INCOME TAX OFFICER WARD 3, SATARA, INCOME TAX OFFICE SATARA vs. NANDKUMAR DATTATRAY KHOT, DAHIWADI MAN
आयकर अपीलीय अिधकरण ”ए” Ɋायपीठ पुणेमŐ।
IN THE INCOME TAX APPELLATE TRIBUNAL
PUNE BENCHES “A” :: PUNE
BEFORE DR.DIPAK P. RIPOTE, ACCOUNTANT MEMBER
AND SHRI VINAY BHAMORE, JUDICIAL MEMBER
आयकर अपील सं. /ITA No.1562/PUN/2024
िनधाᭅरण वषᭅ / Assessment Year: 2015-16
The Income Tax Officer,
Ward-3, Satara
V s
Nandkumar Dattatray Khot,
Shri Agencies Dahiwadi,
Dahiwadi, Man Satara.
Maharashtra – 415508. PAN: AATPK8947P
Appellant/ Revenue
Respondent/ Assessee
Cross Objection No.11/PUN/2025
िनधाᭅरण वषᭅ / Assessment Year: 2015-16
Nandkumar Dattatray Khot,
Shri Agencies Dahiwadi,
Dahiwadi, Man Satara.
Maharashtra – 415508. V s
The Income Tax Officer,
Ward-3, Satara.
PAN:AATPK8947P
Appellant/ Assessee
Respondent /Revenue
Assessee by Shri Suhas Kulkarni - AR
Revenue by Shri Vidya Ratna Kishor – (DR)(Virtual)
Date of hearing
25/03/2025
Date of pronouncement 24/04/2025
आदेश/ ORDER
PER DR. DIPAK P. RIPOTE, AM:
This is an Appeal filed by the Revenue against the Order of the Commissioner of Income tax (appeal) (NFAC) under section 250 of ITA No.1562/PUN/2024 [R] & C.O.No.11/PUN/2025 [A]
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the Income Tax Act, 1961 for A.Y.2015-16 dated 12/06/2024
emanating from Assessment Order u/s.147 r.w.s. 144B dated
22/05/2023. 1.1 The Assessee has filed Cross Objection raising Legal Ground.
The Revenue has raised following grounds of appeal :
“1) On the facts and circumstances of the case and in law, the Id.
CIT(A), while quashing the order passed by the JAO u/s. 148A(d) as well as the Notice issued u/s. 148 of the Act, failed to appreciate that the same were issued in compliance of the directions of the Hon'ble taxmann.com 64) wherein the Hon'ble Court had issued the directions to the 'respective Assessing Officers' i.e. the JAOs who had issued the original notices u/s 148 under the pre-amended provisions, to carry out the follow-up action as a one-time measure with respect to the notices that were issued under the pre-amended provisions.
2) On the facts and circumstances of the case and in law, the Id. CIT(A) is not justified in quashing the Notice issued u/s. 148 of the Income Tax
Act, 1961 issued by the JAO holding the same to be invalid and bad in law on the ground that the said Notice is in contravention of the provisions of Section 151A of the Act read with the Scheme dated 29th
March 2022, without properly interpreting the scope provided in Sec.
144B of the Income Tax Act, 1961 and the context in which it was used in the Scheme notified by the CBDT on 28th March 2022. 3) On the facts and circumstances of the case and in law, the Id. CIT(A) failed to appreciate that sub-sections (7) and (8) of Section 144B of the Income Tax envisages administrative freedom to the CBD'T to transfer any assessment proceedings, including proceedings relating to issuance of notice u/s.148 of the Act to the Assessing Officer havingjuri iction over such case in proper utilization of its resources and therefore, reassessment notices issued u/s.148 of the Act Juri ictional Assessing
Officers pursuant to such directions cannot be said to be invalid and bad in law?
4)
The appellant craves leave to add to, amend, modify or delete any of the grounds at the time of hearing of appeal.”
