ITO, WARD 1(1)(1), RAJKOT, RAJKOT vs. SOPAN EMPIRE, RAJKOT

आयकर अपीलीय अिधकरण, राजकोट �यायपीठ, राजकोट। In The Income Tax Appellate Tribunal, Rajkot Bench, Rajkot Before Dr. Arjun Lal Saini, Accountant Member And Shri Sonjoy Sarma, Judicial Member आयकरअपीलसं./ITA No. 798/Rjt/2025 [ �नधा�रणवष�/Assessment Year: 2019-20 ] ITO, Ward 1(1)(1), Rajkot, Sopan Empire, Room No. 702, Aayakar Bhavan, Vs. Near Karadiya Rajput Wadi, Race Course Ring Road, Rajkot, Mavdi Chowkdi, 150 Ft Ring Rajkot, Gujarat-360001 Road, Rajkot, Gujarat-360004 �थायीलेखासं./जीआइआरसं./PAN/GIR No.: ADJFS9247D (अपीलाथ�/Assessee) (��यथ�/Respondent)

Cross Objection No. 07/Rjt/2026 [ In ITA No. 798/Rjt/2025 ] [ Assessment Year: 2019-20 ] Sopan Empire, ITO, Ward 1(1)(1), Rajkot, Near Karadiya Rajput Wadi, Room No. 702, Aayakar Bhavan, Vs. Mavdi Chowkdi, 150 Ft Ring Race Course Ring Road, Rajkot, Road, Rajkot, Gujarat-360004 Rajkot, Gujarat-360001 �थायीलेखासं./जीआइआरसं./PAN/GIR No.: ADJFS9247D (Assessee) (Respondent) Assessee by : Shri R. K. Takvani, Ld. AR Respondent by : Shri Ravinder Sindhu, Ld. Sr. DR Date of Hearing : 08/06/2026 06/08/2026 Date of Pronouncement :

: ORDER : Per, Dr. Arjun Lal Saini, AM: Captioned appeal filed by the Revenue and Cross- objection filed by the assessee, pertaining to Assessment Year 2019-20, are directed against the order passed under section 250 of the Income Tax Act, 1961 (hereinafter referred to as “the Act”) by Commissioner of Income-tax (Appeals), dated 04.09.2025, which in

ITA No. 798/Rjt/2025 (CO No.07/Rjt/2026) [ AY 2019-20 ] ITO v. Sopan Empire turn arises out of an assessment order passed by the Assessing Officer u/s 147 of the Act, on 18.03.2024. 2. First, we shall adjudicate Revenue’s appeal in ITA No. 798/Rjt/2025, wherein the grounds of appeal raised by the Revenue are as follows: (1). On the facts and circumstances of the case and in law, the Ld.CIT(A) erred in quashing the reopened proceedings u/s 147 of the I.T. Act, only on the basis that there is no mention of the approval received from the Range Head u/s 148B of the I.T. Act whereas the same has been obtained manually. (2). On the facts and circumstances of the case and in law, the Ld. CIT(A) erred in quashing the reopened proceedings u/s 147 of the I.T. Act, only because the assessing officer could not respond the CIT(A)'s communication in time. (3). Any other ground that the Revenue may rise before or during the proceedings before the Hon'ble ITAT. (4). It, is therefore, prayed that the order of the CIT(A) be set aside and that of the assessing officer be restored to the above extent. 3. The relevant material facts, as culled out from the material on record, are as follows. In this case, the Return of Income for the year under consideration, assessment year (A.Y.) 2019-20, was e-filed by the assessee, on 08/07/2019, declaring therein total taxable income of Rs.57,040/-. The return of income so filed subsequently processed u/s 143(1) of the Act by CPC without making any adjustment to the taxable income of the assessee. A search and seizure action u/s 132 of the Act named "operation blue diamond" was carried out on 24.08.2021 in the case of real estate builders of Rajkot. Mainly four groups including R K Group were covered in search action. During the course of search action various business concerns as well as associate persons/key person/family members were covered under section 132 /133A of the Act. Various incriminating documents in the form physical loose papers/diary/register/ print out of accounting ledger as well as digital back up computers, pen drive /Hard Disk, mail etc have been found and seized/ impounded. The seized documents reveal that the RK Group is involved in taking ‘on-money’ in cash on sale/booking/purchase of units of their projects/land. The Page 2 of 32

ITA No. 798/Rjt/2025 (CO No.07/Rjt/2026) [ AY 2019-20 ] ITO v. Sopan Empire assessee is found one of the purchasers who have received ‘on-money’ in cash for the sale land to the RK Group. Since the incriminating digital data/ documents seized during the search action contain information pertaining to /and information contained therein relate to the assessee, therefore, in view of the provision of section 148, Explanation 2, clause (iv) of the Act, a satisfaction with the approval of the Pr. CIT-1. Rajkot was recorded. Thereafter, case has been re-opened u/s 147 of the Act with prior approval of the Pr.CIT-1, Rajkot. The notice u/s 148 of the Act was issued on 29-03-2023 and the assessee has been asked to file the return of income ( ROI) in response to notice issued u/s 148 of the Act. In response to notice u/s 148 of the Act, the assessee filed income tax return (ITR) on 28-04-2023, showing total taxable income of Rs.57,040/-. The notice u/s 143(2) of the Act was issued on 13-01-2024. Subsequently, notice u/s 142(1) of the Act calling certain details/documents relevant to assessment have been issued and served upon the assessee time to time. All above notices have been issued online through ITBA and duly served upon assessee on his E-filing portal /registered mail. The assessee, vide his submission has provided some details and has also taken certain objections against show cause issued in the matter. The objections taken by the assessee have been duly disposed off and communicated to the assessee, vide notice dated 14.02.2024.

Page 3 of 32

ITA No. 798/Rjt/2025 (CO No.07/Rjt/2026) [ AY 2019-20 ] ITO v. Sopan Empire 5. In response to the show cause notice of the assessing officer, the assessee submitted detailed written submission along with documentary evidences, which were not reproduced by the assessing officer in the assessment order. However, the same was dealt with by the assessing officer in the assessment order, vide para 9 of assessment order, page Nos. 15 to 18 of the assessment order. The gist and essence of the reply of the assessee, before the assessing officer, are as follows: (i). The assessee submitted that no cash “on money” has been received over and above the value recorded on registered documents. (ii). The assessee demanded the opportunity for cross-examination during the assessment proceedings, about the statement of the Girish Vanjani, however, the assessing officer did not provide the opportunity of cross examination. (iii). The assessee demanded alleged documents containing the alleged transactions, from the assessing officer. However, the assessing officer did not provide the same and used the documents without providing opportunity of cross- examination and documents were used behind the back of the assessee. (iv). Only selective entries have been picked by the assessing officer which is favourable to the Department and the entries mentioned in the seized data which are favourable to the assessee were ignored. (v). Rate per square meter taken by the Department on imaginary basis, which is significantly exceeds the prevailing market rate. (vi). The Buyer party does not have any income from which the cash was paid. That is, source of the payment, in cash, has not been explained by the assessing officer. (vii). The assessee also demanded from the assessing officer by way of writing separate letter. The approval from the range had under section 148B of the Act, however, the assessing officer did not provide the approval under section 148B of the Act. Page 4 of 32

