NIRO CERAMIC INDIA PRIVATE LIMITED ,MUMBAI vs. DCIT CIRCLE 2(3)(1), MUMBAI

IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH MUMBAI BEFORE SHRI SAKTIJIT DEY, VICE PRESIDENT & SHRI MAKARAND VASANT MAHADEOKAR, ACCOUNTANT MEMBER ITA No. 9315/Mum/2025 (Assessment Year: 2022-23) Niro Ceramic India Deputy Commissioner Private Limited Of Income Tax Circle Vs. 2(3)(1) Survey No. 240/P, Village, Dhuva Taluka 552, 5th Floor, Aayakar Wankaner, District Bhavan, M. K. Road, Morbi, Khijadia BO Mumbai – 400 020 Khijadiya, Rajkot, Gujarat – 363 621 PAN/GIR No. AAECN6757G (Applicant) (Respondent) Assessee by Shri Devendra Jain, Ld. AR Revenue by Shree Kumar C., Ld. DR Date of Hearing 24.06.2026 Date of Pronouncement 29.07.2026 आदेश / ORDER PER MAKARAND VASANT MAHADEOKAR, AM: This appeal by the assessee is directed against the order dated 30.10.2025 passed by the learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi[hereinafter referred to as "the CIT(A)"], under section 250 of the Income Tax Act, 1961 [hereinafter referred to as "the Act"], for the assessment

2 ITA No. 9315/Mum/2025 Niro Ceramic India Private Limited year 2022-23. The impugned appellate order arises from the assessment order dated 28.03.2025 passed by the Assessing Officer under section 147 of the Act. 2. The facts, in brief, are that the assessee is a company engaged in the business of trading in tiles. It procures tiles from the local market in India and exports the same to various countries. The assessee filed its original return of income for the assessment year under consideration on 11.10.2022 declaring total income of Rs. Nil. The return was processed under section 143(1) of the Act and the returned income was accepted. Subsequently, in response to the notice issued under section 148 of the Act, the assessee filed its return of income on 19.04.2024, again declaring total income of Rs. Nil. 3. The reassessment proceedings were initiated on the basis of information received from the Investigation Wing of the Income Tax Department pursuant to a search and seizure operation conducted in the case of the Qutone Group of Companies. During the course of the search, parallel books of account allegedly maintained by the group in respect of M/s Qutone Ceramics Private Limited were found. The Assessing Officer recorded that Mr. Sunil S. Manglunia, stated to be a key person of the group, had admitted that the transactions recorded in such parallel books were not entered in the regular books of account and that most of the transactions were carried out in cash. 4. The Assessing Officer further recorded that the Tally data recovered during the search contained a ledger in the name of

3 ITA No. 9315/Mum/2025 Niro Ceramic India Private Limited “Nero Ceramic”, bearing GST No. 24AAECN6757G1ZB. The said ledger contained an entry dated 30.06.2021 with the narration “Cash Granite”, showing a debit amount of Rs. 5,00,000/-. The Assessing Officer treated the ledger as pertaining to the assessee. 5. The Assessing Officer also relied upon certain cash registers found during the search and the statement of Mr. Bhuwan Vikram, who was stated to have maintained those registers. According to the Assessing Officer, Mr. Bhuwan Vikram had admitted that the cash registers were maintained in coded form by omitting one zero from the unit’s place. The Assessing Officer, therefore, held that the amount of Rs. 5,00,000/- appearing in the seized Tally data was required to be read as Rs. 50,00,000/-. On this basis, he inferred that the assessee had entered into an unaccounted cash transaction of Rs. 50,00,000/- with M/s Qutone Ceramics Private Limited. 6. Notice under section 142(1) of the Act was issued to the assessee calling for the details of its transactions with the entities belonging to the Qutone Group. In response, the assessee submitted that it had purchased tiles from M/s Qutone Granito Private Limited and denied having made or received any cash payment. The assessee also requested the Assessing Officer to furnish copies of the relevant seized material and statements of Mr. Sunil S. Manglunia and Mr. Bhuwan Vikram and sought an opportunity to cross-examine them. 7. The Assessing Officer furnished to the assessee a copy of the seized ledger titled “Nero Ceramic” and the relevant portions of

