HEMLATA KAMAL BHATIA,PUNE vs. DCIT CIRCLE-7 , PUNE

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH “A”, PUNE BEFORE SHRI MANISH BORAD, ACCOUNTANT MEMBER AND SHRI VINAY BHAMORE, JUDICIAL MEMBER आयकर अपील सं. / ITA No.2092/PUN/2025 िनधा�रण वष� / Assessment Year : 2017-18 Hemlata Kamal Bhatia, Vs. DCIT, Circle-7, Pune. 192, Hotel Regency, Dhole Patil Road, Pune- 411001. PAN : AFYPB3174M Appellant Respondent Assessee by : Shri Suhas P. Bora Revenue by : Shri Aviyogi Ambadkar (Virtual) Date of hearing : 25.03.2026 Date of pronouncement : 27.05.2026 आदेश / ORDER PER VINAY BHAMORE, JM: This appeal filed by the assessee is directed against the order dated 17.07.2025 passed by Ld. CIT(A)/NFAC for the assessment year 2017-18. 2. The appellant has raised the following grounds of appeal :- “1. The assessment order u/s 147 r.w.s 144B of the Act is bad in law and void ab initio: a. The Ld. AO has initiated the reassessment proceedings sans any tangible material on record that could justify the income has escaped the assessment.

2 ITA No.2092/PUN/2025 b. The Ld. AO disposed of the objections raised by the appellant against the reopening, but failed to provide a minimum period of 4 weeks thereafter, as mandated by law and judicial precedent, before proceeding with the reassessment. c. The Ld. AO has not provided the documents impounded during the survey action u/s 133A of the Act despite the same forming the basis of reassessment and thereby denying the opportunity to rebut the findings and violating the principles of natural justice. d. The entire reopening of the assessment is merely based on third party documents which cannot form the basis for the reassessment. 2. The Ld. CIT(A) has erred in dismissing the appeal of the appellant stating that the impounded material is confidential in nature and hence cannot be provided to the appellant despite the fact that the said material constitutes the sole basis for reopening the assessment under section 147 of the Act. 3. On the facts and in law, the Ld. CIT(A) has erred in confirming the addition of Rs. 1,07,00,000/- u/s 69A r.w.s. 115BBE of the Act made by the AO without appreciating that: a. The plots were sold in A.Y. 2016-17 and the consideration was duly offered in that year; and a. No corroborative evidence has been brought on record to establish receipt of unaccounted cash in AY 2017-18. 4. The Appellant trust prays that: a. The Assessment Order passed u/s 147 r.w.s 144B of the Act may kindly be declared as bad in law and void ab initio. b. The addition of Rs. 1,07,00,000/- u/s 69A r.w.s 115BBE of the Act may kindly be deleted. c. Any other relief deemed fit by the Hon'ble Tribunal may kindly be granted. 5. The appellant craves leave to add, alter, amend or delete any of the above grounds of appeal.”

3 ITA No.2092/PUN/2025 3. The appellant has also raised the following additional ground of appeal :- “1. The Assessment Order passed u/s 147 r.w.s. 144 r.w.s. 144B of the Act is bad in law as: a. No Notice u/s 143(2) was issued by the AO after requesting the Return of Income filed on 12.02.2018 be treated as Return in response to Notice u/s 148.” 4. Facts of the case, in brief, are that the assessee is an individual deriving income from house property and other sources and has furnished his return of income for the year under consideration on 12.02.2018 declaring an income of Rs.9,05,200/-. The return was processed u/s 143(1) of the IT Act. On the basis of information that the assessee being a landowner has received Rs.1,07,00,000/- in cash and Rs.67,61,500/- through cheque on account of sale of plots during assessment year 2017-18, however the assessee has not offered these transactions for taxation in his return of income for the year under consideration, accordingly the case of the assessee was reopened u/s 147 of the IT Act and notice dated 31.03.2021 u/s 148 was issued after obtaining approval from Joint Commissioner of Income Tax as per the provisions of section 151 of the IT Act. In response to the notice u/s 148 of the IT Act, the assessee did not