ITA No. 798/Rjt/2025 (CO No.07/Rjt/2026) [ AY 2019-20 ] ITO v. Sopan Empire (viii). The assessee demanded the approval under section 151 of the Act from the assessing officer by way of writing a separate letter. The assessing officer did not provide the approval under section 151 of the Act to the assessee, during the assessment proceedings. (ix) The assessee has also submitted that order under section 127 of the Act had not been passed by the appropriate income tax authority before transfer of case from one authority to another authority and no opportunity was given to the assessee. (x) Notice under section 143(2) of the Act was not issued by the jurisdictional assessing officer. 6. However, the assessing officer rejected the above contention of the assessee and observed that firm R K Infra link LLP is owned by the RK Group. It has been established from the seized documents that the impugned land have been purchased on much higher price than recorded on registered conveyance deed. The amount so paid through bank are found recorded on regular books/conveyance deed, however, the amount that was paid in cash has not been recorded on books/conveyance deed. Therefore, saying that no unaccounted payment has been received is nothing but a blatant lie of the assessee. Besides, the assessee has also relied on various judicial pronouncements delivered by various Hon'blé ITAT and Courts in this regard, however, assessing officer noticed that facts and circumstances of peculiar case of the assessee are different from those discussed in judicial pronouncement relied upon by the assessee, therefore, ratio laid down in those decision cannot apply in peculiar case of the assessee. In view of the above, it is crystal clear that the assessee has sold land to the RK Infra link LLP which is business concern of RK Group for total of Rs. 13,30,37,500/-whereas the sale deed has been executed for Rs.92,00,000/- only which establishes the fact that the remaining amount has been paid in cash and the same has not been recorded on registered deed or regular books

Page 5 of 32

ITA No. 798/Rjt/2025 (CO No.07/Rjt/2026) [ AY 2019-20 ] ITO v. Sopan Empire of the assessee. Out of total cash on-money portion, Rs.35,49,85,070/- has been received during the year under consideration, therefore, unaccounted on-money receipt of Rs.35,49,85,070/- was treated as income in the hands of the assessee as unexplained money within meaning of section 69A r.w.s. 115BBE of the Act and added to the total income of the assessee. 7. Aggrieved by the order of the Assessing Officer, the assessee, carried the matter in appeal before the Ld. CIT(A), who has deleted the addition made by the assessing officer. During the appellate proceedings, the assessee submitted before the Ld. CIT(A) that assessment order was passed by the assessing officer without approval of higher authority. The assessee stated before the learned CIT (A) that as per the mandate of Section 148B of the Income Tax Act, 1961, no order of assessment or reassessment or re-computation shall be passed by an Assessing Officer below the rank of Joint Commissioner in respect of an assessment year to which clause (i) to (iv) of Explanation 2 to Section 148 applies, except with the prior approval of the specified authority, that is, Additional Commissioner/Additional Director/Joint Commissioner/Joint Director. In the assessee’s case, the impugned proceedings have been initiated as per clause (iv) of Explanation 2 to Section 148 and the order has been passed by the Assessing Officer (assessing officer) without demonstrating compliance with the mandatory requirement of prior approval from the competent authority as envisaged under Section 148B of the Act. The failure to obtain or even reflect such approval in the impugned order, vitiates the entire proceedings and renders the same liable to be quashed being contrary to the statutory mandate and settled principles of law. If such approval of higher authority was obtained then it shall have mentioned the DIN on the said approval and the same shall also be communicated to the assessee and in the assessment order. But the said action of the higher authority is missing in this case. It is trite that where the statute prescribes a particular manner for exercise of power, the same must be strictly Page 6 of 32

ITA No. 798/Rjt/2025 (CO No.07/Rjt/2026) [ AY 2019-20 ] ITO v. Sopan Empire followed, and any deviation therefrom renders the action unsustainable in law. Therefore, the assessment order shall be considered as invalid. On, perusal of assessment order, it was seen that in para 3 of the assessment order, the assessing officer has mentioned as under: "Since the incriminating digital data/documents seized during the search action contain information pertaining to /and information contained therein relate to the assessee, therefore, in view of the provision of section 148, Explanation 2 clause (iv) of the Act a satisfaction with the approval of the Pr. CIT-1, Rajkot was recorded. Thereafter, case has been re-opened u/s 147 of the Act with prior approval of the Pr.CIT-1, Rajkot. Notice u/s 148 of the Act was issued on 29-03-2023 and the assessee has been asked to file the ROI in response to notice issued u/s 148 of the Act." Further, section 148B of the Act, speaks as under: “[Prior approval for assessment, reassessment or recomputation in certain cases. 148B. No order of assessment or reassessment or recomputation under this Act shall be passed by an Assessing Officer below the rank of Joint Commissioner, in respect of an assessment year to which clause (i) or clause (ii) or clause (iii) or clause (iv) of Explanation 2 to section 148 apply except with the prior approval of the Additional Commissioner or Additional Director or Joint Commissioner or Joint Director]” In the light of the above provisions, the assessee submitted before the learned CIT(A) that the case of the assessee was selected for reassessment proceedings u/s 147 of the Act in view of the provision of section 148 of the Act. The Explanation 2, clause (iv) of the Act, the assessment order shall not have been passed by the Assessing Officer without obtaining prior approval from the Joint/Additional Commissioner of Income Tax u/s 148B of the Act as mentioned above. 8. On perusal of assessment order, it can be noted that the assessing officer has not mentioned therein whether the assessment order was passed after obtaining approval of higher authority as required u/s. 148B of the I.T. Act, 1961. Accordingly, the Ld. CIT(A) issued a letter to the Jurisdictional Assessing Officer vide DIN & Letter No: ITBA/NFAC/F/17/2025-26/1077079494(1) dated 16.06.2025 requesting him to furnish a copy of Approval granted by Joint/Additional Commissioner of Income Tax u/s 148B of the I.T. Act, 1961. The jurisdictional assessing officer was Page 7 of 32

ITA No. 798/Rjt/2025 (CO No.07/Rjt/2026) [ AY 2019-20 ] ITO v. Sopan Empire requested to furnish his reply latest by 23.06.2025. However, the jurisdictional assessing officer did not reply to the ld.CIT(A), that is, during the remand proceedings, no reply was received from the jurisdictional assessing officer by ld.CIT(A). Accordingly, vide DIN & Letter No. ITBA/NFAC/F/17/2025- 26/1079542050(1) dated 12.08.2025, the JAO was once again requested to furnish a copy of Approval granted by Joint/Additional Commissioner of Income Tax u/s 148B of the I.T. Act, 1961. He was requested to furnish his reply by 22.08.2025. However, ld.CIT(A) did not receive response from the assessing officer. Therefore, ld.CIT(A) noticed that non-mentioning of approval u/s 148B of the Act in the assessment order and non-furnishing of reply by the JAO after providing him ample opportunity, it reflects that no mandatory approval u/s 148B of the Act was obtained by the assessing officer before passing the assessment order. On the similar facts, the Hon'ble ITAT Delhi Bench "SMC" in the case of Manish Sharda Vs. ACIT Central Circle in IT Appeal Nos. 259 to 266 (Delhi) of 2025, reported in [2025] 176 taxmann.com 250 (Delhi - Trib.), has held as under: "Section 147, read with section 148B, of the Income-tax Act, 1961 - Income escaping assessment General (Combined approval for reassessment) Assessment years 2019- 20 to 2021-22. Whether where prescribed authority had accorded its combined approval under section 148B dated 09-06-2023 for reopening six assessment years involving three assessees, such approval was not sustainable - Held, yes - Whether therefore, all assessments framed in case of all assessees were to be quashed - Held, yes [Paras 3 and 4] [In favour of assessee)”. Therefore, ld.CIT(A) noticed that where prescribed authority had accord its combined approval under section 148B of the Act, for reopening six assessment years involving three assessees, such approval was not sustainable. However, in the instant case, no approval has been accorded u/s 148B of the Act, before passing the assessment order. In view of the above discussion and judicial pronouncements relied upon, it was therefore, held by ld.CIT(A) that the assessment order was passed u/s 147 of the Act, without obtaining mandatory prior approval from higher authority

Page 8 of 32

ITA No. 798/Rjt/2025 (CO No.07/Rjt/2026) [ AY 2019-20 ] ITO v. Sopan Empire u/s 148B of the Act is considered to be erroneous and bad in law, therefore, the order u/s 147 of the Act, passed by the assessing officer was quashed by ld.CIT(A). 9. Aggrieved by the order of the ld.CIT(A), the assessee is in appeal before this Tribunal.

