HARISH BANGA,HISAR vs. ASSESSMENT UNIT, NEW DELHI

Per : Pawan Singh, Judicial Member:

This appeal by the Assessee is directed against the order of CIT (A) dated 08.07.2025 vide Assessment Year 2018-19. The Assessee has raised following grounds of appeal:-

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1.4 The Ld. CIT(A) failed to consider that the order u/s 148A(d) dated
26/03/2022
was passed mechanically, without independent application of mind, and did not address the Appellant's submissions that the alleged undisclosed commission income of Rs. 13,50,380/- was duly disclosed in the original return of income filed on 30/03/2019. 1.5 The Ld. CIT(A) erred in holding that the Appellant's participation in assessment proceedings estopped him from challenging the validity of the notice u/s 148. The juri ictional defect in reopening cannot be cured by participation, as held in various judicial precedents, including
CIT v. Chetan Gupta (2022) 441 ITR 1 (SC).

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documentary evidence were held allowable unless disproved by the Revenue.

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income. The Assessee disclosed that he has received commission of Rs.13,50,380/- and out of which Rs. 9,00,000/- was paid to earn such commission income. The Assessee furnished all such explanation in his reply dated 15.06.2022. On receipt of reply furnished by the Assessee, the Assessing Officer passed order under Section 148 (A) (d) dated 26.03.2022. In the order, the Assessing Officer substituted/change the basis of reopening. The Assessing Officer after serving notice under Section 148 dated
29.03.2022 proceeded for reassessment. Reassessment was completed on 10.03.2023. The Assessing Officer instead of making addition on the basis which was based for reopening, made addition on other issues, the Assessing Officer disallowed the commission payment of Rs.9,00,000/- debited by Assessee.
Though, the Assessee furnished required details to substantiate genuineness of commission paid to Smt. Suman Devi. The Assessing Officer disregarded the submission of the Assessee and made addition/ disallowance of such commission payment under section 57. The Ld. CIT (Appeal) confirmed the action of Assessing Officer. The Ld. AR of the Assessee submitted that the Hon’ble Juri ictional High Court in Jindal Saw Limited Vs. DCIT reported in 2025 170 taxmann.com 634 (Delhi) held that wherein allegation made in the order under Section 148 (A) (d) were in variance which was set out in the notice under section 148A(b), order under Section 148 (A) (d), was to be set aside. The Ld. AR reiterated his submission that the allegation in the notice under Harish Banga

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Section 148 (A) (d) was that the Assessee received commission income from Future Makers Life Care Pvt. Ltd. However, in the assessment order the AO made addition on account of disallowance of commission paid by Assessee to Suman Devi.
Thus, the ratio of decision of Hon’ble Juri ictional High Court in Jindal Saw Ltd. Vs DCIT (Supra) is squarely applicable on the facts of the case.
3. On merit, the Ld. AR of the Assessee submits that the Assessee furnished the details of commission payment and proved the genuineness of the commission payment. During the assessment the commission recipient was not in the contact with the Assessee therefore, the confirmation could not be filed. Now, the Assessee has filed affidavit of Suman Devi confirming the fact that she has received commission for her service as a sub-agent for introducing new customers to Future Makers Life Care through assessee, as per verbal understanding with the Assessee.
Since, such evidence could not be filed during assessment, now; the Assessee has filed application for admission of additional evidence. The additional evidences are relevant and essential to adjudicate the real controversy about the payment of commission for earning commission income. To support his submission on legal issue, the Ld. AR of the Assessee already relied upon following case laws :-
 Jindal Saw Ltd. Vs Deputy/Assistant Commissioner of Income-tax ([2025] 170 taxmann.com 634 (Delhi)[23-
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12-2024]) wherein the Hon'ble High court held that order u/s 148A(d) of the act is unsustainable as it is at variance with the allegations that were made in the impugned notice issued under Section 148A(b) of the Act.
 Pr. CIT v. Sunlight Tour and Travels (P.) Ltd. [2024]
169 taxmann.com 673 (Delhi) In this case the Hon'ble
High Court held that section 147 cannot be interpreted to mean that Assessing Officer could assess other incomes of assessee even in cases where no addition is made on account of reasons for which reassessment was initiated.
 Pr. CIT v. Jaguar Buildcon (P.) Ltd. [2024] 165
taxmann.com 757 (Delhi). In this case the Hon'ble High
Court held that where assessee's case was reopened on basis of information relating to accommodation entry received from an entity but no addition was made in assessment order on this account since amount was already added in order under section 153A, other addition made by Assessing Officer which did not form part of reasons recorded by him was not valid.
 Anand Cine Services (P.) Ltd. v. Asstt. CIT [2024] 169
taxmann.com 236 (Madras): In this case the Hon'ble High
Court held that Where Assessing Officer issued reopening notice on ground that assessee sold land and deleted certain amount under head 'land' in fixed assets of balance sheet without offering capital gain for assessment, since no additions were made in reassessment order as regards deletion of relevant immovable property which formed basis for reopening assessment, other addition made reassessment order could not be sustained.
 Hon'ble Delhi High Court in the case of Ranbaxy
Laboratories Limited Vs. CIT 2011 336 ITR 136 where it has been held that "it is essential that the items in respect of which the reasons had been recorded are Harish Banga