4 ITA No.2092/PUN/2025 furnish any return of income, however by enclosing the original income tax return requested the Assessing Officer to accept the original return as filed in response to notice u/s 148 of the IT Act. Subsequently, notice dated 15.02.2022 u/s 142(1) of the IT Act was issued to the assessee. The copy of reasons recorded for reopening the case u/s 147 of the IT Act along with necessary documents approvals were provided to the assessee and the objection dated 11.03.2022 filed by the assessee was also disposed off vide order dated 15.03.2022. After considering the reply and submissions of the assessee, the Assessing Officer completed the assessment proceedings u/s 147 r.w.s. 144 r.w.s. 144B of the IT Act and vide order dated 29.03.2022 determined income of Rs.1,83,66,700/- against the income of Rs.9,05,200/- returned by the assessee. The above assessed income includes addition of Rs.1,74,61,500/- on account of receipt of cash and cheque (by cash Rs1,07,00,000/- & through cheque Rs.67,61,500/-) for sale of immovable property not disclosed in the return of income for the year under consideration. 5. Being aggrieved with the above assessment order, the assessee preferred an appeal before Ld. CIT(A)/NFAC. After considering the reply and submissions of the assessee, Ld. CIT(A)/NFAC partly

5 ITA No.2092/PUN/2025 allowed the appeal filed by the assessee. While partly allowing the appeal of the assesee, Ld. CIT(A)/NFAC dismissed grounds no.1, 2 & 4 & partly allowed the appeal on ground no.3, 5 & 6 by observing as under :- “7.3 During the course of appellate proceedings, the appellant has filed written submission along with the supporting judicial decisions. The written submission and judicial decisions are perused by the undersigned. During the course of assessment proceedings, initially the appellant has denied any transaction with Shri Sumit Suryakant Tilekar and later on, i.e. just before (on 25.03.2022) completing the assessment proceedings, the appellant has stated that some plots were sold to three parties and received Rs.1,69,02,000/- as sale consideration. During the course of appellate proceedings, the appellant has argued that there was no sale taken place during the A.Y. 2017-18 and only the sale consideration of Rs.59,50,000/- was received. Further, the appellant has submitted that the income was offered in the A.Y. 2016-17 itself whereas part of sale consideration of Rs.59,50,000/- was received in the A.Y. 2017-18 and therefore, since there is no sale in A.Y. 2017-18, there is no taxable income for A.Y. 2017-18. The appellant has categorically denied that there is no cash received for sale of the land. The case of the appellant was reopened based on the information received on account of survey conducted u/s 133A of the Act and incriminating material impounded in the case of Shri Sumit Suryakant Tilekar. The appellant has not furnished any documents to disprove the incriminating material impounded at the time of survey proceedings. The AO has given the date wise receipt of cash payment by the appellant. The date wise cash payment is perused and found that the date of registration of the property and date of receipt of the cash is almost matched, therefore, this fact established that the appellant has received unaccounted cash for the sale of the land. Therefore, the cash receipt of Rs. 1,07,00,000/- is confirmed. Further, the appellant has claimed that the sale consideration received through banking channel of Rs.37,61,500/- and Rs.30,00,000/- was offered for taxation. The AO has not given the date of receipt of Rs.37,61,500/- and Rs.30,00,000/-. Therefore, the AO is directed to verify whether the receipt of Rs.37,61,500/- and Rs.30,00,000/- through banking channel were offered for taxation or not, if those receipts were offered for taxation, the same may be deleted. The appellant has raised the objection on the

6 ITA No.2092/PUN/2025 addition of Rs. 1,74,61,500/-through ground nos. 3, 5 & 6, therefore, ground nos. 3, 5 & 6 are decided partly in favour of the appellant.” 6. It is the above order against which the assessee is in appeal before this Tribunal. 7. Apart from regular grounds of appeal mentioned in the memo of appeal Form No.36, the assessee also raised an additional ground which is legal in nature. In this regard, we find that the assessee has challenged the impugned assessment order dated 29.03.2022 passed u/s 147 r.w.s. 144 r.w.s. 144B of the IT Act as void ab initio since notice u/s 143(2) of the IT Act was not issued by the Assessing Officer. This being a legal ground goes to the root of the matter & the facts are already on record, we admit the same & proceed first to adjudicate this legal ground as under. 8. In this regard, we find that it is the claim of the assessee that issue of notice u/s 143(2) of the IT Act is mandatory since vide letter dated 29-04-2021 the assessee requested before the Assessing Officer to treat the original return as being filed in response to notice issued u/s 148 of the IT Act. And in the instant case in hand no such notice was issued by the Assessing Officer as can be seen from the assessment order itself. Accordingly, it is the claim of the

