HAR KISHAN,SIRSA vs. INCOME TAX OFFICER, WARD-1, SIRSA, INCOME TAX OFFICER, WARD-, SIRSA

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ITA 826/CHANDI/2025Status: DisposedITAT Chandigarh11 May 2026AY 2015-168 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal found that the Commissioner (Appeals) had not comprehensively examined the assessee's submissions, including RTI replies, regarding the validity of reassessment proceedings. The Tribunal restored the matter to the Commissioner (Appeals) for fresh adjudication.

What were the facts?

The assessee's case was reopened under Section 147 based on information about significant credits in the assessee's bank account. The assessment was completed ex-parte after the assessee failed to file a return or comply with notices. The assessee challenged the validity of reassessment proceedings, including the service of notice and assumption of jurisdiction.

What were the issues?

The key issues were the validity of reassessment proceedings initiated under Section 147, particularly concerning the timely issuance and service of notice under Section 148, and whether the Commissioner (Appeals) had properly considered all evidence.

Which sections of the Income-tax Act were involved?

Section 147,Section 144,Section 144B,Section 148,Section 151,Section 145(3),Section 234B,Section 234C

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DIVISION BENCH, ‘A’ CHANDIGARH

Before: SHRI LALIET KUMAR & SHRI KRINWANT SAHAY

For Appellant: Shri Ashok Goyal & Shri Sifatpreet Singh, CAs
For Respondent: Smt. Geetinder Mann, CIT DR
Hearing: 22.04.2026Pronounced: 11.05.2026

आयकर अपीलीय अिधकरण,च�ीगढ़ �ायपीठ, च�ीगढ़ IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, ‘A’ CHANDIGARH BEFORE SHRI LALIET KUMAR, JUDICIAL MEMBER AND SHRI KRINWANT SAHAY, ACCOUNTANT MEMBER आयकर अपील सं./ ITA No. 826/CHD/2025 िनधा�रण वष� / Assessment Year : 2015-16 Har Kishan, The ITO, Opp. Ratti Ram Murli Dhar Petrol Vs Ward-1, Pump, Begu Road, Sirsa. Sirsa. �ायी लेखा सं./PAN NO: BLUPK6759E अपीलाथ�/Appellant ��थ�/Respondent Assessee by : Shri Ashok Goyal & Shri Sifatpreet Singh, CAs Revenue by : Smt. Geetinder Mann, CIT DR Date of Hearing : 22.04.2026 Date of Pronouncement : 11.05.2026

PHYSICAL HEARING O R D E R PER LALIET KUMAR, JM

This appeal has been preferred by the assessee against the order dated 31.01.2025 passed by the Ld. Commissioner of Income Tax (Appeals), NFAC, Delhi for assessment year 2015-16 arising out of assessment framed u/s 147 r.w.s. 144 and 144B of the Income Tax Act, 1961.

2.

The assessee, in this appeal, has raised the following grounds of appeal :

ITA-826/CHD/2025 2 1. That the learned Commissioner of Income lax (Appeals)-NFAC, Delhi has erred both in law and, on facts in upholding the determination of income made by the learned Additional/Joint//Deputy/Assistant Commissioner of Income Tax Income Tax/ Income Tax Officer, National Faceless Assessment Centre, of the appellant at Rs. 3,20,75,240/- in an order of assessment dated 23.3.2022 u s 147/144/I44B of the Act. 2. That the learned Commissioner of Income Tax (Appeals) has failed to appreciate that assessment framed u/s 147/144/1444H of the Act is barred by limitation and therefore, deserve to be quashes as such. 3. That the learned Commissioner of Income Tax (Appeals) has failed to appreciate that in absence of service of notice u/s 148 of the Act, order of assessment framed is without jurisdiction and deserves to be quashed as such. 4. That the learned Commissioner of Income Tax (Appeals) has erred both in law and on facts in upholding the initiation of proceedings under section 147 of the Act and, completion of assessment under section 147/144/144R of the Act without appreciating that the same were without jurisdiction and hence deserved to be quashed as such. 4.1 That the learned Commissioner of Income Tax (Appeals) has failed to appreciate that there was no specific relevant, reliable and tangible material on record to form a ''reason to believe" that income of the appellant had escaped assessment and in view thereof the proceedings initiated are illegal, untenable and therefore unsustainable. 4.2 That the learned Commissioner of Income Tax (Appeals) has failed to appreciate that initiation of proceedings was mechanical and without any application o f mind much less independent application of mind, therefore the notice issued u/s 148 of the Act was an invalid notice and assumption u/s 147 of the Act was without, jurisdiction. That in any case in absence o f any valid approval obtained under section 1 4.3 51 of the Act, initiation of proceedings u/s 147 of the Act and assessment framed u/s 147/144/144B of the Act are invalid and deserve to be quashed as such. 4.4 That the ld. Commissioner of Income Tax (Appeals) has failed to appreciate that in absence of such alleged foundational material having not been supplied or confronted, and therefore, on this ground alone, invocation of Section 147 of the Act was illegal, invalid and void-ab-initio. 5. That the teamed Commissioner of Income Tax (Appeals) has also erred both on facts and in law in upholding tbc rejection oi hooks of accounts u/s 145(3) of the Act and computing the income in the manner provided u/s 144 of the Act.

