PUJA DINESH SINGH,RAJKOT vs. THE INCOME TAX OFFICER, RAJKOT

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ITA 645/RJT/2026Status: DisposedITAT Rajkot27 July 2026AY 2019-20207 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that the AO erred in issuing the notice under section 148 and framing the assessment under section 147 without proper justification. The addition of unexplained investment was also questioned.

What were the facts?

The assessee purchased an immovable property and paid Rs. 5,15,000/- in cash as 'on-money'. The Assessing Officer (AO) issued a notice under section 148 for reassessment based on this transaction.

What were the issues?

The primary issues were the validity of the reassessment proceedings initiated under section 148 and the addition of unexplained investment without corroborative evidence.

Which sections of the Income-tax Act were involved?

Section 148,Section 147,Section 69,Section 115BBE,Section 271AAC(1),Section 274

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “SMC”

Before: Dr. Arjun Lal Saini

Hearing: 16/06/2026Pronounced: 27/07/2026

आयकर अपीलीय अिधकरण,राजकोट �यायपीठ, राजकोट । In The Income Tax Appellate Tribunal, “SMC” Rajkot Bench, Rajkot Before Dr. Arjun Lal Saini, Accountant Member आयकरअपीलसं/.ITA No.645/RJT/2026 �नधा�रणवष�/ Assessment Year: 2019-20 Puja Dinesh Singh, The Income Tax Officer, Flat No.302, Jagrutideep Vs. ITO WD 1(1)(1), RKT, Residency Sadhuvasani Road, Rajkot, Gujarat- 360001 Rajkot Gujarat- 360005 (अपीलाथ�/assessee) : (��यथ�/Respondent) �थायीलेखासं/.जीआइआरसं/.PAN/GIR No.DMBPS4327A �नधा�रती क� ओर से/Assessee by : Shri R. B. Shah, Ld.AR राज�वक�ओरसे/Revenue by : Shri Anadi Dixit, Ld. Sr. DR सुनवाईक�तार�ख/Date of Hearing : 16/06/2026 घोषणाक�तार�ख/Date of Pronouncement : 27/07/2026 ORDER Per, Dr. Arjun Lal Saini, AM:

The present appeal has been filed by the assessee, against the order passed by the Learned Commissioner of Income Tax (Appeal), National Faceless Appeal, Centre (NFAC), Delhi [hereinafter referred to as “CIT(A)”] dated 30.03.2026, arising in the matter of assessment order passed u/s 147 of the Income Tax Act, 1961 dated 26.03.2024, relevant to the Assessment Year 2019- 20. 2. Grounds of appeal raised by the assessee are as follows: 1. The Ld. CIT (A) erred in confirming the action of AO in issuing the notice u/s 148 of the Act and thereby framing assessment u/s 147 of the I.T. Act, 1961. 2. The Ld. CIT(A) erred in confirming the action of the Ld. AO in making addition of Rs.5,15,000/-, u/s 69 r.w.s. 115BBE as unexplained investment without any corroborative evidence.

ITA No.645/RJT/2026 [ AY 2019-20 ] Puja Dinesh Singh v. ITO 3. The Ld. AO has erred in initiating penalty proceedings under section 271AAC(1) r.w.s. 274 of the I.T. Act, 1961; such initiation, being based on an invalid assessment, is illegal and liable to be quashed. 3. The facts necessary for disposal of the appeal are stated in brief. The assessee has filed income tax return (ITR-1) for the assessment year (A.Y.) 2019- 20 declaring total income at Rs.2,93,870/-, on 26.08.2019, which was processed u/s 143(1)(a) of the Act, on 10.12.2019, without any modification. In this case, the following information / transactions have been flagged which requiring action u/s 148 of the Act for the Assessment Year referred to above. In this case, the assessee has purchased immovable property, that is, shop/office No.303 in the project/building "The City Centre" at Rajkot and made payment of ‘on-money’ of Rs.5,15,000/- in cash for the purchase of the said immovable property during financial year (F.Y.)-2018-19. Therefore, assessing officer issued a show cause notice to the assessing to explain the transaction.

4.

In reply to above show cause notice dated 04.03.2024, the assessee vide submission dated 11.03.2024 has furnished a copy of purchase deed No.RKT/3/JMR/8036/2020 dated 24.12.2020 registered with Sub-Registrar, Rajkot -3 for purchase of office No.303 of the City Centre building for consideration of Rs.8,74,800/- (which was paid by the assessee through cheque No.302788, 090950 and 130131 during F.Y.2020-21) and also furnished Satakhat bearing No.RKT/3/JMR/2721/2020 dated 18.06.2020 registered with Sub- Registrar, Rajkot -3 and also reiterated that no payment of ‘on-money’ in cash was made by her for purchase of immovable property and submitted written submissions, which are as under: "As previously I submitted my response that I am a salaried person in Assessment Year 2019-20. I have not made any cash payment to the builder in Assessment Year 2019- 20. In addition I have booked my office on 10.06.2020, for your reference I herewith attached copy of sale deed and also satakhat. Kindly consider this points."

