REKH CHAND NAHTA, JAGDALPUR,BASTAR vs. INCOME TAX OFFICER, WARD- JAGDALPUR, BASTAR

3 Rekh Chand Nahta Vs. ITO, Ward- Jagdalpur Rs.20,636/-, thus, issued notice u/s.148A(b) of the Act, dated 16.03.2022 calling upon the assessee as to why a notice u/s. 148 of the Act may not be issued in his case. As the assessee had failed to come forth with any plausible explanation, therefore, the A.O passed an order u/s.148A(d) of the Act, dated 26.03.2022. Subsequently, notice u/s.148 of the Act, dated 28.03.2022 was served upon the assessee.

Sl. No. Name & PAN Relation Amount 1. L/Ghewar Chand Nahta Father 8,90,000/- (ABIPN6096L) 2. L/Khamma Bai Nahta Mother 6,50,000/- (ABIPN6141Q) 3. Gautam Nahta Brother 4,00,000/- (APLPN0668M) 4. Jitendra Nahta Brother 6,00,000/- (ALPN0788G)

However, as the assessee had failed to substantiate the authenticity of the aforesaid gifts transactions, therefore, the A.O holding a firm conviction that the creditworthiness of the respective donors was not established, held the entire amount as the assessee’s unexplained money u/s.69A of the Act. Apart from that, the A.O made an addition of the interest income

4 Rekh Chand Nahta Vs. ITO, Ward- Jagdalpur of Rs.20,636/- that was not disclosed by the assessee in her return of income. Accordingly, the A.O vide his order passed u/s.147 r.w.s. 144 r.w.s. 144B of the Act, dated 26.03.2023, after making the aforesaid additions determined the income of the assessee at Rs.25,60,240/-.

“5.2 After an exhaustive review of the grounds of appeal

, statement of facts and written submissions, the following observations are made: 5.3 Appellant stated that extensive evidence to substantiate the sources of income, cash deposits, and investments were submitted before the A.O and these include: Bank Statements: Detailed statements from Central Bank of India, State Bank of India, and ICICI Bank reflecting transactions. Donor Affidavits: Signed affidavits from donors confirming the gifts and their sources. Source of Deposits: Evidence of cash gifts, sale proceeds, accumulated savings, and bank withdrawals substantiating cash deposits. Property Investment Details: Purchase deed and supporting documents explaining the source of funds for acquiring immovable property. 5.3.1 It was argued that the AO made significant additions under Section 69A without properly examining or addressing the evidence submitted by the assessee. 5.4 It is contended that the assessee made multiple requests for adjournments (both on 23.03.2023 and 24.03.2023) to gather and submit additional documents and these requests were neither explicitly rejected nor considered. It was claimed that despite the assessee's request for a virtual hearing, the opportunity for such a hearing was not granted, which 5. Rekh Chand Nahta Vs. ITO, Ward- Jagdalpur deprived the assessee of the chance to clarify or elaborate on their submissions directly before the AO. 5.5 It was further contended that on 24.03.2023, the assessee attempted to upload their response and relevant documents but was unable to do so because of a technical glitch in the e- filing portal and this issue was substantiated with screenshots of the portal provided by the assessee. It was stated that the AO, however, finalized the assessment without addressing or allowing for this procedural hindrance. 5.6 It was maintained that after the assessee filed the return of income in response to the notice under Section 148, the AO was required to issue a notice under Section 143(2) to assume jurisdiction for scrutiny, but no such notice was issued by the AO. 5.7 During the appeal proceedings the assessee provided a detailed cash flow statement explaining the sources and uses of funds. This included: • Turnover from the business under presumptive taxation. Withdrawals from bank accounts during the relevant financial year. Accumulated savings over decades. 5.7.1 It was argued that the AO neither reconciled these figures with the cash deposits in question nor scrutinized the turnover declared under Section 44AD of the Income Tax Act. It was stated that although the assessee provided details of donors' PAN, addresses, and bank transactions, the AO did not verify these details or question the donors directly to assess their creditworthiness. 6.0 Upon a careful examination of the submissions made by the appellant, I am of the considered view that the issues raised in the grounds of appeal require extensive inquiry and verification, including the additional/supporting evidence filed during the appeal proceedings and therefore in the interest of substantial justice and to ensure fair play, it is most appropriate to provide the appellant with an additional opportunity to present his case before the AO. This would enable the AO to thoroughly verify the assessee's submissions and additional/supporting evidence filed during the appeal proceedings and conduct the necessary inquiries to gather all relevant material for an accurate determination of the appellant's income. The Courts in many rulings have clearly held that the importance of providing proper notice and 6. Rekh Chand Nahta Vs. ITO, Ward- Jagdalpur ITA No. 03/RPR/2025 reasonable opportunity for response, even in situations where the assessee failed to comply with initial notices, in order to ensure principles of natural justice are followed. 6.1 Proviso to Section 251(1)(a) of the Income Tax Act w.e.f 01/10/2024 provides that in the case of appeal against an order of assessment made under section 144, the Commissioner (Appeals) is empowered to set aside the order of assessment and refer the matter back to the Assessing officer for making a fresh assessment. 6.2 In view of the power conferred under proviso to Section 251(1)(a) of the Act, I hereby set aside the assessment made u/s 144 and refer the case back to the Assessing Officer for making a fresh assessment, after giving reasonable opportunity of being heard to the assessee The assessee is directed to file necessary documents for substantiating its case and not seek unnecessary adjournment, so as to facilitate disposal of the case, in accordance with the statutory provisions and the timelines prescribed under Section 153(3) of the Act. 7.0 Accordingly, based on the above discussion, the appeal is disposed of.”