Page 9 of 32

ITA No. 798/Rjt/2025 (CO No.07/Rjt/2026) [ AY 2019-20 ] ITO v. Sopan Empire Learned Counsel for the assessee submitted that no approval was taken by assessing officer from the higher authority u/s 148B of the Act, before passing the assessment order.The ld.CIT(A) issued two letters dated 16.06.2025 & 12.08.2025 to the assessing officer in this regard. However, assessing officer neither replied to such letters nor furnished the copy of approval, vide para No. 6.4 of CIT(A)'s order.The ld.Counsel pointed out that CBDT Manual of Office Procedure (Feb 2003, Para 9, Chapter-3. Vol-11) mandates mention of approval in the assessment order itself. Assessment order passed without valid jurisdiction, consequently, ld. CIT(A) rightly quashed the assessment order. The Revenue has challenged the CIT(A)'s order dated 04.09.2025, which quashed the reassessment order, on the primary ground that the assessing officer failed to obtain mandatory prior approval u/s 148B before passing the assessment order. The assessee supports the CIT(A)'s order and additionally raises twelve independent legal grounds through Cross-Objection, each of which independently invalidates the reassessment. Therefore, Learned Counsel for the assessee, submitted that order passed by ld.CIT(A) may be upheld. 11. On the other hand, the Ld. DR for the Revenue has primarily reiterated the stand taken by the Assessing Officer, which we have already noted in our earlier para and is not being repeated for the sake of brevity. 12. We have heard, the rival contentions, perused the material on record and duly considered facts of the case in the light of the applicable legal position. We note that assessing officer has not taken approval of higher authority u/s 148B of the Act prior to passing of the assessment order. As per Para 9 of Chapter-3 of Volume-II (Technical) of the Manual of Office Procedure issued by CBDT in February, 2003, assessing officer is required to specify the fact of obtaining the approval of higher authority in the body of the assessment order. In the present case, assessing officer has not stated the fact of obtaining approval u/s 148B in the assessment order resulting in violation of binding instructions of CBDT. In this regard, the reliance Page 10 of 32

ITA No. 798/Rjt/2025 (CO No.07/Rjt/2026) [ AY 2019-20 ] ITO v. Sopan Empire is placed on the decision of ACIT v. Serajuddin & Co. - [2023] 454 ITR 312 (Orissa) wherein it was held that where assessment orders passed in case of assessee were totally silent about Assessing Officer having written to Additional Commissioner seeking his approval or of Additional Commissioner having granted such approval, Tribunal was correct in holding that in present cases such approval was granted mechanically without application of mind by Additional Commissioner resulting in vitiating assessment orders. Findings of the Hon’ble Court are reproduced below: “2. As rightly pointed out by learned counsel for the assessee, there is not even a token mention of the draft orders having been perused by the Additional CIT. The letter simply grants an approval. In other words, even the bare minimum requirement of the approving authority having to indicate what the thought process involved was is missing in the aforementioned approval order. While elaborate reasons need not be given, there has to be some indication that the approving authority has examined the draft orders and finds that it meets the requirement of the law. As explained in the above cases, the mere repeating of the words of the statute, or mere "rubber stamping" of the letter seeking sanction by using similar words like 'see' or 'approved' will not satisfy the requirement of the law. This is where the Technical Manual of Office Procedure becomes important. Although, it was in the context of section 158BG of the Act, it would equally apply to section153D of the Act. There are three or four requirements that are mandated therein, (i) the AO should submit the draft assessment order "well in time". Here it was submitted just two days prior to the deadline thereby putting the approving authority under great pressure and not giving him sufficient time to apply his mind; (ii) the final approval must be in writing; (iii) The fact that approval has been obtained, should be mentioned in the body of the assessment order. 23. In the present case, it is an admitted position that the assessment orders are totally silent about the AO having written to the Additional CIT seeking his approval or of the Additional CIT having granted such approval. Interestingly, the assessment orders were passed on 30th December 2010 without mentioning the above fact. These two orders were therefore not in compliance with the requirement spelt out in para 9 of the Manual of Official Procedure. 24. The above manual is meant as a guideline to the AOs. Since it was issued by the CBDT, the powers for issuing such guidelines can be traced to Section 119 of the Act. It has been held in a series of judgments that the instructions under section 119 of the Act are certainly binding on the Department. In Commissioner of Customs v. Indian Oil Corporation Ltd. 2004 taxmann.com 1061 (SC)/2004 (165) E.L.T. 257 (SC) the Supreme Court observed as under: "Despite the categorical language of the clarification by the Constitution Bench, the issue was again sought to be raised before a Bench of three Judges in Central Board of Central Excise, Vadodara v. Dhiren Chemicals Industries: 2002 (143) ELT 19 where the view of the Constitution Bench regarding the binding nature of circulars issued under section 37B of the Central Excise Act, 1944 was reiterated after it was drawn to the attention of the Page 11 of 32

ITA No. 798/Rjt/2025 (CO No.07/Rjt/2026) [ AY 2019-20 ] ITO v. Sopan Empire Court by the Revenue that there were in fact circulars issued by the Central Board of Excise and Customs which gave a different interpretation to the phrase as interpreted by the Constitution Bench. The same view has also been taken in Simplex Castings Ltd. v. Commissioner of Customs, Vishakhapatnam 2003 (5) SCC 528. The principles laid down by all these decisions are: (1) Although a circular is not binding on a Court or an assessee, it is not open to the Revenue to raise the contention that is contrary to a binding circular by the Board. When a circular remains in operation, the Revenue is bound by it and cannot be allowed to plead that it is not valid nor that it is contrary to the terms of the statute. (2) Despite the decision of this Court, the Department cannot be permitted to take a stand contrary to the instructions issued by the Board. (3) A show cause notice and demand contrary to existing circulars of the Board are ab initio bad. (4) It is not open to the Revenue to advance an argument or file an appeal contrary to the circulars." 25. For all of the aforementioned reasons, the Court finds that the ITAT has correctly set out the legal position while holding that the requirement of prior approval of the superior officer before an order of assessment or reassessment is passed pursuant to a search operation is a mandatory requirement of section 153D of the Act and that such approval is not meant to be given mechanically. The Court also concurs with the finding of the ITAT that in the present cases such approval was granted mechanically without application of mind by the Additional CIT resulting in vitiating the assessment orders themselves. 26. The question of law framed is therefore answered in the affirmative i.e., in favour of the Assessee and against the Department. 27. The appeals are accordingly dismissed, but in the circumstances, with no order as to costs”. 13. Therefore, we note that as per Para 9 of Chapter-3 of Volume-II (Technical) of the Manual of Office Procedure issued by CBDT in February, 2003, assessing officer is required to furnish draft assessment order at least 30 days in advance to higher authority for going through the case and granting approval in search cases, which is admittedly not done in the present case. Thus, it is clearly evident that approval by JCIT u/s 148B of the Act in the case of assessee was granted ,in a mechanical manner; without application of mind, and without perusing the assessment record. The Legal principles enunciated over a period of time in relation to the requirement of obtaining approval u/s 148B are as follows: Page 12 of 32

ITA No. 798/Rjt/2025 (CO No.07/Rjt/2026) [ AY 2019-20 ] ITO v. Sopan Empire (i).Obtaining approval u/s 148B of the Act is not merely an empty formality. (ii).Prescribed authority has to apply his mind prior to granting such approval. (iii).Non-application of mind by approving authority vitiates the approval and renders it a nullity. (iv)Post-facto approval cannot cure a fundamentally jurisdictional defect prior approval is a statutory mandate, not a procedural formality. (v)If such approval is in a mechanical manner, assessment orders are to be quashed.