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ITA No.645/RJT/2026 [ AY 2019-20 ] Puja Dinesh Singh v. ITO 5. Further, the claim of the assessee was that she had not made any payment of ‘on-money’ in cash of Rs.5,15,000/- during F.Y.2018-19, as she purchased immovable property, that is, office No.303 of commercial building named the City Centre vide registered conveyance deed No. RKT/3/JMR/8036/2020 dated 24.12.2020 for the consideration of Rs.8,74,800/- in F.Y.2020-21. It is a fact that the assessee has purchased the said immovable property during F.Y.2020-21 but it is also correct that the payment of on-money of Rs.5,15,000/- was made by the assessee in cash for purchase of the said immovable property during F.Y.2018- 19 which can be seen from the ledger provided to the assessee. Thus, the claim of the assessee that no amount of ‘on-money’ was paid by her in cash for purchase of immovable property was not accepted by the assessing officer. Therefore, assessing officer made an addition of Rs.5,15,000/-, u/s 69 r.w.s. 115BBE of the I.T. Act, 1961.

6.

Aggrieved by the order of the assessing officer, the assessee carried the matter in appeal before the Ld. CIT(A), who has confirmed the action of the assessing officer. The Ld. CIT(A) noticed that the contention of the assessee that the property was purchased in June 2020, does not negate the possibility of payment of ‘on-money’ prior to execution of the registered sale deed. In fact, it is common in real estate transactions that part of the consideration is paid at the time of booking or during the construction phase and the formal registration takes place subsequently. Therefore, the timing of the registered sale deed does not invalidate the evidence indicating payment of cash during the financial year 2018- 19.

7.

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

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ITA No.645/RJT/2026 [ AY 2019-20 ] Puja Dinesh Singh v. ITO 8. At the outset, Ld. Counsel for the assessee argued that approval u/s 151 of the Act is neither signed manually nor digitally, therefore, re-assessment proceedings initiated against the assessee may be quashed. The Ld. Counsel took me through Approval u/s 151 of the Act, which is reproduced below:

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ITA No.645/RJT/2026 [ AY 2019-20 ] Puja Dinesh Singh v. ITO

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ITA No.645/RJT/2026 [ AY 2019-20 ] Puja Dinesh Singh v. ITO 9. On the other hand, learned DR for the revenue relied on the findings of the assessing officer.

10.

I have gone through the above Approval u/s. 151 of the Act and noted that it is neither signed manually nor digitally, therefore, the issue is squarely covered in favour of the assessee by the judgement of the Co-ordinate Bench of ITAT, Rajkot in the case of M/s Aditya Plastic in ITA No. 185/Rjt/2024 for AY 2013-14 vide order dated 03.09.2025. In this order, the ITAT, Rajkot has inter alia observed as follows: “8. We have heard both the parties, perused the material available on record. We note that the approval of the PCIT is without any signature of the Ld.PCIT and without generating any DIN number which is reproduced below:

8.1. Therefore, the Ld.Cousel for the assessee has stated that the approval u/s.151 of the Act dated 30/03/2020 is not signed by the Ld.PCIT and, hence, it is not considered as a valid approval/satisfaction and, thus, the notice u/s.148 of the Act issued on the basis of said approval is bad in law and without jurisdiction. For that, reliance is placed on the judgement of Hon’ble High Court of Allahabad in the case of Vikas Gupta reported at (2022) 142 taxmann.com 253 (Allahabad HC). The relevant part of judgement is reproduced: 13. Thus, as per provision of section 151 of the Income-tax Act, 1961, an assessing officer gets jurisdiction to issue notice to an assessee under section 148 of the Act, 1961 after Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner of Income-tax is satisfied on the reason recorded by the assessing officer that it is a fit case for issuing such notice. The date and time of the approval granted digitally under section 151 of the Act and the date and time of the notice under section 148 of the Act, shows that the satisfaction was recorded by the PCTT digitally after the notice under section 148 was digitally signed.

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ITA No.645/RJT/2026 [ AY 2019-20 ] Puja Dinesh Singh v. ITO

29.

In the present set of facts there was no valid satisfaction recorded by the by the Prescribed Authority under section 151 of the Act, 1961 when the Assessing Officer issued notice to the assessee under section 148 of the Act, 1961. At the time when the notice under section 148 of the Act, 1961 was issued by the Assessing Officer to the petitioner there was no valid satisfaction recorded by the Prescribed Authority ie. the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner. Subsequent to issuance of the notice under section 148 of the Act, 1961 by the Assessing Officer, the satisfaction under section 151 was digitally signed by the Prescribed Authority. Therefore, the point of time when the Assessing Officer issued notices under section 148, he was having no jurisdiction to issue the impugned notices under section 148 of the Act, 1961. Consequently the impugned notices issued by the Assessing Officer under section 148 of the Act, 1961 were without jurisdiction. The questions no. (a) and (b) are answered accordingly. 8.2. Therefore, based on these facts and circumstances of the case, the assessment order framed by the AO needs to be quashed as there was no approval u/s.151 of the Act for initiating the re-assessment proceedings by the Ld.PCIT, therefore, on this count the assessment order framed by the AO should be quashed.”

11.

Since the issue is squarely covered in favour of the assessee by the decision of the ITAT, Rajkot Bench in the case of M/s Aditya Plastic (supra), and there is no change in facts and law and the revenue is unable to produce any material to controvert the aforesaid findings of the Division Bench (supra). I find no reason to interfere in the said order of the Division Bench. Therefore, respectfully following the binding precedent of the co-ordinate Bench (supra), I allow the appeal filed by the assessee.

12.

In the result, appeal filed by the assessee, is allowed. Order is pronounced in the open Court on 27/07/2026.

Sd/- [ Dr. Arjun Lal Saini ] लेखा सद�/Accountant Member //True Copy// राजकोट/Rajkot िदनांक/ Date: 27/07/2026 Copy of the order forwarded to :  The assessee The Respondent By order   CIT  The CIT(A) DR, ITAT, RAJKOT Sr. Private Secretary  Guard File ITAT, Rajkot 

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