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Income Tax Appellate Tribunal, JAIPUR BENCHES, SMC” JAIPUR
Before: DR. S. SEETHALAKSHMI, JM & SHRI RATHOD KAMLESH JAYANTBHAI,
ORDER PER: RATHOD KAMLESH JAYANTBHAI, AM By way of present appeal the above named assessee – appellant challenges the order of the National Faceless Appeal Centre, Delhi [ for short CIT(A)] dated 10/06/2025 for assessment year 2017-18. The said order of the ld. CIT(A) arises because the assessee has challenged the assessment order dated 27.04.2023 passed under section 147 r.w.s 144B Shambhu Dayal Soni vs. ITO of the Income Tax Act, 1961 [ for short “AO”] by Assessment Unit of Income Tax Department [ for short AO].
2. In this appeal, the assessee has raised following grounds: - “
1. 1. Under the facts and circumstances of the case the learned CIT(A) has erred in confirming the order passed by learned AO u/s 147 of the IT Act, 1961.
2. Under the facts and circumstances of the case the learned CIT(A) has erred in confirming the addition of Rs. 14,10,000/- u/s 69A of the IT Act, 1961 for cash deposited in bank during demonetarization period.
3. Under the facts and circumstances of the case the learned CIT(A) has erred in confirming the application of provisions of section 115BBE of the IT Act, 1961.
4. The appellant crave to add, amend OR alter all OR any grounds of appeal before OR at the time of hearing of appeal.
2.1 Further, in this appeal, the assessee has raised following additional grounds: - Additional Ground No.1 On the facts and in the circumstances of the case and in law, the Learned CIT(A) has erred in not quashing the order u/s 148A(d) passed by the Learned Assessing Officer on 25/7/2022 with the approval of Principal Commissioner-1, Jaipur whereas the approval required u/s 151(2) should have been of Pr. Chief Commissioner of Income Tax/Pr. DGIT, hence, the order passed is ab initio void. Additional Ground No.2 On the facts and in the circumstances of the case and in law, the Learned CIT(A) has erred in not quashing the notice u/s 148 issued on 25/7/2022 by the Learned Assessing Officer with the approval of Principal Commissioner-1, Jaipur whereas the approval required u/s 151(2) should have been of Pr. Chief Commissioner of Income Tax/Pr. DGIT, hence, the notice issued is ab initio void. Additional Ground No.3 Shambhu Dayal Soni vs. ITO On the facts and in the circumstances of the case and in law, the Learned CIT(A) has erred in not quashing the notice u/s 148 issued on 25/7/2022 by the Jurisdictional Assessing Officer (Jethanand Bhoolchandani, ITO Ward 1(1), Jaipur) whereas after 29/03/2022, notice u/s 148 could have been issued by N.F.A.C.only. Additional Ground No.4 On the facts and in the circumstances of the case and in law, the Learned CIT(A) has erred in not quashing the notice u/s 148 issued on 25/7/2022 by the Learned Assessing Officer without quoting DIN in the body of the notice. The notice issued is ab initio void. Additional Ground No.5 On the facts and in the circumstances of the case and in law, the Learned CIT(A) has erred in not quashing the notice u/s 148 issued on 25/7/2022 by the Learned Assessing Officer without meeting the condition laid down in Sec. 149(1)(b) that the amount of escaped income has to be fifty lac or more in cases beyond the period of three years from the end of the relevant assessment year.
Since the above grounds so raised by the assessee are legal in nature and does not require finding of fact and the same are admitted considering the decision of the Apex Court in the case of NTPC Ltd. [ 229 ITR 383]
3. Succinctly, the fact as culled out from the records is that in the case of the assessee, a specific information was available that the assessee Shri Shmbhu Dayal Soni (PAN: AFGPS9157M) is an individual, engaged in job work of gold & silver ornaments with trading of gold and silver jewellery and has filed the return of income for AY 2017-18 on 14.08.2017 declaring total Shambhu Dayal Soni vs. ITO income of Rs.7,62,650/-. The assessee has made cash deposit maintained in bank account No.25480200009558 with Bank of Baroda, Agra Road, Dausa Branch, Dausa. The aforesaid bank account of the assessee was credited by Rs. 14,10,000/- during the demonetization period on 11.11.2016 in the shape of demonetized currency notes of Rs.500/- & Rs.1000/-. However it was noticed that source of such cash/credit entries in bank account of the assessee remains unexplained. Therefore, the case was re-opened u/s.147 of the Income tax Act, 1961. Order u/s.148A(d) was passed on 25.07.2022 and thereby Notice u/s.148 was issued on 25.07.2022. The notice u/s. 148 of the Act dated 23.04.2021 was issued during the extended period under the old provisions of Section 147 to 151 the Income Tax Act, 1961, which have been substituted by Finance Act of 2021 with effect from 01.04.2021. The Hon'ble Supreme Court in the case of UOI Vs. Ashish Agarwal in Civil Appeal No. 3005/2022 dated 04.05.2022 has adjudicated on the validity of the issuance of such notices by the Assessing Officers during the period beginning on 01.04.2021 to 30.06.2021, as per provisions of the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 and other notifications issued thereafter. The Hon'ble Supreme Court has held that these extended reassessment Shambhu Dayal Soni vs. ITO notices issued under the old law shall be deemed to be the show cause notices issued under clause (b) of Section 148A of the new law and directed the Assessing Officers to follow the procedure with respect to such notices. Subsequently, the CBDT had issued Instruction No. 01/2022 F.No. 279/Misc./M51/2022-ITJ dated 11/05/2022 specifying the course of action to be taken for implementation of the directions of the Hon'ble Supreme Court in the above cited case. In the case of the assessee, there was specific information for deposit of cash by the assessee for Rs. 14,10,000/- in the demonetized currency and there was no proper explanation was furnished. Ld. AO issued show cause and in response the assessee explained that it was earned out of job work activity that he has performed in the village and he keep the cash on hand. The explanation furnished was convincing to the ld. AO and thereby he added the same as unexplained money in the hands of the assessee u/s. 69A of the Act.
