VIKAS AROLKAR,MAPUSA vs. INCOME TAX OFFICER, PANAJI

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ITA 269/PAN/2025Status: DisposedITAT Amritsar22 October 2026AY 2017-184 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal admitted the legal issue challenging the validity of the notice under Section 148, as it goes to the root of the reassessment proceedings and no fresh facts were required for investigation, relying on the judgment of the Hon'ble Apex Court in National Thermal Power Co. Ltd. Vs. CIT (229 ITR 383). The Tribunal also noted that the CIT(A) had not adjudicated some of the legal issues raised before it. Citing the judgment of the Delhi High Court in Divine Infracon Pvt. Ltd. Vs PCIT [2025, 171 taxmann.com 92 (Del)], the Tribunal held that it has no jurisdiction to decide a ground not arising from the impugned order of the first appellate authority. Consequently, the order of the CIT(A) was set aside, and the grounds of appeal raised by the assessee were allowed for statistical purposes. The matter was remitted back to the file of the CIT(A) for necessary adjudication of the legal issues. The assessee was directed to provide updated contact details and remain vigilant. No specific finding was given on the addition of Rs. 95,30,000/-.

What were the facts?

The assessee, Vikas Arolkar, filed an appeal before the Income Tax Appellate Tribunal (ITAT), Panaji Bench, against the order of the National Faceless Assessment Centre (NFAC), Delhi, dated 31.07.2025. This order emanated from an assessment order dated 13.05.2023 passed under Section 147 read with Section 144B of the Income Tax Act, 1961. The assessee is challenging an addition of Rs. 95,30,000/- made by the Assessing Officer for unexplained money under Section 69A read with Section 115BBE, which was confirmed by the CIT(A). The assessee also raised a legal issue regarding the validity of the notice issued under Section 148 of the Act for the assessment year 2017-18.

What were the issues?

1. Whether the reassessment proceedings and assessment order are null and void and without jurisdiction, considering that the proceedings were purportedly taken as per the directions in Union of India Vs. Ashish Agarwal (2022) 444 ITR 1 (SC), but no prior notice under Section 148 was issued for the assessment year under appeal during the period from 01-04-2021 to 04-05-2022, and the notice was issued in contravention of CBDT Circular 19 of 2019, and the 'Faceless Jurisdiction of Income-tax Authorities Scheme, 2022' and 'e-Assessment of Income Escaping Assessment Scheme, 2022'. (Question of law and mixed fact and law, turning on Sections 147, 148, 144B, and CBDT Circular 19 of 2019). Assessee's Contention: The assessee argued that the notice under Section 148 was issued in contravention of the Faceless Jurisdiction of the Income Tax Authorities Scheme, 2022, and the e-assessment of Income Escaping Assessment Scheme, 2022. The assessee sought to admit this legal issue for the first time before the Tribunal and suggested restoration to the CIT(A) for adjudication. Revenue's Contention: The learned DR supported the order of the CIT(A).

Which sections of the Income-tax Act were involved?

Section 69A,Section 115BBE,Section 147,Section 144B,Section 148

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, PANAJI DB BENCH, PANAJI

Before: DR.MANISH BORAD & SHRI VINAY BHAMORE

For Appellant: Shri S.J. Kamat, CA
For Respondent: Shri Mayur Kamble, Sr. DR
Hearing: 20.08.2026Pronounced: 22.10.2026

PER DR. MANISH BORAD, ACCOUNTANT MEMBER :

The captioned appeal at the instance of assessee pertaining to A.Y. 2017-18 is directed against the order dated 31.07.2025 of ld. NFAC, Delhi emanating out of Assessment Order dated 13.05.2023 passed u/s.147 r.w.s.144B of the Income Tax Act, 1961 (in short ‘the Act’).

2.

On merits, the assessee has challenged the finding of ld.CIT(A) confirming the addition made by the Assessing Officer at Rs.95,30,000/- for unexplained money u/s.69A r.w.s.115BBE of the Act.

3.

Further, a legal issue challenging the validity of notice u/s.148 of the Act has been raised for the first time before this Tribunal placing reliance on judgment of Hon’ble Apex Court in the case of Union of India Vs. Ashish Agarwal (2022) 444 ITR 1. At the outset, ld.