Page 13 of 32

ITA No. 798/Rjt/2025 (CO No.07/Rjt/2026) [ AY 2019-20 ] ITO v. Sopan Empire 16. In the result, appeal filed by the revenue, is dismissed.

ITA No. 798/Rjt/2025 (CO No.07/Rjt/2026) [ AY 2019-20 ] ITO v. Sopan Empire 14.The Ld. AO has erred in law and on facts of the case in framing the assessment without providing the material relied upon and opportunity of cross-examination resulting in gross violation of principles of natural justice. 15.The Ld. AO has erred in law and on facts of the case in invoking provisions of section 115BBE of the Act. 16.The Ld. AO has passed the assessment order without properly appreciating the facts and he further erred in grossly ignoring various submissions, explanations submitted by the assessee from time to time which and information ought to have been considered before passing the impugned order. The action of the Ld. AO is in clear breach of law and Principles of Natural Justice and therefore deserves to be quashed. 17.The Ld. AO has erred in law and on facts of the case in proposing to charge interest u/s. 234A/B/C/D of the Act. 18.The Ld. AO has erred in law and on facts of the case in initiating penalty proceedings u/s. 271AAC of the Act. 19.The respondent craves leave to add, amend, alter, edit, delete, modify or change all or any of the grounds at the time of or before the hearing of the appeal.

ITA No. 798/Rjt/2025 (CO No.07/Rjt/2026) [ AY 2019-20 ] ITO v. Sopan Empire on facts of the case in obtaining subsequent approval of Ld. PCIT as against statutory requirement of obtaining prior approval of Principal Commissioner under clause (iv) of Explanation 2 to Section 148 of the Act. In these grounds, the manual communications between assessing officer and PCIT with respect to seeking and granting of approval to the satisfaction note as per clause (iv) of Explanation 2 to Section 148 of the Act is bad in law and non-est since the same are contrary to the CBDT Circular No. 19/2019 dated 14.08.2019 and the approval granted by the PCIT under clause (iv) of Explanation 2 to Section 148 of the Act is bad in law.

ITA No. 798/Rjt/2025 (CO No.07/Rjt/2026) [ AY 2019-20 ] ITO v. Sopan Empire representing the Revenue. We find that one key issue arises in summarised and concise ground no.1, for our apt adjudication in the instant lis, which is, whether the Ld.CIT(A) erred in holding that proceedings u/s 148 of the Act, culminating into order u/s 147 of the Act, were valid? and whether the ld CIT(A) has erred in dismissing assessee’s grounds of appeal challenging the action u/s 148 of the Act. Let us, first examine the approval of satisfaction note given by the Principal Commissioner of Income Tax. ( ld.PCIT), which is placed at paper book, page no. 12, of assessee`s paper book wherein approval of satisfaction note, in case of Mukesh M. Shah was given, which is reproduced below:

It is a settled principle of law that correct income is to be assessed in the correct assessment year. However, in the above satisfaction note, there is no “assessment year” is mentioned at all. It means the department does not know for which “assessment year” they are going to assess the assessee. Therefore, the primary document for initiation of reassessment proceeding, does not contain the “assessment year”, which is foundation to assess the income of the assessee, and therefore, we find that since there is no foundation, the superstructure cannot be built on that. Once, the foundation fails, the superstructure also fails, that is, no reassessment proceedings can be initiated against the assessee. In this regard, we placed reliance on the legal maxim “Sublato fundamento cadit opus” (meaning thereby that foundation being removed, structure /work falls). Hence the initial action of the revenue itself is not in consonance with law, then all the subsequent and consequential proceedings would fail through for the reason that illegality strikes at the root of the Page 17 of 32

ITA No. 798/Rjt/2025 (CO No.07/Rjt/2026) [ AY 2019-20 ] ITO v. Sopan Empire order.Therefore, we find that it is a complete non-application of mind, on the part of the revenue authorities to initiate the re-assessment proceedings. It is not clear that for which “assessment year”, the satisfaction note was given”. 36. We have also gone through the annexure of the letter, “Approval of the Specified Authority”, that is, approval given by Principal Commissioner of Income Tax ( Ld.PCIT), vide paper book at page no.13, of the assessee, wherein the approval was given by ld. PCIT and on that approval, the “Assessment Year” is missing. Therefore, when the “assessment year” is not mentioned, then, the primary documents of the Revenue, are defective in the sense that the approval is being granted in mechanical manner. That is, for which assessment year, the proceedings are initiated against the assessee, should be a mandatory requirement, to mention in the notice, which the revenue authorities have failed to do so. Hence, reassessment proceedings needs to be quashed. 37. Now coming to the notice under section 148 of the Income Tax Act 1961, we find that it contains the serious mistake, on the part of the revenue authorities, which is placed at paper book page no. 17 of the assessee`s paper book, and the same is reproduced below:

We have gone through above notice u/s. 148 of the Act and in the above notice, it is stated that the search was initiated in the assessee’s case, however, in fact, no search was initiated in the assessee`s case. The search was initiated u/s. 132 of the Act, in case of other assessees. The above notice also mentioned that search was initiated on 22.10.2021, in case of other assessees, which is also wrongly stated in the notice under section 148 of the Act. The actual date of search is as on 24.08.2021, whereas in the notice it is mentioned as 22.10.2021, which shows, complete non-application of mind by the assessing officer. Hence, it is not a valid notice in the eye of law.Law is well settled that when the statute Page 18 of 32

ITA No. 798/Rjt/2025 (CO No.07/Rjt/2026) [ AY 2019-20 ] ITO v. Sopan Empire requires to do certain thing in certain way, the thing must be done in that way or not at all. Other methods or mode of performance are impliedly and necessarily forbidden. The aforesaid settled legal proposition is based on a legal maxim 'Expressio unius est exclusion alteris', meaning there by that if a statute provides for a thing to be done in a particular manner, then it has to be done in that manner and in no other manner and following of other course is not permissible. Hence, we find that the notice under section 148 of the Act is itself defective and it was issued by the assessing officer without application of mind, therefore, entire reassessment proceedings should be quashed”. 22. On the other hand, on the above technical issue, ld. DR for the revenue relied on the findings of the assessing officer. 23. We have heard, both the parties and noted that it is well settled that where "jurisdictional facts", based on which case has been reopened, are "incorrect", reopening is not justified. 24. Learned Counsel also stated that Clause (iv) of Explanation 2 to section 148 of the Act, requires that assessing officer must take "prier approval" of PCIT/CIT for recording satisfaction. Section148 of the Act also prescribes a similar requirement of prior approval" of specified authority u/s. 151 of the Act.The procedure adopted by revenue authorities while taking approval u/s 151 of the Act is as follows: (a)Assessing officer records proposal/reasons for issuance of notice u/s 148 of the Act. (b)Such proposal/reasons are approved by specified authority u/s 151 of the Act. (c )Only after getting such prior approval, notice u/s 148 is issued. However, in the present case, assessing officer has taken "subsequent approval" as against the requirement of "prior approval" under Clause (iv) of Explanation 2 to section148 of the Act as evident that Satisfaction note was drawn by assessing officer on 20.03.2023, vide paper book page No. 113 to 136. However, approval to satisfaction note was granted by PCIT on 24.03.2023, vide paper book page No. 137 to 140 of the paper book. Since clause (iv) of Explanation 2 to section148 requires Page 19 of 32

