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Facts
The assessee's case was reopened based on cash deposits in a savings account. A notice under section 148 was issued, and the assessee filed a return. The Assessing Officer made additions based on unexplained cash credits and presumptive income computation. The CIT(A) set aside the order and remanded it to the AO for a de novo assessment.
Held
The Tribunal held that the CIT(A) erred by not adjudicating the legal ground raised by the assessee regarding the validity of the reassessment notice under Section 148 due to limitation. The CIT(A) failed to provide a speaking order on this issue.
Key Issues
Whether the CIT(A) erred in not deciding the legal ground challenging the validity of the reassessment notice under Section 148 based on limitation, and instead remanded the issue without a speaking order.
Sections Cited
250, 148, 149, 148A, 142(1), 44AD, 147, 144, 144B
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “E” BENCH, MUMBAI
(Assessment Year: 2015-16) Kunjal Kapil Shah Assessing Officer, Assessment A-101, Unity Apartment, Nadiadwala Unit, ITD, Colony No. 02, Malad West, Mumbai – ITO, Ward 4(2)(1), Mumbai, Room No. 644, 6th Floor, Aayakar Bhavan, 400064. Vs. Maharshi Karve Road, Mumbai – 400020. PAN/GIR No. BTHPS6048B (Appellant) : (Respondent) Assessee by : Shri Subodh Ratna Parikh, CA Respondent by : Shri Ajit Pal Singh, SR DR Date of Hearing : 16.04.2025 Date of Pronouncement : 14.07.2025 O R D E R Per Kavitha Rajagopal, J M: This appeal has been filed by the assessee, challenging the order of the learned Commissioner of Income Tax (Appeals) Delhi (‘ld. CIT(A)’ for short), National Faceless Appeal Centre (‘NFAC’ for short) passed u/s.250 of the Income Tax Act, 1961 (‘the Act'), pertaining to the Assessment Year (‘A.Y.’ for short) 2015-16.
The assessee has challenged the order on the ground that the ld. CIT(A) has failed to adjudicate the legal ground raised by the assessee challenging the validity of the assessment as the notice u/s. 148, dated 13.04.2022 for A.Y. 2015-16 was barred by (A.Y. 2015-16) Kunjal Kapil Shah limitation as per Section 149 of the Act and hence prayed that the assessment be quashed as invalid and bad in law.
Brief facts of the case are that the assessee is an individual and engaged in the business of trading and plastic materials. The assessee’s case was reopened based on the information that the assessee has made cash deposit amounting to Rs. 89,76,600/- in his saving bank account but had failed to file his return of income for the year under consideration. Notice u/s. 148A(b) dated 30.03.2022 was issued by the ld. Income Tax Officer, Ward-4(2)(1), Mumbai (‘JAO’) for which the assessee has not responded and the ld. JAO after obtaining prior approval of ld. PCCIT passed an order u/s. 148A(d), dated 13.04.2022 for the reason that income chargeable to tax has escaped assessment. Notice u/s. 142(1) of the Act was duly issued and served upon the assessee. The assessee filed his return of income in response to the notice u/s. 148, declaring total income at Rs. 37,74,755/- and presumptive income at Rs. 3,04,751 u/s. 44AD of the Act. The ld. AO made an addition of Rs. 89,79,100/- on the ground that the assessee has failed to explain the source of cash credit in the bank account and Rs. 86,735/- being 8% of the net profit on the presumptive income declared u/s. 44AD of the Act which being the difference between the net profit declared by the assessee and calculated by the ld. AO. The ld. AO passed the assessment order u/s. 147 r.w.s. 144 r.w.s. 144B of the Act, being the best judgment assessment dated 15.03.2024, determining total income at Rs. 93,28,515/-.
The assessee was in appeal before the first appellate authority challenging the reassessment proceeding on the ground that the notice u/s. 148 dated 13.04.2021 was (A.Y. 2015-16) Kunjal Kapil Shah barred by limitation as per Section 149 of the Act and on the merits of the addition made by the ld. AO. The ld. CIT(A) vide order dated 30.12.2024 had set aside the assessee’s appeal to the ld. AO for de novo assessment as the ld. AO had passed an ex parte order due to non-compliance by the assessee during the assessment proceeding and without deciding on the legal ground raised
by the assessee.
5. Aggrieved the assessee is in appeal before us, challenging the order of the ld. CIT(A).
6. The learned Authorised Representative ('ld. AR' for short) for the assessee contended that the ld. CIT(A) has erred in not deciding the legal ground challenging the validity of the assessment and had merely remanded back the issue without considering the assessee’s submission. The ld. AR further contended that inspite of recording the assessee’s submission for ground no. 1 challenging the reassessment, the ld. CIT(A) had not given any specific finding on the said ground in the impugned order.
7. The learned Departmental Representative ('ld. DR' for short) for the revenue on the other hand controverted the same and stated that the ld. CIT(A) has remanded all the issues to the file of ld. AO for de novo assessment as the assessment order was an ex parte order. The ld. DR relied on the order of the lower authorities.
8. We have heard the rival submissions and perused the materials available on record. It is observed that before the first appellate authority, the assessee had raised the issue of challenging the validity of the assessment on the ground that the notice u/s. 148 for the relevant A.Y. dated 13.04.2022 was barred by limitation as per Section 149 of the Act. The assessee has also relied on various decisions in support of his contention that as per Finance Act, 2021, no notice u/s. 148 could be issued on or after 31.03.2022 relevant (A.Y. 2015-16) Kunjal Kapil Shah to A.Y. 2015-16 as per the first proviso to sub section (1) of Section 149 of the Act and that on this ground the notice issued on 31.04.2022 was barred by limitation. Though, the ld. CIT(A) has in his order reproduced the assessee’s submission, pertinently, there has been no discussion or finding given by the ld. CIT(A) on the legal issue raised by the assessee. It is settled proposition of law that the adjudicating authority should decide on all the grounds raised by the assessee before it by way of speaking order. In the present case in hand, the ld. CIT(A) has failed to comply with the same. Before us, the only ground that has been raised by the assessee was with regard to challenging the order of ld. CIT(A) on non-adjudication of the legal ground.
9. From the above observation, we are of the considered view that the issue challenging the validity of the assessment which was raised before the ld. CIT(A) has to be remanded back to the ld. CIT(A) for deciding the issue by way of a speaking order on the legal ground raised by the assessee, based on the merits of the case and in accordance with law by adhering to the principles of natural justice and in the interest of justice dispensation. We herby allow the solitary ground raised by the assessee for statistical purpose.