SURESH VITTHALRAO BARGE,BEED vs. WARD-1(5), AURANGABAD, AURANGABAD

PER : MANISH BORAD, AM

This appeal at the instance of the assessee is directed

against the order of Ld. Commissioner of Income Tax

(Appeals)/NFAC, Delhi [“CIT(A)”], dated 18/03/2025 passed

under section 250 of the Income Tax Act, 1961 (“Act”) which is

arising out of order passed u/s. 143(3) r.w.s. 147 of the Act

dated 26.12.2018 by the ITO, Ward-1(2), Beed, for the

Assessment Year (AY) 2015-16.

“1. On facts and circumstances of case and in law, the learned CIT(A) (NFAC) erred in not quashing the entire /

2 ITA.No.1398/PUN./2025 (Suresh Vitthalrao Barge) whole re assessment proceedings which was completed without providing the reasons for reopening of assessments. The appellant prays for just, fair and (₹ 40,73,160/-) appropriate relief. 2. On facts and circumstances of case and in law, the learned CIT(A) (NFAC) erred in concluding that appellant had not asked for the reasons for reopening of an assessment by ignoring the evidence produced by the appellant during the appellate proceedings. The appellant submit that assessment completed without providing the reasons for reopening of case is void ab into and bad in law. The appellant prays for just, fair and appropriate relief. 3. On facts and circumstances of case and in law, CIT(A) erred in confirming addition of Rs 25,25,041/- u/s 56(2) (viib) of IT Act, 1961. The Ld CIT(A) erred in holding that provisions of section 56(2)(viib) applicable to stock in trade. The appellant prays for just, proper and appropriate relief. 4. On facts and circumstances of case and in law, CIT(A) erred in confirming addition of Rs 47,74,213/- under the head income from other sources. The Ld CIT(A) erred in holding that appellant is not carrying a business of plotting and erred in holding advance from prospective buyers are not covered under section 44AD of IT Act, 1961. The appellant prays for just, proper and appropriate relief. 5. On facts and circumstances of case and in law, CIT(A) erred in not quashing the entire / whole assessment proceedings which was completed on the basis of the invalid notice issued under section 148 of the Income Tax Act, 1961. The appellant prays for just, proper and appropriate relief. 6. The appellant craves leave to add, alter, amend or delete any of the above grounds of appeal.”

of appeal:-

“1. On the facts and circumstances of case and in law, appellant submit that reasons for reopening were recorded on the basis of incorrect and non-existent facts. Accordingly, the notice issued under section 148 of the Income Tax Act, 1961 on the basis of such reasons is void ab intio and bad in law. Hence, appellant prays that assessment completed on the basis of such invalid notice is liable to be quashed. The appellant prays for just, proper and appropriate relief.

3 ITA.No.1398/PUN./2025 (Suresh Vitthalrao Barge) 2. On the facts and circumstances of case and in law, appellant submit that sanction given under section 151 of Income Tax Act, 1961 to issue notice under section 148 of Income Tax Act, 1961 is not a valid sanction. The sanction granted is without application of mind. Accordingly, the notice issued on the basis of such sanction and the consequent assessment proceedings is liable to be quashed. The appellant prays for just, proper and appropriate relief. 3. On the facts and circumstances of case and in law, the appellant submit that additions made by the learned AO on issues other than that of reopening the assessment are not in accordance with Income Tax Act, 1961. The appellant prays for just, proper and appropriate relief. The appellant submits that the additional grounds raised are legal in nature and as all the facts are on record, the appellant requests for admission of the above additional grounds of appeal.”

first take up ground No.1, through which assessee has

challenged the validity of the re-assessment proceedings on

the ground that assessee has not been provided with the

reasons recorded for reopening in spite of specific request

made to the Assessing Officer.

