MANOJ RAMKARAN SHARMA,KOLHAPUR vs. INCOME TAX OFFICER, WARD 2(1), KOLHAPUR., KOLHAPUR

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCHES “SMC”, PUNE BEFORE DR.MANISH BORAD, ACCOUNTANT MEMBER AND SHRI PAVAN KUMAR GADALE, JUDICIAL MEMBER आयकर अपील सं. / ITA No.969/PUN/2026,1023/PUN/2026 & 981/PUN/2026 Assessment Years: 2015-16, 2016-17 & 2017-18 Manoj Ramkaran Sharma, ITOWard2(1), G-3, Ravikiran Residency, AayakarBhavan, Mahadik Vasahat, Tarabai Park, Kohlapur- 416005 Vs. Kolhapur- 416003, Maharashtra. Maharashtra. PAN-CHPPS1008C Appellant Respondent

Assessee by : Shri PramodS Shingte.AR Revenue by : Shri Pramod Shahakar, JCIT .Sr.DR Date of hearing : 12.05.2026 Date of pronouncement : 04.06.2026 आदेश / ORDER PER PAVAN KUMAR GADALE, JM: These three appeals are filed by the assessee against the separate orders of NFAC/(CIT(A) passed for u/sec250 of the Act. The assessee has raised the grounds of appeal challenging the order of the CIT(A).

3.The brief facts of the case that, the income tax department has received information that the assessee has made substantial cash deposits and withdrawals in the bank account in F.Y.2014-15 and the assessee has not filed the

return of income for the A.Y. 2015-16. The Assessing Officer (A.O) has reason to believe that the income has escaped assessment and issued notice u/sec 148 of the Act and there was no compliance. Further, notice u/sec 142(1) of the Act was issued on various dates to explain the sources of deposits in the bank account and there was no compliance by the assessee. Therefore, the Assessing Officer considering the information available on record invoked the provisions of Section 144 of the Act and made the addition of unexplained investments u/sec 69 of the Act of Rs.33,24,050/- and passed the order u/sec 147 r.w.s 144 r.w.s144B of the Act dated 15.03.2022.

assessee has submitted that the transactions are with respect to business turnover of cotton waste . Whereas the CIT(A) has dealt on this disputed issue at Page 12 Para 6 & 7 of the order read as under:- “6.1During the appellate proceedings the appellant has contested the jurisdiction of the AO in completing the assessment. The appellant contests that the assessment was to be completed u/s 153C of the Act and not under section 147 of the Act. 6.2 The appellant submitted that the AO has erred in making addition of Rs.33,24,050/- representing the total deposits in bank account of Renukamata Multi-State Urban Credit Co. Society. The appellant further submits that during the relevant period, father of the appellant had carried out transactions of dealing in cotton waste from the account held in the name of the appellant. The transactions reflected in the bank account are related to the business activity. 6.3 The appellants contends that the source of the cash deposits is essentially the business receipts in the form of cash sales and collection from debtors and customers. As per appellant submission, the nature of transaction in the said bank accounts, the appellant has been depositing its regular business collection/receipts in the said bank account. The deposits are utilized for making payments towards purchases and expenses. 6.4 The appellant further submitted that the source of the cash deposited in the bank account was out of the turnover from business and it was incorrect to make addition of the entire cash deposits. The appellant further states that where the appellant was carrying on

business regularly, the natural inference is that all the receipts relate to business and the cash deposits in the banks have emanated from the business activities. 6.5 The appellant contends that the source of the cash deposited in the bank account was out of the turnover from business. However, the appellant did not produce any document on record which could suggest that any business activity was going on and that there was cash in hand owing to the business. No books of account or other documentary evidence has been submitted by the appellant in this regard. 7.a. Amendment by Finance (No.2) Act of 2024 The Finance act 2024 has empowered Commissioner Appeals to examine the cases where assessment order was passed as best judgment case U/s 144 of the Act and to set aside the assessment in appropriate matters and refer the case back to the Assessing Officer for making a fresh assessment. The Finance Act also proposes to make consequential amendment in section 153(3) of the Income-tax Act in order to provide the time limit for disposal of cases which are set aside by Commissioner Appeals. This procedural amendment is applicable to appellate orders passed by the Commissioner Appeals on or after 01/10/2024 b. Introduction of Proviso to Sec 251(1)(a): Proviso to Section 251 1(a) has been introduced with effect from 1/10/2024 and it reads as follows "Provided that where such appeal is against an order of assessment made under section 144, he may set aside the assessment and refer the case back to the assessing officer for making a fresh assessment.”

