MOHAN PANDURANG SHINDE,MALEGAON CAMP, NASHIK vs. ASSESSING OFFICER, WARD 1, MALEGAON

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH “SMC”, PUNE BEFORE SHRI MANISH BORAD, ACCOUNTANT MEMBER AND SHRI VINAY BHAMORE, JUDICIAL MEMBER आयकर अपील सं. / ITA No.2436/PUN/2026 िनधा�रण वष� / Assessment Year : 2018-19 Mohan Pandurang Shinde, Vs. Assessment Unit, Room No.1, Post Colony, Income Tax Department. Opp. Post Malegaon, Camp, Malegaon- 423105. PAN : DJUPS7860A Appellant Respondent Assessee by : Shri Aanup Laddha (Virtual) Revenue by : Shri Sanjiv Kumar Verma Date of hearing : 03.09.2026 Date of pronouncement : 22.10.2026 आदेश / ORDER PER VINAY BHAMORE, JM: This appeal filed by the assessee is directed against the order dated 22.03.2026 passed by Ld. CIT(A)/NFAC for the assessment year 2018-19. 2. The appellant has raised the following grounds of appeal :- “1. On the facts and in the circumstances of the case and in law, the learned Commissioner of Income Tax (Appeals)/NFAC has erred in setting aside/restoring the matter to the file of the Assessing Officer without adjudicating the specific legal and jurisdictional grounds raised by the appellant challenging the validity of reassessment proceedings-initiated u/s 148 of the Income-tax Act, 1961.

2 ITA No.2436/PUN/2026 2. On the facts and in the circumstances of the case and in law, the learned CIT(A) has failed to adjudicate Ground No. 1 relating to absence of valid jurisdiction for issuance of notice u/s 148 by the jurisdictional Assessing Officer in violation of CBDT Notification No. 18/2022 dated 29.03.2022 and section 151A of the Income-tax Act, 1961, thereby rendering the appellate order bad in law. 3. On the facts and in the circumstances of the case and in law, the learned CIT(A) has failed to adjudicate the legal ground challenging the validity of notice issued u/s 148 for non-striking off of inapplicable portions/clauses, thereby passing a non- speaking and legally unsustainable order. 4. On the facts and in the circumstances of the case and in law, the learned CIT(A) ought to have adjudicated the jurisdictional grounds first before restoring the matter to the file of the Assessing Officer, as the said grounds go to the very root of assumption of jurisdiction under section 147/148 of the Act. 5. On the facts and in the circumstances of the case and in law, the learned CIT(A) has failed to adjudicate the legal ground challenging validity of notice issued u/s 148 dated 05-04-2022 beyond the period prescribed under the proviso to section 149(1)(b), though the alleged escaped income/information value was below Rs. 50 lakhs and therefore the reassessment proceedings are barred by limitation and liable to be quashed. 6. On the facts and in the circumstances of the case and in law, the learned CIT(A) has failed to adjudicate the legal ground that approval u/s 151 for passing order u/s 148A(d) and issuance of notice u/s 148 was obtained from an incorrect specified authority, thereby rendering the reassessment proceedings void ab initio for want of valid jurisdiction. 7. On the facts and in the circumstances of the case and in law, the learned CIT(A) has failed to adjudicate the legal ground that reopening of assessment was based on vague, incomplete and incorrect information without proper enquiry or application of mind by the Assessing Officer and therefore the assumption of jurisdiction u/s 147/148 is bad in law. 8. On the facts and in the circumstances of the case and in law, the learned CIT(A) has failed to adjudicate the legal ground that the mandatory approval u/s 151 of the Income tax Act, 1961 was not supplied to the appellant along with order passed u/s 148A(d), thereby vitiating the reassessment proceedings for violation of principles of natural justice and CBDT instructions.

3 ITA No.2436/PUN/2026 9. On the facts and in the circumstances of the case and in law, the learned CIT(A) has erred in not adjudicating the ground relating to addition of Rs. 9,40,000/- made u/s 69A on account of alleged unexplained cash deposits though the appellant had furnished explanation and supporting sources for the said deposits. 10. On the facts and in the circumstances of the case and in law, the impugned appellate order is contrary to the provisions of section 250(6) of the Income-tax Act, 1961, inasmuch as the learned CIT(A) failed to state proper points for determination and failed to render findings on the legal grounds specifically raised and argued by the appellant. 11. On the facts and in the circumstances of the case and in law, the reassessment proceedings-initiated u/s 147/148 deserve to be quashed as being void ab initio, illegal and without jurisdiction. 12. The appellant craves leave to add, alter, amend, modify or withdraw any of the grounds of appeal at the time of hearing.” 3. Facts of the case, in brief, are that the assessee is a salaried employee working as a “Postman” in Post Office at Malegaon. He retired in the month of August, 2017 on superannuation. On the basis of information received through Insight Portal under non-filer cases in accordance with the risk management strategy that the assessee had deposited cash in one or more accounts of Rs.72,23,860/-, however, return of income was not furnished, notice u/s 148A(b) of the IT Act was issued to the assessee on 19.03.2022 and 7 days time was provided to the assessee to respond and it was specifically mentioned in the above notice that the response may be submitted on or before 25th of March 2022. Since the assessee did