The above finding of the ld. AO challenged by the assessee by filling an appeal before the ld. CIT(A). Ld. CIT(A) considered the submission and after giving proper opportunity passed the following order in the case of the assessee :
7.1 The issued were considered. The relevant assessment order, Statements of facts, Grounds of appeal, were carefully perused. On perusal of the assessment order and Written submission, the issues in dispute are additions made by AO u/s 69A of the Act.
7.2 The AO has observed that during the A.Y. 2017-18 a specific information was available that the appellant had made cash deposit in bank account No.25480200009558 maintained with Bank of Baroda, Agra Road, Dausa Branch, Dausa. The aforesaid bank account of the appellant had a cash deposit Rs. 14,10,000/- during the demonetization period on 11.11.2016 in the shape of demonetized currency notes of Rs.500/- & Rs. 1000/-, It was noticed that source of such cash/credit entries in bank account of the assessee remained unexplained during assessment proceeding. Therefore, the case was re-opened by issue of order u/s 148A(d) and notice u/s 148 of the Act, both dated 25.07.2022 with the prior approval of Pr.CIT-1, Jaipur dated 19.07.2022. During the reassessment proceedings the appellant failed to explain the nature and source of the cash deposit in the form of SBN Notes. On verification of the bank statements, the AO found that there was no transaction of cash deposit during the year except for only one deposit of more than one lakh i.e. Rs. 14,10.000/-on 11.11.2016. Accordingly, the AO added the amount of cash deposit of Rs.14,10,000/- as unexplained income u/s 69A of the Act to the income of the appellant for the A.Υ. 2017-18.
7.3 During the appellate proceedings, the appellant submitted that the assessing officer has neither rejected the cash book submitted for the period 01.04.2016 to 08.11.2016 which means the assessing officer has accepted available cash of Rs 14,53,671.58 as on 08.11.2016. The appellant contended that the cash was deposited in bank on 11.11.2016 out of cash in hand in his regular cash book at the time of deposit of Rs 14,10,000 on 11.11.2016. It is further contended that there is no evidence or material on records which proves that the appellant has accepted any SBN during the demonetization which was deposited in bank. It is also stated that the cash book submitted during the period 08.11.2016 to 11.11.2016 was not showing any such receipt of SBN. The appellant has deposited genuine available cash of Rs 14,10,000 on 11.11.2016 in his bank account and accordingly the addition of Rs 14,10,000 so made u/s 69A as unexplained cash deposited in bank is wrong and incorrect and thus the same is liable to be deleted.
Shambhu Dayal Soni vs. ITO 7.4 The above contentions regarding grounds no. 1and 2 are not found acceptable as the assessing officer has specifically asked for explanation regarding nature and source of cash deposit. The same were found to remain unexplained during the course of assessment proceeding. The assessing officer had valid reasons not to accept the contention of the appellant regarding cash deposits especially when it has been pointed out that this was the only cash deposit appearing in the bank account for an amount of more than Rs. 1 lakh. It has been stated by the AO that on other occasions transactions have been done either online i.e. RTGS and NEFT or through cheques. The appellant has not been able to rebut the contention of the AO with any cogent evidence either during the assessment proceedings or even during the appellate proceedings. In view of the aforesaid discussion, I am not inclined to interfere with the findings of the AO in the assessment order.
As regards the contention in ground no. 3 regarding the mistake of making the addition twice, one in normal tax calculation and second in tax calculation under section 115BBE of the Act, the AO is directed to verify the factual position and take necessary action accordingly.
7.5 As a result, the appeal, along with all grounds of appeal on all issues, has been adjudicated. The case is partly allowed.
In the result, the appeal is partly allowed.
5. As the assessee did not find any favour, from the appeal filed before the ld. CIT(A), NFAC, the assessee has preferred the present appeal before this Tribunal on the ground as reproduced hereinabove. To support the various grounds so raised by the assessee, ld. AR of the assessee has filed the written submissions in respect of the various grounds raised by the assessee and the same is reproduced herein below: The assessee is an individual engaged in the job work of gold and silver ornaments with trading of gold and silver jewellery. For the assessment year 2017-18, the assessee has filed return of income declaring total income of Rs. Shambhu Dayal Soni vs. ITO 7,62,650/- on 14/8/2017. Copy of this return along with computation of income, trading and P&L account and Balance sheet is available on Paper Book Page No. 1-7. In this case, proceedings u/s 147 were first initiated by the Learned Assessing Officer by issuance of notice u/s 148 on 23/4/2021. However, subsequent to the decision of the Hon'ble Supreme Court in the case of Union of India Vs. Ashish Agarwal dated 4/5/2022, notice u/s 148A(b) was issued to the assessee on 28/5/2022. A copy of the notice so issued is available on Paper Book Page No.8-9. Subsequently, the Learned Assessing Officer passed order u/s 148A(d) on 25/7/2022. A copy of the same is available on Paper Book Page No.10-11. Notice u/s 148 was issued afresh on 25/7/2022, copy of which is also available on Paper Book Page No.12. In response to this notice, the assessee filed return of income on 16/8/2022, declaring income of Rs.762650/- as declared in the original return. Copy of this return is available on Paper Book Page No.
