MUKESHBHAI VITHALBHAI JAVIA ,RAJKOT vs. ACIT/DCIT, CIRCLE 1(1), RAJKOT, RAJKOT

ITA 648/RJT/2026Status: DisposedITAT Rajkot30 September 2026AY 2019-207 pages
AI SummaryDismissed

What were the facts?

The assessee, Mukeshbhai Vithalbhai Javia, filed appeals against assessment orders for AY 2019-20 and 2020-21. These orders were passed under Section 147 of the Income-tax Act, 1961, by the Assessing Officer (AO) and subsequently upheld by the National Faceless Appeal Centre (NFAC)/Commissioner of Income Tax (Appeals). The appeals stem from a search and seizure action ('operation blue diamond') on real estate builders in Rajkot, which revealed the assessee as a purchaser who paid cash 'on-money' for property units in the 'RK EMPIRE' project. The AO reopened the assessment under Section 147, issued a notice under Section 148, and made an addition of Rs. 75,000/- under Section 69 read with Section 115BBE for unexplained investment. The Ld. CIT(A) confirmed the AO's action.

What did the Tribunal hold?

The Tribunal held that the Ld. CIT(A) had correctly upheld the AO's action. Regarding the assumption of jurisdiction under Section 147, the Tribunal found a clear one-to-one linkage between the registered sale deed, the seized 'Miracle' ledger showing total consideration and cash receipts, and the statements of the group accountant and promoter accepting unaccounted cash dealings. This formed a complete chain of evidence proving the assessee paid 'on-money'. The assessee's denial without rebuttal, books, or bank statements to contradict the seized material failed to discharge the burden. The Tribunal noted that vague denials are insufficient when seized documents and statements corroborate 'on-money' transactions, and additions under Sections 69/69B/69C are justified if the assessee cannot explain differential consideration or cash sources. The Ld. CIT(A)'s observation that the AO confronted all material to the assessee and considered submissions, thus not violating principles of natural justice, was endorsed. The Tribunal found no infirmity in the addition of Rs. 75,000/- under Section 69 read with Section 115BBE. The issue of cross-examination was addressed by the Ld. CIT(A)'s finding that all material was confronted, and the assessee had opportunities to make submissions.

What were the issues?

1. Whether the AO's assumption of jurisdiction and initiation of reassessment proceedings under Section 147 of the Income-tax Act, 1961, by issuing a notice under Section 148, is legally valid? 2. Whether the transfer of jurisdiction from the Income Tax Officer to ACIT/DCIT is void ab initio due to alleged violation of Sections 124 and 127 of the Act? 3. Whether the approval under Section 151 for reassessment is invalid due to the absence of a Document Identification Number (DIN), contravening CBDT Circular No. 19/2019? 4. Whether the AO erred by not furnishing requisite material, including the search person's statement, satisfaction note, and appraisal report, as mandated by Section 144B? 5. Whether the Show Cause Notice is illegal and invalid for not disclosing the specific charging or deeming provision under which additions are contemplated? 6. Whether the notice under Section 148 is void ab initio as it was not issued by a Faceless Assessing Officer, violating the prescribed procedure? 7. Whether the AO made the addition merely on suspicion, conjectures, and surmises, as the assessee's name does not appear in the seized ledger titled 'Account statement for EMP 1210'? 8. Whether the Ld. CIT(A) erred in upholding the addition of Rs. 75,000/- on account of unexplained investment under Section 69 read with Section 115BBE? 9. Whether the AO erred in passing the assessment order without providing an opportunity for cross-examination? Assessee's Contentions: Assessee argued that the assumption of jurisdiction under Section 147 was bad in law. They contended that the transfer of jurisdiction was void ab initio, the Section 151 approval lacked a DIN, and the AO failed to provide necessary documents as per Section 144B. The Show Cause Notice was challenged for vagueness, and the Section 148 notice for not being issued by a Faceless AO. The addition was based on suspicion, and the assessee's name was not in the seized ledger. Finally, the assessment order was passed without an opportunity for cross-examination. Revenue's Contentions: The judgment does not explicitly record the revenue's contentions on each ground. However, the Ld. CIT(A)'s order, as narrated in the judgment, indicates that the revenue's stance was that the AO's actions were legally valid and that the principles of natural justice were not violated.

Which sections of the Income-tax Act were involved?

Section 147,Section 148,Section 250,Section 124,Section 127,Section 151,Section 144B,Section 69,Section 115BBE,Section 142(1)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “SMC”

Before: Dr. Arjun Lal Saini

For Respondent: Shri Shishir Kumar, Ld. Sr. DR
Hearing: 30/07/2026Pronounced: 30/09/2026

Per, Dr. Arjun Lal Saini, AM : Captioned two appeals filed by the assessee, pertaining to assessment years (AY) 2019-20 & 2020-21, are directed against the separate orders passed under Section 250 of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’) dated 27.02.2026 by the National Faceless Appeal Centre (NFAC), Delhi/Commissioner of Income Tax (Appeals) [in short ‘Ld.CIT(A)’] which in turn arises out of separate assessment order

The order continues below.

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