ITA No. 798/Rjt/2025 (CO No.07/Rjt/2026) [ AY 2019-20 ] ITO v. Sopan Empire prior approval, the final satisfaction note must be recorded by assessing officer only after getting the approval from PCIT/CIT. The correct course of procedure in such cases ought to be as under: (i).Assessing officer records draft satisfaction note/proposal along with books of account or documents seized or requisitioned under section 132 or section 132A in case of any other person or information contained therein are pertains or pertain to the assessee. (ii)PCIT/CIT grants requisite approval. (iii)Assessing officer records final satisfaction note after getting such prior approval from PCIT/CIT Thus, Ld. Counsel submitted that the very satisfaction note based on which the case was reopened is bad in law rendering the entire reassessment proceedings as null and void. However, Ld. DR for the revenue relied on the findings of the assessing officer. 25. Learned Counsel also submitted that on perusal of such approval, it is clearly evident that the PCIT has mechanically endorsed the view of assessing officer without any independent application of mind. The PCIT has failed to appreciate the following ledgers reproduced in the satisfaction note recorded by assessing officer are not in the name of the assessee: (i)Ledger of "RK Empire" in the books of Divyaraj & Co (ii)Ledger of "Empire MAV118 Project" in the books of RK World. The assessing officer has merely relied upon assumptions and presumptions while arriving at the satisfaction that such ledgers pertain to or information contained therein relates to the assessee which has been affirmed by the PCIT.The assessing officer recorded the satisfaction for two assessment years, vide paper book page No. 133. The approval granted by the ld.PCIT clearly reflecting non-application of mind and also mechanical manner since: Page 20 of 32

ITA No. 798/Rjt/2025 (CO No.07/Rjt/2026) [ AY 2019-20 ] ITO v. Sopan Empire (i)No Assessment Year is mentioned in the Proposal letter of assessing officer (ii)No Assessment Year is mentioned in the approval of satisfaction note. (iii)No Date is mentioned in the approval of satisfaction note. (iv)No Escapement of income is mentioned in the approval of satisfaction note. Reliance is placed by ld. Counsel for the assessee on the decision of jurisdictional ITAT Rajkot in the case of Mukesh Manekchand Sheth v. DCIT/ACIT - ITA No. 545-547 & 581/Rjt/2024. 26. About ground Nos. 7, 8 and 9, the Learned Counsel submitted that the reopening of assessment u/s 147 of the Act was without obtaining a valid sanction u/s 151 of the Act which is bad in law and without jurisdiction. The approval purportedly granted u/s 151 of the Act for reopening the assessment u/s 147 of the Act is bad in law since the same is granted mechanically without any independent application of mind. The reopening of assessment and consequential assessment proceedings conducted by the Ld. AO without disposing of the objections raised by the assessee against reopening are bad in law. The Ld. Counsel submitted that approvals purportedly granted u/s 151 of the Act are unsigned approvals. Section 282A requires two conditions to be fulfilled simultaneously to constitute a valid notice or document: (i)Notice or document shall be signed; and (ii)Notice or document shall be issued in paper form or communicated in electronic form. Thus, unsigned approvals, though issued manually or electronically are not valid in the eyes of law. Therefore, this issue is squarely covered in favour of the assessee by the decision of the recent jurisdictional ITAT-Rajkot in the case of Dhanji Hirani v. ITO (Int. Taxn.) (ITA NO. 131/Rjt/2025) (Rajkot Trib.) The Tribunal held that: “it is vivid that there is no signature of the concerned authority u/s 151 of the Income Tax Act 1961, in the absence of signature by the concerned Authority, the above approval document, cannot be enforced in the eye of law. In order to create a legal document, the Page 21 of 32

ITA No. 798/Rjt/2025 (CO No.07/Rjt/2026) [ AY 2019-20 ] ITO v. Sopan Empire first and primary condition is that it should be signed by the concerned authority. The court noted that section 151 of the Act, mandates prior approval of the "specified authority" before issuing a notice u/s 148 for income escaping assessment if the document granting approval lacks a manual or digital signature, it calls into question the authority's satisfaction. Physical signature is the traditional evidence of approval. In ITBA (Income Tax Business Application), digital approvals (like authenticated login-based approvals) may suffice legally if appropriately recorded. Based on the approval note there is neither physical signature nor digital signature of any Income tax authority Where no authentication or evidence of the approving authority's satisfaction is found (either digitally or physically), the approval may be deemed invalid. Absence of evidence showing application of mind or digital signature led to reassessment quashing, and consequently, the reassessment order framed by the assessing officer, based on the above approval should be quashed”. Reopening based on such unsigned approval is thus bad in law and deserves to be quashed. In this regard, learned DR for the Revenue relied on the findings of the assessing officer. 27. About ground Nos. 10 and 11 of cross objection, Learned Counsel for the assessee submitted that assessment framed by the AO is without any order u/s 144B(8) of the Act transferring jurisdiction from faceless assessing officer to the Ld. AO is bad in law and without jurisdiction. The assessment framed by the AO is without any order u/s 127 of the Act transferring jurisdiction from faceless assessing officer to the Ld. AO is bad in law and without jurisdiction. 28. About ground No. 10 of cross objection, Ld. Counsel submitted that assessment order is framed without jurisdiction and without issuing statutory notice u/s 143(2) of the Act is bad in law. The present case of the assessee is in pursuant to search case and hence, falls within the jurisdiction of Central Circle Charges. As per CBDT's Order F.No.187/3/2020/ITA-1 dt. 13.08.2020 read with CBDT's Order F.No.187/3/2020-ITA-1 dt. 06.09.2021, assessment of central circle charges is kept outside the purview of faceless assessment u/s. 144B of the Act. Thus, it is only the officer of Central Circle Charge which has jurisdiction in the present case. However, in the present case, the assessment was initiated by FAO and even the notice u/s. 143(2) was issued by FAO who never had jurisdiction. Further, assessment was Page 22 of 32

ITA No. 798/Rjt/2025 (CO No.07/Rjt/2026) [ AY 2019-20 ] ITO v. Sopan Empire transferred to ITO, Ward 1(1)(1), Rajkot (not having Central Circle Charge) purportedly u/s. 144B(8) and show cause notice was issued by him despite lacking jurisdiction. Thereafter, case got transferred to DCIT/ACIT, Circle 1(1), Rajkot having Central Circle Charge who passed the assessment order. The entire assessment proceedings up to the issuance of show cause notice was carried out by the officers not having jurisdiction over the assessee. Only the final assessment order is passed by the officer having jurisdiction over the assessee. It is a trite law it is only the officer having jurisdiction over the assessee that can carry out the assessment proceedings. Thus, the assessment framed in the present case based on the proceedings carried out by non-jurisdictional officers and final show cause notice issued by them is bad in law and deserves to be quashed. It is further submitted that since the FAO was never having jurisdiction over the assessee, notice issued by him u/s. 143(2) is non-est.It is only the DCIT/ACIT, Circle 1(1), Rajkot who had the jurisdiction over the assessee and hence, only he can proceed with the case by issuing a notice u/s 143(2) of the Act. However, no notice u/s. 143(2) was issued by the DCIT/ACIT, Circle 1(1), Rajkot. It is a settled law that assessment framed without issuing statutory notice u/s. 143(2) is not sustainable in the eyes of law. Reliance is placed on the judgment of Hon’ble Supreme Court in the case of ACIT v. Hotel Blue Moon - [2010] 321 ITR 362 (SC). 29. On merit, ld. Counsel submitted that addition was made based of excel sheet and ledger account which contains entries pertaining to other person. Therefore, assessee submitted the following before lower authorities: (i) Ledger entries not pertaining to assessee  Ledger 'RK Empire' in books of Divyaraj & Co. and 'Empire MAV.118 Project' in books of RK World are not in assessee's name.  Assessing officer has assumed these ledgers pertain to M/s Sopan Empire without establishing any factual nexus. Page 23 of 32

ITA No. 798/Rjt/2025 (CO No.07/Rjt/2026) [ AY 2019-20 ] ITO v. Sopan Empire  The entries in the Miracle software reflect transactions of third parties not the assessee.  Entries dated 2008-2009 in the ledger are not relevant to Assessment Year 2019-20. (ii) The ledger also contains entries for third parties:  Ashish Tank, Accurate these cannot be Buildcon, Rajkot Municipal Corporation (RMC), Jitubhai attributed to the assessee.  Ledger entries are vague, non-speaking and largely without narration.  The assessing officer treated only the debit/payment entries as alleged on-money, while completely ignoring the credit/receipt entries appearing in the same ledgers. This pick-and-choose approach shows selective and biased appreciation of the same material and clear non- application of mind.  Incomplete Statements of Girish Vanjani and Sarvanand Sonwani do not implicate assessee.  The assessing officer's theory that bank entries in the seized ledger match the sale deed is factually flawed. The dates and amounts do not match, and some entries are sought to be matched only by assumption. Ledger-2 "Empire MAV.118 Project" contains no bank entries at all.  Decoding theory of backdating by 10 years/multiplying by 100 is unreliable.  No corroborative material, no cash trail, no confirmation from buyer, non-identification of payer of On-money.  Miracle records are not assessee-specific and are internally inconsistent.  Two different ledgers for same alleged transaction destroy reliability.

