DAWOODI BOHRA JAMAT,UDAIPUR vs. ITO WARD EXEMPTION UDAIPUR, UDAIPUR

IN THE INCOME TAX APPELLATE TRIBUNAL JODHPUR BENCH, JODHPUR. BEFORE: DR. MITHA LAL MEENA, ACCOUNTANT MEMBER & DR. S. SEETHALAKSHMI, JUDICIAL MEMBER I.T.A. No. 425/Jodh/2025 Assessment Year: 2014-15 Dawoodi Bohra Jamat, Vs. ITO 73, Dr. Zakir Hussain Marg, Ward - Exemption Uaipur. Uaipur. PAN/GIR No.: AAATD2089C Appellant Respondent Sh. Shrawan Kumar Gupta, Adv. Appellant by Sh. Karni Dan, Addl.CIT (Sr.DR) Respondent by

Date of Hearing 07/05/2025 29/05/2025 Date of Pronouncement

ORDER PER: DR. S. SEETHALAKSHMI, J.M.

The assessee has filed this appeal challenging the impugned order dated 27.03.2025, passed by the learned Commissioner of Income Tax (Appeals), NFAC, Delhi [ld. CIT(A)], for the assessment year 2014-15. The said order of the ld. CIT(A) arises against the order dated 31.03.2022, passed under section

ITA No. 425/Jodh/2025 Dawoodi Bohra Jamat, Udaipur. 143(3) r.w.s.147 of the Income Tax Act, 1961 [for short Act ] by AO, National Faceless Assessment Centre, Delhi [ld. AO].

ITA No. 425/Jodh/2025 Dawoodi Bohra Jamat, Udaipur. 28.03.2022 SCN attaching draft assessment order issued 28.03.2022 Reply to SCN objecting proposed addition and adducing evidence that the transaction pertains to Dawoodi Bohra Charitable Society PAN-AABTD7900P and not to the assessee 29.03.2022 Additional reply filed in response to notice u/s 143(2) 30.03.2022 Personal hearing through VC given 31.03.2022 Assessment order passed

2.2 The assessee, immediately after filing ITR in response to notice u/s 148, requested to provide reasons for reopening its case, vide response dated 27.01.2022. Again, requests for providing the same were made vide submissions dated 03.02.2022 and 21.03.2022 respectively. The reasons were finally made available to the appellant on 23.03.2022 after which it vehemently objected to the same stating that the information mentioned in the reasons does not pertain to it and no such transaction has been carried out during the year. The appellant provided its bank statement to prove its point that no payment has been made to Manisha Parmar, as alleged. 2.3 The AO completed the assessment making an addition of Rs.75,00,000/- u/s 69. The CIT(A), before whom all the evidence which was filed before the AO as well, was again furnished, set aside the assessment to the file of the AO to decide it afresh. 3. Now the assessee is in appeal before the ITAT. He has raised the following grounds of appeal -

ITA No. 425/Jodh/2025 Dawoodi Bohra Jamat, Udaipur. “1. The impugned order u/s 147 rws 144B of the I.T. Act, 1961 dated 31.03.2022 as well as the notice u/s 147/148 and action or proceedings u/s 147 are illegal, bad in law, barred by limitation, without jurisdiction, without approval/satisfaction from the proper or competent authority, and various other reasons or and further contrary to the real facts of the case hence the same may kindly be quashed. 2. The ld. CIT(A) has grossly erred in law as well as on the facts of the case in set-aside the assessment to AO for making a fresh assessment without deciding our legal grounds of appeal and other grounds of appeal when all the details were available before him which had already been examined by the ld. AO and nothing new facts and material were/are to be filed by the assessee, also erred in reading the assessment order u/s 147 rws 144 in place of 147 rws 144B as the assessment order was not passed u/s 144. Hence the order of the ld. CIT(A) are bad in law, invalid, illegal and on facts of the case, for and various other reasons and hence the same may kindly be quashed. 3.1 Rs. 75,00,000/-: The ld. AO has grossly erred in law as well as on the facts of the case in making the addition of Rs.75,00,000/- u/s 69A on account of alleged unexplained investment on account of alleged advance payment for purchase of property, also erred in not considering the material evidences available on record in their true perspective and sense and the ld. CIT(A) has grossly erred in set aside the same to the ld. AO without considering the details, submissions , material available before him. Hence the addition so made by the ld. AO and set aside by the ld. CIT(A) AO is being totally contrary to the provisions of law and facts on the record and hence same may kindly be deleted in full. 3.2 The ld. AO has also grossly erred in law as well as on the facts of the case in not giving the cross examination of the seller and not providing the material/information required by the assessee and thereby the additions made in gross breach of law, against the principal of natural justice and invalid, void-ab-initio and the ld. CIT(A) has grossly erred in set aside the same to the ld. AO without considering the details, submissions , material available before him Hence also on these basis the additions so made in the hands of the assessee is in gross breach of law and illegal, invalid, void ab-intio and hence the liable to be deleted in full. 4. The ld. AO has grossly erred in law as well as on the facts of the case in charging the interest u/s 234A,B,C. The interest so charged is being totally contrary to the provision of law and on facts of the case and hence same may kindly be deleted in full. 5. That the appellant prays your honour indulgences to add, amend or alter of or any of the grounds of the appeal on or before the date of hearing.”

