SANOBER RIYAZ AHMED HEREKAR,MUMBAI vs. INCOME-TAX OFFICER 16(1)(3), MUMBAI

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ITA 5932/MUM/2026Status: DisposedITAT Mumbai22 October 2026AY 2015-167 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 order of the CIT(A) setting aside the assessment. The Tribunal noted that the assessment order was indeed passed under Section 144/147 read with Section 144B. While the assessee had furnished replies, no return of income was filed under Section 139 or in response to the Section 148 notice, meaning the assessment was not converted into one under Section 143(3). The Tribunal found that the proviso to Section 251(1)(a), which empowers the CIT(A) to set aside an assessment made under Section 144 and refer it back to the AO for fresh assessment, was in force at the time of the CIT(A)'s order (19.03.2026). The CIT(A) had not sustained the addition but had provided the assessee another opportunity to substantiate her explanation. The Tribunal held that the objections concerning limitation, validity of reopening, approval under Section 151, and the applicability of Section 69A, as well as the explanation for the gift, remained open for consideration in fresh proceedings before the AO. The assessee was directed to cooperate and furnish necessary material. The Tribunal explicitly stated that its decision upholding the CIT(A)'s order did not express any opinion on these substantive issues.

What were the facts?

The assessee, Sanober Riyaz Ahmed Herekar, is an individual who did not file a return of income for Assessment Year 2015-16. Proceedings were initiated under Section 147 based on information about the purchase of an immovable property for Rs. 56,43,500/-. A notice under Section 148 was issued on 08.04.2022. The assessee explained the property purchase was funded by a housing loan of Rs. 15,00,000/- from HDFC Bank and a gift of Rs. 43,50,000/- from her mother. The Assessing Officer (AO), however, made an addition of Rs. 43,50,000/- under Section 69A read with Section 115BBE, deeming the gift as unexplained money due to insufficient evidence regarding its genuineness and the donor's creditworthiness. The total income was assessed at Rs. 47,62,597/-. The assessee appealed to the CIT(A), who set aside the assessment for fresh examination by the AO, citing a lack of proper appreciation of facts and evidence and the assessment being made under Section 144.

What were the issues?

1. Whether the CIT(A) erred in framing the order ex parte and setting aside the assessment to the Assessing Officer for fresh assessment, violating principles of natural justice, especially when the assessee had furnished documentary evidence during assessment proceedings? - Assessee's contention: The CIT(A) issued only one notice during appellate proceedings and ought to have decided the grounds raised. The assessment order itself acknowledged the furnishing of evidence. The CIT(A) erred in treating the assessment as ex parte under Section 144 and restoring it to the AO. - Revenue's contention: Relied on the order of the CIT(A). 2. Whether the CIT(A) erred in not adjudicating specific grounds of appeal, including: a) Validity of the Section 148 notice issued after the expiry of the period specified under Section 149(1)(b). b) Whether the assessment order is void as the assessed income (Rs. 47,62,597/-) is below Rs. 50,00,000/-. c) Whether the AO was correct in asking the assessee to prove the "source of the source" under Section 69A. d) Whether the AO was correct in treating the gift from the mother as unexplained income under Section 69A and applying rates under Section 115BBE, despite the source being explained. e) Whether the AO was correct in levying penalty under Section 271F despite reasonable cause. f) Whether the AO was correct in considering the gift as income when received from the assessee's mother. - Assessee's contention: These grounds were not adjudicated by the CIT(A). - Revenue's contention: Relied on the order of the CIT(A). 3. Whether the notice under Section 148 issued by the Assessing Officer was bad in law, being beyond the time prescribed under Section 149, and whether the information available with the AO was vague and insufficient to suggest escapement of income? - Assessee's contention: The notice was issued beyond the time prescribed under Section 149, and the information was vague and insufficient, making the notice and consequent orders bad in law. - Revenue's contention: Relied on the order of the CIT(A).

Which sections of the Income-tax Act were involved?

Section 147,Section 144,Section 144B,Section 251(1)(a),Section 148,Section 149,Section 149(1)(b),Section 69A,Section 115BBE,Section 139,Section 143(3),Section 151,Section 271F

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “J(SMC

Before: SHRI PAWAN SINGH & SHRI JAGADISH

For Appellant: Shri Poojan Mehta, CA
For Respondent: Ms. Jayshree Thakur, SR. DR
Hearing: 12.08.2026Pronounced: 22.10.2026

Per: SHRI JAGADISH, A.M.:

1.

This appeal filed by the assessee is directed against the order dated 19.03.2026 passed by the learned Commissioner of Income-tax (Appeals), National Faceless Appeal Centre, Delhi [hereinafter referred to as “Ld. CIT(A)”], for Assessment Year 2015-16, arising out of the assessment order dated 04.03.2024 passed under section 147 read with sections 144 and 144B of the Income-tax Act, 1961 (“the Act”).

ITA No.5932/M/2026 Sanober Riyaz Ahmed Herekar

2.