7 ITA No.2092/PUN/2025 assessee that in the absence of notice u/s 143(2) of the IT Act the Assessing Officer has no jurisdiction to pass the impugned assessment order dated 29.03.2022, therefore it needs to be quashed. 9. On the other hand, it was the contention of Ld. DR that since the assessee has not furnished any return in response to the notice dated 31-03-2021 issued u/s 148 of the IT Act, there was no requirement to issue any notice u/s 143(2) of the IT Act. Ld. DR also furnished a report received on email from the concerned Assessing Officer wherein it was informed/ confirmed that no notice u/s 143(2) of the IT Act was issued. It was also submitted that if the ITBA portal do not find any return in response to notice issued u/s 148 of the IT Act it also cannot issue any notice u/s 143(2) of the IT Act since the notices now a days are system generated. Accordingly, Ld. DR contended that there is no infirmity in the assessment order passed by the Assessing Officer & therefore the additional ground raised by the assessee needs to be dismissed. 10. We have heard Ld. Counsels from both the sides and perused the material available on record including the paper books furnished by the assessee which includes copy of case laws relied on by the

8 ITA No.2092/PUN/2025 assessee. In this regard, we find that admittedly in response to notice issued u/s 148 of the IT Act the assessee has not furnished any return of income, however vide letter dated 29-04-2021 (page7 of paper book) requested before the Assessing Officer to accept the original income tax return as filed in response to notice u/s 148 of the IT Act. We further find that in paragraph 4 appearing on page 3 of the impugned assessment order the Assessing Officer admitted this fact by observing as under :- “In response to the notice u/s 148 the assessee has not filed her return of income for AY 2017-18 but she enclosed the original ITR stating that “copy of ITR in response to notice u/s 148 of the IT Act, 1961. (Enclosed).” 11. We further find that in support of its contention that in the absence of notice u/s 143(2) of the IT Act the assessment orders are treated as bad in law, the assessee has placed reliance on following decisions :- a. Assistant Commissioner of Income-tax v. Hotel Blue Moon (188 Taxman 113) (Supreme Court). b. Commissioner of Income-tax v. Laxman Das Khandelwal (108 taxmann.com 183) (Supreme Court). c. Principal Commissioner of Income-tax v. Shri Jai Shiv Shankar Traders (P.) Ltd (64 taxmann.com 220) (Delhi HC). d. Principal Commissioner of Income-tax v. Staunch Marketing (P.) Ltd. (81 taxmann.com 482) (Delhi HC).

9 ITA No.2092/PUN/2025 e. Raja Bashumiya Maniyar v. The Income Tax Officer-1, Latur (ITA 455/PUN/2025) (Pune ITAT). f. PCIT vs Dart Infrabuild (P.) Ltd. (166 taxmann.com 4) (Delhi HC). g. CIT vs. Nagendra Prasad (156) taxmann.com 19) (Patna HC). h. ACIT v. Logic Control Pvt Ltd. (ITA 3974/DEL/2025) (Delhi ITAT). i. Bababhai Sadarbhai Shaikh v. ITO Ward 1, Ahmednagar (ITA 144/PUN/2025) (Pune ITAT). j. Bharat Kantilal Chengede Vs. ITO, Ward 6(3), Pune (ITA No.1902/PUN/2025) (Pune ITAT). 12. From a plain reading of all these decisions, we find that requirement of issue of a notice u/s 143(2) of the IT Act is a must. We find support from decision relied on by the assessee wherein coordinate bench of this Tribunal in the case of Raja Bashumiya Maniysr vs The Income Tax Officer ITA No.455/PUN/2025 order dated 27-05-2025 under identical facts held that in the absence of notice u/s 143(2) of the IT Act the assessment order is bad in law by observing as under :- “6. In this case, in the order u/s.144 r.w.s 147 of the Act, dated 30.12.2016 the Assessing Officer in Para 5 has stated that since no Return of Income has been filed by the Assessee in response to notice u/s.148 of the Act, no notice u/s.143(2) has been issued. Thus, it is a fact that No Notice u/s.143(2) has been issued. On perusal of the Page No.34 of the paper book, it is observed on 07.04.2016, the Assessee filed a letter stating that the Return of Income filed on 15.02.2012 may be treated as Return in response to notice u/s.148 of the Act. The said letter is reproduced here as under : xxxxx

