ADAM HAJI AMIR HAMZA NADAF,SANGLI vs. ITO WARD-2, SANGLI, SANGLI

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ITA 445/PUN/2025Status: DisposedITAT Pune15 September 2025AY 2017-18Bench: DR.MANISH BORAD (Accountant Member)1 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the reassessment proceedings should have been initiated under Section 153C of the Act, not Section 147, as the information was gathered during a search. Therefore, the assessment proceedings were deemed illegal and quashed.

What were the facts?

The assessee's appeal pertains to AY 2017-18, arising from an assessment order passed u/s.147 r.w.s.144 of the Act. The reassessment proceedings were initiated based on information unearthed during a search related to cash deposits in a cooperative society.

What were the issues?

Whether the reassessment proceedings initiated under Section 147 were valid when the information was derived from a search and should have been proceeded under Section 153C. Validity of assessment proceedings due to non-issuance of notice under Section 143(2).

Which sections of the Income-tax Act were involved?

Section 147,Section 144,Section 153C,Section 143(2),Section 69,Section 132

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, PUNE BENCHES “SMC”, PUNE

Before: DR.MANISH BORAD

For Appellant: Shri Pramod S Shingte
For Respondent: Shri Sanjay Dhivare
Hearing: 11.08.2025Pronounced: 15.09.2025

आदेश / ORDER

PER DR. MANISH BORAD, ACCOUNTANT MEMBER :

1.

The captioned appeal at the instance of assessee pertaining to A.Y. 2017-18 is directed against the order dated 19.12.2024 of National Faceless Appeal Centre (NFAC) Delhi passed u/s.250 of the Income-tax Act, 1961 (hereinafter also called ‘the Act’) arising out of Assessment Order dated 26.03.2022 passed u/s.147 r.w.s144 of the Act.

2.

Assessee has raised following grounds of appeal :

“1. On the facts in the circumstances of the case and in law the learned Assessing Officer erred in initiating the reassessment proceeding under section 147 of the IT Act, 1961, on the basis of information gathered during the search conducted on 26-05-2017, therefore the action is illegal as the proceedings ought to have been initiated u/s.153C, therefore consequential order passed is bad in law and deserves to be struck down

2. On the facts and in the circumstances of the case and in law a learned Assessing Officer erred in making addition of Rs.39,99,535/- as unexplained investments by invoking provisions of section 69 of the IT Act, being cash deposited in Shri Renukamata Multistate Urban Co-operative credit society Ltd., without appreciating the return filed by appellant as well as by dis-regarding appellant's contention. Your appellant prays for deletion of entire addition Your appellant prays for deletion of entire addition. Your appellant craves for to add, alter amend, modify, delete any or all grounds of appeal before or during the course of hearing in the interest of natural justice.” 2.1 Assessee has also raised an additional ground which reads as under :

"On the facts and in the circumstances of the case and in law the learned Assessing Officer erred in not issuing notice u/s 143(2) of the Income Tax Act, post filling of income tax return on 17/03/2022, in response to notice u/s. 148, such default is incurable therefore entire proceedings are void-ab-intio and consequential order passed is bad in law."

3.

I will first take up the legal issue challenging the validity of assessment proceedings which has been carried out u/s.147 r.w.s.144 of the Act.

4.

At the outset, Ld. Counsel for the assessee placing reliance on the decision of this Tribunal in the case of Vijaykumar Mangilalji Chordiya Vs. NFAC, Delhi in dated 19.09.2024 submitted that ld. Assessing Officer ought to have initiated the assessment proceedings u/s.153C of the Act and not u/s.147 of the Act and therefore since valid assessment proceedings have not been initiated the same deserves to be quashed.

5.

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

Adam Haji Amir Hamza Nadaf 6. I have heard the rival contentions and perused the material placed before me. The assessee in the instant case is an individual and did not furnished return of income for A.Y. 2017-18. Based on the information about cash deposit by the assessee in Shri Renuka Mata Multistate Urban Coop. State Credit Society Ltd. (in short ‘RMM’) which was unearthed during the course of search u/s.132 of the Act conducted on 26.05.2017 in the case of RMM, ld. Assessing Officer (AO) initiated the re-assessment proceedings u/s.147 of the Act by issuing notice u/s.148 of the Act.

7.

Before me, ld. Counsel for the assessee submitted that on the basis of very same information in case of another assessee namely Vijaykumar Mangilalji Chordiya (supra) where also information was obtained about cash deposit by this assessee with the account maintained with RMM and re-assessment proceedings u/s.147 were initiated. However, this Tribunal vide order dated 19.09.2024 after considering earlier decision of this Tribunal in the case of ITO Vs. Narendra Sampatlal Bafna in order dated 19.08.2024 has held that proper course by the Assessing Officer should have been under the provisions of section 153C of the Act and not under the provisions of section 147 of the Act as the case has been re- opened on the basis of information that emerged at the time of search at the premises of RMM. This Tribunal thus allowed the additional ground raised by the assessee challenging the validity of assessment proceedings and quashed the assessment order u/s.147 r.w.s.143(3) of the Act .

8.

I find that the above decision of this Tribunal is squarely applicable on the facts of the instant case wherein also the proceedings have been carried out on the basis of information Adam Haji Amir Hamza Nadaf pertaining to the assessee unearthed during the course of search and therefore respectfully following the above decision in the case of Vijaykumar Mangilalji Chordiya (supra) I hold that the assessment proceedings in question deserves to be quashed as they have not been carried out u/s.153C of the Act. Ground No.1 raised by the assessee is allowed.

9.

Dealing with remaining grounds raised by the assessee on merit would become academic

10.

In the result, appeal of the assessee is allowed

Order pronounced on this 15th day of September, 2025.

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