Subsequently, the Learned Assessing Officer has completed the assessment u/s 147 on 27/4/2023 determining total income at Rs. 21,72,650/-, inter-alia, making addition of Rs. 14,10,000/- u/s 69 A, treating the deposits in cash in bank as unexplained. Aggrieved with the order of the Learned Assessing Officer, the assessee preferred appeal before the Learned CIT(A), who has unfortunately confirmed the additions. Now the assessee is in appeal before the Hon'ble ITAT. However, it is submitted that before the Learned CIT(A), the assessee could not take certain grounds of appeal, which are now being taken as additional grounds of appeal. The additional grounds of appeal now taken arise out of the order of the Learned Assessing Officer and are exclusively of legal nature. The same could not be taken before the Learned CIT(A) just out of ignorance and inadvertence. It is submitted that the additional grounds now taken do not require any facts for substantiating the same. The admission of the additional grounds is imperative for discharge of justice in the case of the assessee. The assessee humbly submits and requests the Hon'ble ITAT to admit the additional grounds. The assessee first discussed the additional grounds hereunder :- Additional Ground No.1 On the facts and in the circumstances of the case and in law, the Learned CIT(A) has erred in not quashing the order u/s 148A(d) passed by the Learned Assessing Officer on 25/7/2022 with the approval of Principal Commissioner-1, Shambhu Dayal Soni vs. ITO Jaipur whereas the approval required u/s 151(2) should have been of Pr. Chief Commissioner of Income Tax/Pr. DGIT, hence, the order passed is ab initio void. In this case, order u/s 148A(d) has been passed 25/7/2022 for A.Y. 2017-18. Copy of the same is available on Paper Book Page No cited supra. It is submitted that the A.Y. under consideration is beyond three years from the end of the relevant assessment year, i.e. 2017-18. In such cases, sanction was required u/s 151(2), where the sanctioning authority is Principal Chief Commissioner of Income Tax or Pr. Director General of Income Tax. The relevant provisions are quoted below as these stood on 1/4/2022. [Sanction for issue of notice.
151. Specified authority for the purposes of section 148 and section 148A shall be,— (i) Principal Commissioner or Principal Director or Commissioner or Director, if three years or less than three years have elapsed from the end of the relevant assessment year; (ii) Principal Chief Commissioner or Principal Director General or where there is no Principal Chief Commissioner or Principal Director General, Chief Commissioner or Director General, if more than three years have elapsed from the end of the relevant assessment year.] It is submitted that in this case, the Learned Assessing Officer has mentioned in the notice u/s 148 that prior approval has been obtained from Pr. Commissioner of Income-tax-1, Jaipur. The sanction obtained, being not from Principal Chief Commissioner, is invalid and unlawful. The following cases are quoted in support :- (1) CIT Vs. SPL Siddharth (Delhi High Court) (245 ITR 223) In this case, the Court held that approval has to be granted by the designated authority and none else. The power conferred upon a specific authority must be exercised by such authority only. It cannot be abdicated in favour of another authority, nor delegated to a lower authority. (2) Seimens Financial Services P. Ltd Vs. DCIT (2023) 457 ITR 647 (Bombay) Approval/sanction by PCIT was wrong, it was required from PCCIT as the assessment year involved was beyond three years from the end of the relevant assessment year. Sanction granted by CIT invalid. (3) Chandra Kanta Vithal Bhopai Vs. ITO (2025) 74 CCH 0012 (ITAT Pune) In the case, the approval granted by PCIT is invalid as the same should have been granted by PCCIT.
Shambhu Dayal Soni vs. ITO In view of the aforesaid discussion, the assessment completed by the Learned Assessing Officer is not accordance with law and the same deserves to be quashed. Additional Ground No.2 On the facts and in the circumstances of the case and in law, the Learned CIT(A) has erred in not quashing the notice u/s 148 issued on 25/7/2022 by the Learned Assessing Officer with the approval of Principal Commissioner-1, Jaipur whereas the approval required u/s 151(2) should have been of Pr. Chief Commissioner of Income Tax/Pr. DGIT, hence, the notice issued is ab initio void. In this case, notice u/s 148 has been issued on 25/7/2022 for A.Y. 2017-18. Copy of the same is available on Paper Book Page No cited supra. It is submitted that the A.Y. under consideration is beyond three years from the end of the relevant assessment year, i.e. 2017-18. In such cases, sanction was required u/s 151(2), where the sanctioning authority is Principal Chief Commissioner of Income Tax or Pr. Director General of Income Tax. The relevant provisions are quoted below as these stood on 1/4/2022. [Sanction for issue of notice.
Specified authority for the purposes of section 148 and section 148A shall be,— (i) Principal Commissioner or Principal Director or Commissioner or Director, if three years or less than three years have elapsed from the end of the relevant assessment year; (ii) Principal Chief Commissioner or Principal Director General or where there is no Principal Chief Commissioner or Principal Director General, Chief Commissioner or Director General, if more than three years have elapsed from the end of the relevant assessment year.] It is submitted that in this case, the Learned Assessing Officer has mentioned in the notice u/s 148 that prior approval has been obtained from Pr. Commissioner of Income-tax-1, Jaipur. The sanction obtained, being not from Principal Chief Commissioner, is invalid and unlawful. The following cases are quoted in support :- (1) CIT Vs. SPL Siddharth (Delhi High Court) (245 ITR 223) In this case, the Court held that approval has to be granted by the designated authority and none else. The power conferred upon a specific authority must be exercised by such authority only. It cannot be abdicated in favour of another authority, nor delegated to a lower authority.