ITA No.1562/PUN/2024 [R] & C.O.No.11/PUN/2025 [A]
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1.2 The Assessee has raised following Legal Ground in Cross Objection :
“On the facts and circumstances of the case and in Law, The Learned
Assessing Officer (Ld.AO) erred in initiating the reassessment proceedings for AY 2015-16 vide notice under section 148A(b) dated
24/05/2022, which is beyond the time limit prescribed under the Income-tax Act, 1961. as per the provisions of section 149. Therefore, the present reassessment proceedings initiated beyond the prescribed period of limitation are bad in law and void ab initio.”
Written submission of ld.AR :
“A search action under Section 132 was conducted in the case of Shri Renuka Mata Multi State Urban Co-operative Credit Society Ltd. (SRMUCS). During the search proceedings, the department conducted a comprehensive verification of various bank accounts maintained by account holders Through this investigation, the department gathered information about the assessee (Respondent) regarding cash deposits across multiple locations during the Financial Year 2014-15. The case of the assessee was therefore reopened primarily on the basis of information related to (i) Cash deposit made at home branch of customers
(ii) Cash deposit made at other than home branch of customers'
accounts
(iii) Transfer from other customers of SRMUCS or cash withdrawals.
Even though the complete details of cash deposits as well as cash withdrawals were available with the department prior to issue of notice, without considering the nature of business of the assessee and without independently verifying the escapement of income, the AO has issued a notice under the presumption that all the cash deposits are the income of the assessee
The assessee however faced certain procedural difficulties in filing objections due to portal issues Therefore, there was non-compliance in respect to filing of return in response to notice u/s 148. However, the assessee (Respondent) eventually succeeded in filing objections on February 24, 2023. The same difficulty was also communicated to AO.
(# Page 12 of Order) The Assessing Officer however, dismissed these objections on March 13, 2023 without providing specific reasons. The assessee's request for document verification through a Verification Unit was rejected.
ITA No.1562/PUN/2024 [R] & C.O.No.11/PUN/2025 [A]
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On May 22, 2023, the AO issued a final assessment order under Section 147 read with Section 1448 of the Income Tax Act. The AO arbitrarily added the entire cash deposit amount of 4,36,38,812/as the appellant's income under Section 69A, categorizing these as "unexplained deposits"
The sequence of proceedings in this case is as under :
Notice u/s 148
07/04/2021
(This notice was subsequently withdrawn vide communication dated 16/01/2023)
Proceedings u/s 148A(b)
24/05/2022
Notice u/s 148A(d)
26/07/2022
Notice u/s 148
27/07/2022
Order u/s 147 read with section 144B of the Income
Tax Act
22/05/2023
Against the order u/s 147 rws 1448, dated 22/05/2023, the assessee preferred an appeal before CIT(A) The assessee took around 12
grounds before CIT(A) as mentioned in the page 3 of the Ld CIT(A)'s order. The assessee also took additional ground based on the decision of Telangana HC in the case of Konkanala Ravindra Reddy 156
taxmann.com 178, wherein the notice u/s 148 issued by JAD has been held as invalid.
Subsequently, the Hon'ble Bombay High Court also upheld the said decision in the case of Hexaware Technologies Ltd. v. Asstt. CIT [2024]
162 taxmann.com 225/464 ITR 430. The Learned Commissioner of Income Tax (Appeals] (CIT(A)) allowed the assessee's appeal, substantiating the decision with reference to the landmark judgment of the Bombay High Court in the case of Hexaware Technologies. The order, detalled on Page 45, encompasses the following key observations:
in view of the above discussion, the facts of the appeal and the binding decision of the juri ictional High Court of Bombay in the case of Hexaware Technologies Ltd vs ACIT dated 03.05 2024, it is held that the initiation of reassessment proceedings by order/notice u/s 148A(d) and 148 is bad in nature being issued by the juri ictional AO and not the faceless AO. Hence, the appellant succeeds on the additional ground of appeal and thereby the notice u/s 148 is held to be invalid for the reasons stated above. Due to the initiation of the proceeding being wrong, the subsequent order u/s 147 r.w.s. 1448 dated 22.05.2023 gets nullified accordingly. As a result, the additional grounds of appeal are hereby allowed.