“1. For the brief facts of the case, kindly refer to our WS (PB61-64) before ld. CIT(A) 4

ITA No. 425/Jodh/2025 Dawoodi Bohra Jamat, Udaipur.

ITA No. 425/Jodh/2025 Dawoodi Bohra Jamat, Udaipur. on legal issues and also when asasessee has filled any additional evidence or documents which is not the case of the ld. CIT(A) as on merit also all the documents before the ld. AO. Hence the observation of the ld. CIT(A) itself wrong that the assessee has filed the new documents and explanations. As per new amended act wef 01.10.2024. In our view the matter to be restored to the AO by the ld. CIT(A) those appeals which have been filed after the 01.10.2024 not before it because it is not retrospective amendment. 1.2. Further on the merit the case when it is the admitted facts that all the details and replies have been filled before the ld. AO and considered by the ld. AO and now the assessee is not required to file other details/evidences nor any new documents were filed before the ld. CIT(A). Then the matter was to be decided by the ld. CIT(A) itself, for which he has failed to do so. 1.3 Hence it is prayed that the matter on legal issue and on merit may kindly be consider and decided by your honor. As recently this Honble ITAT in the case of Suresh Kumar Saini v/s ITO Ward 7(4), Jaipur in ITA No. 1256/Jp/2024 dt. 29.01.2025 has decided the legal grounds of appeal even not decided by the ld. CIT(A) also refer Praveen Daga v/s ITO Ward 6(2), Jaipur in ITA No.1309/Jpr/2024 dt.26.03.2025, this case has been decided on merit by the Honble ITAT despite Setaside by the ld. CIT(A). Copy is enclosed. 2.Firstly kindly refer our WS before the ld. CIT(A) (PB 61-78) as our WS before your honor. Now our other submissions are as under. 3.1 As on perusal of the objection decided by the ld. AO(PB 16-17) it is clear that the notice u/s 148 was served upon the assesseeon or after 01.04.2022. which was illegal as already stated. As when the notice u/s 148 was issued on or after 01.04.2021 to 30.06.2021 then the ld. AO was required to follow the decision of the Honble Supreme Court in the case of UOI & Ors V/s Ashish Agrawal in Civil Appeal No. 3005/2022 with other appeals dt. 04.05.2022, which have not been followed by the ld. AO which is contempt matter. 3.2 Under the same facts and circumstances the Honble ITAT Jaipur Bench in the case of Mohamed Sarif vs. DCIT, IT(IT)A No. 23 to 27/JPR/2022, decided on 21.02.2023, the honble bench has quashed the assessment . Here also the same position. Reliance is also placed on decision in Union of India v. Ashish Agarwal, (2022) 444 ITR 1 (SC) and Union of India vs. Rajeev Bansal , (2024), 167 taxmann.com 70 (SC).