Shambhu Dayal Soni vs. ITO (2) Seimens Financial Services P. Ltd Vs. DCIT (2023) 457 ITR 647 (Bombay) Approval/sanction by PCIT was wrong, it was required from PCCIT as the assessment year involved was beyond three years from the end of the relevant assessment year. Sanction granted by CIT invalid. (3) Chandra Kanta Vithal Bhopai Vs. ITO (2025) 74 CCH 0012 (ITAT Pune) In the case, the approval granted by PCIT is invalid as the same should have been granted by PCCIT. In view of the aforesaid discussion, the assessment completed by the Learned Assessing Officer is not accordance with law and the same deserves to be quashed. Additional Ground No.3 On the facts and in the circumstances of the case and in law, the Learned CIT(A) has erred in not quashing the notice u/s 148 issued on 25/7/2022 by the Jurisdictional Assessing Officer (Jethanand Bhoolchandani, ITO Ward 1(1), Jaipur) whereas after 29/03/2022, notice u/s 148 could have been issued by N.F.A.C.only. It is submitted that in this case, notice u/s 148 has been issued on 25/7/2022 by the Jurisdictional Assessing Officer, Shri Jethanand Bhoolchandani, ITO, Ward 1(1), Jaipur. Copy of the notice is available on Paper Book Page No. cited supra. It is the submission of the assessee that lately, the Hon'ble Supreme Court in the case of ADIT(Int.Tax) Vs. Deepanjan Roy in SLP (Civil) Diary No.33956/2025 dated 16/07/2025 has held that notice u/s 148 has to be issued after 29/3/2022 by N.F.A.C. and not by Jurisdictional Assessing Officer. The Hon'ble Supreme Court has upheld the decision of Telengana High Court in the case of Deepanjan Roy Vs. ADIT(Int.Tax), Writ Petition No. 23573/2024 dated 29/8/2024, wherein the Hon'ble High Court had followed the earlier decision of the Court in the case of Venkatarama Reddy Patloola Vs. DCIT dated 24/7/2024 in Writ Petition No. 13357/2024. In this case, the Court had held as under :- " 29.In view of foregoing analysis, it is clear that the respondents have erred in not following the mandatory faceless procedure as prescribed in the scheme dated 29.03.2022. Since notices under Section 148 of the Act were not issued in a faceless manner, the entire further proceeding founded upon it and assessment orders stand vitiated. Thus, the impugned notices under Section 148 of the Act and all consequential Shambhu Dayal Soni vs. ITO assessment orders based thereupon are set aside. Liberty is reserved to the respondents to proceed against the petitioners in accordance with law." In view of the aforesaid findings, finally upheld by the Hon'ble Supreme Court, it is submitted that proceedings u/s 148 in the case of the assessee are also vitiated. The notice u/s 148 in this case was also issued by Jurisdictional Assessing Officer, Shri Jethanand Bhoolchandani, ITO, Ward 1(1), Jaipur on 25/7/2022. Thus, it is a case where notice has been issued after 29/3/2022, that too by Jurisdictional Assessing Officer, hence, the same is ab initio void. The subsequent completion of assessment on 27/4/2023 in pursuance of this notice u/s 148 is also bad in law. The Hon'ble ITAT is humbly requested that on this legal issue alone, the assessment deserves to be quashed. Additional Ground No.4 On the facts and in the circumstances of the case and in law, the Learned CIT(A) has erred in not quashing the notice u/s 148 issued on 25/7/2022 by the Learned Assessing Officer without quoting DIN in the body of the notice. The notice issued is ab initio void. In the case of the assessee, the notice u/s 148 dated 25/7/2022 does not contain DIN. Copy of the notice u/s 148 is available on paper book page no. cited supra. It is submitted that CBDT Circulars required that in all correspondence with the assessee, quoting of DIN is a must and in the absence of that, the relevant document is a nullity. The perusal of the notice u/s 148 dated 25/7/2022 reveals that DIN has not been quoted in the notice. The notice has been issued without DIN in the body of the order and the same is in violation of CBDT Circular No.19/2019 dated 14/08/2019. The same is reproduced below :- Circular No. 19/2019 Government of India Ministry of Finance Department of Revenue Central Board of Direct Taxes New Delhi, dated the 14th of August, 2019 Subject: Generation/Allotment/Quoting of Document Identification Number in Notice / Order / Summons / letter / correspondence issued by the Income-tax Department -reg.
Shambhu Dayal Soni vs. ITO With the launch of various e-governance initiatives, Income-tax Department is moving toward total computerization of its work. This has led to a significant improvement in delivery of services and has also brought greater transparency in the functioning of the tax-administration. Presently, almost all notices and orders are being generated electronically on the Income Tax Business Application (ITBA) platform. However, it has been brought to the notice of the Central Board of Direct Taxes (the Board) that there have been some instances in which the notice, order, summons, letter and any correspondence (hereinafter referred to as –communication”) were found to have been issued manually, without maintaining a proper audit trail of such communication.
In order to prevent such instances and to maintain proper audit trail of all communication, the Board in exercise of power under section 119 of the Income- tax Act, 1961 (hereinafter referred to as “the Act”), has decided that no communication shall be issued by any income-tax authority relating to assessment, appeals, orders, statutory or otherwise, exemptions, enquiry, investigation, verification of information, penalty, prosecution, rectification, approval etc. to the assessee or any other person, on or after the 1st day of October, 2019 unless a computer-generated Document Identification Number (DIN) has been allotted and is duly quoted in the body of such communication.
In exceptional circumstances such as, — (i) when there are technical difficulties in generating/allotting/quoting the DIN and issuance of communication electronically; or (ii) when communication regarding enquiry, verification etc. is required to be issued by an income-tax authority, who is outside the office, for discharging his official duties; or (iii) when due to delay in PAN migration, PAN is lying with non-jurisdictional Assessing Officer; or (iv) when PAN of assessee is not available and where a proceeding under the Act (other than verification under section 131 or section 133 of the Act) is sought to be initiated; or (v) When the functionality to issue communication is not available in the system, the communication may be issued manually but only after recording reasons in writing in the tile and with prior written approval of the Chief Commissioner / Director General of income-tax. In cases where manual communication ‘is required to be issued due to delay in PAN migration. the proposal seeking approval for issuance of manual communication shall include the reason for Shambhu Dayal Soni vs. ITO delay in PAN migration. The communication issued under aforesaid circumstances shall state the fact that the communication is issued manually without a DIN and the date of obtaining of the written approval of the Chief Commissioner / Director General of IncomeTax for issue of manual communication in the following format- .. This communication issues manually without a DIN on account of reason/reasons given in para 3(i)/3 (ii)/3(iii)/3(iv)/3(v) of the CBDT Circular No …dated ….. (strike off those which are not applicable) and with the approval of the Chief Commissioner / Director General of Income Tax vide number …. dated …. “ 4. Any communication which is not in conformity with Para-2 and Para-3 above, shall be treated as invalid and shall be deemed to have never been issued.