ITA No.1562/PUN/2024 [R] & C.O.No.11/PUN/2025 [A]
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5.17 Since the appellant has already got relief in terms of the quashing of the reassessment proceedings in para 5.16 above, the other grounds of appeal are hereby rendered academic in nature and are not being adjudicated separately. However, for statistical purposes they are hereby dismissed.
6 In the result, the appeal filed by the appellant is treated as Partially
Allowed.”
1 The ld.AR relied on the following decisions : (i) Union of India Vs. Rajeev Bansal [2024] 167 taxmann.com 70 (SC)
(ii) Ibibo Group Private Limited Vs ACIT Circle 10(1), Delhi-WP(C)
17639/2022
(iii) Neera Gupta Vs ITO Ward 46(4), New Delhi - W.P.(C)
17352/2024, CM APPL 73891/2024 & CM APPL. 73892/2024
(iv) Pratishtha Garg Vs ACIT Circle 25, Delhi-W.P (C) 16878/2024
CM APPL 71476/202
(v) Adhir Sachdeva Vs ACIT & Ors W.P(C) 17647/2024 and CM
APPLS 75054-55/2024
(vi) Pushpak Realities Pvt. Ltd. ITA No.4812/Mum/2024, ITA No 4814/Mum/2024 and ITA No.4816/Mum/2024-(AY 2013-14, 2014-15 &
2015-16)
(vii)
Manish
Financial-ITA.
No.5055/Mum/2024
and I.T.A.
No.5050/Mum/2024 (Assessment Year: 2015-16 & 2016-17)
Findings & Analysis :
We have heard both the parties and perused the records. The ITA No.1562/PUN/2024 and C.O. No.11/PUN/2025 were heard together and decided by this common order. We will take up first the Cross Objection Appeal.
ITA No.1562/PUN/2024 [R] & C.O.No.11/PUN/2025 [A]
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C.O.No.11/PUN/2025 :
1 The Assessee had filed return of Income on 05/08/2017 for A.Y.2015-16. The Assessing officer, Income Tax Officer, Ward-3, Satarareceived certain information from ACIT, Central Circle-4(4), Mumbai vide letter dated 12/03/2021 in the context of search carried out u/s.132 of the Income tax Act in the case of Shri. Renuka Mata Multi State Urban Cooperative Society Ltd. TheAssessing Officer issued Initial Notice u/s.148 on 07/04/2021 for A.Y.2015-16. Subsequently, the proceedings-initiated u/s.148 vide notice dated 07/04/2021 was closed, the relevant part of the impugned order is reproduced here as under :
ITA No.1562/PUN/2024 [R] & C.O.No.11/PUN/2025 [A]
2 The Income Tax Officer,Ward-3, Satara issued communication dated 24/05/2022 for A.Y.2015-16 treating the earlier notice as Notice u/s.148A(b) of the Act and shared the information with the Assessee. The order u/s.148A(d) was passed on 26/07/2022 for A.Y.2015-16. 3.3 Before the Hon’ble Supreme Court in the case of UoI Vs. Rajeev Bansal 469 ITR 46(SC), Mr.N.Venkataraman, learned Additional Solicitor General of India, made the following submissions on behalf of the Revenue: Quote, “a. Parliament enacted TOLA as a free-standing legislation to provide relief and relaxation to both the assesses and the Revenue during TOLA seeks to relax actions and proceedings that could not be completed or complied with within the original time limits specified under the Income-tax Act, b. Section 149 of the new regime provides three crucial benefits to the assesses: (1) the four-year time limit for all situations has been reduced to three years; (ii) the first proviso to Section 149 ensures that re-assessment for previous assessment years cannot be undertaken beyond sic years; and (iii) the monetary threshold of Rupees fifty lakhs will apply to the re assessment for previous assessment years; f. The Revenue concedes that for the assessment year 2015-16, all notices issued on or after 1 April 2021 will have to be dropped as they will not fall for completion during the period prescribed under TOLA;” Unquote.
