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Facts
The assessee filed an appeal against the CIT(A)'s order for AY 2017-18. The original assessment involved additions based on alleged unexplained cash credits. The CIT(A) had remanded the issues back to the AO for fresh assessment.
Held
The Tribunal admitted a new ground of appeal raised by the assessee regarding the validity of the reassessment notice u/s 148 being barred by limitation. Since this issue was not decided by the lower authorities, the Tribunal remitted all issues back to the AO for de novo assessment.
Key Issues
Whether the reassessment proceedings were barred by limitation due to the actual issuance date of the notice u/s 148? Whether the validity of the reassessment proceedings and the merits of the additions should be adjudicated de novo.
Sections Cited
148, 147, 250, 251(1)(a)
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Income Tax Appellate Tribunal, PUNE “B” BENCH : PUNE
Before: DR. MANISH BORAD & SHRI VINAY BHAMORE
IN THE INCOME TAX APPELLATE TRIBUNAL PUNE “B” BENCH : PUNE BEFORE DR. MANISH BORAD, ACCOUNTANT MEMBER AND SHRI VINAY BHAMORE, JUDICIAL MEMBER I.T.A.No.888/PUN/2025 (Assessment Year 2017-18) Sachin Bhagawan Nalage, ITO, Ward-1(1), Kolhapur 1434 C Ward Laxmipuri, Konda Lane, Near Traffic vs. Signal, Kolhapur. PAN : ALDPN 8879 N (Appellant) (Respondent) For Assessee : Shri Vaibhav R. Chaugule, CA For Revenue : Shri Manish Mehta, Addl. CIT Date of Hearing : 15.05.2025 Date of Pronouncement : 21.05.2025 ORDER PER DR. MANISH BORAD, AM:
This appeal by the assessee is directed against the order dated 18.01.2025 of the Ld. Commissioner of Income Tax (Appeals)/NFAC, Delhi [“CIT(A)”] for the A.Y. 2017-18
The assessee has raised the following grounds of appeal:-
“1. The Learned CIT (NFAC) failed to appreciate that the notice u/s 148 though dated as 31/03/2021 was actually issued on 01/04/2021, thereby making the re-assessment proceedings barred by limitations (Rs. 5978135) 2. The Learned CIT (NFAC) in the facts and circumstance of the case, besides setting aside the assessment to the AO for making fresh assessment, ought to have held that the proceedings initiated u/s 147 were bad in law and on that ground alone ought to have cancelled the assessment (Rs. 0) 3. The Learned CIT (NFAC) erred in not adjudicating the grounds against validity of re-assessment proceedings, raised at the time of filing appeal u/s 250 (Rs. 0) 4 The appellant craves leave to add, alter, amend or delete any of the above grounds of appeal (Rs. 0) Rs. 59,78,135” Total Tax Effect
2 ITA.No.888/PUN./2025 (Sachin Bhagawan Nalage) 3. At the outset, learned counsel for the assessee referring to ground No.1 stated that re-assessment proceedings are barred by limitation as notice u/s. 148 of the Act dated 31/03/2021 has been actually issued to the assessee on 01/01/2021. He also referred to certain judicial precedents in support of his contentions.
On the other hand, Ld.DR submitted that this legal ground has been raised for the first time before this Tribunal.
We have heard the rival contentions of both the parties and perused the record placed before us. We notice that the assessee who is an individual declared total income of Rs. 5,48,658/- in the return of income for the A.Y. 2017-18. Based on the information about the alleged unexplained cash credit/investment of the assessee with M/s. Shri Renuka Mata Multi State Urban Co-op. Credit Society Ltd., the assessee was issued a notice u/sec. 148 of the Act for carrying out the re-assessment proceedings. In the course of the re-assessment proceedings, certain submissions were filed, but they were not sufficient to satisfy the Ld.AO who observed that assessee has categorically failed to furnish any details relating to business/profession activities undertaken by him, details of bank accounts held jointly/individually, the source of investments made by him/father in the above referred credit society and certain other details also. The Ld.AO concluded the proceedings making addition of Rs. 48,29,995/-.
The assessee challenged the addition before the Ld. CIT(A) and in Form No.35 along with raising grounds on merits also raised ground challenging the validity of re-assessment proceedings. However, Ld. CIT(A) on considering the submissions filed by the 3 ITA.No.888/PUN./2025 (Sachin Bhagawan Nalage) assessee has remanded the issues back to the file of the Ld.AO observing that the matter requires further verification and accordingly, set aside the assessment to the Ld.AO in terms of the proviso to sec. 251(1)(a) for making fresh assessment. Even though, Ld. CIT(A) has remanded the issues to the Ld.AO, the assessee preferred appeal before this Tribunal and has raised new legal ground challenging the validity of notice issued u/sec. 148 being barred by limitation. Since this legal issue has been raised for the first time, but the same goes to the root cause of the assessment proceedings in question, we admit the legal ground. However, since the same has not been raised before the Ld. CIT(A), there is no finding on the said issue by the first appellate authority and therefore, it needs to be remanded back to the lower authorities. However, since Ld. CIT(A) has also remanded back the issues raised before him to the Ld.JAO, we remit back all the issues in the instant appeal to the file of the Ld.JAO before whom the assessee can raise the necessary issues about the validity of re- assessment, validity of notice issued u/sec. 148 along with issues raised on merits for which a reasonable opportunity of being heard shall be granted to the assessee. The Ld.JAO shall thereafter carryout denovo assessment proceedings in accordance with law. Assessee is also directed to remain vigilant and not to take adjournments unless otherwise required for reasonable cause and furnish all the details in support of grounds of appeal. All the grounds of appeal raised by the assessee are allowed for statistical purposes.
4 ITA.No.888/PUN./2025 (Sachin Bhagawan Nalage) 7. In the result, appeal of the assessee is allowed for statistical purposes. Order pronounced in the open Court on 21.05.2025.