and filed return of income for A.Y. 2015-16 on 31/10/2015 declaring total income of ₹ 5,61,630/-. The assessee also

furnished the tax audit report along with return. The

Ld.Assessing Officer (AO) based on the information about the

transaction of immovable property entered into by the

assessee and there being difference in the stamp duty

valuation, issued a notice u/s. 148 of the Act, dated

12/02/2018 duly served upon the assessee. Thereafter, the

4 ITA.No.1398/PUN./2025 (Suresh Vitthalrao Barge) re-assessment proceedings were carried out and the Ld.AO made the addition of ₹ 47,74,213/- u/s. 69 of the Act and ₹25,25,041/- on account of difference in stamp duty value and income assessed at ₹ 78,60,884/-

Ld.CIT(A), but failed to succeed. Now, assessee is in appeal

before this Tribunal.

ground No.1 of the appeal, submitted that a specific request

was made on 10/04/2018 in the e-proceedings for providing

copy of reasons recorded for reopening of the assessment and

approval received from Jt./Addl. Commissioner of Income Tax.

However, the assessee was not provided the needful. Reliance

placed on the judgment of the Hon'ble Jurisdictional High

Court in the case of CIT vs. M/s. Trend Electronics (ITA No.

1867/2013, dt. 16/09/2015), in which the Hon'ble Court has

held that recording of reasons and furnishing of the same has

to be strictly complied with as it is a jurisdictional issue.

vehemently argued supporting the order of Ld. CIT(A).

placed before us. The assessee has raised ground No.1

challenging the validity of re-assessment proceedings on the

ground that reasons recorded for reopening were not provided

5 ITA.No.1398/PUN./2025 (Suresh Vitthalrao Barge) to the assessee, as a result of which, the assessee could not

raise objections against the reasons recorded and therefore, in

the light of the settled judicial precedents, Ld.AO failed to

assume the proper jurisdiction prior to carrying out the

re-assessment proceedings in question. We observe that the

case of the assessee pertains to A.Y. 2015-16 for which regular

return of income stood furnished. The Ld.AO issued notice

dated 12/02/2018. In response to the notice, the assessee

vide letter dated 10/04/2018 requested the Ld.AO to provide

the reasons recorded and the copy of the letter is reproduced

below:-

6 ITA.No.1398/PUN./2025 (Suresh Vitthalrao Barge) 10. We also note that during the e-proceedings carried out

vide notice u/s. 148 of the Act, dated 12/02/2018, assessee

has requested for providing copy of reasons recorded as well as

approval received from Jt./Addl. Commissioner of Income Tax.

Copy of e-proceedings response/acknowledgment is

reproduced below:-

So far as the fact that whether Ld.AO has given the reasons

recorded to the assessee or not. We note that during the

appellate proceedings, Ld.CIT(A) called for remand report from

the Ld.AO on this very issue and in this remand report dated

14/02/2025 the Ld.AO at point No.5 has stated as under:-

“5. made in the written submission was correct? Have you provided copy of the reasons recorded or not?', it is submitted

7 ITA.No.1398/PUN./2025 (Suresh Vitthalrao Barge) that copy of the reasons recorded for re-opening of the case was not provided by this office to the assessee as the same was never asked by the assessee as per record.”

the Ld.AO it remains an uncontroverted fact that copy of the

reasons recorded for reopening of the case were not provided

by the Ld.AO to the assessee alleging that the assessee has

never asked for the same. But the e-proceedings,

acknowledgment reproduced above, clearly shows that

assessee has requested for supply of reasons recorded and

Ld.AO has not accepted the request of the assessee and has

not supplied the reasons recorded for reopening of the

assessment. We therefore find that specific request has been

made by the assessee for supply of reasons recorded for

reopening so as to raise objections to such reasons and that

the Ld.AO in spite of request being made by the assessee has

not provided the reasons recorded for reopening to the

assessee. Under these given facts and circumstances of the

case, we would like to note of the judgment of Hon'ble

Jurisdictional High Court in the case of M/s. Trend Electronics

(supra), where also the assessee sought copy of recorded

reasons for reopening but the same were not supplied to the

assessee and the Hon'ble Court has decided this issue

observing as follows:-

“8. We find that the impugned order merely applies the decision of the Apex Court in GNK Driveshafts (India) Ltd.

