INCOME TAX OFFICER, WARD-11(1), PUNE, PUNE vs. ILIYAS AYYUB NADAF, PUNE

First we take up ITA No.563/PUN/2025 for assessment year 2015-16 as the lead case.

Facts of the case, in brief, are that the assessee is an individual and has not filed his return of income. Information was received that during the course of search and seizure action u/s 132 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) carried out in the case of M/s. Shri Renuka Mata Multi State Urban Co-operative Credit Society Ltd. on 26.05.2017 it was found that huge money was deposited in the bank accounts maintained with the society. Further, during the course of assessment proceedings the society could not explain the source of the same. It was found that the assessee has maintained accounts in M/s. Shri Renuka Mata Multi State Urban Co-operative Credit Society Ltd. and has entered into financial transactions exceeding the taxable limits. The assessee during the impugned assessment year has deposited cash to the tune of Rs.2,17,87,268/-. Since the assessee has not filed his return of income and has not offered any income arising out of the above transactions for taxation, therefore, the Assessing Officer, after recording reasons, reopened the assessment as per provisions of CO Nos.34 to 36/PUN/2025

Similarly for assessment year 2016-17 the Assessing Officer made addition of Rs.2,48,37,716/- as unexplained cash deposits to be taxed u/s 115BBE of the Act and for assessment year 2017-18 he made addition of Rs.88,44,488/- as unexplained cash deposits to be taxed u/s 115BBE of the Act.

In appeal the Ld. CIT(A) / NFAC restored the issue to the file of the Assessing Officer with a direction to make fresh assessment in accordance with proviso to section 251(1)(a) of the Act.

Aggrieved with such order of the Ld. CIT(A) / NFAC the Revenue is in appeal before the Tribunal by raising the following grounds: CO Nos.34 to 36/PUN/2025

The Ld. DR at the outset submitted that the assessment order was not passed u/s 144 of the Act, therefore, the Ld. CIT(A) / NFAC could not have set aside the order as per provisions of section 251(1)(a) of the Act. He submitted that the Ld. CIT(A) / NFAC should have decided the appeal on merit by himself instead of setting aside the order to the file of the Assessing Officer.

The Ld. Counsel for the assessee on the other hand while supporting the order of the Ld. CIT(A) / NFAC submitted that various submissions were made before the Assessing Officer which he had ignored and passed the order for which the Ld. CIT(A) / NFAC directed the Assessing Officer to frame the assessment de novo. He, however, submitted that he has no objection if the matter is restored to the file of the Assessing Officer since full details were filed before him explaining the source of cash deposits which he has not accepted. CO Nos.34 to 36/PUN/2025

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. It is an admitted fact that the Assessing Officer has not passed the order u/s 144 of the Act but has passed the order u/s 143(3) r.w.s. 147 of the Act which is evident from page 1 of the assessment order. Under these circumstances, the Ld. CIT(A) / NFAC could not have restored the issue to the file of the Assessing Officer without deciding the issue on merit. However, it is also an admitted fact that the assessee has filed various details before the Assessing Officer which were not considered by the Assessing Officer properly for which he has no objection if the issue is restored to the file of the Assessing Officer for de novo assessment. Although the Ld. CIT(A) / NFAC has no power to set aside the issue when the order has not been framed u/s 144, however, the Tribunal has the power to restore the issue to the file of the Assessing Officer for de novo assessment if the circumstances so warrant. Since in the instant case the assessee has filed various details which according to him were not considered by the Assessing Officer in proper prospective and since it is the submission of the Ld. Counsel for the assessee that given an opportunity the assessee is in a position to substantiate his case by filing the requisite details to the satisfaction of the Assessing Officer, therefore, considering the totality of the facts of the case and in the interest of justice, we deem it proper to restore the issue to the file of the Assessing Officer with a direction to decide the issue afresh and in accordance with law after providing due opportunity of being heard to the assessee. The grounds raised by the Revenue are accordingly allowed for statistical purposes. CO Nos.34 to 36/PUN/2025

Identical grounds have been raised by the Revenue in ITA Nos.564 & 565/PUN/2025 for assessment years 2016-17 and 2017-18 respectively. Since we have restored the issue to the file of the Assessing Officer for de novo assessment for assessment year 2015-16, therefore, following similar reasonings, we restore the grounds raised in assessment years 2016-17 and 2017-18 to the file of the Assessing Officer for de novo assessment.

The Ld. Counsel for the assessee at the time of hearing did not press the Cross Objections filed by the assessee for which the Ld. DR has no objection. Accordingly the three COs filed by the assessee are dismissed as not pressed.

In the result, all the three appeals filed by the Revenue are allowed for statistical purposes and all the three COs filed by the assessee are dismissed.

अपीलार्थी / The Appellant; 2. प्रत्यर्थी / The Respondent

4. The concerned Pr.CIT, Pune DR, ITAT, ‘A’ Bench, Pune 5. गार्ड फाईल / Guard file.