4 ITA No. 9315/Mum/2025 Niro Ceramic India Private Limited the statements of the aforesaid persons along with the show- cause notice dated 05.03.2025. In reply dated 10.03.2025, the assessee contended that nowhere in the statements had the concerned persons confirmed that M/s Qutone Ceramics Private Limited had made a payment of Rs. 50,00,000/- to the assessee. It was further submitted that the purchases were genuine and the payments were made through banking channels after deduction of tax at source under section 194Q of the Act. 8. The Assessing Officer, however, rejected the explanation of the assessee. He held that the seized Tally data, the coded cash registers and the statements recorded during the search constituted sufficient evidence to establish that the assessee had entered into an unaccounted transaction. He further held that, after the material had been supplied to the assessee, the burden was upon the assessee to rebut the same, which, according to him, the assessee had failed to discharge. The Assessing Officer accordingly treated Rs. 50,00,000/- as unexplained money in the hands of the assessee and added the same under section 69A of the Act. Penalty proceedings under section 271AAC(1) of the Act were also initiated separately.The Assessing Officer thus completed the assessment under section 147 of the Act vide order dated 28.03.2025, determining the total income of the assessee at Rs. 50,00,000/-. 9. Aggrieved, the assessee preferred an appeal before the CIT(A). The assessee challenged the validity of the reassessment proceedings as well as the addition made under section 69A of

5 ITA No. 9315/Mum/2025 Niro Ceramic India Private Limited the Act. It contended, inter alia, that the reassessment had been initiated merely on the basis of information received from the Investigation Wing without independent application of mind, that the addition was based entirely upon third-party statements and coded entries found from the premises of the Qutone Group, and that no opportunity to cross-examine the persons whose statements were relied upon had been granted. The assessee also submitted that no money had been found in its possession and that its transactions with the concerned party were duly routed through banking channels. 10. The CIT(A), however, upheld the validity of the reassessment. He held that the information received from the Investigation Wing and the material found during the search in the case of the Qutone Group constituted tangible material directly linking the alleged unexplained cash transaction with the assessee. He further observed that the Assessing Officer had obtained the requisite approval, issued the statutory notice and afforded an opportunity of hearing to the assessee. The CIT(A), therefore, held that the reopening was valid and within jurisdiction. 11. On the merits of the addition, the CIT(A) observed that the seized Tally accounts contained coded entries relating to the assessee and that such entries were supported by the statements recorded during the search. He held that the seized books containing coded entries and the statements of the persons involved constituted a strong evidentiary basis. According to the

6 ITA No. 9315/Mum/2025 Niro Ceramic India Private Limited CIT(A), the assessee had failed to produce cogent evidence disproving the ownership or origin of the cash reflected in the seized records. He further held that the routing of certain transactions through banking channels did not negate the existence of undisclosed cash transactions. The addition of Rs. 50,00,000/- under section 69A of the Act was accordingly sustained.

7 ITA No. 9315/Mum/2025 Niro Ceramic India Private Limited under Explanation 2(iv) to section 148 of the Act, thereby rendering the reassessment proceedings void ab initio. 4. In the facts and circumstances of the case and in law, the Learned NFAC, CIT (Appeals) has erred in confirming the action of the Learned Assessing Officer in issuing notice under section 148 of the Act merely on surmises and conjectures without being in possession of any information suggesting escapement of income. 5. In the facts and circumstances of the case and in law, the Learned NFAC erred in upholding the reassessment proceedings initiated on the basis of a mechanical and non-speaking approval granted under section 151 of the Act, without independent application of mind, rendering the reassessment void ab initio. 6. In the facts and circumstances of the case and in law, the Learned NFAC, CIT (Appeals) has erred in upholding the reassessment and the consequent addition, without granting opportunity of cross- examination of the witnesses relied upon by the Assessing Officer, thereby violating the principles of natural justice. 7. In the facts and circumstances of the case and in law, the Learned NFAC, CIT (Appeals) has erred in sustaining the addition of Rs. 50,00,000/- under section 69A of the Act as unexplained money. 8. The appellant craves leave to add, alter, delete or modify all or any of the above grounds of appeal. All the above grounds are without prejudice to each other. 14. During the course of hearing, the learned Authorised Representative (AR) submitted that Ground No. 1 was not pressed. Accordingly, Ground No. 1 is dismissed as not pressed.

