Vs. ITO Asst.Year : 2015-16 - 2–

• The alleged material originates from search under Section 132 conducted on third parties. • As per law, such cases must be dealt with under Section 153C. which requires: - Recording of satisfaction, - Identification of incriminating material belonging to the assessee, - Proper transfer of such material. • The AO has bypassed this mandatory procedure and resorted to Section 147, which is impermissible. • When the Act provides a specific mechanism (Section 153C), general provisions (Section 147) cannot be used as a substitute. • "Expressio unius est exclusio alterius" (Express mention of one thing excludes others) III. REOPENING BASED SOLELY ON THIRD-PARTY MATERIAL - INVALID • The reopening lacks independent corroboration. • Reliance solely on third-party statements/material is legally unsustainable. • Reopening cannot be based on unverified, borrowed information without nexus. • Mere allegation without proof of involvement cannot justify adverse inference. "Actus non facit reum nisi mens sit rea" (The act does not make a person guilty unless the mind is also guilty) IV. VIOLATION OF PRINCIPLES OF NATURAL JUSTICE • Opportunity provided was illusory: - SCN issued: 25.03.2022 - Time allowed: ~1 day i.e. 26.03.2022 - Order passed: 28.03.2022 • This violates fundamental principles of fairness. • Providing extremely short time makes compliance impossible. vitiating proceedings. "Lex non cogit ad impossibilia" (The law does not compel the impossible) • No person should be condemned without a fair opportunity of being heard. "Audi) alteram partem" (Hear the other side) V. VIOLATION OF SECTION 144B (FACELESS ASSESSMENT SCHEME) • Mandatory procedure under Section 144B not followed: - No meaningful opportunity, - No proper consideration of reply, - Order passed mechanically.

ITA No. 978/Ahd/2026 Aditya Multipack Solutions Pvt Ltd Vs. ITO Asst.Year : 2015-16 - 3– VI. ADDITION UNDER SECTION 69A LEGALLY UNSUSTAINABLE • The addition of ₹2,00,69,550/- is arbitrary and unjustified because: - No proof of ownership of alleged money. - No evidence of actual receipt, - No nexus between assessee and alleged transactions. - Burden of proof wrongly shifted to assessee. - The AO must prove unexplained money; assessee is not required to disprove vague allegations. "Ei incumbit probatio qui dicit, non qui negat" (The burden of proof lies on the one who asserts, not on the one who denies) VII. DENIAL OF CROSS-EXAMINATION • AO relied on statements of alleged entry operators. • No opportunity for cross-examination was provided. • Unverified statements without cross-examination have no evidentiary value. "Testis unus, testis nullus" (One witness is no witness) VIIL. INVALID ORDER OF CIT(A) NON-SPEAKING ORDER EX- PARTE • CIT(A) failed to adjudicate: - Jurisdictional issues, - Legal grounds, - Merits. - An ex-parte order without reasoning is legally unsustainable. "Quod non apparet non est" (What is not apparent does not exist).”

3.

The brief facts of the case are that the assessee is a Private Limited Company engaged in the business of trading in fabrics. It filed its return of income for the assessment year under consideration on 28.09.2015 declaring total income of Rs.72,170/-. The return was processed u/s 143(1) of the Act and no scrutiny assessment u/s 143(3) was framed. Subsequently, the assessment was reopened by issuance of notice u/s 148 dated 31.03.2021 on the basis of information allegedly received from the Investigation Wing that the assessee had obtained bogus accommodation entries aggregating to Rs.2,00,69,550/- from concerns controlled by Shri Jignesh Shah and Shri Sanjay Shah.

ITA No. 978/Ahd/2026 Aditya Multipack Solutions Pvt Ltd Vs. ITO Asst.Year : 2015-16 - 4– 3.1 The assessee filed its return in response to notice u/s 148 and also sought the reasons recorded for reopening. The assessee specifically informed the Assessing Officer that no such transactions existed in its books of account and requested the Assessing Officer to furnish complete particulars of the alleged accommodation entries, the basis thereof, and the material relied upon. The Assessing Officer did not furnish any details establishing the alleged transactions nor supplied the material relied upon. During the reassessment proceedings, the Assessing Officer ultimately made an addition of Rs.2,00,69,550/- u/s 69A of the Act treating the same as unexplained money.

4.

Aggrieved by the order of the Assessing Officer, the assessee filed an appeal before the Ld. CIT(A) who dismissed the appeal.

5.

Aggrieved by the order of the Ld. CIT(A) , the assessee is in further appeal before this Tribunal.

6.

Before us, the Ld. AR challenged the validity of the reassessment proceedings on the ground that the reasons recorded are based entirely on information received from the Investigation Wing without any independent application of mind by the Assessing Officer. The Ld. AR also submitted that the alleged information emanated from a search conducted in the cases of third parties and, therefore, the Revenue ought to have proceeded u/s 153C of the Act after complying with the mandatory statutory requirements and not under section 147. It was further contended that the assessee had specifically denied having received any accommodation entries and had requested the Assessing Officer to furnish the details and material relied upon; however, no seized material, statement, or other evidence connecting the assessee with the alleged transactions was ever furnished. The Ld. AR thus submitted that the reopening is founded on borrowed satisfaction and the consequential addition u/s 69A has been made without any independent enquiry or corroborative evidence, rendering the reassessment liable to be quashed.

ITA No. 978/Ahd/2026 Aditya Multipack Solutions Pvt Ltd Vs. ITO Asst.Year : 2015-16 - 5– 7. The Ld. DR, on the other hand, supported the orders of the authorities below and submitted that the information received from the Investigation Wing constituted tangible material sufficient for reopening the assessment.

8.

