PRABHATI DEVI,DAUSA vs. ITO WARD DAUSA , DAUSA

fu/kZkfjrh dh vksj ls@ Assessee by : Shri Sarwan Kumar Gupta, Advocate & Miss. Lakshita Deora, Advocate. jktLo dh vksj ls@ Revenue by : Shri Gautam Singh Chaudhary, JCIT D/R lquokbZ dh rkjh[k@ Date of Hearing : 24/09/2024 mn?kks"k.kk dh rkjh[k@Date of Pronouncement : 01/10/2024 vkns'k@ ORDER PER: SANDEEP GOSAIN, J.M.

This appeal by the assessee is directed against the order dated 19.03.2024 of ld. CIT (Appeals), National Faceless Appeal Centre (NFAC), Delhi passed under section 250 of the Income Tax Act, 1961 for the assessment year 2011-12. The grounds raised in the appeal are reproduced as under :-

1.2. The ld. AO has grossly erred in law as well as on the facts of the case order in passing the Ex-party order u/s 144 rws147 without providing the adequate and reasonable opportunity of being heard to the assessee in gross breach of law and are bad in law, invalid, illegal and on facts of the case, and hence the same may kindly be quashed and the resultant addition may kindly be deleted in full.

2. Rs.28,02,415/- : The ld. CIT(A) has grossly erred in law as well as on the facts of the case in confirming the addition of Rs.28,02,415/- made by the ld. AO on account of purchase of property by treating as income from undisclosed sources as income from other sources, also erred in not invoking any provisions of law while making the addition. The Ld. AO and CIT(A) both have also erred in not considering the vital facts and material available on record in their true perspective and sense available on record. Hence the addition so made by the ld. AO and confirmed by the ld. CIT(A) is also being contrary to the real facts of the case and not according to the provision of law, hence the same may kindly be deleted in full.

3. 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.

4. 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.

2. From the record I find that there is a delay of 80 days in filing the present appeal and in this regard an application for seeking condonation of delay has been filed by the assessee. In support of the condonation application, the assessee has also filed an Affidavit which reads as under :-

“ I, Prabhati Devi W/o Sh. Ram Sahai Meena Age-81years , R/o V.P. Daglav Post Surajpura, Tehshil District Dausa, Rajasthan 303303, do hereby solemnly affirm on oath as under: 1. That I am not a regular Income Tax Assesee and holding PAN CAHPPS1666E.

2. That an appeal is being filled by me before your honor for A.Y.2011-12 by the delay about 2 Months and 19 days. Although actually there is no delay if following facts are being considered.

3. That we would like to submit that actually there is no delay in the appeal filling, as the I have not received the order physically. Still if your honor is of the view that the appeal is being filled with the delay. Then the reason of late filing was that the Notices as well as order was sent by the AO at the email ID: itrdausa108gmail.com and cankjain1989@gmail.com this email was not of mine but some counsel through whom appeal was filed, who has not informed to us and escaped to view the email and it may be possible that he has not seen the email or under impression that I was having knowledge nor he has asked to us about these notices and orders.

4. That recently when my son went in the office of the counsel to know the status of the appeal, then the counsel checked the income tax portal and has come to know about above order, then my relative and son consult with other CA and advocate and checked Income Tax portal. Thereafter the advocates has checked the Income Tax Portal and saw all the facts and details then I have come to about the above order or just come to know before few days.

5. That after coming to knowledge about the CIT(A) order the counsel prepared the appeal and is being filed it on 06/08/2024. 6. That this looking all these above facts there was no delay after coming to the knowledge and there was no fault of mine, and the fault if any was of other person who has not intimated to me due to some bonafide mistake, Thus due to all this reason the appeal could not be filed within time. 7. That I am not literate person and have 81 years age and suffering various diseases not able to move. 8. That the contents or averment of application for condonation of delay are true and correct and may be treated as part of this affidavit. Place: Dausa Date: .08.2024 Deponent “ Considering the reasons mentioned in the said application accompanied by an Affidavit of the assessee, I feel that the reasons mentioned in the application constitute sufficient cause for not filing the appeal within the time before the Tribunal. Moreover, no counter affidavit has been filed by the revenue. Therefore, taking a lenient view and considering the principles laid down in the case of Collector, Land Acquisition vs. Mst.

Katiji, 1987 AIR 1353 (SC), I condone the delay in filing the appeal before me and decide the appeal herein below.