c. Amendment in Sec 153(3): Insertion of the term "section 250" has been made with effect from 1/10/2024 in 3 places, including the proviso whereby the Assessing Officer has been specified time to complete fresh assessment pursuant to setting aside of the assessment order by the CIT Appeals as per proviso to section 251(a) of the IT Act with effect from 1/10/2024. d. Procedural amendments: Jurisprudence, date of examination of records by the authority, It is a settled fact that in the matter of procedural amendment, the date of examination of the record by the authority should be on or after the date of amendment. This has been held by Ld ITAT Rajkot in the case of Swiss Singapore India Pvt. Ltd. vs CIT (IT & TP) Ahmedabad in ITA no. 158 and 159/RJT/2023, date of order 21/05/2024. In this order reliance has been placed on the decision of Hon Supreme court in the case of Shree Shankaracharaya University of Sanskrit and Others vs. Dr. Manu and others in CA no. 3752 of 2023 dt. 15/05/2023. In addition, reliance has been placed in the order of ITAT Mumbai bench in the case of Zenzi Pharmaceuticals Industries Pvt. Ltd. Vs. CIT (TP, 2023 157 taxmaan.com210(mumtrib.).--------the issue of jurisdiction is therefore dismissed” 5. Further the CIT(A) has dealt on the information and assessment u/sec144r.w.s147 of the Act and relied on the provisions and restored the matter to the file of the Assessing Officer to make a fresh assessment dealt at Para 9 of the CIT(A) order as under:- “9.I have gone through the maternal on record including the contents of assessment order, grounds of appeal with statement of facts filed by the assessee. (ii) On going through the submissions filed by the assessee, I am of the considered opinion that the issues contained in the response of the appellant require extensive enquiries and verification which may not be possible with the machinery available at the level of Commissioner (Appeals) It would best serve in the interest of justice if the appellant gets another chance to represent his case before Ld. AO and thereupon Ld. AO can venly the submission of the appellant and conduct necessary enquiries to gather maternal for a true and correct estimation of income of the appellant. Directions foc corripiance by the appellant as well as AO are being issued. (iii) In the appellate proceedings, the appellant submitted the bank account statement. On perusal of the same it is found that the deposits in the account has been made on several dates and thereafter cash withdrawal has been done from the account The appellant submitted that during the relevant period, father of the appellant had carried out transactions of dealing in cotton waste from the account held in the name of the appellant. The AO is directed to verify the genuineness of the transaction appearing in the bank account with the direction to make enquiries with regard to the claim of business carried out by the appellant's father. The same is essential to examine the veracity of the claim of the appellant in accordance with the applicable legal provisions.

(iv) The matter requires extensive factual verification, therefore the assessment order is set aside and the Assessing Officer is directed to make a fresh assessment after giving adequate opportunities to the appellant and complying with all extant rules and provisions and following principles of natural justice. The appellant may note that all necessary compliance should be made at the earliest and within the time limit prescribed in the notices issued by Ld. AO. It should be the endeavor of the Appellant to promptly submit necessary evidences in support of his Income tax retum, suo-moto or as required by the Assessing Officer without causing undue delays leading to submissions towards the fag end of the limitation period. The assessment order is set aside accordingly in accordance with proviso to Sec. 251(1)(a) with a direction to the AO to make a fresh assessment in accordance with rules and timelines prescribed u/s 153(3) of the Act.” 6. Aggrieved by the order of the CIT(A), the assessee has filed the appeal before the Hon’ble Tribunal. At the time of hearing, the Ld. AR submitted that the CIT(A) has erred in not considering the assessee’s submissions that the reopening of assessment made based on search proceeding in the case of Renukamata Multi State Ruban Credit Co. Society is bad in law and also the CIT(A) has erred in not accepting the contentions of the assessee that the cash deposits in bank account are out of the business turnover and alternatively profit component has to be taxed on estimated basis. The Ld.AR substantiated the submissions with paper book and judicial decisions and prayed for allowing the assessee’s appeal. Per Contra, the Ld.DR