ITA-826/CHD/2025 3 6. That the learned Commissioner of Income Tax (Appeals) has also erred both m law and on facts in sustaining an addition of Rs. 3,17,04,000/-representing alleged profit earned by the appellant declared turnover for the Instant year. 6.1 That while confirming the above addition, the learned Commissioner of Income Tax (Appeals) has failed to appreciate the factual substratum of the ease, statutory provisions of law and as such, addition so confirmed is highly misconceived, totally arbitrary, wholly unjustified and therefore, unsustainable. 6.2 That the ld. CIT (Appeals) has erred both in law and on facts in recording various adverse inferences which are contrary to the facts on record, material placed o record and, are otherwise unsustainable in law and therefore, addition so sustained is absolutely unwarranted. 6.3 That the entire addition made and sustained is based on surmises, conjectures and suspicion and therefore, illegal, invalid and unsustainable. 6.4 That various adverse finding recorded by the learned Commissioner of Income Tax (Appeals) are factually incorrect, legally misconceived and wholly untenable. 7. That the learned Commissioner of Income Tax (Appeals) has also erred both in law and on facts in sustaining an addition of Rs. 3.71,237/- representing contract receipt received by the appellant. 8. That the learned Commissioner of Income Tax (Appeals) has also erred in law and on facts in upholding the levy of interest u/s 234B and levy of interest u/s 234C of the Act which is not leviable on the facts of the appellant.

3.

Briefly stated, the facts of the case are that the assessee is an individual. The case of the assessee was reopened on the basis of information available with the department that huge credits amounting to Rs.39.63 crores were found in the bank account maintained by the assessee with Sirsa Nai Mandi Branch during the relevant period. On the basis of such information, proceedings u/s 147 of the Act were initiated and notice u/s 148 dated 31.03.2021 was issued to the assessee. Since according to the Assessing Officer the assessee neither

ITA-826/CHD/2025 4 filed return of income in response to notice issued u/s 148 nor complied with notices issued u/s 142(1), the assessment was completed ex-parte u/s 144 r.w.s. 147 of the Act by estimating income embedded in bank credits at 8% of Rs.39,63,00,000/- and making addition of Rs.3,17,04,000/-. Further addition of Rs.3,71,237/- was made on account of contract receipts and the total income was assessed at Rs.3,20,75,240/-.

4.

Aggrieved against the assessment order, the assessee carried the matter before the Ld. CIT(A). Before the Ld. CIT(A), the assessee challenged the validity of reassessment proceedings inter alia on the grounds that notice issued u/s 148 was not served within the prescribed period of limitation, that the assumption of jurisdiction u/s 147 was invalid, that proper approval u/s 151 had not been obtained and that no adequate opportunity had been afforded during the course of assessment proceedings. The assessee also challenged the additions made on merits. The Ld. CIT(A), however, dismissed the appeal of the assessee and upheld both the validity of reassessment proceedings as well as the additions made by the Assessing Officer.

5.

Still aggrieved, the assessee is now in appeal before the Tribunal and has raised various grounds challenging the legality of reassessment proceedings, service of notice issued u/s 148, assumption of jurisdiction

ITA-826/CHD/2025 5 u/s 147, rejection of books of account and additions sustained by the Ld. CIT(A).

6.

During the course of hearing, the Ld. Counsel for the assessee submitted that the notice issued u/s 148 dated 31.03.2021 was never served upon the assessee within the prescribed period of limitation and therefore the reassessment proceedings are void-ab-initio. It was submitted that though the notice bears date 31.03.2021, the same was admittedly emailed to the counsel for the assessee only on 01.04.2021 and therefore the notice cannot be said to have been issued and served within limitation prescribed under the Act. The Ld. Counsel further submitted that the assessee has also obtained reply under the Right to Information Act, 2005, which has an important bearing on the issue relating to issuance and service of notice u/s 148 and the same has not been properly appreciated by the Ld. CIT(A).