8 ITA No. 9315/Mum/2025 Niro Ceramic India Private Limited which specific condition was applicable to the case of the assessee. 16. Elaborating the contention, the learned AR submitted that the notice simultaneously stated that "a search was initiated under section 132 of the Act in your case or in the case of the person in respect of which you are assessable under the Act." According to him, these are two mutually exclusive jurisdictional situations. The notice, however, failed to specify whether the search had been conducted in the case of the assessee itself or in the case of another person to whom the assessee was allegedly connected. 17. The learned Authorised Representative further submitted that the notice also employed the expressions "books of accounts or documents... pertain to, or any information contained therein, relate to you", without specifying whether the Department's case was that the seized books or documents pertained to the assessee or whether merely the information contained therein related to the assessee. According to him, these expressions operate in different statutory fields and carry distinct legal consequences. Instead of recording a definite satisfaction on the relevant jurisdictional fact, the Assessing Officer merely reproduced all possible statutory expressions in a standard format. 18. The learned AR further invited our attention to the satisfaction note placed at pages 46 and 47 of the paper book, which formed the basis for initiation of proceedings under section

9 ITA No. 9315/Mum/2025 Niro Ceramic India Private Limited 148 of the Act. Referring to paragraph 3 of the satisfaction note, he submitted that the Assessing Officer had merely recorded that, on verification of the seized material, it was noticed that the assessee had carried out "unaccounted cash transactions" with M/s Qutone Ceramics Private Limited. The tabular statement incorporated therein mentioned the ledger name as "NERO CERAMIC", the proposed addition in the name of Niro Ceramics, the assessment year, the amount of Rs. 5,00,000/- and described the nature of addition merely as "Cash Transactions". 19. The learned AR submitted that neither the satisfaction note nor the table contained therein disclosed the exact nature or character of the alleged transaction. According to him, there was no finding whether the alleged transaction represented unexplained money, unexplained expenditure, unexplained investment, cash receipt, cash payment or any other specific transaction contemplated under the provisions of the Act. The expression "Cash Transactions" employed in the satisfaction note was vague and generic and did not disclose the precise allegation against the assessee. 20. Inviting our attention to paragraph 8 of the satisfaction note, the learned Authorised Representative submitted that the Assessing Officer had merely recorded that the assessee had carried out unaccounted cash transactions of Rs. 5,00,000/- with M/s Qutone Ceramics Private Limited. The satisfaction note did not specify whether the alleged amount represented cash received by the assessee, cash paid by the assessee, unexplained money

10 ITA No. 9315/Mum/2025 Niro Ceramic India Private Limited found in its possession or any other taxable transaction. It also did not identify the precise statutory provision under which the alleged escapement was proposed to be assessed. According to the learned AR, the repeated use of the generic expression “cash transactions” showed that the Assessing Officer had not formed any definite opinion regarding the nature and character of the alleged transaction. 21. He further submitted that the notice issued under section 148 of the Act was itself an omnibus notice containing alternative and mutually inconsistent expressions, without specifying the exact jurisdictional condition applicable to the assessee. The notice referred to a search initiated in the case of the assessee “or” in the case of a person in respect of whom the assessee was assessable and further stated that the seized books or documents “pertain to” or the information contained therein “relate to” the assessee. Thus, both the satisfaction note and the notice merely reproduced the statutory language in a standard format without correlating it with the specific facts of the assessee’s case. 22. On this basis, the learned AR contended that the satisfaction recorded by the Assessing Officer was vague and mechanical and that the approval granted by the specified authority was equally mechanical. According to him, had the approving authority independently examined the material and applied its mind, it would have noticed that neither the satisfaction note nor the notice disclosed whether the alleged transaction was a receipt or payment, the nature of the income

