SEBASTIAN AMANCIO DSOUZA,COMOTI VADO vs. ASSESSING OFFICER, AAYKAR BHAVAN

IN THE INCOME TAX APPELLATE TRIBUNAL PANAJI BENCH “SMC”, PANAJI BEFORE SHRI MANISH BORAD, ACCOUNTANT MEMBER AND SHRI VINAY BHAMORE, JUDICIAL MEMBER आयकर अपील सं. / ITA No.194/PAN/2026 िनधा�रण वष� / Assessment Year : 2017-18 Sebastian Amancio Dsouza, Vs. ITO, Ward-2(1), Panaji. Comoti Vado, Candolim Panaji- 403515. PAN : ADHPD4026H Appellant Respondent Assessee by : Shri P. K. Bansal Revenue by : Shri Mayur Kamble Date of hearing : 13.08.2026 Date of pronouncement : 27.10.2026 आदेश / ORDER PER VINAY BHAMORE, JM: This appeal filed by the assessee is directed against the order dated 15.01.2026 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 passed u/s 144 of the Income Tax Act' 1961, by the Id AO and sustained by the Id CIT(A) is without jurisdiction, misconceived, bad in law and without following the principles of natural justice. 2) The Id CIT(A) and ld AO has erred in applying provision of section 69A and 115BBE of the Income Tax Act, which is not applicable to the case.

2 ITA No.194/PAN/2026 3) The Id CIT(A) has erred in sustaining the addition of Rs. 3,72,190/- without considering the income as per the return of income filed by the appellant. 4) The Id CIT(A) has not considered the provision of section 44AD of the Act, and have also ignored that the appellant is covered u/s 5A of the IT Act. 5) The Id CIT(A) and Id AO has erred in making addition u/s 69A of Rs. 16,93,000/- without considering the fact, that cash deposited in the bank is out of business receipt of the assessee. 6) The Id AO has not appreciated the fact that the appellant regularly files his ITR every year and has been showing business income over the years. 7) The Id CIT(A) has erred in sustaining the additions of Rs.3,72,190/- & Rs.16,93,000/-, without considering the facts of the case and the submission made by the appellant. 8) With these and such other grounds that may be urged at the time of hearing the appellant prays for relief sought for.” 3. The appellant has also raised the following grounds of appeal :- “1. Order of Assessment passed u/s 144 of the Income-tax Act, 1961 is void-ab-initio and liable to be quashed, as no Notice u/s 143(2) of the Act has been issued, while the Belated Return of Income filed u/s 139(4) of the Act is a valid Return of Income. 2. Assessing Officer was not correct in law in disallowing the credit of Tax Deducted at Source (TDS) and Self-assessment tax paid.” 4. The appellant has also raised the following grounds of appeal along-with above extracted additional grounds of appeal :- “1. That the Charging of the Income tax @ 60% + 25% thereon u/s 115BBE of the Act is illegal and bad in law as the amended provisions of the Section 115BBE are applicable from A.Y. 2018- 19 and not from A.Y. 2017-18 as has been held by Hon’ble Madras High Court in the case of Smile Micro Finance Ltd. vs. ACIT and by Hon’ble Rajasthan High Court in the case of Deepak Maratha S/o Ramchandra Maratha vs. Union of India,

3 ITA No.194/PAN/2026 New Delhi And Principle Commissioner of Income Tax-1, The Income Tax Officer, Jodhpur. 2. That the assessing officer has acted against the law and facts of the case by not allowing correctly the Credit of taxes and including TDS and Self-Assessment Tax Paid. 3. Assessing Officer acted against the law in not allowing the deduction under Chapter VIA of the Income Tax Act.” 5. Facts of the case, in brief, are that the assessee is an individual engaged in the business of running Bear Bar & Restaurant and also engaged in Beach Shack and Water Sports activities. The assessee failed to file his return of income u/s 139(1) of the IT Act as per the data available in ITBA. The case of the assessee was selected for scrutiny and notice u/s 142(1) was issued to the assessee on 19.01.2018. The assessee in response to above notice filed his return of income manually on 14.06.2018 and also e-filed his return of income on 12.06.2019. However, according to the Assessing Officer, the above manual return dated 14.06.2018 was furnished belatedly therefore, the Assessing Office treated the same as invalid. Subsequently, show cause notice u/s 144 of the IT Act was also issued to the assessee. During the course of assessment proceedings, it was observed by the Assessing Officer that the assessee has deposited cash amount of Rs.16,93,000/- in his bank accounts during demonetization period. During the course of assessment proceedings, it was stated by the assessee that he is