The communication issued manually in the three situations specified in para 3- (i), (ii) or (iii) above shall have to be regularised within 15 working days of its issuance, by — i. uploading the manual communication on the System. ii. compulsorily generating the DIN on the System; iii. communicating the DIN so generated to the assessee/any other person as per electronically generated pro-forma available on the System.
6. An intimation of issuance of manual communication for the reasons mentioned in para 3(v) shall be sent to the Principal Director General of Income- tax (Systems) within seven days from the date of its issuance.
Further, in all pending assessment proceedings, where notices were issued manually, prior to issuance of this Circular, the income-tax authorities shall identify such cases and shall upload the notices in these cases on the Systems by 31th October, 2019.
8. Hindi version to follow. (Sarita Kumari) Director (ITA.II), CBDT It is submitted that the Circular issued stipulates that every communication issued by Income Tax Authority should carry a DIN quoted in the body of such communication. No exception has been provided that DIN may be mentioned in the forwarding letter. Each and every communication has to have a DIN. In the case of assessment order, there has to be separate DIN for the assessment order and separate DIN for demand notice. This has been so held in the case of Shambhu Dayal Soni vs. ITO SPS Structures Ltd Vs. DCIT (2023) 69 CCH 0319 (Chd Trib). Following decisions are also quoted below. (1) Gajendra Singh & Anr Vs. DCIT (2023) 69 CCH 0321 (Delhi ITAT)
(2) CIT Int. Tax Vs. Brandix Mauritius Holdings Ltd dt. 20/03/2023 (Delhi High Court)
(3) PCIT Vs. Tata Medical Centre Trust I.T.A. 202/2023 dt. 26/09/2023 (Cal) In the facts and circumstances, the notice issued u/s 148 dated 25/7/2022, having no DIN, is invalid. In the absence of DIN, the notice u/s 148 is non- existent and invalid. In the facts and circumstances and keeping in view the mandatory stipulations of the circular quoted above, the notice u/s 148 requires to be quashed. Additional Ground No.5 On the facts and in the circumstances of the case and in law, the Learned CIT(A) has erred in not quashing the notice u/s 148 issued on 25/7/2022 by the Learned Assessing Officer without meeting the condition laid down in Sec. 149(1)(b) that the amount of escaped income has to be fifty lac or more in cases beyond the period of three years from the end of the relevant assessment year. In the case of the assessee, notice u/s 148 has been issued on 25/7/2022 for A.Y. 2017-18. Apparently, notice has been issued beyond a period of three years from the end of the assessment year and, as such, the same is covered u/s 149(1)(b). Notice for A.Y. 2017-18 could not have been issued without complying the terms and conditions of Sec. 149(1)(b) as these stood on 1/4/2022. The provisions of Sec. 149(1) are quoted below : Time limit for notice. 149. (1) No notice under section 148 shall be issued for the relevant assessment year,— (a) if three years have elapsed from the end of the relevant assessment year, unless the case falls under clause (b); 5[(b) if three years, but not more than ten years, have elapsed from the end of the relevant assessment year unless the Assessing Officer has in his possession books of account or other documents or evidence which reveal that the income chargeable to tax, represented in the form of— (i) an asset; (ii) expenditure in respect of a transaction or in relation to an event or occasion; or Shambhu Dayal Soni vs. ITO (iii) an entry or entries in the books of account, which has escaped assessment amounts to or is likely to amount to fifty lakh rupees or more:] One of the conditions for issuing notice u/s 148 with reference to Sec. 149(1)(b) is that income escaping assessment is likely to amount Rs. 50 lacs or more. In the case of the assessee, notice u/s 148 was issued without working out that the escaped income was likely to be Rs. 50 lac or more. In the assessment order completed on 27/4/2023, the addition is only of Rs.14,10,000/- u/s 69 A, which is much less than Rs. 50 lacs. As such, the conditions mentioned u/s 149(1)(b) are not met. The issuance of notice u/s 148 happens to be in violation of Sec. 149(1)(b), which renders the entire assessment proceedings as invalid. Now the assessee takes up the regular grounds as under :- Ground No.1 Under the facts and circumstances of the case, the Learned CIT(A) has erred in confirming the order passed by learned Assessing Officer u/s 147 of the IT Act, 1961. As discussed against Additional Grounds No. 1 to 5 above. Ground No.2 Under the facts and circumstances of the case, the Learned CIT(A) has erred in confirming the addition of Rs. 14,10,000/- u/s 69 A of the IT Act, 1961 for cash deposited in bank during demonetization period. In the case of the assessee, the Learned Assessing Officer has made addition, treating the cash deposits of Rs. 14,10,000/- on 11/11/2016 in bank account maintained with Bank of Baroda, Dausa as unexplained u/s 69A. The deposits in cash were made during the period of demonetization. The Learned Assessing Officer has made addition disregarding the detailed submission made before him under letter dated 11/1/2023, 6/2/2023 and 27/3/2023. Copies of these letters are available on Paper Book Page No.14-23. The Learned Assessing Officer failed to appreciate the submissions of the assessee that the cash was deposited in bank out of sales in cash routed through the cash book regularly maintained by the assessee. The Learned CIT(A) has also wrongly sustained the addition made by the Learned Assessing Officer. Before the Learned CIT(A) also, assessee had made detailed submission under letter dated 24/1/2025, copy of which is available on Paper Book Page No24-31. The action of the Learned CIT(A) in confirming the addition made by the Learned Assessing Officer is assailed as under :-
It is submitted that during the year under consideration, the assessee was conducting business of sale and purchase of gold and silver ornaments and job work. Return of income disclosing income of Rs. 7,62,650/- was filed on 14/8/2017. The return was accompanied with computation of total inc;ome and final accounts consisting of Balance sheet, trading a/c and P&L account. During the course of assessment proceedings as well as during the course of appellate proceedings, the assessee submitted copy of IT return and final accounts, which are available on Paper Book Page No cited supra. The assessee also submitted copy of cash book for the F.Y. 1/4/2016 to 31/3/2017 relevant to A.Y. 2017-18. The cash book disclosed that an amount of Rs. 14,10,000/- was deposite don 11/11/2016 in bank account maintained with Bank of Baroda. The source of cash deposited is fully explained from the cash book itself as there is regular accretion in cash in hand in each month by way of cash sales of silver and gold ornaments. It is submitted that the books of accounts and the cash book furnished before the Learned Assessing Officer was never rejected u/s 145(3). No defect was also pointed out in the maintenance of the books of account, including the cash book. It is the submission of the assessee that when the books of accounts have not been rejected, the cash book stands accepted and accordingly, the source of deposit of cash in bank through cash book also stands explained and should have been accepted. Copy of cash book is available on Paper Book Page No. 32-44. (b) Trading account of the assessee/sales stand accepted.
