M/S BABA SHAD BHURA PARBANDHAK KAMETY,HARYANA vs. DEPUTY COMMISSIONER OF INCOME TAX, HARYANA

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘E’, NEW DELHI BEFORE SH. SATBEER SINGH GODARA, JUDICIAL MEMBER AND SH. NAVEEN CHANDRA, ACCOUNTANT MEMBER ITA No. 7515/Del/2025 (Assessment Year : 2018-19) M/s. Baba Shad Bhura Vs. DCIT Parbandhak Kamety Circle Baba Shad Bhura Mandir Bahri Karnal PO, Asandh, Karnal Haryana – 132 039 PAN No. AAEAB 8259 K (APPELLANT) (RESPONDENT) Assessee by Dr. Rakesh Gupta, Adv., Shri Somil Agarwal, Adv. and Shri Deepesh Garg, Adv. Revenue by Ms. Ankush Kalra, Sr. D.R. Date of hearing: 28.04.2026 Date of Pronouncement: 06.07.2026

ORDER PER NAVEEN CHANDRA, ACCOUNTANT MEMBER : This captioned appeal has been filed by the learned CIT(A)-NFAC, Delhi order dated 09.09.2025 arising from the assessment order dated 30.03.2023 under Section 143(3) r.w.s. 147 of the Income Tax Act, 1961 (‘the Act’) by the Assistant Commissioner of Income Tax, DCIT, CIR, Karnal concerning Assessment Year (A.Y.) 2018-19.

ITA No. 7515/DEL/2025 [A.Y 2018-19] Baba Shad Bhura Parbhandhak Kamety vs. DCIT 2. Brief facts of the case are that the assessee is a Registered Society registered under Society Act, engaged in charitable, social welfare and religious work. The major source of income of the society is donation from devotees to the temple and annual receipt from agreement to sell all offerings received in temple. 3. An information in this case was received wherein assessee had deposited cash in its bank accounts maintained with HDFC Bank Ltd of Rs.97,45,000/-. The AO had issued show-cause notice to the assessee, as per provisions of section 148A(b) of the Act. After approval dated 25.03.2022 of specified Authority, an order u/s 148A(d) was duly passed on 26.03.2022 and notice u/s 148 of the Act was duly issued to the assessee on 28.03.2022/29.03.2022. 4. In response to various statutory notices issued during the course of assessment proceedings, the assessee has submitted that the cash deposited in account is due to annual receipt from agreement to sell all offering received in temple which is deposited one time during the year. The devotees offer donation to the temple. Such offerings are to be auctioned again. In order to facilitate auction of offerings to the temple, the assessee has called for the bids from eligible bidders to auction offerings. Resultantly, it is submitted that such bid for auction of the offerings to the temple were granted in favour of Kuldeep Singh

Page 2 of 9

ITA No. 7515/DEL/2025 [A.Y 2018-19] Baba Shad Bhura Parbhandhak Kamety vs. DCIT for amount of Rs.1,00,00,000/-. This amount was received by the assessee. Further, the order for bidders have also paid Rs. 10 lakh each in cash as security deposit. Therefore, after returning security deposit of other bidders amounting to Rs. 40 lakhs and retaining the amount received from successful bidder which is Kuldeep Singh, the assessee had cash balance as on 29.08.2017 of Rs. 47,45,000.00/-. 5. Further, during the course of assessment proceedings, it was submitted by the assessee that the assessee was registered society within the meaning of provisions of section 10(23C) (iiiad) of the Act and its income is exempted. However, the assessee could not submit any documentary evidence that fulfils the criteria laid down by the provisions of section 10(23C) (iiiad) of IT Act. The Assessing Officer in absence of requisite documentary evidence to explain the cash deposit amounting to Rs.97,50,000/-, made an addition of Rs.97,50,000/- to the total income of the assessee under section 69A of the Act. 6. Aggrieved, assessee was in appeal before the CIT(A)/NFAC which was dismissed by the CIT(A)/NFAC. Aggrieved by the order of CIT(A)/NFAC, assessee is now in appeal before us with the following grounds: 1. “That having regard to the facts and circumstances of the case, Ld. CIT(A) ought to have quashed the impugned reassessment order passed by Ld. AO u/s 147 as the statutory and mandatory notice u/s 143(2) has not been issued during the course of reassessment Page 3 of 9