4 ITA No.194/PAN/2026 involved in business of running a Beach Shack and Water Sports activity and also engaged in running a Bar and Restaurant, and an amount of Rs.16,93,000/- was deposited during demonetization period which was collected during the course of business prior to demonetization. Not being satisfied with the above reply of the assessee, the Assessing Officer vide order dated 18.12.2019 completed the assessment proceedings u/s 144 of the IT Act by determining the income of the assessee at Rs.20,65,190/- as against income of Rs.8,16,040/-disclosed by the assessee in belated return. The above assessed income includes addition of Rs.16,93,000/- being unexplained money deposited during demonetization period u/s 69A r.w.s. 115BBE of the IT Act. 6. Being aggrieved with the above assessment order, the assessee preferred an appeal before Ld. CIT(A)/NFAC. Not being satisfied with the reply and submissions of the assessee, Ld. CIT(A)/NFAC dismissed the appeal. 7. It is the above order against which the assessee is in appeal before this Tribunal. 8. We have heard Ld. Counsels from both the sides and perused the material available on record including the paper book furnished by the assessee. In this regard, we find that the assessee has also

5 ITA No.194/PAN/2026 raised additional ground challenging the validity of the assessment order in the absence of notice u/s 143(2) of the IT Act. In this regard, we find that the assessee has challenged the order of assessment passed u/s 144 of the IT Act as void ab initio and liable to be quashed as no notice u/s 143(2) of the IT Act has been issued while the belated return of income filed u/s 139(4) of the IT Act is valid return of income. In this regard, we find that the Assessing Officer issued notice u/s 142(1) of the IT Act on 19.01.2018 and in response to which the assessee furnished manual return of income on 14.06.2018. Since the assessee did not furnish the above return of income within the time allowed by the Assessing Officer, the Assessing Officer treated the manual return filed by the assessee as invalid and did not issue notice u/s 143(2) of the IT Act. In this regard, we find that the filing of belated return has been accepted by the Assessing Officer in the assessment order itself. It is the contention of the assessee that notice u/s 143(2) is a must even if the return of income is filed belatedly and without the issue of notice u/s 143(2) of the IT Act, the Assessing Officer has no jurisdiction. In this regard, Ld. Counsel of the assessee placed reliance on various coordinate bench decisions. In support of above contention, we also find support from coordinate bench decision passed in the

6 ITA No.194/PAN/2026 case of Kamlesh Pramod Gandhi vs. ITO in ITA Nos.1596 & 1597/PUN/2026 order dated 31.07.2026 wherein under identical facts in the absence of notice u/s 143(2) of the IT Act, the Tribunal declared the impugned assessment order as bad in law by observing as under :- “11. After considering the written submission filed by the Revenue and the rejoinder filed by the assessee, we find that under identical facts similar issue has already been decided by a coordinate bench of this Tribunal in the case of assessee itself for assessment year 2014-15 in ITA No.1567/PUN/2026 order dated 07.07.2025 wherein the Tribunal followed the judgement of Hon’ble High Court of Patna in the case of Commissioner of Income-tax - 11 vs. Nagendra Prasad [2023] 156 taxmann.com 19 (Patna) [02-08-2023] and held the assessment order invalid which was passed without issue of notice u/s 143(2) of the IT Act by observing as under :- “6. So far as the validity of the order in absence of issue of notice u/s 143(2) is concerned, he held that the return in response to the notice u/s 148 has been treated as invalid return by the system. Therefore, once the return itself is treated as invalid, the Assessing Officer was justified in proceeding with the re-assessment by issuing notice u/s 142(1) of the Act. He held that the issuance of notice u/s 143(2) pre-supposes a valid return which was absent in the present case. Therefore, non-issue of notice u/s 143(2) of the Act does not vitiate the re-assessment proceedings. 7. So far as the merit of the case is concerned, he held that the assessee was unable to discharge the burden cast on him. The assessee in the instant case failed to produce the primary evidences such as sale bills, vouchers, stock registers or VAT returns to substantiate the sales corresponding to the specific dates and amounts of the cash deposits. Without a verifiable trail linking the cash deposits to specific commercial transactions, the claim of business sales remains a bald assertion. He accordingly upheld the addition on merit also. 8. Aggrieved with such order of the Ld. CIT(A) / NFAC the assessee is in appeal before the Tribunal. 9. The Ld. Counsel for the assessee at the outset submitted that the assessee in response to the notice u/s 148 of the Act dated 31.03.2021 filed its return of income on 27.01.2022 which