The assessee has raised the following grounds of appeal:

“1. The Na�onal Faceless Appeal Centre (hereina�er referred to as the CIT(A)) erred in framing the order ex parte and further, se�ng aside the assessment to the Assessing Officer for fresh assessment.

The appellant contends that on the facts and in the circumstances of the case and in law, the CIT(A) issued one no�ce before passing the impugned order and as such, there is gross viola�on of principles of natural jus�ce.

The appellant further contends that on the facts and in the circumstances of the case and in law, the ac�on of the CIT(A) in trea�ng the assessment order as passed under sec�on 144 and se�ng aside the assessment to the Assessing Officer for fresh assessment is erroneous inasmuch as, the appellant during the course of assessment proceedings furnished all the relevant documentary evidence and accordingly, the impugned order of the CIT(A) ought to be quashed.

2.

The CIT(A) erred in not adjudica�ng the following grounds of appeal –

“a) Whether on the facts and circumstances of the case and in law, whether the proceeding is “void ab ini�o” as the no�ce u.s. 148 has been issued a�er the expiry of the period as specified u.s. 149(1)(b)?

b) Without prejudice to the above and on the facts and in the circumstances of case and in law, Whether the Assessment Order is void as the Assessed Income is Rs.47,62,597/- i.e. below Rs. 50,00,000/-?

c) Without prejudice to the above and on the facts and in the circumstances of case and in law, whether the learned A.O. was correct to ask the Assessee to prove the “source of the source” u.s. 69A?

d) Without prejudicial above, on the facts and in the circumstances of case and in law, Whether the learned A.O. is correct in trea�ng Gi� received from mother as unexplained income u.s. 69A and applied rates as per sec�on 115BBE without apprecia�ng the fact that the source has already been explained?

e) Whether the Learned A.O. was correct in levying penalty u.s. 271F despite the fact that the Assessee had reasonable cause for not filing of the return?

f) Whether the Learned A.O. was correct in considering the gi� as income as the Assessee despite the fact that the same is received as Gi� from her mother? Further it is requested that: -

1) The Assessee craves leave to amend, alter or delete any of the above grounds of appeal. 2

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2) It is prayed that the above submission be allowed.

3) Personal hearing may be granted to us to comprehend the ma�er in case required.”

3.

The Income-tax Officer – 16(1)(3), Mumbai (hereina�er referred to as the Jurisdic�onal Assessing Officer) erred in issuing the no�ce under sec�on 148 of the Act.

The appellant contends that on the facts and in the circumstances of the case and in law, the no�ce issued under sec�on 148 is bad in law and consequently, the assessment order and the CIT(A) ought to be quashed.

The appellants further, contend that the no�ce issued under sec�on 148 is bad in law inasmuch as the said no�ce is issued beyond the �me prescribed under sec�on 149 and hence, the consequent assessment order and the CIT(A) ought to be quashed.

The appellants further, contend that the informa�on available with the Assessing Officer is vague, insufficient and does not suggest that income chargeable to tax has escaped assessment and therefore, the no�ce issued under sec�on 148 is bad in law and hence, the consequent assessment order and CIT(A) order ought to be quashed.

4.

The Na�onal Faceless Assessment Centre (hereina�er referred to as the Assessing Officer) erred in making addi�on under sec�on 69A of the Act of Rs 43,50,000, being the amount received as gi� from mother as unexplained money.

The appellant contends that on the facts and in the circumstances of the case and in law, the Assessing Office erred in making the impugned addi�on without apprecia�ng the facts of the case in its en�rety and as such, the addi�on ought to be deleted.

The appellants contend that on the facts and in the circumstances of the case and in law, the Assessing Officer ought not to have made the impugned addi�on invoking the provisions of sec�on 69A of the Act, inasmuch as, the prescrip�on of provisions of sec�on 69A of the Act are not applicable and as such, the impugned addi�on ought to be deleted.

The appellant craves leave to add to, alter or amend the aforestated ground of appeal.”

3.

Brief facts of the case are that the assessee, an individual, had not filed her return of income for the year under consideration. On the basis of information regarding purchase of an immovable property for Rs.56,43,500/-, proceedings were initiated and notice under section 148 was issued on 08.04.2022. No return of income was filed in response to the said notice. During the assessment proceedings, the assessee furnished replies explaining that the purchase was funded by a housing loan of Rs.15,00,000/- from HDFC 3

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Bank and a gift of Rs.43,50,000/- received from her mother, Smt. Nilofar Herekar. The Assessing Officer held that the supporting evidence was insufficient to establish the genuineness of the receipt and the creditworthiness of the donor. He accordingly made an addition of Rs.43,50,000/- under section 69A read with section 115BBE of the Act. Including professional income of Rs.4,10,000/- and income from other sources of Rs.2,597/- disclosed in the computation furnished by the assessee, the total income was assessed at Rs.47,62,597/-.

4.