ITA No. 425/Jodh/2025 Dawoodi Bohra Jamat, Udaipur. 98 CCH 0010 DelHC it has been held that Section 151 of the Act clearly stipulates that the CIT, who is the competent authority to authorize the reassessment notice, has to apply his mind and form an opinion. The mere appending of the expression ‘approved’ says nothing. It is not as if the CIT has to record elaborate reasons for agreeing with the noting put up. At the same time, satisfaction has to be recorded of the given case which can be reflected in the briefest possible manner. In the present case, the exercise appears to have been ritualistic and formal rather than meaningful, which is the rationale for the safeguard of an approval by a higher ranking officer. For these reasons, the Court is satisfied that the findings by the ITAT cannot be disturbed. On this preposition kindly also refer Also refer Maruti Clean Coal And Power Ltd. vs. ACIT (2018) 400 ITR 0397 (Chhattisgarh) In the case of CIT vs. S. Goyanka Lime & Chemicals Ltd. (2015) 231 TAXMAN 0073 (MP) it has been held that While according sanction, the Joint Commissioner, Income Tax has only recorded so “Yes, I am satisfied” If the case in hand is analysed on the basis of the aforesaid principle, the mechanical way of recording satisfaction by the Joint Commissioner, which accords sanction for issuing notice under section 147, is clearly unsustainable and we find that on such consideration both the appellate authorities have interfered into the matter. In doing so, no error has been committed warranting reconsideration. (para 7) As far as explanation to Section 151, brought into force by Finance Act, 2008 is concerned, the same only pertains to issuance of notice and not with regard to the manner of recording satisfaction. That being so, the said amended provision does not help the revenue. No question of law involved in the matter, warranting reconsideration appeals are, therefore, dismissed. Also refer PAC AIR SYSTEMS P. LTD. vs. ITO (2020) 58 CCH 0001 Del Trib it has been held that Reassessment—Income escaping assessment—Assessee filed present appeal challenging order of CIT(A) wherein, AO’s action was accepted—Assessee contended that AO had erred in assumption of jurisdiction u/s 147/148 based on invalid and mechanical approval granted by Addl. CIT—Held, approval granted by Addl. CIT was a mechanical and without application of mind, which was not valid for initiating re-assessment proceedings, because from said remarks, it was not coming out as to which material; information; documents and which other aspects went gone through and examined by Addl. CIT for reaching to satisfaction for granting approval—Thereafter, AO had mechanically issued notice u/s 148—Reopening in assessee’s case for AY in dispute was bad in law and deserved to be quashed—Approval granted by Addl. CIT was a mechanical and without application of mind, which was not valid for initiating reassessment proceedings issue of notice u/s 148 and was not in accordance with s. 151 thus, notice issued u/s 148 was invalid and accordingly, reopening in this was bad in law and therefore, same was hereby quashed—Assessee’s appeal partly allowed. In the case of Gorika Investment And Export (P) LTD. vs. ITO (2018) 53 CCH 0168 DelTribReopening—Income escaping assessment—Validity thereof—Assessee filed return of income declaring income which was processed u/s. 143(1)—AO issued notice u/s. 148 after recording reasons that income of assessee had escaped assessment—AO framed assessment u/s. 143(3) r.w.s. 147 by making addition—CIT(A) upheld order of AO—Held, in CIT Vs N.C. Cables

ITA No. 425/Jodh/2025 Dawoodi Bohra Jamat, Udaipur. Ltd., it was held that CIT(A) who was competent authority to authorize reassessment notice had to apply his mind and form opinion—Mere appending of expression ‘approved’ says nothing— Satisfaction had to be recorded of given case which could be reflected in briefest possible manner—Exercise appears to had been ritualistic and formal rather than meaningful, which was rationale for safeguard of approval by higher ranking officer—AO initiated proceedings u/s. 147 r.w.s. 148 on basis of information furnished by Directorate of Investigation Unit and CIT gave approval without applying his mind in slip-shod manner—As approval/sanction given by CIT was without recording satisfaction, reopening was not sustainable—Assessee’s appeal allowed. TARA ALLOYS LTD. vs. ITO (2018) 63 ITR (Trib) 0484 (Delhi) Reassessment—Income escaping assessment—Validity thereof—Case of assessee was selected for scrutiny as per provisions of section 147 and 151 and accordingly notice u/s 148 was issued to assessee— Proceedings u/s 147/148 were initiated after recording reasons on basis of information received from Investigation Wing of Department on basis of search and seizure operation. During course of assessment proceedings, assessee was specifically asked to explain and justify transaction with G received as share application money/share capital and why same should not be disallowed or added in income of assessee—AO held that it was camouflage just to introduce its own fund through entry operator therefore amount was added in income of assessee company as unexplained u/s 68—CIT(A) confirmed reassessment and addition made by AO of share capital and unexplained cash credit—Held, notice u/s 148 could be quashed if ‘belief’ was not bona fide or one based on vague, irrelevant and non-specific information—Basis of belief should be discernible from material on record which was available with AO when he recorded reasons— There should be link between reasons and evidence/material available with AO—Commissioner had simply affixed “approved” at bottom of note sheet prepared by ITO technical—ITO could not have had reason to believe that income had escaped assessment by reasons of assessee ’s failure to disclose material facts and if Commissioner had read report carefully he could not have come to conclusion that this was fit case for issuing notice u/s 148—Commissioner had simply put “approved” and signed report thereby giving sanction to AO—Nowhere Commissioner had recorded satisfaction note, not even in brief after applying his mind—After expiry of four years from end of relevant assessment year, notice u/s 148 should not be issued unless Commissioner was satisfied that it was fit case for issue of such notice—Reassessment proceedings and notice being bad in law were quashed—Assessee’s appeal allowed. Also refer a recent judgment of this Honble ITAT in the case of Sh. Anshuman Singh v/s ACIT Circle-1 Jaipur in ITA No.733 & 739/JP/2023 dt. 10.04.2024. 5. No approval has been taken from PCCIT: As admittedly in the present case notice u/s 148 was on or after 01.04.2021 or after 31.03.2021 for A.Y. 2014-15 which is after the lapse 5-6 years hence the approval as per Sec.151 was to be taken from PCCIT not from CIT and thereafter the notice u/s 148 was to be issued, hence the notice is illegal invalid and liable to be quashed.