4 ITA No.2436/PUN/2026 not responded to the above notice, another notice u/s 148A(b) was issued to the assessee on 26-03-2022 providing the time to respond upto 03-04-2022, since the assessee did not comply with the above notice, order u/s 148A(d) of the IT Act was passed on 05.04.2022 holding that this is a fit case for issue of notice u/s 148 of the IT Act and accordingly, notice u/s 148 of the IT Act was issued to the assessee on 05.04.2022. The assessee in response furnished its return of income by declaring income of Rs.2,94,270/-. Subsequently, notices u/s 143(2) and show cause notices respectively were issued to the assessee. The assessee in response to above notices submitted that there is no such deposit of cash of Rs.72,23,860/- in his accounts as alleged by the Department and in support of its contentions furnished copy of bank passbook of SB accounts of the relevant period. The Assessing Officer in the light of reply furnished by the assessee, re-examined the information available on Insight Portal and found that the report was meant for some other assessee namely Ramesh Mahadu Borse PAN No.AVZPB7570G which was wrongly filed in the PAN of the assessee, therefore, the Assessing Officer accepted that the information value relating to the instant assessee is only of

5 ITA No.2436/PUN/2026 Rs.29,23,860/- & not of Rs.72,23,860/-. The Assessing Officer on further examination of statement of account furnished by the assessee found that the Post Office has reported entire cash and credit transactions of Rs.29,26,339/- in place of cash transaction of Rs.9,40,000/- only. The Assessing Officer further found that the assessee was in receipt of retirement/ pensionery benefit of Rs.19,86,339/- in his Account No.-0451519702 which was credited through transfer. Accordingly, the Assessing Officer came to the conclusion that the assessee has made cash deposits of only Rs.9,40,000/- in his account for which the assessee has not furnished any explanation till date. Therefore, the Assessing Officer vide order dated 21.03.2024 completed the assessment proceedings u/s 147 r.ws. 144B of the IT Act by determining the income of the assessee at Rs.12,34,270/- as against the income of Rs.2,94,270/- returned by the assessee. The above assessed income includes addition of Rs.9,40,000/- being unexplained cash deposit u/s 69A of the IT Act. 4. Being aggrieved with the above action of the assessing officer, the assessee preferred an appeal before Ld. CIT(A)/NFAC. The assessee furnished reply before Ld. CIT(A)/NFAC and contended

6 ITA No.2436/PUN/2026 that the notice issued u/s 148 of the IT Act is bad in law, since it was issued on the basis of information pertaining to other assessee namely Ramesh Mahadu Borse PAN No.AVZPB7570G which was mistakenly uploaded on the Insight Portal on the PAN Number of the assessee. It was also made clear that the Post Office reported cash transaction as well as credit transaction in the SFT (Statement of Financial Transactions) and this fact was accepted by the Assessing Officer in assessment order itself and therefore, the reopening was on wrong premises & addition of only Rs.9,40,000/- was made to the income of the assessee and rest of the amount of Rs.19,86,339/- was accepted as retirement/ pensioner benefit transferred by the Post Office. It was also made clear before Ld. CIT(A)/NFAC that the cash deposit of Rs.9,40,000/- was out of explained sources of income and in support of above contentions relevant documents such as copy of sale deed dated 07-08-2017 of plot sold by the assessee against which cash of Rs.1,92,000/- was received and GPF withdrawal certificate issued by Post Office for an amount of Rs.2,85,000/- were also furnished & both the amounts were claimed to be deposited in his bank accounts. Apart from above, it was also submitted that the assessee always keep high

7 ITA No.2436/PUN/2026 amount of cash with himself since his 32 year old son is handicapped since childhood, who was suffering from locomotor disability. His spine got operated when he was just two months old and since then he is bed ridden and cannot stand on his own. His son is registered with Department of Empowerment of Persons with Disabilities, Ministry of Social Justice and Empowerment, Government of India vide enrolment number 2720/00000/2307/0200608 dated 05-07-2023. A copy of the same was also submitted. It is for this reason; the assessee is always worried and could not pay proper attention to the legal compliances. This fact has already been brought to the kind knowledge of the Assessing Officer vide his submission dated 26-02-2024, during the course of scrutiny assessment proceedings, and all these cash were deposited by him after he got retired in the year 2017. The sources of cash deposited were explained with the help of a chart & it was made clear that the total amount of Rs.9,40,000/- was not deposited in one go but on different dates. After considering the reply and submissions of the assessee & also by admitting the additional evidences under Rule 46A, Ld. CIT(A)/NFAC restored the matter back to the file of the Assessing Officer for deciding the issue of