11 ITA No. 9315/Mum/2025 Niro Ceramic India Private Limited allegedly escaping assessment, or the precise jurisdictional clause invoked. The approval granted despite these patent inconsistencies demonstrated that the sanctioning authority had merely endorsed the proposal without recording an informed and independent satisfaction. It was, therefore, submitted that the notice was a mechanical reproduction of a pro forma and the sanction accorded thereto was a routine and non-speaking approval. The Assessing Officer had failed to disclose the exact jurisdictional foundation for assuming jurisdiction under section 148 of the Act, while the specified authority had failed to examine and rectify the inherent vagueness and contradictions in the proposal. 23. In support of the aforesaid contentions, the learned AR placed reliance upon the decision of the Hon’ble jurisdictional Bombay High Court in Commissioner of Income-tax v. Ramsukh Motilal [1955] 27 ITR 54 (Bom.). He submitted that the Hon’ble High Court had held that issuance of a notice in accordance with the statutory requirements is a condition precedent to the assumption of jurisdiction for reassessment. Where the notice is not issued in the manner contemplated by law, it is no notice in the eye of law, and the Assessing Officer does not acquire jurisdiction to proceed with the reassessment. He further relied upon the following observations of the Hon’ble Bombay High Court to contend that a defect affecting the jurisdictional notice cannot be cured by participation, consent or waiver on the part of the assessee.

12 ITA No. 9315/Mum/2025 Niro Ceramic India Private Limited 24. The learned AR also placed reliance upon the decision of the Hon’ble Supreme Court in Y. Narayana Chetty v. Income-tax Officer [1959] 35 ITR 388 (SC), wherein the principle laid down by the Hon’ble Bombay High Court in Ramsukh Motilal was approved. He submitted that the Hon’ble Supreme Court had authoritatively held that service of a valid statutory notice is a condition precedent to the validity of reassessment proceedings and that such notice cannot be regarded as a mere procedural requirement. 25. On the strength of these decisions, the learned AR submitted that the notice dated 29.03.2024 was not merely defective in form but failed to disclose the precise jurisdictional foundation on which the reassessment had been initiated. Since the notice contained multiple alternative statutory expressions and the satisfaction note did not identify the exact nature of the alleged cash transaction or the income alleged to have escaped assessment, the jurisdictional requirement was not fulfilled. He submitted that the mechanical approval granted to such an uncertain proposal could not cure the fundamental defect. The consequential reassessment proceedings and the assessment order passed under section 147 of the Act were, therefore, liable to be declared void ab initio. 26. The learned Departmental Representative (DR), on the other hand, relied upon the orders of the authorities below. He submitted that the reassessment proceedings were not initiated on the basis of vague or general information, but on the basis of

13 ITA No. 9315/Mum/2025 Niro Ceramic India Private Limited specific material found and seized during the search and seizure operation conducted in the case of the Qutone Group of Companies. 27. The learned DR invited our attention to paragraphs 3 and 4 of the assessment order. Referring to paragraph 3, he submitted that parallel books of account maintained by the Qutone Group in respect of M/s Qutone Ceramics Private Limited were found during the search. Mr. Sunil S. Manglunia, stated to be a key person of the group, had admitted that the transactions recorded in such parallel books were not entered in the regular books of account and that most of them were in cash. In the case of the assessee, the recovered Tally data contained a ledger in the name of “Nero Ceramic”, bearing GST No. 24AAECN6757G1ZB, which corresponded with the GST number of the assessee. The said ledger contained an entry dated 30.06.2021 with the narration “Cash Granite” and a debit amount of Rs. 5,00,000/-. 28. The learned DR further referred to paragraph 4 of the assessment order and submitted that cash registers were also found during the search. Mr. Bhuwan Vikram, who maintained such registers, had admitted that the amounts were recorded in coded form by omitting one zero from the unit’s place. Since the entries from the cash registers were transferred to the seized Tally accounts, the amount of Rs. 5,00,000/- appearing in the Tally ledger was required to be read as Rs. 50,00,000/-. He submitted that the entry was recorded as an amount paid to the assessee

14 ITA No. 9315/Mum/2025 Niro Ceramic India Private Limited and, therefore, represented an actual cash payment of Rs. 50,00,000/- to the assessee. 29. According to the learned DR, the seized Tally ledger, the matching GST number, the narration “Cash Granite”, the coded cash registers and the statements of the persons connected with the Qutone Group constituted specific and corroborative material directly linking the assessee with the unaccounted transaction. He contended that the expressions used in the notice or the satisfaction note could not be read in isolation and had to be understood in the light of the underlying seized material and the reasons recorded by the Assessing Officer. 30. We have considered the rival submissions and perused the material placed on record. Ground Nos. 2 to 5 challenge the assumption of jurisdiction under section 148 of the Act on the grounds that the notice was vague and internally inconsistent, the satisfaction recorded by the Assessing Officer did not disclose the precise nature of the alleged escapement, and the approval granted by the specified authority was mechanical. Ground No. 6 raises the allied grievance that the material and statements relied upon were not fully furnished and that no opportunity of cross- examination was granted. Since these grounds arise from the same jurisdictional foundation, they are considered together. 31. At the outset, it is necessary to examine the notice dated 29.03.2024 issued under section 148 of the Act. The notice states that the Assessing Officer had information that a search was initiated under section 132 “in your case or in the case of the