It is submitted that along with the return of income furnished on 14/8/2017, the assessee had also furnished trading account, copies of which are available on Paper Book Page cited supra. The trading account disclosed sales of Rs. 97,08,717/- and gross profit of Rs. 11,56,599.80 It is the submission of the assessee that the Learned Assessing Officer has not disturbed the trading account, sales or the gross profit disclosed by the assessee. The sales of Rs. 97,08,717/- include the cash sales, which were utilized in depositing cash in the bank account of Rs.14,10,000/- on 11/11/2016. It is the submission of the assessee that once when the cash sales have been accepted and the gross profit thereon has also been put to tax, subsequently the Learned Assessing Officer was precluded in not accepting the cash sales as source of deposit in the bank. The Learned Assessing Officer in the entire assessment order has not pointed out any discrepancy with reference to the trading account/sales /gross Shambhu Dayal Soni vs. ITO profit. Having done so, it did not behove the Learned Assessing Officer to have subsequently rejected the cash sales as source of deposit of cash in the bank account. Further, when the gross profit from cash sales of Rs.14,10,000/- already stood included in the gross profit disclosed by the assessee in the return of income amounting to Rs.11,56,599/-, by treating the cash of Rs. 14,10,000/- deposited in the bank account as unexplained, the sales have been taxed twice, which is not in accordance with law. It is the submission of the assessee that when the sales as per trading account stand accepted, when the cash book has also not been rejected, in these circumstances, there was no case left with the Learned Assessing Officer to treat the deposit in cash of Rs. 14,10,000/- as unexplained. The Learned CIT(A) also erred in confirming the same. The addition deserves to be deleted. (c) Cash deposits are backed by cash sales, which are backed by cash book, purchase register etc. The assessee is submitting a copy of cash book for the period 1/4/2016 to 31/3/2017. The perusal of cash book reveals that the assessee was having cash balance as on 1/10/2016 of Rs. 5,26,882/-. The cash balance increased to Rs. 9,85,275/- as on 1/11/2016 on account of cash sales made by the assessee during the period 1/10/2016 to 30/10/2016. Further, there are sales in cash from 1/11/2016 to 10/11/2016, which accumulated the cash sufficient enough for depositing Rs.14,10,000/- on 11/11/2016 in the Bank of Baroda. The assessee has maintained day-to-day sales account, establishing beyond doubt that cash sales were effected. However, the cash sales individually are much below the staturory limit of Rs. 2 lacs and, as such, the cash sale vouchers do not contain full particulars, such as, address and PAN of the purchasers. These were not mandatorily required. Copyof purchase register is available on Paper Book Page No. 45-47. In the circumstances, the cash sales are established beyond doubt. (d) Sales disclosed in VAT returns stand accepted. It is further submitted that the assessee is registered with GST Departament and has been filing GST returns. For the year under consideration, the assessee had disclosed sales of Rs.97,08,717/- in the trading account. In respect of these sales, the assessee had furnished GST returns, copy of which is available on Paper Book Page No48-52. In the GST returns also, the sales disclosed by the assessee are of Rs. 97,08,717/-. The GST Department has accepted the sales disclosed by the assessee. In view of these facts, it is submitted that when the sales declared in GST returns have been accepted by the GST Department, the Learned Assessing Officer was not justified in doubting the cash sales which are the source of deposits in the bank account. In these circumstances, it is Shambhu Dayal Soni vs. ITO submitted that the source of cash deposit of Rs. 14,10,000/- stands fully explained. The addition, therefore, deserves to be deleted. The submissions made above are duly supported by following decisions of High Courts/various benches of the ITAT :- (1) ACIT, Central Circle-1, Jaipur Vs. Mahendra Kumar Agarwal, Held – " The The AO did not make any enquiry on the material submitted by the appellant. She merely proceeded on statistical analysis to make the addition on account of cash deposits. We agree with the findings of ld. CIT(A) that the AO has not brought any material on record to establish that the sale bills are bogus nor any evidence indicating that such sales was bogus and merely having some doubt by twisting the data and giving some findings which are not alone sufficient to justify the addition the income so assessed in not tenable in the eye of law. In fact the AO neither found any concrete and conclusive evidence of back dating of the entries of sales, evidence of bogus sales, evidence of bogus purchases, and non-existing cash balance in the books of account. The AO did not even reject the books of accounts of the appellant under the provision of section 145(3) of the Act. Therefore, the contention of the revenue on the facts and circumstances of the case is not accepted and we see no reason to interfere in the order of the ld. CIT(A). " (2) Shri Mahesh Kumar Gupta Vs. ACIT Cir-4,Jaipur ITAT, Jaipur Held - "..after considering the factual matrix of the cash on hand in our considered view the addition made cannot sustain and therefore, we vacate the addition of Rs. 80,00,000/- made under section 68 of the Act as the same cannot be made without rejecting the books of account of the assessee regularly maintained by the assessee and the said cash deposited is duly supported by the entries passed in the books of account and part of the sale accepted by the AO. In terms of these observations ground no. 1 raised by the assessee is allowed.
