DHARMIL ANIL BODANI,MUMBAI vs. DCIT, CC 19(1), MUMBAI

PER PAWAN SINGH, JUDICIAL MEMBER: 1. This appeal by assessee is directed against the order of ld. CIT(A)/NFAC, Delhi dated 22.12.2025 for Assessment Year (AY) 2013-. The assessee has raised following grounds of appeal: “1. The Commissioner of Income-tax (Appeals) at National Faceless Appeal Centre (NFAC), Delhi (hereinafter referred to as the CIT(A)) has erred in upholding the action of the Officer at the Assessment Unit (hereinafter referred to as the Assessing Officer) in making addition of Rs. 3,98,17,137 under section 69A of the Act in respect of receipt of proceeds on sale of shares of Kyra Landscapes Ltd. on the ground that the said receipt is alleged to be unexplained taxable income generated through non-genuine transactions.

The appellant contends that on the facts and in the circumstances of the case and in law, the CIT(A) ought not to have upheld the action of the Assessing Officer in making the impugned addition of Rs 3,98,17,137 under section 69A in respect of

Dharmil Anil Bodani ITA No. 592/M/2026 (AY: 2013-14) receipt of proceeds on sale of shares of Kyra Landscapes Ltd. without appreciating that the same is duly accounted for in the books of account of the appellant and are also backed by documentary evidences, and the appellant has also provided the evidences to prove the source of investment; as such, the prescription of the provisions of section 69A per se are not applicable and hence, the impugned addition ought to have been deleted.

The appellant further, contends that the CIT(A) ought not to have upheld the action of the Assessing Officer in making the impugned addition inasmuch as the assessment order has been framed in violation and utter disregard to the principles of natural justice inasmuch as, amongst others, the Assessing Officer has not given the documents/ statements on oath to the appellant for rebuttal, which are in his possession and on which he has relied upou and has not given an opportunity to the appellant to cross examine the persons whose statement the Assessing Officer has relied upon. The appellant further, submits that during the 'Video Conference' proceedings the appellant specifically required the Assessing Officer to inform if he has the said documents, to which he responded by stating that the appellant need not ascertain the same

The appellant further, contends that the CIT(A) on the facts and in the circumstances of the case and in law, ought not to have upheld the action of the Assessing Officer in making the impugned addition inasmuch as the Assessing Officer has not proved that the cash emanated from the coffers of the appellant.

Without prejudice to the above, the appellant further, submits that the CIT(A) has erroneously averred in para 7.5 of his order that "Thus it is seen that the case of section 694, the assessee may or may not have maintained books of account butis found to be the owner of the money, jewellery, bullion or other valuable article. Howeverthe other essential ingredients of the sections such as burden of proof with regard to the source of the credits or unexplained money. test of satisfaction, are common to both sections 68 and 694 and hence the judicial decisions on section 68 will also be relevant for section 69A respectively with regard to the burden of proof on the assessee to prove the source etc." 2

Dharmil Anil Bodani ITA No. 592/M/2026 (AY: 2013-14) 2. The CIT(A)) erred in framing an ex parte order.

The appellant contends that on the facts and in the circumstances of the case and in law, the CIT(A) ought not to have passed an ex parte order.

The appellant further, contends that in any view of the matter, the CIT(A) has on the facts and in the circumstances of the case and in law erred in not decided the following jurisdictional and other grounds of appeal -

"2. Notice u/s 148 issued prior to 01.04.2021 which is beyond six years from the end of the relevant assessment year is time barred and without jurisdiction.

On the facts and circumstances of the case and in law, the learned AO erred in not appreciating that the notice issued u/s 148 which had become timed barred prior to 1-4-2021 as per the then provisions cannot be revived under new regime by applying section 149(1)(b) of the Act which came into effect from 1-4-2021. Thus, the reassessment proceedings being void-ab-initio, thereby the entire additions made must be deleted.

On the facts and circumstances of the case and in law, the learned AO erred in considering the approval taken by the PCIT (sought originally while issuing the notice u/s 148 as per the old law) as also the approval of the specified authority as per the new section 151 while issuing notice u/s 1484(b). Thus the reassessment proceedings initiated without taking the approval of the PCCIT as per provision of section 151 is void-ab-initio and thereby the entire additions made must be deleted.