Aggrieved, the assessee preferred an appeal before the Ld. CIT(A). The Ld. CIT(A) observed that the issues had not been examined on a proper appreciation of the facts and evidence. Considering that the assessment was made under section 144, he exercised the power conferred by the proviso to section 251(1)(a) of the Act and set aside the assessment for fresh examination by the Assessing Officer. He directed the Assessing Officer to conduct the necessary enquiries, consider the explanation and evidence furnished by the assessee and pass a speaking order after providing an adequate opportunity of being heard. The assessee was also directed to cooperate and furnish the supporting material. Against this order, the assessee is in appeal before us.

5.

Before us, the Ld. Authorised Representative submitted that the assessee had participated in the assessment proceedings and furnished replies and documentary evidence, as acknowledged in the assessment order itself. It was therefore contended that the Ld. CIT(A) erred in treating the assessment as an ex parte assessment under section 144 and restoring it to the Assessing Officer. The Ld. AR further submitted that only one notice was issued during the appellate proceedings and that the Ld. CIT(A) ought to have decided the grounds raised before him. On the validity of reopening, it was contended that the notice dated 08.04.2022 was beyond the limitation prescribed under section 149, that the assessed income was below Rs.50 lakh and that a copy of the approval under section 151 had not been supplied. Reference was made to the decision of the Hon’ble Bombay High Court in Mukesh J. Ruparel, reported in 153 taxmann.com 70. On merits, the Ld. AR relied upon the bank 4

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statement reflecting the receipt from the assessee’s mother and her confirmation dated 15.01.2024, stated to have been furnished on 16.01.2024. It was submitted that the source of the receipt had been explained and that the assessee could not be required to establish the source of the source.

6.

Per contra, the Ld. Departmental Representative relied upon the order of the Ld. CIT(A).

7.

We have heard the rival submissions and perused the material available on record. The principal grievance of the assessee is against the action of the Ld. CIT(A) in setting aside the assessment for fresh consideration. We find that the assessment order dated 04.03.2024 expressly states that it has been passed under section 147 read with sections 144 and 144B of the Act. The concluding paragraph of the assessment order also records that the assessment is made under section 144/147 read with section 144B. Thus, the Ld. CIT(A) has proceeded on the statutory provision under which the assessment was actually completed.

8.

We note that the assessee had furnished replies during the assessment proceedings and that these replies find mention in the assessment order. However, no return of income was filed either under section 139 or in response to the notice under section 148. Mere furnishing of replies and a computation of income does not, in these circumstances, convert the assessment completed under section 144 into an assessment under section 143(3). The contention that the Ld. CIT(A) had no power to set aside the assessment merely because the assessee had participated in the proceedings is therefore not acceptable.

9.

The proviso to section 251(1)(a), inserted by the Finance (No.2) Act, 2024 with effect from 01.10.2024, specifically empowers the Ld. CIT(A) to set aside an assessment made under section 144 and refer the case to the Assessing Officer for making a fresh assessment. The impugned appellate order was passed on 19.03.2026, when the aforesaid provision was in force. The assessment in the present case having been made under section 144, the exercise of the said power by the Ld. CIT(A) is within the scope of the provision. 5

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10.

Further, the Ld. CIT(A) has not sustained the addition against the assessee. He has set aside the assessment and provided the assessee one more opportunity to substantiate her explanation. The direction requires the Assessing Officer to examine the material, conduct the necessary enquiries and pass a speaking order after providing an adequate opportunity of hearing. The grievance that the evidence furnished during the assessment proceedings was not properly considered can also be addressed in the fresh proceedings. In these circumstances, we find no infirmity in the order of the Ld. CIT(A) warranting our interference.

11.

Since the assessment has been set aside in its entirety, the objections concerning limitation, validity of reopening, approval under section 151 and applicability of section 69A, as well as the explanation and evidence relating to the gift, remain open for consideration in accordance with law. The assessee shall be at liberty to raise these objections and furnish the relevant evidence and authorities before the Assessing Officer, who shall consider and deal with the same by a speaking order. Our decision upholding the order of the Ld. CIT(A) shall not be construed as expressing any opinion on these issues. The assessee shall cooperate in the fresh proceedings and comply with the notices issued. Subject to the above observations, the order of the Ld. CIT(A) is upheld.

12.

In the result, the appeal filed by the assessee is dismissed.

Order pronounced in the open court on 22/10/2026.

Sd/- Sd/- (JAGADISH) (PAWAN SINGH) Accountant Member Judicial Member

Mumbai, Dated: 22/10/2026 A. Rao Sr. Private Secretary

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Copy of the order forwarded to: 1. Appellant 2. Respondent 3. The CIT 4. The CIT (Appeals) 5. The DR, I.T.A.T. By order ABHINAV ANANT Digitally signed by ABHINAV ANANT GAVANDE GAVANDE Date: 2026.10.28 14:03:15 +05'30' (Assistant Registrar) ITAT, Mumbai

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