15 ITA No. 9315/Mum/2025 Niro Ceramic India Private Limited person in respect of which you are assessable under the Act”. It thereafter records that the books of account or documents seized or requisitioned in the case of the Qutone Group “pertain to, or any information contained therein, relate to you or the person in respect of which you are assessable under the Act”. 32. The notice thus incorporates multiple statutory alternatives without identifying which particular factual and jurisdictional condition was applicable to the assessee. Admittedly, no search under section 132 was conducted in the case of the assessee. The search was conducted in the case of the Qutone Group. Therefore, the reference in the notice to a search initiated “in your case” was factually inapplicable. Similarly, the notice does not specify whether the Department’s case was that the seized books or documents themselves “pertained to” the assessee or that only the information contained therein “related to” the assessee. These are not interchangeable expressions. The notice nevertheless retained all the alternatives appearing in the statutory format without striking off the inapplicable portions or recording the precise jurisdictional fact. 33. The ambiguity in the notice assumes greater significance when the satisfaction note is examined. In paragraph 3 of the satisfaction note, the Assessing Officer recorded that the seized material showed that the assessee had carried out “unaccounted cash transactions” with M/s Qutone Ceramics Private Limited. The table forming part of the satisfaction note merely described the nature of the proposed addition as “Cash Transactions” and

16 ITA No. 9315/Mum/2025 Niro Ceramic India Private Limited mentioned an amount of Rs. 5,00,000/-. Paragraph 8 of the satisfaction note again stated that the assessee had carried out unaccounted cash transactions of Rs. 5,00,000/- with the said concern. 34. The satisfaction note does not record whether the impugned amount represented cash received by the assessee, cash paid by the assessee, unexplained money found in its possession, unexplained expenditure incurred by it or any other transaction having a taxable character. It also does not identify the specific provision under which the alleged transaction was proposed to be assessed. The expression “cash transactions” is generic and does not, by itself, disclose the nature of the income alleged to have escaped assessment. 35. There is also an apparent inconsistency between the satisfaction note and the subsequent assessment order. In the satisfaction note, the proposed amount is Rs. 5,00,000/- and the transaction is described only as an unaccounted cash transaction. In the assessment order, however, the Assessing Officer treated the entry of Rs. 5,00,000/- as representing Rs. 50,00,000/- by adding a zero on the basis of the statement of Mr. Bhuwan Vikram and ultimately treated the amount as cash received by the assessee and taxable as unexplained money under section 69A of the Act. Thus, the jurisdictional satisfaction did not contain the definite factual conclusion which subsequently formed the basis of the addition.

17 ITA No. 9315/Mum/2025 Niro Ceramic India Private Limited 36. The Revenue has relied upon the ledger appearing in the seized Tally data in the name of “Nero Ceramic”, bearing the GST number of the assessee, and the entry dated 30.06.2021 with the narration “Cash Granite”. It is also the case of the Revenue that the cash registers were maintained in coded form by omitting one zero and that, consequently, the entry of Rs. 5,00,000/- represented Rs. 50,00,000/-. We are conscious that, at the stage of reopening, the sufficiency of the material is ordinarily not to be examined as if the Tribunal were adjudicating the addition on merits. However, the existence of a valid jurisdictional satisfaction based on definite information is nevertheless a condition precedent. 37. In the present case, the statements relied upon by the Assessing Officer, as reproduced in the assessment order, are general statements concerning the maintenance of parallel books and the alleged coding methodology adopted by the Qutone Group. No specific statement has been brought to our notice wherein either Mr. Sunil S. Manglunia or Mr. Bhuwan Vikram expressly states that the assessee received Rs. 50,00,000/- in cash or that the particular entry in the name of “Nero Ceramic” represented a cash payment to the assessee. The Assessing Officer inferred the nature and quantum of the transaction by combining the ledger entry with the general statements concerning coding. 38. The assessee had specifically requested copies of the seized material and the statements relied upon and had also sought an