ITA No. 7515/DEL/2025 [A.Y 2018-19] Baba Shad Bhura Parbhandhak Kamety vs. DCIT proceedings, more so when return was filed by the assessee in response to notice u/s 148 of the Act. 2. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. AO in passing the impugned reassessment order u/s 147 and that too without assuming jurisdiction as per law and without following the mandatory and statutory conditions laid down u/s 147 to 151A of Income Tax Act, 1961 and without recording 'reason' and without obtaining approval u/s 151 in accordance with law. 3. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. AO in passing the impugned reassessment order as the notices have been issued by the Jurisdictional officer instead of NFAC mode. 4. That in any case and in any view of the matter, action of Ld. CIT(A) in confirming the action of Ld. AO in passing the impugned reassessment order u/s 147 which is bad in law and against the facts and circumstances of the case and barred by limitation also. 5. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. AO in making addition of Rs.97.50,000/- on account of cash deposits in the bank account of assessee and that too u/s 69A by treating it as alleged unexplained money and taxing the same u/s 115BBE and that too by recording incorrect facts and findings and in violation of principles of natural justice and without appreciating/considering the submission and evidences filed by the assessee. 6. In any view of matter and in any case, action of Ld. CIT(A) in confirming the action of Ld. AO in making addition of Rs.97,50,000/- on account of cash deposits in the bank account of assessee u/s 69A/115BBE, is bad in law and against the facts and circumstances of the case. 7. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. AO in not allowing the exemption claimed by the assessee u/s 10(23C)(iiiad) of Income Tax Act, 1961. 8. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in not reversing the action of Ld. AO in assessing the income at Rs.2.29,87,734/- against the receipts of Rs.1,52,37,734/- declared by the assessee. 9. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in not reversing the action of Ld. AO in charging interest u/s 234A, 234B and 234C of Income Tax Act, 1961. 10. That the appellant craves the leave to add, modify, amend or delete any of the grounds of appeal at the time of hearing and all the above grounds are without prejudice to each other.”

Page 4 of 9

ITA No. 7515/DEL/2025 [A.Y 2018-19] Baba Shad Bhura Parbhandhak Kamety vs. DCIT 7. The substantial ground raised in the instant case is that the mandatory and statutory notice under section 143(2) of the Act has not been issued during the course of reassessment proceedings. Ground No. 1 relates to Ld. AO treating the return filed u/s 148 on 27.04.2022 as invalid return and non-issuance of notice u/s 143(2). The ld AR stated that the assessee filed return, in response to notice u/s 148 dated 28.03.2022, on 27.04.2022, but e-verified this return on 01.03.2023. The assessee had explained that the return filed in response to notice u/s 148 could not be e-verified due to non-linking of PAN and Aadhaar of the authorized person; and that the return was initially sent by post but was not received by CPC, and was subsequently e-verified through digital signature along with filing of condonation request for delay. The ld AR furnished the copy of the screenshot of the income-tax portal dated 16.02.2023 showing that the return filed in response to notice u/s 148 was pending for approval of condonation of delay in e- verification. The ld AR furnished the copies of the income-tax portal showing that no notice u/s 143(2) was issued and that only notice u/s 142(1) dated 10.11.2022 was issued. It is stated that the AO erroneously recorded on page 11 of the assessment order that notice u/s 143(2) dated 10.11.2022 was issued. It is also submitted that the Ld. AO has assessed the income by treating the return filed on