submitted that the Assessing Officer passed the order u/sec 144 of the Act and CIT(A) was right in restoring the matter to the file of the Assessing Officer. And The Ld.DR supported the order of the CIT(A). 7. We heard the rival submissions and perused the material on record. The sole crux of the disputed issues envisaged by the Ld.AR that the CIT(A) has erred in sustaining the validity of re assessment u/sec148 of the Act. Prima facie, We find that the CIT(A) had dealt on these factual aspects, amendments and judicial decisions and dealt on the legal issue and passed a reasoned order. Further the CIT(A) has observed that since the assessment was completed u/sec144 of the Act and relied on the provisions of section 251(1)(a) of the Act and has set- aside the assessment order and restore the issues to the file of the assessing officer for fresh adjudication. The Ld.AR contentions are that the cash deposits in bank account are out of the business turnover of cotton waste. Whereas on perusal of bank statements filed by the assessee placed at page 9 to 18 of the paper book, we find maximum transactions pertains to cash deposits/remittances from different places/locations of the assessee bank account maintained are at Hyderabad, Nagpur, Yavatmal etc and most of the cash withdrawals are in particular at Kolhapur. The Ld.AR explanations are that such deposits are out of the business turnover of cotton waste of the assessee father and only profit percentage has to be taxed. Whereas the assessee could not substantiate the transactions of deposits with any primary or secondary evidence supporting with Trade/ License registration certificate issued by local authority of the state,

books of accounts, invoices copies of sale and purchases, expenses incurred on running of the business or any document in support of the business. Further in the reassessment proceedings u/sec147 of the Act, in lieu of notice u/sec148 of the Act and notices issued u/sec142(1) of the Act on various dates by the Assessing Officer, there was no compliance by the assessee and finally the Assessing Officer has invoked the provisions of section 144 of the Act and passed Best Judgment Assessment Order U/sec144 of the Act. Therefore, we considering the facts, circumstances, submissions and principle of natural justice shall provide with one more opportunity of hearing to the assessee to substantiate the case with details and to explain the sources of deposits with the evidences. Accordingly, we restore the disputed issues to the file of the Assessing Officer to adjudicate afresh on merits. Further the assessee should be provided adequate opportunity of hearing and shall cooperate in submitting the information . And we allow the grounds of appeal of the assessee for statistical purposes. 8. In the result, appeal filed by the Assessee is allowed for statistical purposes.

ITA.No.981/PUN/2026 & ITA.No. 1023/PUN/2026.

Accordingly, the grounds of appeal of the assessee are allowed for statistical purpose. 10. In the result, the three appeals filed by the assessee are allowed for statistical purposes. Order pronounced in the open court on this day of June 2026. Sd/- Sd/- MANISH BORAD PAVAN KUMAR GADALE (ACCOUNTANT MEMBER) (JUDICIAL MEMBER) पुणे / Pune; दिन ांक / Dated : 04th June, 2026. Abhishek Mohan Abhishek Digitally signed by Abhishek Mohan Mohan Date: 2026.06.05 10:06:41 +05'30' आिेश की प्रतितितप अग्रेतिि / Copy of the Order forwarded to : अपीि र्थी / The Appellant. 1. प्रत्यर्थी / The Respondent. 2. 3. The Pr. CIT concerned. तिभ गीय प्रतितनति, आयकर अपीिीय अतिकरण, “SMC” बेंच, 4. पुणे / DR, ITAT, “SMC” Bench, Pune. ग र्ड फ़ इि / Guard File. 5. //True File//

आिेश नुस र / BY ORDER,

Assistant Registrar, आयकर अपीिीय अतिकरण, पुणे / ITAT, Pune