Prayer: In view of the above facts and circumstances the case and legal position the notice as well as the assessment may kindly be quashed.

ITA No. 425/Jodh/2025 Dawoodi Bohra Jamat, Udaipur.

SUBMISSIONS ON GOA-3: 1. In this regard it is submitted that we strongly rely upon on our WS filed before the ld. CIT(A) (PB61-78) and please also kindly consider as WS before your honor. 2. Further as the ld. AO was not having any material to disprove our contentions and documents, that is why he has not rebutted the same with the documentary evidences. That is why he also not accepted our request and not provided the cross examinations. The ld.CIT(A) has wrongly observed that “the appellant did not provide any documentary evidence or explanation during the assessment proceedings. However, the appellant has now submitted an explanation and supporting documents during the appellate proceedings, which were not available to the Assessing Officer earlier.” However on perusal of the documents filed before the ld. CIT(A) and the same is also filed before your honor and on perusal of the letters filed to the ld. AO it is clear that the assessee has not filed any new or additional evidences before the ld. CIT(A), then how ld. CIT(A) can give the wrong observations and the same liable to be quashed or ignored. And the resultant addition liable to be deleted in full. Prayer: Therefore in view of the above facts, circumstances of the case and legal position the notice as well as the assessment may kindly be quashed and the addition may kindly be deleted in full.”

S.No. Particulars Page No. 1. Copy of ITR with computation of total income. 1-4 2. Copy of Audited accounts 5-7 3. Copy of Notice u/s 148. 8 4. Copy of Notice u/s 142(1) 9-13 5. Copy of letter to AO 27.01.2022 14-15 6. Copy of Objection disposal order dt. 09.03.2022. 16-19 7. Copy of approval u/s 151 20 8. Copy of reasons recorded u/s 148. 21-25 9. Copies of letters to AO. 26-34 10. Copy of bylaws and Registration Certificate 35-41 11. Copy of Bank statement of assessee. 42-45 12. Copy of list of members 46-47 13 Copy of Bank statement of M/s Dawoodi Bohra Charitable Society. 48-55 9

ITA No. 425/Jodh/2025 Dawoodi Bohra Jamat, Udaipur. 14. Copy of Agreement. 56-60 15. Copy of Written Submissions to CIT(A). 61-78

ITA No. 425/Jodh/2025 Dawoodi Bohra Jamat, Udaipur. enquiry nor brought any clinching evidences to disprove the evidences produced by the assessee. The assessee, by providing its bank statement and audited accounts, proved that no payment has been made by it, through banking channel for the purchase of the impugned property. By providing the bank statement of M/s Dawoodi Bohra Charitable Society, which reflected the payments made to Manisha Parmar, it further substantiated its stand that the impugned transaction of purchase of land does not pertain to it. Considering the vortex of evidences, it can be said that the assessee has successfully discharged the onus cast upon it and therefore, the addition made by the AO needs to be deleted. We order accordingly.

ITA No. 425/Jodh/2025 Dawoodi Bohra Jamat, Udaipur. coterminous with that of AO, it was expected of him, to adjudicate the case and not to pass it on over to the AO. This casual approach of CIT(A) needs to be reprimanded.

Sd/- Sd/- (Dr. Mitha Lal Meena) (DR. S. Seethalakshmi) Accountant Member Judicial Member Dated 29/05/2025 Santosh- Sr. P.S Copy of the order forwarded to: (1)The Appellant (2) The Respondent (3) The CIT (4) The CIT (Appeals) (5) The DR, I.T.A.T. True Copy By order