8 ITA.No.1398/PUN./2025 (Suresh Vitthalrao Barge) (supra). Further it also follows the decision of this Court in Videsh Sanchanr Nigam Ltd. (supra) in holding that an order passed in reassessment proceedings are bad in law in the absence of reasons recorded for bad in issuing a reopening notice under Section 148 of the Act being furnished to the assessee when sought for. It is axiomatic that power to reopen a completed assessment under the Act is an exceptional power and whenever revenue seeks to exercise such power, they must strictly comply with the prerequisite conditions viz. Reopening of reasons to indicate that the Assessing Officer had reason to believe that income chargeable to tax has escaped assessment which would warrant the reopening of an assessment. These recorded reasons as laid down by the Apex Court must be furnished to the assessee when sought for so as to enable the assessee to object to the same before the Assessing Officer. Thus in the absence of reasons being furnished, when sought for would make an order passed on reassessment bad in law. The recording of reasons (which has been done in this case) and furnishing of the same has to be strictly complied with as it is a jurisdictional issue. This requirement is very salutary as it not only ensures reopening notices are not lightly issued. Besides in case the same have been issued on some misunderstanding/misconception, the assessee is given an opportunity to point out that the reasons to believe as recorded in the reasons do not warrant reopening before the reassessment proceedings are commenced. The Assessing Officer disposes of these objections and if satisfied with the objections, then reopening notice under Section 148 of the Act is dropped/withdrawn otherwise it is proceeded with further. In issues such as this, i.e. where jurisdictional issue is involved the same must be strictly complied with by the authority concerned and no question of knowledge being attributed on the basis of implication can arise. We also do not appreciate the stand of the revenue, that the respondent- assessee had asked for reasons recorded only once and therefore seeking to justify non-furnishing of reasons. We expect the state to act more responsibly. 9. In view of the fact that the order of the Tribunal has only applied the settled position of law in allowing the respondent- assessee's appeal. No substantial question of law arises for our consideration.”

Jurisdictional High Court in the case of M/s. Trend Electronics

(supra) we find that the ratio laid down therein is squarely

applicable on the facts of the instant case and that the reasons

9 ITA.No.1398/PUN./2025 (Suresh Vitthalrao Barge) recorded for reopening have not been provided to the assessee

in spite of specific request made. Therefore, we find that the

Ld.AO failed to assume proper jurisdiction before carrying out

the re-assessment proceedings and in the light of the above

judgment, we hereby quash the re-assessment proceedings as

untenable and bad in law. Finding of the Ld.CIT(A) on this

issue is set aside. Ground No.1 of the appeal raised by the

assessee is allowed.

additional grounds of appeal, since we have already allowed

the ground No.1 and quashed the re-assessment proceedings,

dealing with the remaining grounds of appeal would be merely

academic in nature and therefore they are held to be

dismissed as infructuous.

terms in indicated above.

Order pronounced in the open Court on 20.01.2026.

Sd/- Sd/- [VINAY BHAMORE] [MANISH BORAD] JUDICIAL MEMBER ACCOUNTANT MEMBER

Pune, Dated 20th January, 2025

vr/-

10 ITA.No.1398/PUN./2025 (Suresh Vitthalrao Barge) Copy to

By Order //True Copy //

Assistant Registrar, ITAT, Pune.

S.No Details Date Initials Designati on 1 Draft dictated on 09.01.2026 Sr. PS/PS 2 Final Draft placed before author 12.01.2026 Sr. PS/PS 3 Draft proposed & placed before the .01.2026 JM/AM Second Member 4 Draft discussed/approved by Second .01.2026 AM/AM Member 5 Approved Draft comes to the Sr. .01.2026 Sr. PS/PS PS/PS 6 Kept for pronouncement on .01.2026 Sr. PS/PS 7 Date of uploading of Order .01.2026 Sr. PS/PS 8 File sent to Bench Clerk .01.2026 Sr. PS/PS 9 Date on which the file goes to the Office Superintendent 10 Date on which file goes to the A.R. 11 Date of Dispatch of order