ANIMESH MEHTA,INDIA vs. ACIT WARD 1(3), JAIPUR

IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, “SMC” BENCH, JAIPUR BEFORE SMT. ANNAPURNA GUPTA, ACCOUNTANT MEMBER ITA No. 1944/JPR/2025 (Assessment Year:2010-11)

Animesh Mehta Vs. ACIT Flat No. 102 Vedant Ward 1(3), Sapphire, Sneha Nagar, Jaipur Nagpur 440015, Maharashtra �थायीलेखासं./जीआइआरसं./PAN/GIR No:AIPPM 5533 K Appellant .. Respondent Appellant by : Sh. Y.K. Sud, CA (thru V.C.) Respondent by : Mrs. Aarti Rawat, Addl. CIT Date of Hearing 25.06.2026 Date of Pronouncement 07.07.2026 O R D E R The present appeal has been filed by the assessee against the order passed by the Office of the Commissioner of Income Tax, Appeal CIT(A), Jaipur-04 (hereinafter referred to as “Ld. CIT(A)”), dated 29.10.2025 u/s 250 of the Income Tax Act, 1961,(hereinafter referred to as “the Act”). 2. In the facts of the present case, assessment u/s 147 of the Act r.w.s. 143(3) was framed on the assessee, making addition of

P a g e | 2 ITA No.1944/JPR/2025 Animesh Mehta Rs.4,70,000/- to the income returned by the assessee of Rs.6,09,180/- on account of the impugned sum being received by the assessee from IL and FS Employee Welfare Trust. The said amount was added to the income of the assessee, since the assessee did not produce any evidence of payment of tax by the Trust. The order of the AO was confirmed by the Ld. CIT(A). 3. Before me, the assessee has challenged the validity of the assessment framed in ground No.1 and 2 which reads as under:- 1. That the CIT(A) was not justified in upholding the reassessment proceedings initiated by the AO u/s 147 of the Income Tax Act 1961. While upholding the initiation CIT(A) failed to appreciate that AO lost his jurisdiction on the fact that no addition for the reasons recorded had been made in the assessment order. 2. That CIT(A) failed to appreciate that notice issued u/s 148 was served upon the assessee after 31-03-2017, therefore reassessment proceedings were barred by limitation. 4. The argument of the ld. Counsel for the assessee before me was that the assessment framed in the present case u/s 147 of the Act was bad in law and without jurisdiction, since the AO failed to make any addition on the income of the assessee which he had reason to believe to have escaped assessment but went on to add some other income for which he had not recorded any reasons for reopening the case of the assessee. 5. In this regard, he drew my attention to the facts of the case pointing out that the reopening was resorted to by the AO on the information available with him that the assessee had made transaction in share commodities amounting to Rs.2,03,03,985/- during the impugned year and had not filed any return of income. He drew my

P a g e | 3 ITA No.1944/JPR/2025 Animesh Mehta attention to this fact noted in para 1 of the assessment order. He thereafter pointed out from the assessment order, that the AO made addition only to the amount received by him from IL and FS Employee Welfare Trust of Rs.4,70,000/- ,accepting the explanation of the assessee with regards to the transaction in share commodities of Rs.2.03 crores. 6. He pointed out, that this plea was raised before the Ld. CIT(A) also and it was also pointed out to him, that the law in this regard had been settled by the Jurisdictional High Court in the case of CIT Vs. Dr. Devendra Gupta 336 ITR 59 (Raj.), holding that where no addition was made on account of escaped income alleged in the reasons recorded, the AO completely lost jurisdiction to frame assessment u/s 147 of the Act .That the assessment framed without making any addition of the alleged escaped income is invalid. He drew my attention to the submissions made in this regard, before the Ld. CIT(A) reproduced at page 4 & 5 of the Ld.CIT(A)s order as under: 4 That Mr. YK Sud, Chartered Accountant, filed a written submissions vide letter dated05.10.2019 along with an application for filling of additional ground, copy of which is attached herewith for your kind consideration as per Annexure-4, with regard to that it is prayed that the Assessing Officer initiated the reassessment proceedings u/s 147/148 by issuing notice u/s 148 dated 27.03.2017 and perusal to the reasons recorded it is clear that jurisdiction u/s 14 has been assumed to verify investment made by the assessee in share/commodity a mentioned in the reasons recorded. There was no other ground for reopening of the assessment. However, while framing the assessment no additions on account of investment of Rs. 20303985/- made by the assessee has been made since the source of all the investments have been duly explained. Only additions amounting to Rs.4.70 lacs was made on account of amour received from IT & FSEmployees Welfare trust as a share of the beneficiary on which the trust has already paid Income Tax at the applicable rates.

