NIRMAL PURSHOTAM BHATIA ,MUMBAI vs. INCOME TAX OFFICER WARD 2(2), KALYAN

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ITA 501/MUM/2026Status: HeardITAT Mumbai19 June 2026AY 2014-157 pages

In favour of the Revenue: the assessee's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal upheld the AO's action of estimating commission income, finding no infirmity in the addition sustained by the CIT(A). The assessee failed to provide evidence to rebut the findings or substantiate claims of non-involvement.

What were the facts?

The assessee's bank accounts showed substantial deposits, which the Assessing Officer (AO) found were used by a third party for routing accommodation entries. The AO estimated commission income at 0.05% of the total deposits.

What were the issues?

Whether the reassessment proceedings were validly initiated and whether the estimation of commission income on accommodation entries was justified.

Which sections of the Income-tax Act were involved?

Section 147,Section 144,Section 148,Section 133(6),Section 132(4),Section 131(1A),Section 250

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, MUMBAI BENCH “J(SMC

Before: SHRIOM PRAKASH KANT & SHRI ANIKESH BANERJEE

For Respondent: Shri Mukesh Thakwani (Sr.DR)
Hearing: 17/06/2026Pronounced: 19/06/2026

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “J(SMC)”, MUMBAI BEFORE SHRIOM PRAKASH KANT, ACCOUNTANT MEMBER AND SHRI ANIKESH BANERJEE, JUDICIAL MEMBER ITA No.499/Mum/2026 (Assessment year: 2016-17) ITA No.500/Mum/2026 (Assessment year: 2015-16) ITA No.501/Mum/2026 (Assessment year: 2014-15)

Nirmal Purshotam Bhatia vs ITO Ward 2(2), Mumbai Flat No. 202, Devimaa Officer of ITO Ward 2(2), Kalyan, Apartment, Block No.1515, Income Tax Office, Mohan Plaza, Prem Nagar Tekdi, Gandhi Khadakpada, Kalyan (W)-421301 Road, Ulhasnagar-421005 PAN:AINPB2060N APPELLANT RESPONDENT Assessee by : None Revenue by : Shri Mukesh Thakwani (Sr.DR) Date of hearing : 17/06/2026 Date of pronouncement : 19/06/2026 O R D E R Per:Anikesh Banerjee (JM): A bunch of appeals pertain to the same assessee filed against the order of the NFAC, Delhi [for brevity the “Ld. CIT(A)”], order passed under section 250 of the Income Tax Act 1961 (for brevity ‘the Act’) for Assessment Year 2014-15 to 2016-17, date of order 26.11.2025 for all three years. The impugned orders emanated from the order of the Assessment Unit Income Tax Department (for

2 ITA No.499 to 501/Mum/2026 NirmalPurshotam Bhatia brevity the ‘Ld. AO’) order passed under section 147 r.w.s. 144 r.w.s. 144B of the Act date of order 25.05.2023 for A.Y. 2014-15, 24.05.2023 for A.Y. 2015-16 and 30.03.2022 for A.Y. 2016-17.

2.

The appeals were called for hearing; however, none appeared on behalf of the assessee. Upon perusal of the record, it is observed that the matters had been adjourned on several occasions. Considering the facts and merits of the case, we proceed to dispose of the appeals ex parte qua the assessee after hearing the submissions of the Ld. DR. 3. Since all the appeals pertain to the same assessee and arise from a common issue, they were heard together for the sake of convenience and are being disposed of by this consolidated order. ITA No. 499/Mum/2026, AY 2016- 17 is treated as the lead case, and the decision rendered therein shall apply mutatis mutandis to the remaining appeals. 4. The brief facts of the case are that the assessee is a non filer of income tax return for A.Y. 2016-17 but filed the return for rest of the years. The assessment was reopened u/sec. 147 and it is found that the assessee had deposited the amount of Rs.1,80,34,91,094/- in the bank account maintained with Kalyan Janta Sahkari Bank, IDBI Bank, Bank of India, Konark Urban Cooperative Bank Ltd. Therefore, the source of the deposits in bank account of the assessee are remained unexplained or undisclosed. The Ld. AO made a separate verification and it is found that all the transaction in Bank account was used by Mr. Satish C Harchwani for his associates friends/related for providing accommodation entries. It found that the assessee has no involvement in the entire transaction.