Without prejudice to the above and without admitting, on the facts and circumstances of the case and in law, the learned AO erred in issuing notice 148A(b) 3

Dharmil Anil Bodani ITA No. 592/M/2026 (AY: 2013-14) without satisfying the conditions envisaged u/s 149(1)(b) relating to the existence of any asset which represents the impugned income suspected to have escaped assessment. Thus notice issued u/s 148 is bad-in-law and thereby the entire additions must made be deleted.

Without prejudice to the above and without admitting, on the facts and circumstances of the case and in law, the initiation of the reopening proceedings by passing order u/s 148A(d) mechanically on the basis of information supplied by Investigation Agency/SEBI without evaluating the information received vis-à-vis the facts of the appellant's case does not entail "information" which suggests that the income chargeable to tax has escaped assessment within the meaning of Explanation 1 to section 148. Thus the reopening proceedings initiated u/s 148 is bad-in-law and thereby the entire additions made must be deleted."

The appellant craves leave to add to, alter or amend the aforestated grounds of appeal. 2. Rival submissions of both the parties have been heard and record perused. At the outset of hearing, the learned authorised representative (ld. AR) of the assessee submits that grounds of appeal raised by assessee is squarely covered by the decision of Mumbai Tribunal and assessee’s own case for A.Y. 2012-13 in ITA No. 648/M/2024, wherein similar reopening on the basis of exactly same reasons recorded were quashed. The ld. AR submits that AO simply referred the information received from ITO, Sharanpur, Mumbai without application of mind and verification of record of the assessee. The AO acted on borrowed satisfaction. The AO has not even seen the record of the return of income for relevant assessment year. The ld. AR by referring the reasons recorded which is

Dharmil Anil Bodani ITA No. 592/M/2026 (AY: 2013-14) a part of order under section 148A(b) dated 27.07.2022 submits that as reasons recorded are verbatim. 3. On the other hand, learned Senior Departmental Representative (ld. Sr. DR) for the Revenue submits that assertion of ld. AR of the assessee is factually incorrect. As per amended provision of section 149(1)(b). The notice can be given for reopening of assessment upto 10 years where escapement of income is exceeding Rs. 50.00 lac. In the present case escapement of income is admittedly more than Rs. 50.00 lakhs which is Rs. 3.94 crore. The AO issued notice under section 148 with the approval of Pr. CCIT. Before passing the order of AO issued notice under section 148(1)(b) and on consideration of reply / objection thereof, the Assessing Officer (AO) passed order under section 148A(d) and issued the notice under section 148. To support his submission, the ld. Sr DR for the revenue relied upon the decision of Madras High Court in Kandasamy Veluswamy vs ACIT (2026) 182 taxmann.com 74 (Madras). 4. We have considered the rival submissions of both the parties and have gone through the orders of lower authorities carefully. We find that exactly on similar set of fact and on similar ground of appeal on similar set of reasons recorded, the co-ordinate bench of this Tribunal in assessee’s own case for A.Y. 2012-13 passed the following order: “6. We have heard both the parties at length on the legal issue and also perused the relevant finding given in the impugned order as well as material referred to before us. As stated above and is also evident from the reasons recorded communicated twice by the ld. AO, one on 29/09/2019 and other on09/10/2019 that there was certain information received from ITO Ward(E)-4, Sharanpur, 5

Dharmil Anil Bodani ITA No. 592/M/2026 (AY: 2013-14) Mumbai vide letter dated 18/04/2016. As per the information there was a penny stock company, named M/s. Kyra Landscapes Ltd. (earlier known as TCL Technologies Ltd.) and as per the information assessee was also one of the beneficiaries who had purchased 3.40 lakhs number of shares at Rs.10/- per share and assessee has traded in scrip for Rs.3,98,17,137/- during the F.Y.2011-12 relevant A.Y.2012-13 and accordingly, an amount of Rs.3,98,78,137/- had escaped assessment. First of all, the ld. AO has simply referred to the information received from ITO and without applying his mind and verifying the record of the assessee, simply based on borrowed satisfaction has issued the notice without even verifying whether assessee had actually sold shares to the tune of Rs.3,98,17,137/- during the relevant assessment year or not. He has even failed to peruse the return of income filed originally wherein assessee has declared long term capital gain of Rs.71,72,136/- on the total sale consideration of Rs.79,22,137/-. This clearly shows that ld. AO has not even verified the return of income of the assessee which was on record and has blindly issued the notice u/s.148 based on incorrect figures reported in the information received from another ITO. Any information received from Investigation Wing or from another Officer can be the triggering point, however, it is incumbent upon the AO to verify the records of the assessee and after verifying he has to arrive at his own reason to believe based on material or information in his possession and then only hecan acquire jurisdiction to issue a notice u/s.148 to reopen the assessment. The Hon’ble Jurisdictional High Court in the case of PCIT vs. Shodiman Investments Pvt. Ltd., reported in 422 ITR 337 (Bom) held that the reasons must indicate the material which forms the basis of reopening the assessment and the reasons should evidence the linkage / nexus to the conclusion that income chargeable to tax has escaped assessment. There has to be a rational connection with the formation of belief and if the aforesaid requirements are not made, reopening u/s.147 cannot be upheld. In that case the reopening was done on the basis of information received from DIT (Investigation) about a particular entity entering into suspicious transaction. However, that material was not further linked by any reason to come to the conclusion that assessee has indulged in any activity which could give rise to reason to belief on the part of the AO that income