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assessed. If the AO accepts that the items for which reasons are recorded have not escaped assessment, it means he had no "reasons to believe that income has escaped assessment" and the issue of the notice becomes invalid".
 CIT V. Jet Airways (1) Ltd. [2010] 195 Taxman 117
(Bombay), the Bombay High Court held that if after issuing notice under section 148, Ld. Assessing Officer accepts contention of assessee and holds that income, for which he had initially formed a reason to believe that it had escaped assessment, has, as a matter of fact, not escaped assessment, it is not open to him to independently assess some other income; if he intends to do so, a fresh notice under section 148 would be necessary, legality of which would be tested in event of a challenge by assessee.
 Aishwarya Rai Bachchan v. Pr. CIT [2022] 135
taxmann.com 335 (Mumbai – Trib.), ITAT held that where
AO recorded reasons on basis of which reassessment was initiated, but did not make any addition in reassessment proceedings, in such case primary reason to believe that income had escaped assessment would fail and reassessment could not be treated as a valid order.
4. On the other hand, the Ld. Sr. DR for the Revenue supported the order of lower authorities. The Ld. Sr. DR submits that in fact addition is made on the basis of same information which was the basis of issuance of notice under Section 148 (A) (b). On merit the Ld. Sr. DR. submits that the Assessee failed to substantiate the genuineness of commission payment to Suman
Devi.
Copy of agreement/other document to establish genuineness of Assessee’s claim were not furnished. The Harish Banga