3 ITA No.499 to 501/Mum/2026 NirmalPurshotam Bhatia Considering this, the Ld. AO treated the entire transaction as providing of accommodation entry to various bogus or paper concern. Accordingly, the Ld. AO had added cash commission @.0.05% of the total deposit or credits in the bank account which comes total commission amount to Rs.901745/- & was added back with the total income of the assessee. Aggrieved assessee filed an appeal before the Ld. CIT(A). The Ld. CIT(A) uphold the impugned assessment order. Being aggrieved assessee filed an appeal before us.

5.

We have heard the submissions of the Ld. DR and perused the material available on record. It was submitted that the assessee’s case was reopened on account of deposits/credits aggregating to Rs.1,80,34,91,094 in various bank accounts maintained by the assessee. During the course of investigation, the Ld. AO conducted detailed enquiries and found that the assessee’s bank accounts had been utilized by Mr. Satish C. Harchwani for routing accommodation entries on behalf of his associates, friends, and related parties. It was further found that the assessee had no direct involvement in the transactions carried out through the said bank accounts. The statements of Mr. Satish C. Harchwani recorded under sections 132(4) and 131(1A) of the Act also revealed and admitted that the bank accounts were being used for providing accommodation entries to various entities. Upon due verification of the facts and circumstances of the case, the Ld. AO estimated the commission income at 0.05% of the total deposits/credits routed through the bank accounts, resulting in an addition of Rs.9,01,745. The Ld. DR strongly supported the orders of the revenue authorities.

4 ITA No.499 to 501/Mum/2026 NirmalPurshotam Bhatia 6. The Ld. DR further invited our attention to the impugned appellate order. The relevant findings recorded by the Ld. CIT(A) are reproduced below: “6.1.3 I have examined the submission of the appellant and the reasons for delay in filing the appeal and in view of the judicial rulings relating to condonation of delay, having examined the reasons and the fact the delay in filing the appeal is condoned.

6.2 Brief facts of the case are that theappellant has not filed ITR for AY 2016-17. The assessment has been reopened u/s. 147 with prior approval of the competent authority based on the information received through Insight portal. The appellant has deposited an amount of Rs. 1,80,34,91,094/- in his bank accounts maintained with Kalyan Janata Sahakari Bank, IDBI Bank, Bank of India, Konark Urban Co-Op Bank Ltd., during the F.Y. 2015-16 relevant to A.Y. 2016-17. The A.O. during assessment proceeding found that the appellant's bank account was used by Sh. Satish C harchwani for his associates/friends/relatives for the purpose of providing bogus accommodation entries. As per the instruction of Sh. Satish C harchwani, Therefore, the A.O. added cash commission @ of 0.05% of total credits appearing in the bank account of the appellant as its commission income and assessment was completed by making addition of Rs. 9,01,745/-.

6.3 The appellant in its grounds of appeal no 1 assailed that On the facts and in the circumstances of the case and in law, the Notice issued u/s.148 and assessment order passed u/s 147r.w.s. 144 of the Act is bad in law. 6.3.1 I have considered facts of the case, Assessment order and other material available on record. In this case it is noticed that It is an admitted fact that the present case emanates from information unearthed during a valid search and seizure operation conducted on the accommodation entry provider group. The information clearly established that the appellant's bank account was used for routing accommodation entries involving unexplained money. The Assessing Officer recorded specific and tangible reasons based on information from insight portal and issued notice u/s 148 as per due process of law. The appellant failed to cooperate and did not file complete and reliable details before the AO, leading to assessment u/s 144. Thus, initiation of reassessment proceedings was based on credible information, valid reasons to believe, and within statutory framework. The appellant failed to demonstrate any procedural infirmity. Accordingly, Ground No. 1 raised by the appellant is dismissed.