Page 24 of 32

ITA No. 798/Rjt/2025 (CO No.07/Rjt/2026) [ AY 2019-20 ] ITO v. Sopan Empire  Ledger remains unsettled with outstanding debit balances inherently illogical.  Unsigned, unauthenticated and dumb documents cannot sustain addition. 30. On merit, ld.DR for the revenue relied on the findings of the assessing officer. 31. We have heard, both the parties on merit and noted that assessee’s case is covered by the Jurisdictional ITAT Rajkot in the case of M/s. RC Buildcon, in ITA Nos. 941/RJT/2024, wherein it was held as follows: “18. We note that the assessee has contended that the addition made by the assessing officer is just based on the excel file data found and seized from the third party. The addition cannot be made without rejecting the audited books of account u/s 145(3) of the Act. We note that no tangible documents, loose papers found during the course of search. So far, the excel sheet is concerned, there is no signature of the assessee as well as authorized partner of M/s Vivan Infraspace LLP. The Assessing Officer one side has observed that perusal of the excel sheet revealed that the assessee- company has not reported entire receipts, as appearing from the seized excel sheet. Matching of entries on the seized excel -sheet found from the third- party with those on the accounting ledger of the assessee and of M/s Titanium Buildcon LLP (developer of the project The City Centre) has no any nexus in the case since the assessee has worked with company, M/s Titanium Buildcon LLP and has no relevance with any document seized in the form of data/transactions recorded in the excel file from third-party. In absence of any instance of transactions being pointed out by the assessing officer, there is nothing for rebuttal by the person receiving such notice from the assessing officer. A person can offer rebuttal with evidence only where the department provides the details of the transactions which they consider to have led to cash receipt by the assessee. Merely comparing the excel sheet found from the third- party with the accounts of assessee- company, will not be an instance to prove that the assessee- company has received cash from the third- party. The well settled legal position is that a non- speaking document without any corroborative material, evidence on record and finding that such document has materialized into transactions giving rise to income of the assessee which had not been disclosed in regular books of account by such assessee, has to disregarded for the purposes of assessments to be framed pursuant to search and seizure action. From the search and seizure perspective, such non speaking seized documents are referred to as "Dump Documents". 19. Therefore, we find that no arbitrary addition to the income of the assessee can be made by the Assessing Officer based on the dump documents, loose papers Page 25 of 32

ITA No. 798/Rjt/2025 (CO No.07/Rjt/2026) [ AY 2019-20 ] ITO v. Sopan Empire containing scribbling, rough/vague notings in the absence of any corroborative material, evidence recorded and finding that such dump documents had materialized into transactions giving rise to income of the assessee, which had not been disclosed in regular books of accounts by the assessee. For that reliance is placed on the judgement of the Hon'ble Supreme Court in the case of K.P. Varghese vs. ITO [1981] 7 Taxman 13/131 ITR 597 held that the fictional receipt cannot be deemed to be receipt in the absence of any cogent material to support the factum of actual receipt. Moreover, the Hon'ble High Court of Delhi in case of CIT vs. D.K. Gupta [2008] 174 Taxman 476 upheld the order of the Tribunal wherein it was held that Ad-hoc/Dumb Documents without any corroborative evidence and finding, that the alleged documents nave materialized into transactions cannot be deemed to be the income of the assessee. The Hon'ble Calcutta Bench of ITAT in case of T.S. Venkatesan v. Asstt. CIT [2000] 74 ITD 298 held that in the absence of corroborative evidence, addition of undisclosed income could not be made simply on the basis of entries on loose papers recovered from the residence of a third- party and certain general statements of said party. Therefore, the well settled legal position is that a non- speaking document referred to as a "Dump Document" without any corroborative material, evidence on record, has to disregarded for the purposes of assessments to be framed u/s 153A and 153C of the Act. The aforementioned legal position also gathers support from the Judgement of the Hon'ble Supreme Court in case of CBI v. V.C. Shukla 1998 taxmann.com 2155 popularly known as Jain Hawala Case wherein it was held that any presumption of transaction on some vague, tenuous and dubious entries in a sheet of paper is not rational and hence legal unless there is corroboration by corresponding entry in regular accounts of both the parties to the transaction. In this case it was held that entries in Jain Notebooks held on facts admissible under section 34, but file containing loose sheets of papers are not "book" and hence entries therein not admissible under section 34 of the evidence Act. Further it was also held in this case that entries in books of account shall not alone be sufficient evidence to charge any person with liability.The above view further gathers reinforcement from the judgment of the Hon'ble Supreme Court in case of Common Cause v. Union of India [2017] 77 taxmann.com 245/245 Taxman 214/394 ITR 220 popularly known Sahara dairies and Aditya Birla diaries case. In this case, the Hon'ble Supreme Court, following the judgment rendered in case of V.C. Shukla (supra), laid down the following principles: (i) Entries in loose papers/sheets are irrelevant and not admissible under section 34 of the Evidence Act. It is only where the entries are in the books of account regularly kept, depending on the nature of occupation, that those are admissible; (ii) As to the value of entries in the books of account, such statement shall not alone be sufficient evidence to charge any person with liability, even if they are relevant and admissible, and that they are only corroborative evidence. Even then Page 26 of 32

ITA No. 798/Rjt/2025 (CO No.07/Rjt/2026) [ AY 2019-20 ] ITO v. Sopan Empire independent evidence is necessary as to trustworthiness of those entries which is a requirement to fasten the liability. (iii) The meaning of account book would be spiral notebook/ped but not loose sheets. (iv) Entries in books of account are not by themselves sufficient to charge any person with liability, the reason being that a man cannot be allowed to make evidence for himself by what he chooses to write in his own books behind the back of the parties. There must be independent evidence of the transaction to which the entries relate and in absence of such evidence no relief can be given to the party who relies upon such entries to support his claim against another; (v) Even if books of account are regularly kept in the ordinary course of business, the entries therein shall not alone be sufficient evidence to charge any person with liability. It is not enough merely to prove that the books have been regularly kept in the course of business and the entries therein are correct. It is further incumbent upon the person relying upon those entries to prove that they were in accordance with facts; (vi) The Court has to be on guard while ordering investigation against any important Constitutional functionary, officers or any person in the absence of some cogent legally cognizable material. When the material on the basis of which investigation is sought is itself irrelevant to constitute evidence it is not admissible in evidence. 20. We note that apart from excel sheet, no evidence has been found to suggest that the assessee had actually received the said amount. In the absence of any documentary evidence to suggest the same, it could not be presumed that the amounts reflected in the excel sheet were the income of the assessee, received from RK Group. The Assessing Officer has not brought on record any evidence to suggest that RK Group has admitted that the amounts were paid to the assessee- company. Hence, simply rough noting on the excel file, which is not signed by any party, does not mean that the addition could be made in the hands of the assessee- company. Since no evidence was found relating to the existence of any transaction between the assessee- company and R K Group and in the absence of any corroborative evidence to suggest that the assessee- company had actually received the said amount, no addition could be made merely on the basis of noting excel file found during the search proceedings from third party. 21. We find that no tangible documents, any loose papers found during the courses of search, which contains the signature of the assessee as well as authorized partner of M/s Titanium Buildcon LLP. In Pankaj Dahyabhai Patel (HUF) Vs. ACIT (1999) 63 TT) (Ahm) 790-where papers were not seized from house of the assessee nor was in his handwriting, of the assessee, the inference of on-money receipt based on such paper was not justified. Additions based on loose papers without Page 27 of 32

