GULAMAHEMAD HAMIDULLA KHAN,PUNE vs. ITO, WARD-14(3), PUNE, PUNE

The Ld. AR submitted that reopening is bad in law. Ld. AR invited our attention to notice u/s 148A(b) of the Act wherein it is merely mentioned that the assessee has deposited Rs.61,63,170/- in cash with M/s. Shri Renuka Mata Multi State Urban Co-operative Credit Society Ltd. The Ld. AR submitted that the Assessing Officer (AO) has no specific information before issuing notice u/s 148 of the Act. Therefore, notice u/s 148 is bad in law. The Ld. AR also submitted that notice u/s

The Ld. DR relied on the order of the Assessing Officer and the Ld. CIT(A). On earlier hearing i.e. 07.05.2026, we have directed the Ld. DR to file copy of information based on which notice u/s 148 was issued. The Ld. DR filed a report.

We have heard both the parties and perused the records. In this case, we have studied the notice u/s 148A(b) of the Act dated 25.05.2022 and order u/s 148A(d) of the Act dated 14.07.2022. In the said notice, it is specifically mentioned that on the basis of information received on INSIGHT Portal, notice 2

Similarly, we have perused the documents filed by the Ld. DR regarding re-opening. The relevant paragraphs of the said Annexure are reproduced as under : “Brief details of the assess , assessee is an individual. The assessee has filed his return of income for assessment year A.Y. 2016-17. 2. Brief details of information collected/received by AO: As per the information received. search & Seizure action u/s 132 of the IT Act, 1961 was carried out in case of M/s. Shri Renuka Mata Multi State Urban Co-operative Credit Society Ltd. (in short Society/SRMSCS) (PAN. AADAS7782D) on 26.05.2017. During the search, it was found that the society was used as a conduit for laundering their unaccounted money by some unscrupulous tax payers. The assessee is one of them who deposited huge in the said bank in cash. The total cash amount deposited by the assessee is of Rs. 61,63.170/- and subsequently withdrew the same from other branch of the bank.

Thus, it is observed that the AO has relied on a vague statement which was provided to the AO on INSIGHT Portal of the Income Tax Department that the assessee had deposited Rs.61,63,170/-. Nowhere in the reasons recorded or in the order u/s 148A(d) of the Act or in the notice u/s 148A(b) of the Act any Account Number or Branch Name of M/s. Shri Renuka Mata Multi State Urban Co-operative Credit Society Ltd. is mentioned. Thus, the AO has issued notice without any specific information on record.

The Hon’ble Bombay High Court in the case of Principal CIT-5 vs. Shodiman Investments (P.) Ltd. [2020] 422 ITR 337 (Bombay) has held as under : Quote, “12. The re-opening of an Assessment is an exercise of extra- ordinary power on the part of the Assessing Officer, as it leads to 4

The Hon’ble Delhi High Court in the case of Well Trans Logistics India (P.) Ltd. Vs. Addl. Commissioner of Income-tax, [2024] 166 taxmann.com 72 (Delhi) has held as under : Quote, “24. We may note that the Assessing Officer after reproducing the information received from DDIT,(Investigation) Unit, drew the conclusion of escapement of income. In the case of Assistant Commissioner of Income-tax v. Rajesh Jhaveri Stock Brokers (P.) Ltd. [2007] 161 Taxman 316/291 ITR 500 (SC), the Supreme Court had explained that expression "reason to believe" would mean justification to know or suppose that income had escaped assessment. While, it is correct that it is not necessary for the Assessing Officer to finally ascertain whether income had escaped assessment, nonetheless, the Assessing Officer must have sufficient cause to believe that it has. 25. In the present case, as may be seen, there is no "close nexus" or "live link" between tangible material and the reason to believe that income has escaped assessment. The information received from the Investigating Unit of the Revenue cannot be the sole basis for forming a belief that income of the assessee has escaped assessment. Having received information from the Investigating Wing, it was incumbent upon the Assessing Officer to take further steps, make further enquiries and garner further material and if such material indicate that the income of the assessee has escaped assessment and then form a belief that the income of the assessee has escaped assessment. 26. Clearly, in this case, the Assessing Officer has not acquired any material to form such belief. There is not even a line of reason which may justify the formation of the belief. Consequently, we are satisfied that reopening of assessment for the assessment year in question by the Assessing Officer does not satisfy the requirement of law in terms of Section 147 & 148 of the Act.” Unquote.

Respectfully following the decisions of the Hon’ble High Court of Delhi and Bombay, we hereby hold that the AO was not having any specific information, before issuing notice u/s 148 of the Act. Therefore, reasons recorded are based on surmises. Accordingly, notice u/s 148 of the Act is bad in law and accordingly quashed.

During the assessment proceedings the Assessee submitted that he is a small scrap merchant who collects scrap by visiting localities, colonies. The submission of the Assessee has been reproduced by the AO in the Assessment Order. The Assessee denied having any such account. No where in the Assessment order the AO has referred to any specific Account Number allegedly pertaining to the assessee. The entire addition made by the AO is based on the INSIGHT portal information. The AO has no where mentioned the so called dates on which the amounts were allegedly deposited. Thus, the entire addition is based on surmises and conjectures. Therefore, even on merits the Addition is unsustainable. Accordingly, we direct the AO to delete the addition.

Accordingly,the appeal of the assessee is allowed.