BAHADUR SINGH,LUDHIANA, PUNJAB vs. INCOME TAX OFFICER WARD 3(1), LUDHIANA, LUDHIANA

That the reopening of Assessment is bad in law and in derogation of the provisions of section 151A of the Act read with Notification No. 18/2022 dated 29.03.2022 issued by the Central Board of Direct Taxes

That the order dated 06.10.2025 passed by the Ld. CIT(A) is bad in law and liable to be quashed as it is against the specific directions of the Honble Punjab & Haryana High Court in CWP No. 23628 of 2025 titled Bahadur Singh vs. Income Tax Officer & others.

That the Ld. CIT(A) has grossly erred in upholding the order passed by Ld. AO assessing the income at Rs. 44,78,030 under 3 section 147 of the Income Tax Act, 1961 by making addition of Rs. 24,00,000 to the returned income of the Appellant under section 69 r.w.s 115BBE of the Income Tax Act, 1961. 2

That the Ld. AO has grossly erred both in law and on facts by making an addition of Rs. 24,00,000 on account of alleged on money payment for purchase of property, even though no such variation was ever proposed in the Show Cause Notice.

That the Ld. Assessing Officer has erred in the reopening based 5 on borrowed satisfaction and without any independent application of mind.

That the Ld. CIT(A) has erred in confirming addition solely based on a statement and in absence of any independent corroboration.

That in the absence of any specific information with respect to the Appellant, reliance on the loose papers/documents without corroboration is bad in law and irrelevant as evidence being not admissible under Section 34 of the Evidence Act, 1872 to constitute evidence.

That the Ld. CIT(A) erred in upholding the addition made by Ld. AO without giving opportunity to appellant to cross examine the third party.

That the appellant craves leave to add, amend, OR alter the grounds of appeal before the appeal is finally heard.

The brief facts of the case, as emanating from the record, are that the assessee is an individual who had originally filed his return of income declaring income of Rs. 14,73,000/-. Subsequently, reassessment proceedings were initiated and the income was assessed at Rs. 44,78,030/- by making an addition of Rs. 24,00,000/- on account of alleged unexplained investment under section 69 read with section 115BBE of the Act on the basis of third- party information obtained during search in the case of M/s Omaxe Ltd.

1 The Ld. Assessing Officer relied upon certain seized excel sheets and statements recorded during search proceedings to infer that the assessee had made cash payments over and above the recorded consideration. The assessee denied the allegation and submitted that the property transaction in question pertained to a subsequent assessment year and that all payments were made through banking channels. However, the Assessing Officer rejected the explanation and completed the reassessment by making the impugned addition.

Against the order of the AO the assessee went in appeal before the Ld CIT(A).

The Ld. CIT(A) confirmed the addition by holding that the reassessment proceedings were valid, that the seized material carried presumption under 3 section 292C, and that the assessee failed to rebut the same. The appeal of the assessee was accordingly dismissed.

Against the order of the Ld. CIT(A) the assessee preferred in appeal before us.

During the course of hearing the AR submitted that the entire addition is based solely on third-party information without any independent enquiry or corroborative evidence. It was contended that no opportunity of cross- examination was provided despite specific request, thereby violating the principles of natural justice.

1 It was further submitted that the alleged transaction pertains to financial year 2020–21 relevant to A.Y. 2021–22 and not to the year under consideration. The first payment itself was made on 09.03.2021 through banking channels and there was no cash payment whatsoever.

2 The Ld. AR also argued that the reassessment proceedings are bad in law as the juri ictional requirements under the amended provisions were not complied with. Reliance was placed on various judicial precedents including the decisions of the Hon’ble Supreme Court and High Courts. The Ld. AR relied upon the decision of the Coordintate Bench in the case of Anupama Gupta Vs. ITO Ward-2 in ITA No. 972/Chd/2025. 8. The Ld. DR, on the other hand, supported the orders of the lower authorities and submitted that the addition was based on credible material found during search and duly corroborated by statements recorded under oath.

We have heard the rival submissions and perused the material available on record. The issue for consideration is whether the addition of Rs. 24,00,000/- made under section 69 r.w.s. 115BBE is sustainable in the facts and circumstances of the case. It is observed that the entire addition has been made on the basis of third-party material allegedly obtained from M/s Omaxe Ltd. during search proceedings. However, there is nothing on record to demonstrate that such material was ever confronted to the assessee in a 4 meaningful manner or that an effective opportunity of cross-examination was granted.

1 The Hon’ble Supreme Court in the case of Kishinchand Chellaram vs. CIT has clearly held that any material collected at the back of the assessee cannot be used against him unless he is confronted with the same. Similarly, denial of cross-examination has been held to be a serious flaw rendering the addition unsustainable.

2 In the present case, though the Revenue claims reliance on seized material and statements, the assessee has consistently denied having made any cash payment and has furnished documentary evidence showing that the transaction took place in a subsequent year through banking channels. The Revenue has not brought any independent corroborative evidence to establish actual flow of unaccounted cash.

3 Further, we find considerable force in the contention of the assessee that the transaction itself pertains to a different assessment year. The undisputed fact that the first payment was made in March 2021 clearly militates against the assumption that any investment was made during the year under consideration.

4 The presumption under section 292C, though available to the Revenue, is rebuttable in nature. In the present case, the assessee has discharged the initial burden by furnishing plausible explanation supported by documentary evidence, whereas the Revenue has failed to establish the addition with cogent material. Further, no search was carried out in the premises of the assessee and therefore the Revenue cannot take the benefit of the Section 292C of the Act.

5 We also find that the addition has been made merely on the basis of suspicion and general allegations regarding industry practices without bringing any direct evidence against the assessee. It is a settled law that suspicion, however strong, cannot take the place of proof. Moreover, the 5 issue is squarely covered by the decision in the case of Anupama Gupta (supra) in favour of the assessee.

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In the result, the appeal of the assessee is allowed.

""थ"/ The Respondent 3. आयकर आयु"/ CIT 4. आयकर आयु" (अपील)/ The CIT(A) 5. िवभागीय "ितिनिध, आयकर अपीलीय आिधकरण, च"ीगढ़/ DR, ITAT, CHANDIGARH 6. गाड" फाईल/ Guard File