18 ITA No. 9315/Mum/2025 Niro Ceramic India Private Limited opportunity to cross-examine the concerned persons. The assessment order records that a copy of the seized ledger and selected pages of the statements were attached to the show-cause notice dated 05.03.2025. However, there is nothing in the assessment order to establish that the complete seized Tally data, the underlying cash registers from which the data was allegedly transferred, or the entire statements necessary to understand the context of the alleged coding mechanism were furnished to the assessee. The assessee’s grievance is, therefore, not answered merely by supplying a single ledger extract and selected portions of statements. 39. More importantly, despite the specific request, no opportunity to cross-examine the persons whose statements were relied upon was granted. The statements were not peripheral material. They constituted the sole basis for multiplying the ledger amount by ten and for characterising the entry as an unaccounted cash payment to the assessee. In the absence of cross-examination and independent corroborative material directly establishing that the assessee received Rs. 50,00,000/-, the statements could not have been treated as conclusive against the assessee. 40. The approval granted by the specified authority is required to be examined in this factual background. The satisfaction note itself did not specify whether the alleged transaction was a receipt or payment, did not explain how the proposed amount of Rs. 5,00,000/- represented income escaping assessment and did not

19 ITA No. 9315/Mum/2025 Niro Ceramic India Private Limited identify the provision under which it was proposed to be taxed. The notice thereafter retained all possible statutory alternatives. Had the approving authority independently scrutinised the proposal and the material, these patent ambiguities and inconsistencies ought to have been noticed. The grant of approval without requiring the Assessing Officer to clarify the precise jurisdictional fact, the character of the transaction and the nature of the alleged escapement indicates that the approval was accorded in a routine manner.

“If a notice is not given as provided by section 34, then in the eye of the law it is no notice at all, and clearly the Income-tax Officer proceeded to assess the assessee under section 34 without complying with the condition precedent laid down in section 34 which alone could have given him jurisdiction to assess the assessee.” 42. The Hon’ble jurisdictional High Court further held:

“It is well settled that no consent can confer jurisdiction upon a Court if the Court has no jurisdiction, and if we take the view that the Income- tax Officer can have jurisdiction only provided he complies with the conditions laid down in section 34, then no consent by the assessee or no waiver on his part can confer jurisdiction upon the Income-tax Officer.” 43. The ratio emerging from the aforesaid decision is that a valid notice conforming to the statutory requirements is not a mere procedural formality but a condition precedent to the assumption

20 ITA No. 9315/Mum/2025 Niro Ceramic India Private Limited of jurisdiction. If the jurisdictional notice does not comply with the statutory mandate, participation by the assessee cannot cure the defect. In the present case, the notice did not identify the precise statutory contingency applicable to the assessee and mechanically retained mutually alternative expressions. The defect goes to the assumption of jurisdiction and cannot be regarded as an inconsequential irregularity.

“The service of the requisite notice on the assessee was a condition precedent to the validity of any re-assessment made under section 34; and if a valid notice was not issued as required proceedings taken by the Income-tax Officer in pursuance of an invalid notice and consequent orders of re-assessment passed by him would be void and inoperative.” 45. The Hon’ble Supreme Court further observed:

“The notice prescribed by section 34 cannot be regarded as a mere procedural requirement; it is only if the said notice is served on the assessee as required that the Income-tax Officer would be justified in taking proceedings against him. If no notice is issued or if the notice issued is shown to be invalid then the validity of the proceedings taken by the Income-tax Officer without a notice or in pursuance of an invalid notice would be illegal and void.” 46. Though the decisions relied upon were rendered under the corresponding provisions of the erstwhile enactment and are of considerable vintage, the ratio laid down therein, namely, that a