ITA No.1562/PUN/2024 [R] & C.O.No.11/PUN/2025 [A]
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3.4 Thus, the Ld.Additional Solicitor General of India submitted before the Hon’ble Supreme Court that for A.Y.2015-16 all the notices issued after 01/4/2021 will have to be dropped.
5 In the case under consideration, we have already mentioned that the initial notice u/s.148 was issued 07/04/2021, which is after 01/04/2021. Thus, as submitted by Ld.ASG the proceedings initiated for A.Y.2015-16 after 01/04/2021 needs to be dropped. However, in this case the AO has not dropped the proceedings initiated after 01/04/2021 for A.Y.2015-16, which should have been dropped as submitted by Ld.ASG.
6 The Hon’ble Delhi High Court had considered this issue in the case of Pratishta Garg Vs. ACIT WP(C) 16878/2024 order dated 19/12/2024. The relevant paragraphs of the order of the Hon’ble Delhi High Court is reproduced here as under : Quote, “1. The petitioner has filed the present petition, inter alia, praying asunder:
"A. Issue a writ in the nature of Certiorari to quash the impugned notice dated 22.06.2021 issued under section 148 of the Act, and the consequential notice 25.05.2022 issued under section 148A(b) of the Act; the impugned order dated 19.07.2022 passed under section 148A(d) of the Act and the impugned notice dated 19.07.2022 issued under section 148 of the Act in the case of the petitioner for AY 2015-
16;
ITA No.1562/PUN/2024 [R] & C.O.No.11/PUN/2025 [A]
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D. Issue any other Writ, order, or Direction which this Hon'ble Court may deem fit and proper in the facts and circumstances of the case, and E. To allow the writ petition with cost in favor of the Petitioner and against the Respondent."
Learned counsel for the Revenue fairly states that the prayers made by the petitioner are required to be allowed as the same are covered by the concession made by the Revenue before the Supreme Court in Union of India and Others vs. Rajeev Bansal: 2024 SCC OnLine SC 2693, 2024 INSC 754, as recorded in paragraph 19 (f) of the said decision. He also submits that the Coordinate Bench of this Court had, after noting the aforesaid concession, allowed a similar petition Ibibo Group Pvt. Ltd. vs. Assistant Commissioner of Income Tax Circle: W.P.(C) 17639/2022 by order dated 13.12.2024. 3. It is relevant to note paragraph 19 (e) and (f) of the decision of the Supreme Court in Union of India and Others vs. Rajeev Bansal, 2024 SCC OnLine SC 2693. The same are set out as under:
"(e) The Finance Act, 2021 (2021) ((2021) 432 ITR (Stat) 52) substituted the fold regime for reassessment with a new regime. The first provisio to section 149 does not expressly bar the application of Taxation and other Laws (Relaxation and Amendment of Certain
Provisions) Act, 2020, Section 3 of the Taxation and other Laws
(Relaxation and Amendment of Certain Provisions) Act, 2020 applies to the entire Income-tax Act, including sections 149 and 151 of the new regime. Once the first proviso to section 149(1)(b) is read with Taxation and other Laws (Relxation and Amendment of Certain Provisions) Act,
2020, then all the notices issued between April 1, 2021 and June 30,
2021 pertaining to the assessment years 2013-2014. 2014-2015, 2015-
2016, 2016-2017, and 2017-2018 will be within the period of limitation as explained in the tabulation below :
Assessment
Year
Within Years Expiry of Limitation read with TOLS for (2) (3)
Within Six
Years
(4)
Expiry of Limitation read with TOLA for (4) (5)
2013-2014
31.03.2017
TOLA not applicable;
31.03.2020 30.06.2021
2014-2015
31.03.2018
TOLA not applicable.