We have heard the rival submissions and carefully perused the material available on record. 8.1 The reasons recorded by the Assessing Officer read as under: "Bogus accommodation entries amounting to Rs.2,00,69,550/- from bogus concern of Shr. Jignesh Shah and Sanjay Shah during the financial year 2014-15." A bare reading of the above reasons demonstrates that except reproducing the information allegedly received from the Investigation Wing, no independent analysis has been made by the Assessing Officer. The assessment was reopened on the basis of information received from the Investigation Wing alleging that the assessee had received accommodation entries from certain entities. The reasons recorded merely reproduce the said information and do not indicate any independent application of mind by the Assessing Officer. Except for the information received, no material has been referred to in the reasons to form an independent belief that income had escaped assessment. We further find that the information relied upon by the Assessing Officer admittedly arose from a search conducted in the case of third parties. If the Revenue intended to proceed against the assessee on the basis of such search material, it was required to follow the procedure prescribed u/s 153C of the Act. The Assessing Officer, however, invoked the provisions of section 147 without following the statutory procedure.

8.2 We also find that the assessee had specifically denied having entered into any such transactions and requested the Assessing Officer to furnish the details vide letter dated 19.01.2022 in reply to notice u/s 142(1) of the Act, however, no such material was supplied. No independent enquiry was conducted and no evidence has been brought on record to establish that the assessee had actually

ITA No. 978/Ahd/2026 Aditya Multipack Solutions Pvt Ltd Vs. ITO Asst.Year : 2015-16 - 6–

received the alleged accommodation entries. The addition has thus been made merely on the basis of unverified information.

8.3 We further examined the assessment order. The said part of the assessment order reads as under:-

“Notices u/s 142(1) dated 16-11-2021 along with questionnaire and a reminder letter dated 14-12-2021 were issued to the assessee, with a request to file a Return of Income in response to notice u/s 148. The assessee company filed its Return of income on22- 11-2021 and furnished its reply on 22-11-2021. The notice u/s 143(2) was issued to the assessee on 18.02.2022

In the submissions made on 19-01-2022 and 02-03-2022 by the assessee company stating that, there are no transactions in our books as regards accommodation entries amounting to Rs. 2,00,69,550/- from the above mentioned bogus concern of Jignesh S Shah and Sanjay Shah, without providing any details with regards to the nature of receipts received through his HDFC bank account to the extent of Rs. 2,00,69,550/- (which was opted to have been made as accommodation entries) The assessee chose to contest the basis of reopening citing various case laws which are not related to the case of the assessee. Further the assessee cannot question the authenticity of the notice issued by the department and the copy of the approval accorded by the competent authority u/s 151 is an internal document of the department.

The assessee without substantiating the nature of receipts received, is contesting the re-opening after having filed a return of income in response to notice u/s 148 goes to prove that there is no proof /evidence in support of the claim of expenses with the assessee.

The assessee's submissions were perused. For the reasons cited supra income amounting to Rs. 2,00,69,550/- is added to the income returned as un-explained money and brought to tax. Further, penalty proceedings u/s 274 r.w.s. 271(1)(c) for concealment of income is initiated separately in the hands of the assessee.

The Income of the assessee is computed as follows: Total income (as per ITR filed u/s 148) : Rs. 72,168/- Add: unexplained money u/s 69A : Rs. 2,00,69,550/- Assessed Income : Rs. 2,01,41,718/-“

8.4 In view of these facts, we are of the considered view that the assumption of jurisdiction u/s 147 of the Act is not sustainable. Consequently, the reassessment order passed u/s 143(3) r.w.s. 147 of the Act is quashed. Since the reassessment itself has been held to be invalid, the addition made u/s 69A does not survive. Even on the merits of the case, we find that the Revenue did not

ITA No. 978/Ahd/2026 Aditya Multipack Solutions Pvt Ltd Vs. ITO Asst.Year : 2015-16 - 7– produce any prima facie material to show the particulars of bank account of the assessee in which the impugned deposits were credited.

8.5 The remaining grounds are rendered academic and no specific adjudication is required.

9.

In the result, the appeal of the assessee is allowed.

The order pronounced in the open Court on 06.08.2026

Sd/- Sd/-

(RAHUL CHAUDHARY) (DR. B.R.R. KUMAR) JUDICIAL MEMBER VICE-PRESIDENT Ahmedabad; Dated 06.08.2026 **btk आदेश की �ितिलिप अ�ेिषत / Copy of the Order forwarded to : अपीलाथ�/ The Appellant 1. ��थ�/ The Respondent. 2. संबंिधतआयकरआयु�/ Concerned CIT 3. 4. आयकरआयु�(अपील) /The CIT(A)- 5. िवभागीय�ितिनिध, आयकरअपीलीयअिधकरण, अहमदाबाद/ DR, ITAT, Ahmedabad 6. गाड�फाईल /Guard file. आदेशानुसार/ BY ORDER, True Copy सहायकपंजीकार (Dy./Asstt. Registrar) आयकरअपीलीयअिधकरण, अहमदाबाद / ITAT, Ahmedabad

1.

Date of dictation … ……words processed by the Hon’ble VP on his PC On 22.07.1016… 2. Date on which the typed draft is placed before the Dictating Member ………03.08.2026 3. Other Member………04.08.2026…. 4. Date on which the approved draft comes to the Sr.P.S./P.S…………05.08.2026… 5. Date on which the fair order is placed before the Dictating Member for pronouncement……06.08.2026 6. Date on which the fair order comes back to the Sr.P.S./P.S…........06..08.2026 7. Date on which the file goes to the Bench Clerk ……….06.08.2026 8. Date on which the file goes to the Head Clerk…………………………………... 9. The date on which the file goes to the Assistant Registrar for signature on the order 10. Date of Dispatch of the Order……………………………………

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