8 ITA No.2436/PUN/2026 addition of Rs.9,40,000/-, however, Ld. CIT(A)/NFAC did not give any finding on the legal ground wherein the assessee has challenged the validity of the notice issued u/s 148 of the IT Act, since it was issued on wrong facts & without application of mind. 5. It is the above order against which the assessee is an appeal before this Tribunal. 6. We have heard Ld. counsels from both the sides and perused the material available on record including the paper book and copy of case laws relied on by the assessee. In this regard, we find that originally the case of the assessee was reopened for the purposes of verification of alleged deposit of cash of Rs.72,23,860/- in his savings bank accounts. When the assessee denied to have deposited any of such cash in his bank accounts, the Assessing Officer re- examined the information available on Insight Portal and found that the cash of Rs.42,97,521/- was deposited by some other assessee namely, Ramesh Mahadu Borse PAN No.AVZPB7570G & the information was mistakenly uploaded on the Insight Portal on the PAN Number of the assessee. Thereafter, the Assessing Officer continued the assessment proceedings for the verification of the information of cash deposit of R.29,26,339/- in the savings account

9 ITA No.2436/PUN/2026 of the assessee. When the assessee produced the copy of savings account before the Assessing Officer, it came in the knowledge of the Assessing Officer that the Post Office wrongly reported, cash transaction as well as credit transaction in the SFT (Statement of Financial Transaction), whereas it was required to report only cash transaction of Rs.9,40,000/-, since the remaining amount of Rs.19,86,339/- was transferred by the Post Office being Retirement/ Pensionery Benefits of the assessee & was from explained sources. It is also observed by us that upto this point the Assessing Officer never raised any query regarding cash deposit of Rs.9,40,000/- & therefore, the assessee was under impression that nothing more remains to explain. We further observe that when the Assessing Officer failed in justifying any of the reasons of reopening, he resorted to ask new query regarding cash deposit of Rs.9,40,000/- which was never the reason for reopening, by issuing fresh show cause notice dated 05-04-2023. Since the assessee was mentally disturbed due to the health of his only son 32 years old (Fully Handicapped) and could not answer the above show cause notice, the Assessing Officer proceeded to make addition on the basis of cash deposit of Rs.9,40,000/- treating the same as unexplained

10 ITA No.2436/PUN/2026 money u/s 69A r.w.s. 115BBE of the IT Act. We further find that in first appeal proceedings before Ld. CIT(A)/NFAC, the assessee has already explained the sources of impugned cash deposit of Rs.9,40,000/- with the help of additional evidences in the shape of sale deed dated 07-08-2017 of plot through which the assessee received cash of Rs.1,92,000/- & certificate regarding GPF withdrawal of Rs.2,85,000/- is also produced which was deposited in the savings account. Apart from above, the assessee always kept ready a substantial cash amount in hand keeping in mind the ill health of his only son, however, after retirement the same cash was deposited back in the savings account. Thus, we find that the assessee successfully demonstrated the sources of balance cash deposit before Ld. CIT(A)/NFAC with the help of a chart which was also referred by Ld. CIT(A)/NFAC in his order. 7. Considering the totality of the facts of the case and in view of our discussion in preceding paragraphs, we find merit in the arguments of Ld. Counsel of the assessee that the reopening in the instant case was on wrong premises & in this regard find support from the judgement of Hon’ble Bombay High Court passed in the case of Narendra Kumar Shah vs. Assistant Commissioner of

11 ITA No.2436/PUN/2026 Income-tax [2024] 162 taxmann.com 397 (Bombay)[10-10-2023] wherein Hon’ble Court under identical facts quashed the notice u/s 148 of the IT Act & allowed the petition of the assessee by observing as under :- “8. We would go a step further and say that even the notice under Section 148A(b) of the Act was unjustified. This is because the Assessing Officer ("AO") before issuing the notice, was bound to atleast verify or enquire following the information that was received in accordance with the Risk Management Strategy. In fact the guidelines for issuance of notice under Section 148 of the Act bearing F No. 299/10/2022-Dir(Inv.III)/611 dated 1st August 2022 at paragraph 2.1 (vi) and (vii) read as under : (vi) The AO shall, if required, undertake enquiries on any "information" received/available with him which suggests that the income chargeable to tax has escaped assessment in a previous year only with the prior approval of "specified authority". (vii) If the result of enquiry/information available suggests that the income chargeable to tax has escaped assessment, the AO shall provide an opportunity of being heard to the assessee by issuing a show cause notice u/s 148A(b) of the Act. The said notice shall provide between 7 to 30 days' time to the assessee for submitting the reply A template of show cause notice is enclosed at Annexure-A1. The instruction regarding uploading of data on functionalities/portal of the Income Tax Department bearing F No. 299/10/2022- Dir(Inv.III)/647 dated 22nd August 2022 at paragraphs 3 and 4 read as under : 3. Further, it in re-emphasized that – (i) Before initiating proceedings under Section 148/147 of the Act, any information available database/portal of the Income Tax on Department shall be verified before drawing any adverse inference against the taxpayers. It is not out of place to mention here that the information made available/data uploaded by the reporting entities may not be fully accurate due to inter alia, error of human nature technical nature, etc. Therefore, due verification may be carried out and opportunity of being heard