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Counsel for the assessee submitted that the legal issue challenging the validity of notice u/s.148 of the Act allegedly been issued in contravention of Faceless jurisdiction of the Income Tax Authorities Scheme 2022 and e-assessment of Income Escaping Assessment Scheme 2022 has been raised for the first time before this Tribunal. Only prayer made to admit the same, however, raised no objection if the same is restored to the file of ld.CIT(A) for necessary adjudication.

4.

On the other hand, ld. DR supported the order of ld.CIT(A)

5.

We have heard the rival submissions and perused the record placed before us. The assessee is an individual and filed the return of income for A.Y. 2017-18 in response to notice u/s.148 of the Act on 28.01.2023 declaring income of Rs.8,95,440/-. Thereafter, notice u/s.148 of the Act issued for carrying out the reassessment proceedings and finally addition u/s.69A r.w.s.115BBE of the Act made at Rs.95,30,000/- assessing the income at Rs.1,04,25,440/-. Subsequently, assessee preferred appeal before ld.CIT(A) but failed to succeed. Now the assessee is in appeal before this Tribunal raising one of the legal issue challenging the reassessment which reads as under :

“2. The Learned Commissioner of Income Tax (Appeals) has erred in not declaring the assessment proceedings and assessment order as Null and void and without jurisdiction in spite of the fact that a. The proceedings taken purportedly as per the directions of the honourable Supreme Court in Union of India v. Ashish Agarwal [2022] 444 ITR 1 (SC) having been without jurisdiction as there was no prior notice u/s 148 issued for the assessment year under appeal during the period from 1-4-2021 till 4-5-2022 covered by the aforesaid order of the honourable Apex Court; b. The proceedings having been based on a notice u/s 148 issued in contravention of the CBDT circular 19 of 2019. 3 Vikas Arolkar

c. The proceedings having been based on a notice u/s 148 issued in contravention of the 'Faceless Jurisdiction of Income-tax Authorities Scheme, 2022' and 'e-Assessment of Income Escaping Assessment Scheme, 2022'”

6.

The above legal issue stands raised for the first time before this Tribunal and the same goes to the root cause of the reassessment proceedings. Since the legal issue can be raised at any stage and no fresh facts are required to be investigated, we therefore placing reliance on the judgment of Hon’ble Apex Court in the case of National Thermal Power Co. Ltd. Vs. CIT (SC) (229 ITR 383) admit the same. We also find that ld.CIT(A) has not adjudicated some of the legal issues raised before it. In the light of these facts, we are of the considered view that the legal issues along with other issues are remitted back to the file of ld.CIT(A) by virtue of judgment of Hon’ble Delhi High Court in the case of ‘Divine Infracon Pvt. Ltd. Vs PCIT’ [2025, 171 taxmann.com 92 (Del)], wherein their Hon’ble Lordship vide para 13 have categorically held that, the Tribunal has no jurisdiction to proceed to decide the ground which did not arise from the impugned order passed by first appellate authority, irrespective of such ground was raised in first appeal or not. Order of ld.CIT(A) is set aside and the grounds of appeal raised by the assessee are allowed for statistical purposes. Assessee is directed to provide latest email id and contact detail to the Department for receiving the notices from ITBA portal. Assessee is also directed to remain vigilant and not to take adjournment unless otherwise required for reasonable cause.

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7.

In the result, the appeal of the assessee is allowed for statistical purposes.

Order pronounced on 22nd October 2026 under Rule 34(5) of the Income Tax (Appellate Tribunal) Rules, 1963. (VINAY BHAMORE) (MANISH BORAD) JUDICIAL MEMBER ACCOUNTANT MEMBER Panaji; दिन ंक / Dated : 22nd October, 2026. Satish Satish Kumar Kumar Madishetty Madishetty Date: 2026.10.22 17:04:46 +05'30'

आदेश की प्रतिलिपि अग्रेपिि / Copy of the Order forwarded to : अपील र्थी / The Appellant. 1. प्रत्यर्थी / The Respondent.

2.3.

The Pr. CIT concerned. विभ गीय प्रतितनधि, आयकर अपीलीय अधिकरण, Panaji 4. ‘DB’ Bench / DR, ITAT, Panaji ‘DB’ Bench ग र्ड फ़ इल / Guard File. 5. आिेश नुस र / BY ORDER,

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