7.

The Ld. Counsel further contended that the assessee had filed detailed written submissions before the lower authorities explaining the legal and factual position, however, the same have not been properly considered while adjudicating the jurisdictional grounds. It was also argued that the effect of non-filing of return of income by the assessee during the relevant assessment year vis-à-vis assumption of jurisdiction and issuance/service of notice u/s 148 has not been examined by the Ld. CIT(A) in the proper perspective. The Ld. Counsel accordingly prayed

ITA-826/CHD/2025 6 that the matter may be restored to the file of the Ld. CIT(A) for fresh adjudication of the jurisdictional issue after considering the RTI reply and written submissions filed by the assessee.

8.

Per contra, the Ld. Sr. DR relied upon the orders of the lower authorities and submitted that the notice issued u/s 148 was digitally signed on 31.03.2021 and therefore the reassessment proceedings were validly initiated within limitation. It was further submitted that sufficient opportunity had been afforded to the assessee during assessment proceedings but the assessee failed to comply with statutory notices and therefore the Assessing Officer was justified in completing the assessment u/s 144 of the Act.

9.

We have heard the rival submissions and perused the material available on record including the assessment order, order passed by the Ld. CIT(A), written submissions filed before the lower authorities and the additional evidences placed before us. We find that the assessee has specifically challenged the validity of reassessment proceedings on the ground that notice issued u/s 148 dated 31.03.2021 was not served within the prescribed period of limitation and therefore the assumption of jurisdiction u/s 147 is invalid. We further find that the assessee has also placed reliance upon the reply received under the Right to Information Act, 2005, wherein certain factual aspects relating to issuance/service of notice have been brought on record.

ITA-826/CHD/2025 7 10. We further find that though the Ld. CIT(A) has adjudicated the jurisdictional grounds raised by the assessee, however, the reply received under the RTI Act along with the written submissions and supporting documentary evidences filed by the assessee do not appear to have been comprehensively examined while adjudicating the issue relating to validity of reassessment proceedings. The additional material filed by the assessee, particularly the RTI reply touching upon the date and manner of issuance/service of notice u/s 148, goes to the root of the assumption of jurisdiction and therefore requires proper verification and adjudication by the first appellate authority.

11.

We also find that the effect of non-filing of return of income by the assessee during the relevant assessment year vis-à-vis assumption of jurisdiction u/s 147 and issuance/service of notice u/s 148 requires detailed examination in the light of the statutory provisions as well as judicial precedents relied upon by the parties. The interplay between non-filing of return of income, recording of reasons to believe, limitation for issuance/service of notice and validity of reassessment proceedings has not been examined by the Ld. CIT(A) in a comprehensive manner.

12.

Considering the entirety of facts and circumstances of the case and in the interest of substantial justice, we deem it appropriate to set aside the impugned order of the Ld. CIT(A) and restore the matter back to his file with the direction to adjudicate the jurisdictional issue afresh

ITA-826/CHD/2025 8 in accordance with law after duly considering the RTI reply, written submissions and all other documentary evidences filed by the assessee. The Ld. CIT(A) is also directed to specifically examine the effect of non- filing of return of income on the assumption of jurisdiction and issuance/service of notice under section 148 of the Act and thereafter pass a consolidated, speaking and reasoned order in accordance with law after affording adequate opportunity of being heard to both the parties. 13. Since the matter is being restored to the file of the Ld. CIT(A) for fresh adjudication on the legal issue itself, we are not expressing any opinion on merits of the additions at this stage and all issues are left open. 14. In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced on 11.05.2026.

Sd/- Sd/-

(KRINWANT SAHAY) (LALIET KUMAR) ACCOUNTANT MEMBER JUDICIAL MEMBER “Poonam” आदेश की �ितिलिप अ�ेिषत/ Copy of the order forwarded to : अपीलाथ�/ The Appellant 1. ��थ�/ The Respondent 2. आयकर आयु�/ CIT 3. िवभागीय �ितिनिध, आयकर अपीलीय आिधकरण, च�ीगढ़/ DR, ITAT, CHANDIGARH 4. गाड� फाईल/ Guard File 5.

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