7 ITA No.194/PAN/2026 was subsequently e-verified on 02.03.2022 which is evident from the screenshot of the return filed on income tax portal, copy of which is placed at pages 5 to 8 of the paper book. Therefore, the finding of the Ld. CIT(A) / NFAC that the return was treated as invalid by the system is incorrect. He submitted that a return which has been e-verified and is appearing as filed return on the income tax portal cannot be characterized as invalid return. He submitted that it is an undisputed fact that no notice u/s 143(2) of the Act was ever issued by the Assessing Officer after filing of the return in response to the notice u/s 148 of the Act. He has only issued notice u/s 142(1) of the Act. Relying on the decision of the Hon’ble Patna High Court in the case of CIT vs. Nagendra Prasad reported in (2023) 156 taxmann.com 19 (Patna), he submitted that the Hon’ble High Court in the said decision has held that where notice was issued by the Assessing Officer under section 148 requiring the assessee to file a return within thirty days but return was filed after eight and a half months, since return was filed by the assessee in response to the said notice though delayed, there should have been a notice issued under section 143(2) as requirement to issue notice could not be dispensed with. 10. Referring to the decision of the Co-ordinate Bench of the Tribunal in the case of Bababhai Sadarbhai Shaikh vs. ITO vide ITA No.144/PUN/2025 order dated 23.10.2025 for assessment year 2015-16, he submitted that in that case also notice u/s 148 of the Act was issued on 31.03.2021 and the assessee vide letter dated 14.03.2022 requested the Assessing Officer to consider the original return as return filed in response to notice u/s 148. Since no notice u/s 143(2) of the Act was issued, the Tribunal, following the decision of the Hon’ble Patna High Court in the case of CIT vs. Nagendra Prasad (supra), held that there should have been a notice issued u/s 143(2) which is a requirement and which cannot be dispensed with. 11. Referring to the decision of the Co-ordinate Bench of the Tribunal in the case of Bharat Kantilal Chengede vs. ITO vide ITA No.1902/PUN/2025 order dated 13.01.2026 for assessment year 2012-13, he submitted that in that case also notice u/s 148 was issued on 25.03.2019 and the assessee filed his return in response to the said notice on 11.12.2019 which is after the statutory period of 30 days given by the Assessing Officer. The notice u/s 143(2) was not issued and the assessment order was passed on 20.12.2019. When the assessee challenged the assessment in absence of notice u/s 143(2), the Tribunal, following various decisions held that the failure by the Assessing Officer to issue notice to the assessee u/s 143(2) after the assessee filed his return in response to the notice u/s 148 is fatal to the order of re-assessment. Relying on various other

8 ITA No.194/PAN/2026 decisions, he submitted that since admittedly the Assessing Officer has not issued notice u/s 143(2) after the assessee filed return in response to the notice u/s 148, though, belatedly, such assessment order is invalid being not in accordance with law. 12. The Ld. DR on the other hand submitted that the assessment record and assessment order clearly indicate that the return filed in response to the notice u/s 148 was not accepted by the system as a valid return and was reflected as an invalid return. The Assessing Officer has specified this fact in the assessment order. Therefore, there is no requirement of issue of notice u/s 143(2). 13. So far as the contention of the assessee that the return subsequently stood e-verified on 02.03.2022 is concerned, he submitted that the matter requirs verification from the assessment record. He submitted that mere production of a screenshot at the appellate stage cannot automatically displace the contemporaneous record relied upon by the Assessing Officer while framing the assessment. He submitted that this screenshot or the fact that the return subsequently stood e-verified was not on the record of the file of the Ld. DR. 14. So far as the various decisions relied on by the Ld. Counsel for the assessee are concerned, he submitted that these decisions are distinguishable and not applicable to the facts of the present case. In all these cases, there existed a valid return on record and the Hon’ble Courts found complete absence of notice u/s 143(2) despite such valid return. However, in the present case, the assessment order itself records that the return filed in response to notice u/s 148 was treated as invalid by the system and the re-assessment proceedings were continued through statutory notices u/s 142(1). 15. Without prejudice to the above, the Ld. DR submitted that the matter may be restored to the file of the Assessing Officer for examination of the assessment records and portal records regarding the exact status, date of validation and processing of the return purportedly filed in response to the notice u/s 148 of the Act. Further, the assessee has not challenged the validity of reopening on merits before the Tribunal. He submitted that the reopening was based on specific information relating to substantial cash deposits and therefore, re-assessment proceedings were initiated on a valid foundation. He accordingly submitted that the order of the Ld. CIT(A) / NFAC be upheld and the grounds raised by the assessee be dismissed. 16. We have heard the rival arguments made by both the sides, perused the orders of the Assessing Officer and the Ld. CIT(A) / NFAC and the paper book filed on behalf of the assessee. We have also considered the various decisions cited