Since, we have decided the ground no. 1 in favour of the assessee the second ground for levy of additional tax u/s. 115BBE become educative in nature." (3) M/s Fasion Zone Vs. JCIT, Ludhiana ITAT, B Bench, Chandigarh Shambhu Dayal Soni vs. ITO Held - "We have heard the rival submissions and purused the material available on record. The assessee has deposited a sum of Rs 48 lacs on 13/11/2016 and a sum of Rs 2 lacs on 22/02/17 in its bank account maintained with Axis Bank. The source of such cash deposits has been explained by the assessee as out of its cash sales so undertaken and it has also been explained that such cash sales are subject to VAT where VAT has been collected and deposited with the government treasury. In support of its explanation, the assessee has furnished the cash book containing the entries towards the cash sales, bank statement for the relevant period, VAT returns, copy of trading and profit/loss account and balance sheet which are duly audited. No defect has been pointed out by the AO in terms of availability of stock or in any of the documentation so submitted by the assessee or in the books of accounts. Therefore, merely the fact that certain cash deposits have been made by the assessee during the period of demonization and such deposits are on a higher side considering the past year figures cannot be basis to hold the explanation so made by the assessee as unsustainable and treat the cash sales as bogus and bringing the cash deposits to tax u/s 68 of the Act." (4) CIT Vs. Kailash Jewellery House ITAT, Delhi In this case, the assessee deposited cash of Rs. 24,58,400/- in bank account. The Assessing Officer made the addition on the ground that nexus of such deposit was not established with any source of income. The assessee claimed that it was duly recorded in the books on account of cash sales and was considered in the Profit and Loss Account. The Assessing Officer had verified the stock and cash position as per books and had accepted the same. Complete books of account and cash book was submitted to the Assessing Officer and discrepancy was pointed out. On this basis CIT(A) deleted the addition. Tribunal also observed that it is not in dispute that sum of Rs.24,58,400/- was credited in the sale account and had been duly included in the profit disclosed by the assessee in its return. Therefore, cash sales could not be treated as undisclosed income and no addition could be made once again in respect of the same. The Hon'ble High Court dismissed the appeal filed by the Department. Ground No.3 Under the facts and circumstances of the case, the Learned CIT(A) has erred in confirming the application of provisions of Sec. 115BBE of the IT Act, 1961. Consequential relief may kindly be allowed. Ground No.4 The assessee craves your indulgence to add amend or alter all or any grounds of appeal before or at the time of hearing.
Shambhu Dayal Soni vs. ITO The additional grounds taken above may kindly be considered by the Hon'ble ITAT. The Hon'ble Tribunal is requested to consider the above grounds of appeal, including the additional grounds as mentioned above, and decide the appeal in favour of the assessee.
To support the contention so raised in the written submission reliance was placed on the following evidence / records / decisions:
Sr. No. Particular Page no.
Copy of acknowledgement of return of income filed on 14/8/2017 01-07 along with computation of total income, copy of trading & P&L a/c and Balance sheet 2. Copy of notice u/s 149A(b) dated 28/5/2022 issued by the Learned 08-09 Assessing Officer 3. Copy of order u/s 148(A(d) dated 25/07/2022 issued by the 10-11 Learned Assessing Officer 4. Copy of notice u/s 148 dated 25/7/2022 issued by the Learned 12 Assessing Officer 5. Copy of acknowledgement of return filed in response to notice u/s 13 148 on 16/8/2022 6. Copy of submissions dated 11/1/2023, 6/2/2023 & 27/3/2023 filed 14-23 before the Learned Assessing Officer 7. Copy of submission filed before the Learned CIT(A) 24-31 8. Copy of cash book for the period 1/4/2016 to 31/3/2017 32-44 9. Copy of purchase register for the period 1/4/2016 to 31/3/2017 45-47 10. Copy of VAT returns filed before the GST Department in support of 48-52 sales shown, which stood accepted Decision relied upon Prakash Dhoot Vs. DCIT, CC-1, Jodhpur in DB Civit Writ petition no. 17872/2025 [ Rajasthan High Court – Jodhpur ] Shambhu Dayal Soni vs. ITO 7. The ld. AR of the assessee in addition to the above written submission so filed vehemently argued that the assessee in this case the assessee has raised the prayer to admit the addition ground of appeal which is legal in nature wherein he contended that in this case the as the notice is issued after three the approval was required to be accorded by the PCCIT and not PCIT. He also raised a ground stating that issue of notice by Jurisdictional assessing officer is bad in law and the same is required to be issued by the National Faceless Assessment Unit. As regards the merits of the dispute he submitted that the money deposited is the saving and business income of the assessee as contended in the detailed written submission placed on record.
8. The ld DR is heard who relied on the findings of the lower authorities and more particularly advanced the similar contentions as stated in the order of the ld. CIT(A) vide para 7.4 of the order of the ld. CIT(A).