ITA No. 798/Rjt/2025 (CO No.07/Rjt/2026) [ AY 2019-20 ] ITO v. Sopan Empire corroborative evidence, it was held, by Tribunal, to be not sustainable. Neither evidence to link the seized documents found in the premises of third party, that is, R K Group during the course of search, then the presumption u/s 132(4A) of the Act not applicable. The action of the Assessing Officer in making addition based on the searched person`s excel -sheet data, recording of third party, that the same belongs to the assessee, is incorrect, as the same would be clearly impermissible, as the seized data, admittedly, had no nexus with the assessee and there is no signature of assessee or third-party, on such excel sheet. In the case of Addl. CIT v. Miss Lata Mangeshkar [1974] 97 ITR 696 (Bom), the addition was made in the hands of the assessee on the basis of the entries in the books of third persons. Hon'ble Bombay High Court held that such addition could not be made only on the basis of the nothings in the books of third persons. The entire addition revolving to the excel sheet found and seized from the third- party which is "dump documents" which has no legality in the eyes of the law and the addition exclusively based on such documents needs to be deleted. 22. We note that assessee’s issue under consideration is also covered by the judgement of the Hon’ble High Court of Gujarat in the case of PCIT vs. Kaushik Nanubhai Majithia R/Tax Appeal No. 20 of 2024 order dated 06.03.2024, while passing the order the Hon’ble Gujarat High Court has made the following observations: “1. Having noted the findings of the facts returned by the Commissioner of Income Tax (Appeals) ('CITA', in brief) and the Income Tax Appellate Tribunal ('ITAT', herein after), we may record that, essentially, the proceedings under Section 153C of the Income Tax Act, 1961 (in short, 'IT Act of 1961') were initiated against the Respondent- assessee on the basis of an excel sheet found from the computer of a person, associated with the Company, namely Navratna Organizers and Developers Private Limited (in short as "the Developer'), in the premises of whom the search was conducted. 2. The excel sheet, according to the learned Counsel for the Revenue, contained the details of payment made by the assessee to the developer, with respect to which tax had been paid by the developer before the Settlement Commissioner. The findings returned by the CITA and ITAT on the issue is sought to be assailed on the ground that the payment of tax by the developer, in whose premises search was conducted, before the Settlement Commissioner, with respect to the amount entered in the excel sheet found from the possession of the assistant working with the developer, is sufficient proof of the transaction between the assessee and the developer. 3. We find Inherent fallacy in this submission, inasmuch as, there is no basis for conducting proceedings against the assessee merely for the fact that the developer had paid tax on the amount shown in the excel-sheet There is no adjudication with regard to the payment, which was shown in the excel-sheet to the effect that the same was actually paid by the assessee to the developer. Even otherwise, the concurrent findings written by the CITA and ITAT are that the document found from the premises of the third party namely excel-sheet, which is the basis the proceedings was without any signature and there is no corroborative material to substantia the said document. The nature of the document has not been explained by the Assessing Officer while proceeding against the assessee. The statements of the persons recorded during search with reference to the alleged, seized Page 28 of 32

ITA No. 798/Rjt/2025 (CO No.07/Rjt/2026) [ AY 2019-20 ] ITO v. Sopan Empire material, was not provided to the assessee and hence, the entire proceedings under Section 153C of the IT Act of 1961 stood vitiated. 4. Learned Counsel for the petitioner could not successfully demolish the facts, which ai recorded concurrently by the CITA and ITAT. 5. No question of law much less any substantial question of law arises to entertain this appeal. The same is accordingly, dismissed.” 23. The issue is also covered by the judgement of the Co-ordinate Bench of ITAT Rajkot, in the case of Sidique Ibrahim Allana, in ITA No.73/RJT/2025, wherein it was held as follows: “Analysis and Conclusion: 18. We have heard both the parties and carefully gone through the submission put forth on behalf of the assessee along with the documents furnished and the case laws relied upon, and perused the fact of the case including the findings of the ld CIT(A) and other materials brought on record. We note that assessing officer initiated the reassessment proceedings against the assessee, with the approval of Principal Commissioner that the books of accounts or documents, seized or requisitioned under section 132 of the Act, in case of Shri Mansur Mehta Group, pertains or relates to the assessee under consideration. Therefore, we note that there was no search on the assessee. We find that the figure mentioned in the WhatsApp chat at 550/-, has been interpreted by the Assessing Officer by adding five zeros, as if, it is at Rs. 5,50,00,000/- without any basis. We find that what is the basis, to add five more zeros, has not been explained by the Assessing Officer in his assessment order. As per learned DR for the revenue, the assessing officer added five zero, after the figure at 550/-, by applying common sense, is not acceptable. The addition made by the Assessing Officer (AO), is based purely on his own assumption, such as arbitrarily adding five zeroes to Rs. 550/-, found in a WhatsApp chat, is not legally sustainable, in the eyes of law, as, it is not corroborated by any further evidence. Such five zeroes were not even corroborated by a clear statement taken during the search proceedings. Neither the assessee stated nor the third-party stated, in his statement that five zeroes to Rs. 550/- may be added. 19. We note that the addition made by the assessing officer, must be based on concrete evidence and not on mere suspicion, conjecture, or assumptions. No addition can be made on the basis of assumptions and presumptions without corroborative evidence. A WhatsApp chat showing a reference to Rs. 550/- alone does not prove that the assessee, made investment in India of Rs. 550 x 100,000 (that is, Rs.5,50,00,000). The evidentiary value of a WhatsApp message must be corroborated with supporting evidence such as bank statements, ledger entries, cash flow statement, or statements from the sender/receiver etc. Any arbitrary enhancement in the figure of WhatsApp chat, by the assessing officer (like adding 5 zeroes) without giving the assessee a chance to rebut would violate the principles of natural justice, also. If the assessing officer wants to treat the figure at 550/- equivalent to Rs.5,50,00,000/-, by his own assumption and presumption, then in that circumstances, the onus is on the assessing officer to prove that the amount of Rs.5,50,00,000/-, is the investment made by the assessee in any movable and immovable property, in India, which he has failed to prove with corroborative evidence. That is, the assessing officer must prove that the Rs. 550 refers to undisclosed investment of assessee, and if claiming it is Rs. 5,50,00,000/-, then assessing officer must produce valid evidence before the assessee, for his rebuttal, which the assessing officer has failed to do so. Thus, addition of 5 zeroes to Rs. 550 is based purely on assumption by the Assessing Officer, which is unjustified, and therefore, needs to be deleted. Page 29 of 32