Dharmil Anil Bodani ITA No. 592/M/2026 (AY: 2013-14) chargeable to tax has escaped assessment. The relevant observation reads as under:-

“13. In this case, the reasons as made available to the Respondent- Assessee as produced before the Tribunal merely indicates information received from the DIT (Investigation) about a particular entity, entering into suspicious transactions. However, that material is not further linked by any reason to come to the conclusion that the Respondent-Assessee has indulged in any activity which could give rise to reason to believe on the part of the Assessing Officer that income chargeable to tax has escaped Assessment. It is for this reason that the recorded reasons even does not indicate the amount which according to the Assessing Officer, has escaped Assessment. This is an evidence of a fishing enquiry and not a reasonable belief that income chargeable to tax has escaped assessment.

 Tata Sons Limited vs DCIT [2022] 137 taxmann.com 414 (Bombay HC)  Anwar Mohammed Shaikh vs ACIT [2023] 148 taxmann.com 288 (Bombay HC)  Arvind Sahdeo Gupta vs ITO [2023] 153 taxmann.com. 244 (Bombay HC) 7

Dharmil Anil Bodani ITA No. 592/M/2026 (AY: 2013-14)  Amarjeet Thapar v. ITO (2019) 411 ITR 626 (Bom) (HC)

Thus, on this ground also the reasons recorded cannot be sustained. 8. Lastly, here in this case assessee has filed detailed objections before the AO highlighting that reasons contain incorrect assumption of facts and despite filing such objection ld. AO has not disposed off the objection and even in the two subsequent show-cause notice issued u/s.142(1) also, AO continued to allege that income escaped assessment is Rs.3,9817,137/-. If assessee files objection, then it is mandatory for the AO to dispose of the objections and this principle has been affirmed by the Hon’ble Bombay High Court in the following judgments:

 Rabo India Finance Ltd. v DCIT [2012] 346 ITR 81 (Bombay HC)  Bayer Material Science v DCIT [2016] 66 taxmann.com 335 (Bombay HC) 9. Thus, it has been held that if AO has not disposed of the objections, then he cannot proceed further and pass the assessment order and consequently the order of reassessment is invalid. Accordingly, in view of the aforesaid three grounds, the impugned notice u/s.148 dated 30/03/2019 and the reasons recorded are held as void ab initio and accordingly, entire reassessment proceeding and order is quashed.

Dharmil Anil Bodani ITA No. 592/M/2026 (AY: 2013-14) reopening is bad in law as AO made reopening without making independent inquiry and application of mind. 6. We find that coordinate bench of this Tribunal quashed similar reopening on exactly similar information on assuming jurisdiction and also held that AO has not disposed off the objection and continued to allege that income escaped assessment. Thus, considering the consistent decision of co-ordinate bench of similar set of facts notice under section 148 dated 27.07.2022 is quashed. Once, notice under section 148 is quashed the assessment order passed on the basis of such notice has become void ab initio. In the result, the assessee succeeded on legal issue. Considering the fact that assessee succeeded on legal issue, therefore, adjudication on others grounds of appeal has become academic. 7. In the result, appeal of the assessee is allowed. Order was pronounced in the open Court on 25/06/2026.

/- SdSd/- S/- Sd/-- MAKARAND VASANT MAHADEOKAR PAWAN SINGH ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai, Dated: 25/06/2026 Biswajit Copy of the order forwarded to: (1) The Assessee; (2) The Revenue; (3) The PCIT / CIT (Judicial); (4) The DR, ITAT, Mumbai; and By order (5) Guard file.

Assistant Registrar / DDO ITAT, Mumbai 9