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Assessee merely furnished copy of bank certificate. Since the Assessee failed to prove the identity of the person, thereby AO rightly disallowed such commission payment.
5. I have considered the rival submission of both the parties and have gone through the orders of the lower authorities carefully. I find that Assessee has raised multiple grounds of appeal however, in my considered view; there are two substantial ground of appeal, first, validity of notice under Section 148 and assessment order passed thereof and secondly on merit, if the Assessee duly substantiate genuineness of commission payment. So far as legal ground is concerned, on perusal of notice under Section 148 (A) (b), I find that AO along with such notice provided the details of allegation/information which was basis of issuing such notice. Such information was provided in the form of Annexure to notice under Section 148 (A) (b). In the annexure, the AO recorded/mentioned that : “It is brought to your notice that this office has received flagged information in your case for the financial year 2017-18 relevant to the assessment year 2018-19 which reveals that you received commission amounting to Rs. 13,50,380/- from M/s Future
Maker Life Care Pvt. Ltd. This office has also information that the M/s Future Maker Life Care Pvt. Ltd. was running Ponzi Scheme in the garb of earning high returns for persons who deposited money with them for trading health care products whereas no actual business done by the aforementioned company.
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2. In view of the above, you are required to show cause as to why a notice u/s 148 of the Income Tax Act, 1961 should not be issued on the basis of information discussed in the preceding para which delineates that income chargeable to tax has escaped assessment in your case for the relevant assessment year i.e.
2018-19.”
6. I find that in response to notice dated 12.03.2022, the Assessee filed his detailed reply dated 18.03.2022. In the reply the Assessee submitted that he has received referral commission from Future Makers Life Care Private Ltd. for introduction of customer for the scheme allotted of said company. He received total commission of Rs. 13,50,380/- out of which he further paid commission of Rs.9,00,000/- to Smt. Suman Devi for earning such commission income. The Assessee also furnished computation of his total income which was the basis while filing return of income. The assessee explained that it was agreed with sub-agent/Suman Devi that she will receive 2/3rd of referral commission pertaining to her customers. Thus, out of total commission of Rs.13,50,380/-, 2/3rd of which that is Rs.9,00,000/- was paid through account payee cheque. I find that the AO accepted such explanation of Assessee. However, the AO while passing the order under Section 148 (A) (d) has not proposed for making such addition, rather change the basis of reopening and doubted the commission paid by Assessee and proposed to disallow under Section 57. Ultimately, while
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passing the assessment order the AO disallowed the commission of Rs.9,00,000/- for the want of agreement and other supporting documents. The action of the AO was confirmed by CIT (A) on the issue / grounds related with the objection of the Assessee that order under Section 148 (A) (d) is at variance. The Ld. CIT(A) while confirming the action of AO held that the AO followed the prescribed procedure. On merit, the addition was confirmed for the want of identity and genuineness of commission payment. It was also held that the Assessee has not explained the nature of services and actual rendering of service with supporting evidences.
7. Before me the Ld. AR of the Assessee on legal issue vehemently argued that basis of addition in the assessment order as well as in the order under Section 148 (A) (d) is at variance with the information supplied with notice under Section 148 (A)(d). On careful perusal of information, in the annexure with notice under Section 148 (A) (b), I find that the AO in the said information noted that commission payment made by Future
Makers Life Care was without actual business. However, the commission income shown by Assessee was accepted by AO.
The AO doubted the commission paid by Assessee to Smt.
Suman Devi. Thus, the basis of addition is quite different than the allegation of issuance of notice under Section 148 (A) (b).
8. I find that the Hon’ble Juri ictional High Court in Jindal Saw
Vs. DCIT (Supra) held that wherein the allegation made in the Harish Banga

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notice under Section 148 (A) (b) is at variance with the grounds raised in the order passed under Section 148 (A) (d), impugned notice as well as impugned order was to be set aside. Hence, I find merit in the submission of Ld. AR of the Assessee that addition is at variance with the allegation of information about escapement of income. I also find merit in the submission of Assessee that the commission received by the Assessee from Future Makers Life Care Pvt. Ltd. is accepted by the AO. Thus, the substantial ground of appeal raised by the Assessee is allowed. Even otherwise on merit, I find that the right from the beginning the Assessee has explained that out of total commission earned from Future Makers Life Care, the Assessee parted with 2/3rd of commission income to Smt. Suman Devi.
Suman Devi referred certain clients while acting as a sub-agent.
Before AO the Assessee furnished bank statement of Assessee.
However, the other evidence could not be furnished by Assessee.
Before Tribunal the Assessee filed application for admission of additional evidence. The Assessee furnished PAN, Aadhar Card,
Bank Statement and Affidavit of Suman Devi. On perusal of such details I find that such details and evidence are material to effectively adjudicating the controversy before me. Thus, considering the relevancy of evidence such additional evidence taken on record. Considering the fact that commission payment was made through account payee cheque, Assessee furnished bank statement before the AO. Now the assessee also furnished
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evidence of identity of Suman Devi in the form of Aadhar Card and also filed her affidavit to substantiate the purpose of commission received by her, therefore, I find that Assessee has successfully proved the identity and genuineness of commission payment. Hence, the Assessee also succeeded on merit. In the result, both the substantial ground of appeal is allowed.
9. In the result, appeal of the Assessee is allowed.
Order pronounced in the open court on19.12.2025, with the direction to place result on notice board at Delhi. ( PAWAN SINGH )
JUDICIAL MEMBER

Mumbai

* Tarun Kushwaha
Sr. Private Secretary.

Copy to: The Appellant
The Respondent
The CIT, Concerned, Mumbai
The DR Concerned Bench

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By Order

Dy/Asstt.