12 ITA No.2436/PUN/2026 be given to the taxpayer before initiating proceedings under Section 148/147 of the Act. (ii) The supervisory authorities are hereby advised to keep an effective supervision as to ensure that all extant Instructions/ Guidelines/Circulars/SOPs are duly followed by the Assessing Officers in their charge. 4. In addition to above, it is also advised that all the information/reports which are being uploaded on any of the functionalities/portal of Directorate of Systems should be verified by the Officer TANVI uploading the said information/reports. Supervisory authorities are to ensure that all extant Instructions/ Guidelines/Circulars/SOPs in this regard are duly followed by Officer uploading the said information/reports. If the AO had only verified in the portal of assessee before initiating proceedings, particularly when he had the PAN number with him, AO would have realized that not only Petitioner has filed the Return of Income, but also the return has been processed and an order dated 26th February 2020 under Section 143(1) of the Act had been passed. Therefore, the notice that was issued under Section 148A(b) of the Act also has to be quashed and set aside.” 8. Respectfully following the above Judgement passed by Honble High Court of Bombay in the case Narendra Kumar Shah (supra), we do not hesitate to declare the impugned notice u/s 148 of the IT Act as void ab initio & bad in law & consequently quash the same, since the information of cash deposit of some other assessee was considered for reopening the case of the assessee, secondly the whole of the transactions i.e. cash and transfer entries both were considered for the purposes of reopening of the case whereas the transfer entries pertains to explained sources i.e. receipt of

13 ITA No.2436/PUN/2026 retirement/ pensionery benefits & all these facts were accepted by the Assessing Officer himself in the assessment order & the sources of cash deposit of remaining amount were successfully explained before Ld. CIT(A)/NFAC, however, he erred in not accepting the same. Since we have already declared the impugned notice issued u/s 148 of the IT Act as bad in law the consequential assessment order dated 21-03-2024 based on the above impugned notice is also quashed. 9. Even otherwise on merits of the case the addition of Rs.9,40,000/- is contested by the assessee & in view of our discussion in preceding paragraphs that the assessee has successfully demonstrated the sources of cash deposits of Rs.9,40,000 before Ld. CIT(A)/NFAC therefore, we are of the view that the order passed by Ld. CIT(A)/NFAC is not correct wherein instead of calling remand report from the Assessing Officer on additional evidences and decide the matter himself, the matter was restored back to the file of the Assessing Officer for deciding the issue afresh. Accordingly, on merits also the assessee succeeds & therefore, we deem it appropriate to set-aside the order passed by Ld. CIT(A)/NFAC and direct the Assessing Officer to delete the

14 ITA No.2436/PUN/2026 addition of Rs.9,40,000/- and accept the income returned by the assessee. Thus, the grounds of appeal raised by the assessee are allowed. 10. In the result, the appeal filed by the assessee is allowed. Order pronounced on this 22nd day of October, 2026. Sd/- Sd/- (MANISH BORAD) (VINAY BHAMORE) ACCOUNTANT MEMBER JUDICIAL MEMBER पुणे / Pune; �दनांक / Dated : 22nd October, 2026. Sujeet/DOC आदेश क� �ितिलिप अ�ेिषत / Copy of the Order forwarded to : अपीलाथ� / The Appellant. 1. ��यथ� / The Respondent. 2. 3. The Pr. CIT concerned. िवभागीय �ितिनिध, आयकर अपीलीय अिधकरण, “SMC” ब�च, 4. पुणे / DR, ITAT, “SMC” Bench, Pune. गाड� फ़ाइल / Guard File. 5. आदेशानुसार / BY ORDER, Digitally signed by Sunil Kumar // True Copy // Sunil Kumar More More Assistant Registrar Date: 2026.10.25 10:43:19 +05'30' आयकर अपीलीय अिधकरण, पुणे / ITAT, Pune.