9. On the technical ground raised by the assessee ld. DR insisted to consider the report of the ld. AO on factual aspect of the matter and for that ld. DR was given time up to 28.10.2025 but no submission was received till
10. We have heard the rival contentions and perused the material placed on record. Vide ground no. 2 the assessee – appellant challenges the addition of Rs. 14,10,000/- made by the ld. AO u/s 69A of the Act and was sustained by the same by the ld. CIT(A). Record reveals that the Learned Assessing Officer has made addition, treating the cash deposits of Rs. 14,10,000/- on 11/11/2016 in bank account maintained with Bank of Baroda, Dausa as unexplained money u/s 69A of the Act. The deposits in cash were made during the period of demonetization. The Learned Assessing Officer has made addition disregarding the detailed submission made before him under letter dated 11/1/2023, 6/2/2023 and 27/3/2023. Copies of these letters are placed on record vide Paper Book Page No.14- 23. The Learned Assessing Officer failed to appreciate the submissions of the assessee that the cash was deposited in bank out of sales in cash routed through the cash book regularly maintained by the assessee. The Learned CIT(A) has also wrongly sustained the addition made by the Learned Assessing Officer. Before the Learned CIT(A) also, assessee had made detailed submission under letter dated 24/1/2025, copy of which is Shambhu Dayal Soni vs. ITO available on Paper Book Page No24-31. The bench noted that lower authority has not rejected the books of accounts which were regularly maintained by invoking the provision of section 145(3) of the Act. As is evident from the record that the assessee was conducting business of sale and purchase of gold and silver ornaments and job work for the year under consideration. Return of income disclosing income of Rs. 7,62,650/- was filed on 14/8/2017. The return was accompanied with computation of total income and final accounts consisting of Balance sheet, trading a/c and P&L account. While assessment proceedings as well as during the course of appellate proceedings, the assessee submitted copy of IT return and final accounts, which are available on Paper Book filed. The assessee also submitted copy of cash book for the F.Y. 1/4/2016 to 31/3/2017 relevant to A.Y. 2017-18. The cash book disclosed that an amount of Rs. 14,10,000/- was deposited on 11/11/2016 in bank account maintained with Bank of Baroda. The source of cash deposited is fully explained from the cash book itself as there is regular accretion in cash in hand in each month by way of cash sales of silver and gold ornaments. It is submitted that the books of accounts and the cash book furnished before the Learned Assessing Officer was never rejected u/s 145(3). No defect was also pointed out in the maintenance of the books of account, including the cash book. It is the Shambhu Dayal Soni vs. ITO submission of the assessee that when the books of accounts have not been rejected, the cash book stands accepted and accordingly, the source of deposit of cash in bank through cash book also stands explained and should have been accepted. We also note that in the trading account filed the assessee disclosed sales of Rs. 97,08,717/- and gross profit of Rs. 11,56,599.80. When these book results were not disturbed by rejecting the same on account of any mistake in the opinion of the ld. AO no separate addition is required to be made. The sales of Rs. 97,08,717/- include the cash sales, which were utilized in depositing cash in the bank account of Rs.14,10,000/- on 11/11/2016. It is the submission of the assessee that once when the cash sales have been accepted and the gross profit thereon has also been put to tax, subsequently the Learned Assessing Officer was precluded in not accepting the cash sales as source of deposit in the bank. The Learned Assessing Officer in the entire assessment order has not pointed out any discrepancy with reference to the trading account/sales /gross profit. Having done so, it did not behoove the Learned Assessing Officer to have subsequently rejected the cash sales as source of deposit of cash in the bank account. Further, when the gross profit from cash sales of Rs.14,10,000/- already stood included in the gross profit disclosed by the assessee in the return of income amounting to Rs.11,56,599/-, by treating Shambhu Dayal Soni vs. ITO the cash of Rs. 14,10,000/- deposited in the bank account as unexplained, the sales have been taxed twice, which is not in accordance with law. It is the submission of the assessee that when the sales as per trading account stand accepted, when the cash book has also not been rejected, in these circumstances, there was no case left with the Learned Assessing Officer to treat the deposit in cash of Rs. 14,10,000/- as unexplained and therefore, the double addition of same source is not permitted when the cash sales is accepted. It is further submitted that the assessee is registered with GST Departament and has been filing GST returns. For the year under consideration, the assessee had disclosed sales of Rs.97,08,717/- in the trading account. In respect of these sales, the assessee had furnished GST returns, copy of which is available on Paper Book Page No48-52. In the GST returns also, the sales disclosed by the assessee are of Rs. 97,08,717/-. The GST Department has accepted the sales disclosed by the assessee. In view of these facts, it is submitted that when the sales declared in GST returns have been accepted by the GST Department, the Learned Assessing Officer was not justified in doubting the cash sales which are the source of deposits in the bank account. In these circumstances, it is submitted that the source of cash deposit of Rs. 14,10,000/- stands fully explained. We also take note of the fact that the Shambhu Dayal Soni vs. ITO assessee has submitted a copy of cash book for the period 1/4/2016 to 31/3/2017. The perusal of cash book reveals that the assessee was having cash balance as on 1/10/2016 of Rs. 5,26,882/-. The cash balance increased to Rs. 9,85,275/- as on 1/11/2016 on account of cash sales made by the assessee during the period 1/10/2016 to 30/10/2016. Further, there are sales in cash from 1/11/2016 to 10/11/2016, which accumulated the cash sufficient enough for depositing Rs.14,10,000/- on 11/11/2016 in the Bank of Baroda. The assessee has maintained day-to-day sales account, establishing beyond doubt that cash sales were made. The bench noted that the ld. CIT(A) has not appreciated this very fact and therefore, there is no reason to sustain that addition and the same is directed to be deleted. The assessee having similar set of facts has relied upon the finding of the co-ordinate bench of of ITAT in the case of (1) ACIT, Central Circle-1, Jaipur Vs. Mahendra Kumar Agarwal, in (2) Shri Mahesh Kumar Gupta Vs. ACIT Cir-4,Jaipur ITAT, Jaipur and (3) M/s Fasion Zone Vs. JCIT, Ludhiana I.T.A. No.331/Chd/2023, ITAT, B Bench, Chandigarh On being consistent and based on the discussion so recorded herein above we direct the ld. AO to delete the addition of Rs. 14,10,000/- made in Shambhu Dayal Soni vs. ITO the hands of the assessee and consequently ground no. 2 raised by the assessee is allowed. Ground no. 3 is consequential in nature and therefore, finding is required. Ground no. 4 is general does not require any finding. Ground no. 1 and additional ground no. 1 to 5 are on various legal issue raised by the assessee but since we have considered the appeal of the assessee on the facts, these legal grounds raised by the assessee become academic at this stage. In the result, the appeal of the assessee is allowed.
Order pronounced in the open court on 20/11/2025.