P a g e | 4 ITA No.1944/JPR/2025 Animesh Mehta

It is well settled law that where no addition is made on account of escaped income alleged in the reasons recorded, the AO completely loses his jurisdiction assumed u/s 147 and assessment framed without making any addition on the alleged escaped income is likely to be invalid. It is a legal ground so it is prayed that the same may be admitted as additional ground. In this regard your Kind attention is drawn towards the following judgements: 1 MARTECH PERIPHERALS (P) LTD. vs DCIT & ANR 295 CTR(MAD) 528 2 ACIT vs M.K.EXIM (INDIA) LTD. 141 TTJ(JAIPUR)UO 17 3 CIT vs ATLAS CYCLES INDUSTRIES 180 ITR(P&H) 319 4 SARAF GRAMODYOG SANSTHAN vs ITO, WARD LALITPUR 108 ITD(AGRA) 115 5 CIT vs DR.DEVENDRA GUPTA 336 ITR (RAJ) 59 It is prayed that in case your good self has any doubts or needs to have different view than the view expressed by the benches of ITAT and honorable courts, a personal hearing opportunity may be granted to the appellant to personally express his case and clear the doubts.

P a g e | 5 ITA No.1944/JPR/2025 Animesh Mehta Jurisdictional High Court in another case, of CIT Vs. Ram Singh 306 ITR 343 (Raj.), had reiterated the said proposition of law. He pleaded therefore, that the decision of Jurisdictional High Court be applied to the facts of the case and the assessment order be held to be invalid. 9. Ld. DR on the other hand, relied the order of Ld. CIT(A). 10. I have considered the contention of the Ld. Counsel for the assessee. It is not denied that in the assessment framed u/s 147 of the Act, the AO did not make any addition on the income, which he found to have escaped assessment and for which he assumed jurisdiction to reopen the case of the assessee. That the AO went on to make addition on some other issue. Having noted so, I find that Jurisdictional High Court has unequivocally held in the case of Devendra Gupta (Supra) and Ram Singh (Supra) that in such circumstances, the AO loses jurisdiction to frame assessment u/s 147 of the Act and any order passed making addition on any other issue other than the one for which reopening was resorted to is invalid. 11. In the light of the same, I have no hesitation in holding that the assessment order passed in the present case u/s 147 of the Act is invalid, being without jurisdiction and the assessment order is accordingly quashed. 12. Ground of appeal No.1 and 2 raised by the assessee is allowed in above terms. 13. Ground of Appeal No.3 relates to the addition made in the hands of the assessee of Rs.4,70,000/- on account of the amount received by the assessee from IL and FS Welfare Trust. The said addition was made

P a g e | 6 ITA No.1944/JPR/2025 Animesh Mehta by the AO since the assessee failed to produce evidence of tax paid by the Trust on the impugned amount .Theorder of the AO was confirmed by the Ld. CIT(A). 14. Before me, ld. Counsel for the assessee placed order passed by the ITAT in the case of IL and FS Trust for the impugned year i.e. AY 2010-11 in ITA No.5484/Mum/2014 dated 30.09.2016, pointing out therefrom the fact noted therein that the said Trust had filed these return of income declaring income of Rs.57,73,28,600/- on the 22nd July 2010. He stated therefore, that it is evident that the IL and FS Trust had paid taxes on its income for the impugned assessment year i.e. AY 2010-11 and therefore, the assessee be not held liable to pay any taxes on the income received from the said Trust. 15. Noting the contention of the ld. Counsel for the assessee as above, I agree that the fact of IL and FS Trust having paid taxes on its income for the impugned year stands established by the order of the ITAT in the case of IL and FS (Supra) for the impugned year which I have noted categorically records the said fact ,and since the assessees contention for not paying any taxes on income distributed by the said Trust to the assessee stood rejected by the Revenue authorities solely for the reason that evidence of taxes paid by the said Trust was not furnished, the same having now been furnished before me, I hold that there remains no reason for holding the assessee liable to pay taxes on the amount of Rs.4,70,000/- received from IL and FS Trust. The addition therefore, made of Rs.4,70,000/- is deleted. 16. Ground of appeal No.3 is allowed.

P a g e | 7 ITA No.1944/JPR/2025 Animesh Mehta 17. In effect, appeal of the assessee is allowed. Order pronounced in the open court on 07.07.2026

Sd/- (Annapurna Gupta) ACCOUNTANT MEMBER Dated 07.07.2026 Mittali, Sr. PS Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT By Order, Asst. Registrar ITAT, Jaipur