ITA No. 798/Rjt/2025 (CO No.07/Rjt/2026) [ AY 2019-20 ] ITO v. Sopan Empire 20. We also note that ld. DRP mentioned in its order that figure of 550/-, is apparently at Rs.550 lakhs, which is again without any base. The learned DRP did not mention that how the figure of 550/- is apparently at Rs.550 lakhs. By following arbitrary method, the said figure, could be apparently be presumed at Rs.5500 lakhs or Rs.55,000/- lakhs also. Thus, the findings of the Ld DRP, is also based on surmise and conjuncture, so far adding five zeroes are concerned. 21. We also note that the provision of Section 132(4A) and Section 292C of the Act creates deeming fiction on the assessee subjected to search or survey, wherein it may be presumed that any such document found during the course of search / survey from the possession or control of person searched / surveyed belongs to such person and contents of such documents are true. However, in the assessee`s case under consideration, it is an undisputed fact that the impugned loose papers- WhatsApp chat, was not found from the possession of assessee, but the same was found from the possession of third party. Therefore, noting made in such loose papers do not present a preponderance of probabilities, so as to support the allegation of unexplained investment. It is well settled position of law that a non-speaking document referred to as a “Dump Document” without any corroborative material or evidence on record has to disregarded for the purposes of assessments to be framed under the Income Tax Act. This view gathers support from the landmark judgement of the Hon’ble Supreme Court in case of CBI v. V. C. Shukla 1998 taxmann.com 2155 (SC) popularly, known as Jain Hawala Case, wherein it was held that any presumption of transaction on some vague, tenuous and dubious entries in a sheet of paper, is not rational and hence legal, unless there is corroboration by corresponding entry in regular accounts of both the parties to the transaction. In this case it was held that entries in Jain Notebooks held on facts admissible under Section 34 of Evidence Act, but file containing loose sheets of papers are not “book” and hence entries therein not admissible under Section 34 of Evidence Act. Further it was also held in this case that entries in books of account shall not alone be sufficient evidence to charge any person with liability. Entries even if relevant are only corroborative evidence. Independent evidence as to trustworthiness of those entries is necessary to fasten the liability. In view of these facts, it was held by the Hon’ble Supreme Court that entries made in the Jain Hawala diaries are under Section 34 of the Evidence Act, but truthfulness thereof not proved by any independent evidence. It was also held in this case that “books” ordinarily mean a collection of sheets of paper or other material, blank, written, printed, fastened or bound together so as to form a material whole. Loose sheets or scraps of paper cannot be termed as “book” for they can be easily detached and replaced. The Supreme Court further went on to state that even correct and authentic entries in books of account cannot without independent evidence of their trustworthiness fix a liability upon a person. 22.The above view further gathers reinforcement from another recent and landmark judgement of the Hon’ble Supreme Court in case of Common Cause v. UOI [2017] 77 taxmann.com 245 popularly known Sahara dairies and Aditya Birla diaries case. In view of the above rulings laid down by Hon’ble Apex Court, we find that the figure 550/- reflected in the WhatsApp chat, is without any head or tail and such figure does not consist complete breakup of transactions and hence, no adverse inference could have been drawn solely on the basis of such WhatsApp chat. We also place reliance on the decision of Hon’ble Supreme Court in the case of K. P. Varghese v. ITO [1981] 131 ITR 597 (SC), wherein, it is held that the fictional receipt cannot be deemed to be a receipt in the absence of any cogent material to support the factum of actual receipt. 23. Our view is further fortified by the judgement of the Hon’ble High Court of Delhi in case of CIT v. D.K. Gupta [2008] 174 Taxman 476 (Delhi), wherein, Hon’ble High Court had upheld the order of the lower court (ITAT), wherein, it was held that Ad-Hoc / Dumb Page 30 of 32

ITA No. 798/Rjt/2025 (CO No.07/Rjt/2026) [ AY 2019-20 ] ITO v. Sopan Empire Documents without any corroborative evidence/finding that the alleged documents have materialized into transactions cannot be deemed to be the income of the assessee. We also find that Co-ordinate Bench of ITAT Mumbai, in case of Amarjit Singh Bakshi (HUF) v. ACIT [2003] 86 ITD 13 (Delhi) (TM) held that any noting in the loose sheet is no evidence by itself. An entry in the books of account maintained in the regular course of business is relevant for purposes of considering the nature and impact of a transaction, but notings on slips of paper or loose sheets of paper cannot fall in this category. Thus, we find that in assessee`s case under consideration, the basis for addition is only WhatsApp chat. The WhatsApp chats are unsigned documents. The Assessing Officer has not established nexus between the WhatsApp chat with actual investment in India by the assessee, if any. Such WhatsApp chat, seized during the course of search, is a dumb document having no evidentiary value, hence no addition can be made, in the hands of the assessee, in the absence of corroborative material. In the instant case, undoubtedly no statement from the parties whose names found in the WhatsApp chat, has been brought to the notice and as such entire addition in the hands of the assessee, on the basis of uncorroborated, WhatsApp chat, in the loose paper form, is not possible. 24. Besides, the assessee under consideration, is a non-resident, therefore no any income has accrued or arisen in India, by way of WhatsApp chat, which contains figure at 550/- .The assessee stated that he lived in the UAE, since 1995, and as per section 5(2) of the Income Tax Act, 1961, an income of a non-resident, is not taxable, if such income, is not received or accrued or arised in India. Since, assessee had no income that is received or accrued or arose in India, hence he is not liable for payment of any taxes in India. Besides, no any investment was made by the assessee, in India, which is mentioned in the WhatsApp chat at Rs.550/-. At the cost of repetition, the provisions of section 5(2) of the Act, is reproduced below: “(2) Subject to the provisions of this Act, the total income of any previous year of a person, who is a non-resident, includes all income from whatever source derived which- (a) is received or is deemed to be received in India in such year by or on behalf of such person or (b) accrues or arises or is deemed to accrue or arise to him in India during such year.” The assessee submitted, a copy of his passport, before the assessing officer, to demonstrate that he was non-resident in India, therefore, we note that since, the assessee is a non-resident in India, therefore, he is not liable to tax in India, on the basis of WhatsApp chat, which contains the figure at 550/-, as the said amount has neither accrued in India nor arisen in India. In addition to this, figure in WhatsApp chat, is an arbitrary figure, without any corroborative evidence, therefore, it is not a real income of the assessee. Under the Income Tax Act, only real income is to be taxed, not the imaginary figure or arbitrary figure, which does not have any support with corroborative evidence. Therefore, in absence of any external evidence, addition cannot be resorted to only on the basis of WhatsApp chat. The department had not brought on record any evidence to prove conclusively that the WhatsApp chat contained details of secreted profits which were chargeable to tax in India. Hence, we are not inclined to accept the contention of the Assessing Officer/ DRP in any manner and hence the addition so made is deleted. Hence ground No.3 raised by the assessee, on merit, is allowed.” 24. Based on these facts and circumstances, we delete the addition made by the assessing officer and dismiss the appeal of the revenue and allow the appeals of the different assessees, based on same facts and circumstances”. Page 31 of 32

ITA No. 798/Rjt/2025 (CO No.07/Rjt/2026) [ AY 2019-20 ] ITO v. Sopan Empire 32. From the above decision of Jurisdictional Tribunal it is vivid that the entire addition revolving to the excel sheet found and seized from the third- party which is "dump documents" which is unsigned, which has no legality in the eyes of the law and the addition exclusively based on such documents needs to be deleted. The Hon’ble Jurisdictional High Court of Gujarat in the case of PCIT Vs. Kaushik Nanubhai Majithia R/Tax Appeal No. 20 of 2024 order dated 06.03.2024 ( supra), held the same view. Therefore, respectfully following the binding precedent in the case of M/s. RC Buildcon (supra), we allow the cross objection raised by the assessee, on merit.

Order is pronounced in the open Court on 06/08/2026.

Sd/- Sd/- [ Shri Sonjoy Sarma ] [ Dr. Arjun Lal Saini ] �याियक सद�य/Judicial Member लेखा सद�य/Accountant Member //True Copy// िदनांक/Date: 06/08/2026 राजकोट/Rajkot Copy of the order forwarded to :  The assessee  The Respondent  CIT The CIT(A) By order   DR, ITAT, RAJKOT  Guard File Private Secretary ITAT, Rajkot Page 32 of 32