31.03.2021 30.06.2021
2015-2016
31.03.2019
TOLA not applicable;
31.03.2022 TOLA not applicable.
ITA No.1562/PUN/2024 [R] & C.O.No.11/PUN/2025 [A]
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2016-2017
31.03.2020
TOLA not applicable.
31.03.2023 TOLA not applicable.
2017-2018
31.03.2021
TOLA not applicable.
31.03.2024 TOLA not applicable.
(f) The Revenue concedes that for the assessment year 2015-2016, all notices issued on or after April 1, 2021 will have to be dropped as they will not fall for completion during the period prescribed under the Taxation and other Laws (Relaxation and Amendment of Certain
Provisions) Act, 2020."
In view of the aforesaid, the impugned order dated 19.07.2022 issued under Section 148(A)(d) of the Income Tax Act, 1961 (hereafter the Act) as well as the notice dated 19.07.2022 issued under Section 148 of the Act in respect of AY 2015-16 are liable to be set aside. It is so directed.
The petition is allowed in the aforesaid terms.
Pending application also stands disposed of.”,Unquote.
7 Similarly, Hon’ble Delhi High Court in the case of Neera Gupta Vs. ITO WP(C) 17352/2024 vide order dated 17/12/2024 allowed the petition of the assessee.
8 The facts of the Pratishta Garg case(supra) and Neera Gupta Case (supra) are identical to the assessee under consideration. In the case of the Pratishtha Garg the Order u/s.148A(d) was passed on 19/07/2022 and notice u/s 148 was issued on 19/07/2022 for A.Y.2015-16. In the case of the Assessee Nandkumar Khot also the order u/s.148A(d) was passed on 26/07/2022 and notice u/s.148 was issued on 27/07/2022 for AY 2015-16. ITA No.1562/PUN/2024 [R] & C.O.No.11/PUN/2025 [A]
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3.9 No decision of Hon’ble Juri ictional High Court has been brought to our notice. Therefore, in absence of decision of Hon’ble
Juri ictional High Court the law laid down by Hon’ble Delhi High
Court is binding on us.
10 Therefore, respectfully following the decision of Hon’ble Delhi High Court(supra) and the submission made by Ld. Additional Solicitor General before Hon’ble Supreme Court, the Order u/s.148A(d) and the notice u/s 148 are quashed.
11 Accordingly, the legal ground raised by the assessee in C.O.No.11/PUN/2024 is allowed in above terms.
Condonation of Delay :
There was a delay of 44 days in filling the CO by the assessee. The assessee is a senior citizen staying in a village.The Assessee has filed an affidavit explaining the elaborate reasons. We are convinced that there was sufficient reason hence we condone the delay.
In the result, Cross Objection appeal filed by the assessee is allowed.
ITA No.1562/PUN/2024 [R] & C.O.No.11/PUN/2025 [A]
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ITA No.1562/PUN/2024 (Revenue) :
Since we have already quashed the notice u/s.148 and order u/s.148A(d) of the Act,the grounds raised by the revenue becomes academic and hence we do not intend to adjudicate. Accordingly, Grounds raised by the revenue are dismissed as unadjudicated.
In the result, appeal of the Revenue is dismissed as unadjudicated.
Order pronounced in the open Court on 24th April, 2025. (VINAY BHAMORE)
ACCOUNTANT MEMBER
पुणे / Pune; ᳰदनांक / Dated : 24th April, 2025/ SGR
आदेशकᳱᮧितिलिपअᮕेिषत / Copy of the Order forwarded to :
1. अपीलाथᱮ / The Appellant.
2. ᮧ᭜यथᱮ / The Respondent.
3. The CIT(A), concerned.
4. The Pr. CIT, concerned.
5. िवभागीयᮧितिनिध, आयकर अपीलीय अिधकरण, “ए” बᱶच, पुणे / DR,
ITAT, “A” Bench, Pune.
गाडᭅफ़ाइल / Guard File. आदेशानुसार / BY ORDER,
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Senior Private Secretary
आयकर अपीलीय अिधकरण, पुणे/ITAT, Pune.