Page 5 of 9

ITA No. 7515/DEL/2025 [A.Y 2018-19] Baba Shad Bhura Parbhandhak Kamety vs. DCIT 27.04.2022 as having been filed at Nil income which is also recorded by the Ld. CIT(A), in para 10.3 at page 46 of the impugned order. It is submitted that the Ld. AO relied upon the information available from the return filed by the appellant on 27.04.2022 in response to notice u/s 148. Thus the ld AR vehemently argued that the non-issuance of notice u/s 143(2) makes the impugned reassessment order as bad in law as held in the following judicial decision: - PCIT vs. Jai Shiv Shankar Traders Pvt. Ltd., (2016) 383 ITR 0448, (Del). PCIT vs. Staunch Marketing (P) Ltd., (2017) 81 taxmann.com 482 (Del). Anil Agarwal, HUF vs. ITO, in ITA No.2594/Del/2024. DCIT vs. Ashutosh Foods, ITA No. 234/Del/2025. Sunil Yadav vs. DCIT, ITA No. 8748/Del/2025. PCIT vs. Silver Line, ITA No. 578/2015, 383 ITR 455(Del) ACIT vs. Hotel Blue Moon, (2010) 321 ITR 0362, (SC). 8. Per contra, the ld DR heavily relied on the orders of the AO and the CIT(A). 9. We have heard the rival submission and have carefully perused the materials on record. The law mandates that the return filed under section 148 is to be treated as return filed u/s 139. Once the return filed under section 148, is found defective on account of being not e- verified, it is incumbent upon the assessee u/s 139(9) of the Act to intimate the defect and give opportunity to rectify the defect. We find no such effort was made by the AO to consider the condonation application and declare the return as defective. Further the assessee’s

Page 6 of 9

ITA No. 7515/DEL/2025 [A.Y 2018-19] Baba Shad Bhura Parbhandhak Kamety vs. DCIT explanation that the return, in response to notice u/s 148 was filed on 27.04.2022 and could not be e-verified earlier because of non-linking of PAN and aadhar of the authorized person, has not been rebutted by the AO. This return was subsequently e-verified on 01.03.2023, much before the passing of assessment order u/s 147 on 30.03.2023. 10. We find that it is an admitted fact that the AO has treated the return filed u/s 148 as having been filed as nil income. The CIT(A) also recorded that the AO has relied upon the information available in the said return. We also note that the AO has recorded in the assessment order that notice u/s 143(2) was issued on 10.11.2022 but the ITBA portal report furnished by the assessee do not reflect any issuance of notice u/s 143(2) of the Act. The same also remains unrebutted by the Revenue. In such factual matrix of the instant case, we are of the considered view that no notice u/s 143(2) was issued to the assessee. In such facts and circumstances, when the AO has utilized the information in the return filed u/s 148, it was incumbent upon the AO to have issued the notice u/s 143(2) before passing the assessment order. We are of the considered view therefore, that the failure to issue notice u/s 143(2) has rendered the impugned assessment order bad in law and ab initio void. We are fortified in our view by the decisions of Hon’ble Delhi High Court in the case of PCIT vs. Jai Shiv

Page 7 of 9

ITA No. 7515/DEL/2025 [A.Y 2018-19] Baba Shad Bhura Parbhandhak Kamety vs. DCIT Shankar Traders Pvt. Ltd., (2016) 383 ITR 0448, (Del) and PCIT vs. Staunch Marketing (P) Ltd., (2017) 81 taxmann.com 482 (Del). The grounds are accordingly allowed. 11. In the result, the appeal of the assessee in ITA 7515/Del/2025 is allowed. Order pronounced in the open court on 06.07.2026

Sd/- Sd/- (SATBEER SINGH GODARA) (NAVEEN CHANDRA) JUDICIAL MEMBER ACCOUNTANT MEMBER Date:- 06.07.2026 Priti Yadav, Sr. Ps* Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI

Page 8 of 9