21 ITA No. 9315/Mum/2025 Niro Ceramic India Private Limited valid notice conforming to the statutory requirements is a condition precedent to the assumption of jurisdiction in reassessment proceedings, continues to hold the field. Applying the said principle to the facts of the present case, we find that the notice dated 29.03.2024 suffers from substantive and not merely typographical defects. It does not disclose whether the search was initiated in the case of the assessee or in the case of another person, nor does it specify whether the seized books or documents pertained to the assessee or whether only the information contained therein related to the assessee. The satisfaction note also fails to identify with clarity the precise nature of the alleged transaction and the income stated to have escaped assessment. These infirmities go to the root of the assumption of jurisdiction and, therefore, vitiate the reassessment proceedings. 47. The matter can also be viewed from another angle. The satisfaction contemplated under Explanation 2(iv) to section 148 and the proviso to section 148A requires the Assessing Officer to be satisfied, with the prior approval of the specified authority, that the books of account or documents seized in the case of another person pertain to the assessee or that the information contained therein relates to the assessee. Such satisfaction must be evident from the record. In the present case, the notice reproduced both statutory alternatives, whereas the satisfaction note merely referred to an unaccounted cash transaction without recording whether the seized document itself pertained to the

22 ITA No. 9315/Mum/2025 Niro Ceramic India Private Limited assessee or whether only the information contained therein related to it. The statutory satisfaction was, therefore, not recorded with the requisite clarity. 48. We also find that no independent corroborative evidence was brought on record to show that the assessee actually received Rs. 50,00,000/- in cash. No receipt, confirmation, cash withdrawal, corresponding entry in the books of the assessee or specific admission by any person of the Qutone Group concerning payment to the assessee was identified. The entire case rests upon a third-party ledger entry of Rs. 5,00,000/- and general statements concerning the coding methodology. Even these materials were not furnished in their entirety to the assessee and the persons whose statements were relied upon were not offered for cross-examination. 49. The CIT(A), while upholding the reopening, proceeded on the premise that the seized material directly linked unexplained cash of Rs. 50,00,000/- with the assessee and that due opportunity had been granted. These findings do not address the specific inconsistencies in the notice and satisfaction note. The CIT(A) also did not examine whether the approval under section 151 reflected an independent consideration of the jurisdictional conditions. Further, the finding that there was no denial of opportunity is contrary to the assessment record itself, which records the assessee’s request for cross-examination but does not record that such opportunity was granted.

23 ITA No. 9315/Mum/2025 Niro Ceramic India Private Limited 50. Considering the cumulative effect of the aforesaid circumstances, namely, the omnibus and internally inconsistent notice, the vague satisfaction referring merely to “cash transactions”, the absence of a definite finding concerning the nature of the alleged escapement at the stage of reopening, the routine approval despite patent discrepancies, the absence of direct corroborative evidence, the non-supply of the complete underlying seized material despite a specific request and the denial of cross-examination, we hold that the jurisdictional requirements for valid initiation of reassessment proceedings were not satisfied. 51. Accordingly, the notice dated 29.03.2024 issued under section 148 of the Act and the consequential reassessment order dated 28.03.2025 are held to be invalid and void ab initio. Ground Nos. 2 to 6 are, therefore, allowed. 52. In view of our decision on the jurisdictional grounds, the addition of Rs. 50,00,000/- under section 69A of the Act does not survive. Ground No. 7 is, therefore, rendered academic and does not require separate adjudication. 53. In the result, the appeal filed by the assessee is allowed. Order pronounced in the open court on .07.2026.

Sd/- Sd/- (SAKTIJIT DEY) (MAKARAND VASANT MAHADEOKAR) VICE PRESIDENT ACCOUNTANT MEMBER

24 ITA No. 9315/Mum/2025 Niro Ceramic India Private Limited Mumbai, Dated 29/07/2026 Dhananjay, Sr.PS आदेश की प्रतितिति अग्रेतिि/Copy of the Order forwarded to : अपीलाथी / The Appellant 1. प्रत्यथी / The Respondent. 2. 3. संबंधधत आयकर आयुक्त / The CIT(A) आयकर आयुक्त(अपील) / Concerned CIT 4. धिभागीय प्रधतधनधध, आयकर अपीलीय अधधकरण, मुम्बई / DR, ITAT, Mumbai 5. गार्ड फाईल / Guard file. 6. आदेशानुसार/ BY ORDER, सत्याधपत प्रधत //True Copy// 1. उि/सहायक िंजीकार ( Asst. Registrar) आयकर अिीिीय अतिकरण, मुम्बई / ITAT, Mumbai