7 Rekh Chand Nahta Vs. ITO, Ward- Jagdalpur Elaborating on his contention, the Ld. AR submitted that though the assessee has in compliance to notice u/s. 148 of the Act, dated 28.03.2022 had filed his return of income on 03.02.2023, but the A.O without taking cognizance of the same had grossly erred in law and facts of the case in assuming jurisdiction and framing the assessment vide his order passed u/s. 147 r.w.s. 144 r.w.s. 144B of the Act, dated 26.03.2023. Carrying his contention further, the Ld. AR submitted that now when the assessee in compliance to the notice u/s. 148 of the Act, dated 28.03.2022 had filed his return of income, therefore, it was incumbent on the part of the A.O to have issued a notice u/s. 143(2) of the Act, which, however, was never done by him. The Ld. AR to fortify his aforesaid contention had taken me through the return of income that was filed by the assessee u/s. 148 of the Act, dated 28.03.2022, Page 36 of APB. Also, the Ld. AR had taken me through “ITR-4S” which revealed that he had filed the return of income in compliance to notice u/s. 148 of the Act. The Ld. AR submitted that now when the assessee had filed his return of income in compliance to notice u/s. 148 of the Act, therefore, failure on the part of the A.O to issue notice u/s. 143(2) of the Act rendered the assessment so framed by him as invalid and nothing short of nullity.

8 Rekh Chand Nahta Vs. ITO, Ward- Jagdalpur his “Ground of appeal No.2” had assailed the impugned assessment framed by the A.O vide his order passed u/s.147 r.w.s. 144 r.w.s. 144B of the Act, dated 26.03.2023 claiming the same as being illegal, bad in law and void-ab-initio in absence of notice having been issued u/s. 143(2) of the Act, but the first appellate authority had though referred to the said claim of the assessee, but had not adjudicated the same. The Ld. AR to buttress his aforesaid claim had taken me through Page 41, Para 5.6 of the CIT(Appeal)’s order.

9 Rekh Chand Nahta Vs. ITO, Ward- Jagdalpur ITA No. 03/RPR/2025

“2. On the facts and in the circumstances of the case, the assessment order passed u/s.144 r.w.s. 147 read with Section 1448 is illegal, bad-in-law and void-ab- initio inasmuch as the mandatory notice as required u/s.143(2) of the Act, 1961 was not issued to the assessee even though the assessee had filed the return of income electronically in response to the notice u/s 148 on 03.02.23, hence, the assessment order is bad-in-law, illegal and void-ab-initio. Prayer: It is prayed that the assessment order passed without issuance of mandatory notice u/s. 143(2) may kindly be declared as illegal, bad-in-law and consequential enhancement of Rs.25,40,000/- made by the Assessment Unit may kindly be deleted.”

10 Rekh Chand Nahta Vs. ITO, Ward- Jagdalpur The aforesaid evasive approach on the part of the CIT(Appeals) needs to be deprecated.

11 Rekh Chand Nahta Vs. ITO, Ward- Jagdalpur ITA No. 03/RPR/2025