9 ITA No.194/PAN/2026 before us. The only issue to be decided in the instant appeal is regarding the validity of assessment in absence of issue of notice u/s 143(2) of the Act. It is an admitted fact that the Assessing Officer in the instant case issued notice u/s 148 on 31.03.2021. It is also an admitted fact that the assessee filed its return of income in response to the notice u/s 148 of the Act on 27.01.2022. It is also an admitted fact that no notice u/s 143(2) was issued to the assessee. It is also an admitted fact that the Assessing Officer passed the order on 25.03.2022 u/s 147 r.w.s. 144B of the Act. Under these circumstances, we have to see as to whether the assessment order can be held as null and void in absence of any notice u/s 143(2). 17. It is the submission of the Ld. DR that since the return was treated as invalid by the system, therefore, there was no valid return filed and therefore, there was no requirement of issuing any notice u/s 143(2). However, a perusal of the assessment order shows that the Assessing Officer has proceeded to compute the income on the basis of the return filed in response to the notice u/s 148 by observing as under:

10 ITA No.194/PAN/2026 19. Once the system shows that the return has been e-verified, therefore, merely because the Assessing Officer mentions in the order that the return was treated as invalid return by the system, the same in our opinion cannot be accepted. We, therefore, hold that the return filed by the assessee is not an invalid return. 20. Once the return is treated as a valid return, the next question that arises for our consideration is as to whether the assessment order can be held as valid in absence of any notice issued u/s 143(2) when the assessee files the return in response to the notice u/s 148, though, belatedly. 21. We find an identical issue had come up before the Co- ordinate Bench of the Tribunal in the case of Bharat Kantilal Chengede vs. ITO (supra). In that case, notice u/s 148 of the Act was issued to the assessee on 25.03.2019 and the assessee filed his return of income in response to the same on 11.12.2019 which was after the statutory period of 30 days given by the Assessing Officer. No notice u/s 143(2) of the Act was issued by the Assessing Officer before completion of the assessment. The Tribunal relying on various decision quashed the assessment order by observing as under: “14. We have heard the rival arguments made by both the sides, perused the orders of the Assessing Officer and the Ld. CIT(A) / NFAC and the paper book filed on behalf of the assessee. We have also considered the various decisions cited before us. We find the Assessing Officer in the instant case issued notice u/s 148 of the Act on 25.03.2019. We find the assessee in the instant case filed his return of income on 11.12.2019 which is after the statutory period of 30 days given by the Assessing Officer. It is also an admitted fact that the assessment order was passed on 20.12.2019 and no notice u/s 143(2) of the Act has been issued and served on the assessee before completion of the assessment. Under these circumstances, we have to see as to whether non-issue of notice u/s 143(2) of the Act renders the assessment proceedings invalid when the assessee filed the return in response to the notice issued u/s 148 of the Act belatedly. 15. We find an identical issue had come up before the Hon’ble Delhi High Court in the case of PCIT vs. Draft Infrabuild (P.) Ltd. (supra). We find the Hon’ble High Court, following its earlier order in the case of PCIT vs. Shri Jai Shiv Shankar Traders (P.) Ltd. (supra) and various other decisions, has held that the failure by the Assessing Officer to issue a notice to the assessee u/s 143(2) of the Act after the assessee files his return of income in response to the notice u/s 148 of the Act is fatal

11 ITA No.194/PAN/2026 to the order of re-assessment proceedings. The relevant observations of Hon’ble High Court read as under:

12 ITA No.194/PAN/2026

13 ITA No.194/PAN/2026

14 ITA No.194/PAN/2026 Central, Patna decided on 25-7-2023, this Court considered the issue and held against the revenue. 7. We find that the question of law has to be answered in favour of the assesee and against the revenue. Hotel Blue Moon (supra) governs the issue which has been followed in Chand Bihari Agrawal (supra). 8. The Miscellaneous Appeal stands dismissed.” 17. The various other decisions relied on by the Ld. Counsel for the assessee also supports his case to the proposition that when the assessee files return in response to the notice u/s 148 of the Act, though, belatedly, non-issue of notice u/s 143(2) of the Act makes the re-assessment proceeding a nullity. 18. So far as the decision relied on by the Ld. DR is concerned, no doubt, the Hon’ble Delhi High Court on an earlier occasion has taken a view that non-issue of notice u/s 143(2) of the Act does not make the re-assessment proceedings invalid where the assessee files the return in response to the notice u/s 148 of the Act. However, it is to be noted that subsequent to this decision, the Hon’ble High Court recently in three other decisions has held that when the assessee files return in response to the notice u/s 148 of the Act, though, belatedly, the issue of notice u/s 143(2) of the Act is a mandatory requirement and non- issue of the same makes the re-assessment proceedings invalid. In any case, it is the settled position of law that when two views are possible on an issue, the view which is favourable to the assessee has to be adopted. Since the Assessing Officer in the instant case has admittedly not issued any notice u/s 143(2) of the Act after the assessee filed the return in response to the notice u/s 148 of the Act, though, belatedly, therefore, respectfully following the decisions cited (supra), we hold that the order passed by the Assessing Officer without following the mandatory requirement of issue of notice u/s 143(2) of the Act makes such re-assessment order a nullity. Since the assessee succeeds on this legal ground, the grounds challenging the addition on merit are not being adjudicated.” 22. Since the facts of the in the instant case are identical to the facts of the case already decided by the Co-ordinate Bench of the Tribunal cited (supra), therefore, we hold that the order passed by the Assessing Officer without following the mandatory requirement of issue of notice u/s 143(2) makes the re- assessment order an invalid assessment. We, therefore, set aside the order of the Ld. CIT(A) / NFAC and the grounds raised by the assessee on this issue are allowed. 23. In the result, the appeal filed by the assessee is allowed.”

15 ITA No.194/PAN/2026 12. Respectfully following the above decision of the Tribunal passed in the case of assessee itself for assessment year 2014-15 in ITA No.1567/PUN/2026 order dated 07.07.2025, wherein the facts & issues involved are exactly identical to the instant case in hand of Asstt Year 2015-16, we are of the considered opinion that the order dated 27-03- 2022 passed by the Assessing Officer without following the mandatory requirement of issue of notice u/s 143(2) makes the re-assessment order invalid & without jurisdiction. We, therefore, are not inclined to take a different view than what has already been taken by the Tribunal in the case of the assessee itself for Asstt Year 2014-15 in ITA No.1567/PUN/2026 order dated 07.07.2025 & accordingly deem it appropriate to set-aside the order passed by Ld. CIT(A)/NFAC and declare the impugned assessment order dated 27.03.2022 as bad in law. Thus, the grounds raised by the assessee on this issue are allowed.” 9. Respectfully following the above coordinate bench decision passed in the case of Kamlesh Pramod Gandhi (supra), wherein the facts & issues involved are exactly identical to the instant case in hand, we are of the considered opinion that the assessment order dated 18.12.2019 passed by the Assessing Officer without following the mandatory requirement of issue of notice u/s 143(2) (even against belated return) makes the assessment order invalid & without jurisdiction. We, therefore, deem it appropriate to set-aside the order passed by Ld. CIT(A)/NFAC and declare the impugned assessment order dated 18.12.2019 as bad in law and accordingly, the same is quashed. Thus, the additional ground raised by the assessee on this issue is allowed. Since we have already quashed the assessment order dated 18.12.2019 by allowing the additional ground regarding non-issuance of notice u/s 143(2) of the IT Act,

16 ITA No.194/PAN/2026 the other grounds raised by the assessee becomes infructuous hence not adjudicated by us. 10. In the result, the appeal filed by the assessee is allowed. Order pronounced on this 27th day of October, 2026. Sd/- Sd/- (MANISH BORAD) (VINAY BHAMORE) ACCOUNTANT MEMBER JUDICIAL MEMBER Pune / Dated : 27th October, 2026. Sujeet/DOC Digitally signed by Sujeet Kumar Sujeet Kumar Sharma Sharma Date: 2026.10.28 14:15:37 +05'30' आदेश क� �ितिलिप अ�ेिषत / Copy of the Order forwarded to : अपीलाथ� / The Appellant. 1. ��यथ� / The Respondent. 2. 3. The Pr. CIT concerned. 5. DR, ITAT, Panaji. गाड� फ़ाइल / Guard File. 5. आदेशानुसार / BY ORDER, // True Copy // Assistant Registrar ITAT, Pune.