10 ITA No.2092/PUN/2025 6.1 The Assessee also filed copy of the said Income Tax Return. The impugned letter of the assessee has an acknowledgment stamp and signature of the Clerk, of the Office of the DCIT, Circle Latur, dated 07.04.2016. This fact has not been rebutted by the ld.DR for the Revenue. 6.2 Thus, Assessing Officer has erred in stating that No Return of Income has been filed in response to notice u/s.148 of the Act. It is observed that Assessee had filed Return of Income in response to notice u/s.148 of the Act, within 30 days. Therefore, it was mandatory to issue a notice u/s.143(2) of the Act. Admittedly, Notice u/s.143(2) has not been issued. 6.3 The Hon’ble Delhi High Court in the case of Pr.CIT Vs. Shri Jai Shiv Shankar Traders (P.) Ltd., 282 CTR 435 (Del) dated 14.10.2015 has held as under : “19. The resultant position is that as far as the present case is concerned the failure by the AO to issue a notice to the Assessee under Section 143(2) of the Act subsequent to 16th December 2010 when the Assessee made a statement before the AO to the effect that the original return filed should be treated as a return pursuant to a notice under Section 148 of the Act, is fatal to the order of re-assessment. 20. Consequently, there is no legal infirmity in the impugned order of the ITAT. No substantial question of law arises. The appeal is dismissed. 6.4 The ITAT Delhi Bench in the case of ACIT Vs. P & R Infraprojects Ltd., in ITA No.4944/DEL/2018 has also quashed the Assessment Order wherein, Notice u/s.143(2) was not issued.” 13. Respectfully following the above decision passed by a coordinate bench of this Tribunal in the case of Raja Bashumiya Maniysr vs The Income Tax Officer ITA No.455/PUN/2025 order dated 27-05-2025, we are of the considered opinion that in the instant case in hand the Assessing Officer was required to issue notice u/s 143(2) of the IT Act since he has accepted the request

11 ITA No.2092/PUN/2025 letter of the assessee wherein original return of income was requested to be treated as filed in response to the notice u/s 148 of the IT Act. We are of the view that if the Assessing Officer was not convinced with the request of the assessee he could have rejected the request made by the assessee & asked the assessee to file return however nothing of that sort was acted upon by the Assessing Officer, therefore we cannot accept the contention of Ld. DR that the assessee has not filed the return in response to the notice issued u/s 148 of the IT Act. 14. Considering the totality of the facts of the case & in view of above discussion &also in the light of coordinate bench decision passed in the case of Raja Bashumiya Maniysr vs The Income Tax Officer (supra), we deem it appropriate to set-aside the order passed by Ld. CIT(A)/NFAC & quash the impugned reassessment order dated 29-03-2022 passed u/s 147 r.w.s. 144 r.w.s. 144B of the IT Act, since the legal requirement to issue notice u/s 143(2) of the IT Act was not fulfilled which consequently vitiates the reassessment & makes the reassessment order bad in law resulting in nullity. Accordingly, the additional legal ground raised by the assessee is allowed.

12 ITA No.2092/PUN/2025 15. Since we have allowed the additional ground & already quashed the impugned reassessment order, the other grounds challenging the reassessment are not being adjudicated. 16. In the result, the appeal filed by the assessee is allowed. Order pronounced on this 27th day of May, 2026. Sd/- Sd/- (MANISH BORAD) (VINAY BHAMORE) ACCOUNTANT MEMBER JUDICIAL MEMBER पुणे / Pune; �दनांक / Dated : 27th May, 2026. Sujeet/DOC Sujeet Kumar Digitally signed by Sujeet Kumar Sharma Sharma Date: 2026.06.01 13:04:25 आदेश क� �ितिलिप अ�ेिषत / Copy of the Order forwarded to : +05'30' अपीलाथ� / The Appellant. 1. ��यथ� / The Respondent. 2. 3. The Pr.CIT concerned. िवभागीय �ितिनिध, आयकर अपीलीय अिधकरण, “A” ब�च, 4. पुणे / DR, ITAT, “A” Bench, Pune. गाड� फ़ाइल / Guard File. 5. आदेशानुसार / BY ORDER, // True Copy // Assistant Registrar आयकर अपीलीय अिधकरण, पुणे / ITAT, Pune.