6.4 The appellant in its grounds of appeal no 2 assailed that The Learned Assessing Officer is not justified in estimating Rs. 9,01,745/- as unaccounted commission income at 0.05% of total bank credits ignoring the fact that these bank accounts were never operated by the appellant. The

5 ITA No.499 to 501/Mum/2026 NirmalPurshotam Bhatia appellant bank account was used by the accommodation entry provider for fictitious entries to different persons. 6.4.1 I have considered facts of the case, Assessment order and other material available on record. In this case it is noticed that though the appellant contended that he had no knowledge of transactions routed through the bank account. However, no evidence has been produced to substantiate the claim. The bank account stands in the name of the appellant and he failed to identify the persons involved or furnish confirmations. The appellant has also not lodged any police complaint regarding alleged misuse of bank account. The fact that substantial credits and debits have been routed through the bank account is undisputed. The AO has discussed in detail in para 4(4.1 to 4.9), detailed modus-operendi of accommodation entries of Sh. Satish C harchwani and it is undisputed fact that the bank account of the appellant was used by Sh. Satish C harchwani to provide bogus accommodation entries, Hence A.O. correctly applied a commission rate of 0.05% on total turnover, which is consistent with settled judicial precedents in cases of accommodation entry operators and beneficiaries. Therefore, the estimation is reasonable and justified.Further, the burden of proving that transactions do not belong to the appellant lies entirely on him, which has not been discharged. In absence of satisfactory explanation, the AO was fully justified in making the addition. Accordingly, Ground No. 2 raised by the appellant is dismissed. 7. In view of the above facts, the appeal is dismissed.”

7.

We have heard the submissions of the Ld. DR and carefully considered the material available on record. It is an undisputed fact that the assessment was reopened on the basis of substantial deposits/credits aggregating to Rs.1,80,34,91,094 in the bank accounts standing in the name of the assessee. During the course of investigation, the Ld. AO conducted independent enquiries, including verification through notices issued under section 133(6) of the Act. The investigation further revealed that the assessee’s bank accounts were utilized by Shri Satish C. Harchwani for routing accommodation entries to various entities. The statements of Shri Satish C. Harchwani recorded under sections 132(4) and 131(1A) of the Act clearly corroborated the modus operandi adopted for

6 ITA No.499 to 501/Mum/2026 NirmalPurshotam Bhatia providing such accommodation entries. The assessment was completed ex parte under section 144 of the Act owing to the non-cooperation of the assessee. Even during the appellate proceedings before the Ld. CIT(A), the assessee failed to furnish any cogent evidence to rebut the findings recorded by the Ld. AO or to substantiate the claim that the transactions did not belong to him. In these circumstances, we find no infirmity in the action of the Ld. AO in estimating the commission income at 0.05% of the total credits routed through the bank accounts and in making the consequential addition. The findings recorded by the Ld. CIT(A) are well-reasoned and call for no interference.

8.

As regards the legal ground challenging the validity of the notice issued under section 148 and the assumption of jurisdiction under section 147 read with section 144 of the Act, we note that the assessee has neither appeared before us nor placed any material on record to substantiate the challenge. No written submissions or supporting evidence have been furnished to demonstrate any procedural irregularity or jurisdictional defect in the reassessment proceedings. On the contrary, the record shows that the reassessment was initiated on the basis of specific and tangible information received by the Department and after following the prescribed statutory procedure. Accordingly, we find no merit in the legal challenge raised by the assessee.

9.

In view of the foregoing discussion and having regard to the facts and circumstances of the case, we find no reason to interfere with the order of the Ld. CIT(A). The additions made by the Ld. AO and sustained by the Ld. CIT(A) are

7 ITA No.499 to 501/Mum/2026 NirmalPurshotam Bhatia hereby upheld. Consequently, all the grounds raised by the assessee are dismissed.

10.

In the result, the appeals of the assessee bearing ITA Nos. 499 to 501/Mum/2026 are dismissed. Order pronounced in the open court on 19th day of June 2026. Sd/- Sd/- (OM PRAKASH KANT) (ANIKESH BANERJEE) ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai,िदनांक/Dated: 19/06/2026 SAUMYASr.PS

Copy of the Order forwarded to: 1. अपीलाथ�/The Appellant , 2. �ितवादी/ The Respondent. 3. आयकरआयु� CIT 4. िवभागीय�ितिनिध, आय.अपी.अिध., मुंबई/DR, ITAT, Mumbai 5. गाड�फाइल/Guard file. BY ORDER, //True Copy// (Asstt. Registrar), ITAT, MUMBAI

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