29.10.2010, wherein it is stated that the assessee had jointly purchased an immovable property (land) at village Dholabas, Tehsil- Lalsot District Dausa by paying Rs.49,00,000/- and stamp duty of Rs.7,04,830/-. Whereas the DLC value of the property under consideration was Rs.1,63,63,200/- for the purpose of charging stamp duty and other charges, thus the total investment of Rs.56,04,830/-(Rs.49,00,000/- +7,04,830/-) was made by the assessee jointly. As the assessee has purchased the property jointly therefore the share of the assessee comes to Rs.28,02,415/-. Hence the source of the amount invested for purchasing of said property remained unverified, apparently the purchase of land was made out of undisclosed income and the assessee had not filed the ITR for A.Y. 2011-12. Therefore I have reason to believe that income to the extent of Rs.28,02,415/- has escaped assessment u/s 147”. Accordingly, the AO had issued notices u/s 142(1) dated 18.10.2018 and 05.12.2018 but these notices have also not been served upon the assessee. Thereafter, the AO has passed the ex-parte assessment u/s 144 and made the addition of Rs.28,02,415/- of above investment in purchase of property as alleged undisclosed sources without invoking any provisions of law. Aggrieved by the order of AO, the assessee preferred appeal before the ld. CIT (A). The ld. CIT (A) dismissed the appeal of the assessee after considering the submissions of the assessee. Against the said order of the ld. CIT (A), the assessee has preferred the present appeal before the Tribunal on the grounds mentioned above.

4. Before me, the ld. Counsel of the asseessee reiterated his submissions as made before the first appellate authority and submitted his written submissions which are being reproduced hereunder :

“1. Notice u/s 148 not served upon the assessee: At the very outset it is submitted that the Ld. AO has erred in framing there assessment order without serving notice u/s 148 properly to the appellant and therefore assessment is made without jurisdiction and deserve to be quashed.

In instant case the notice u/s 148 of the IT act was not served upon the assessee. As the Ld. AO has issued the Notice U/s 148 on dt.27/03/2018 and in the assessment order also the Ld. AO has nowhere stated that the Notice has been served upon the assessee, he stated only issued. And also on inspection of assessment record by the undersigned on dt.06.09.2024 it is cleared that the notice has also not been sent on Email and on the order sheet also no mention of service further, there is also no delivery report of service of notice on the record. Further it is also very important to note that we had applied to Income Tax Officer Ward –Dausa for the certified copies of documents, with proof of service notice, in response thereto the ld. AO has given the documents but he has not given the proof of service notice u/s 148 and other notices also on inspection the assessment record the same was not available. Thus it has been proved that the notice u/s 148 has not been served, still if your honor is having any doubt the ld. AO may kindly be asked for provide the proof of services of the notices. The Ld. AO only commented that the notice u/s 148 issued but it is silent so far as on its proof of duly served upon the assessee and the same notice was not received by the assessee within time as prescribed by law. Assessee has come to know about the said notice only on receiving the assessment order, all these proves that the notices have not been served upon the assessee. And it is settled legal position of law that the proper service of the notice u/s 148 on the assessee is mandatory, without service of notice the subsequent proceedings are invalid and illegal and liable to be dropped. Thus the assessment order u/s 144/147 is bad in law and deserved to be quashed as the mandatory condition for reopening of the assessment could not have been fulfilled. Proper service of the notice u/s 148 is mandatory condition upon the assessee but Ld. AO could not have been served the notice as issued u/s 148 admittedly as per record.

Further, notice issued u/s 148 is primary condition of law to initiate the re- assessment proceedings under section 147 could not have been served properly to the assessee appellant therefore mandatory condition could not have been fulfilled. The proper service of notice u/s 148 is a jurisdictional requirement that must be mandatorily complied with and in the absence of the same, the proceedings should not be initiated on the assessee.

The same contention is favored by many land mark judgment which are as follows;

Honorable ITAT, Agra Bench in M/s K.P. Cold Storage Vs ITO had held that; In the present case AO on basis of information received from the ADIT(Inv.) that there were huge cash deposits in the bank accounts maintained by assessee during the period F.Y 2008-09, had issued notice under section 148 which culminated into assessment framed determining total income at Rs. 2,21,60,400/- as against Rs.12,45,390/- originally returned by assessee. Assessee contended that no notice under section 148 was served upon assessee and ex-parte assessment was completed without serving any notice under section 148 till the completion of assessment which rendered the assessment order to be held void-ab- initio. It was held a valid service of a valid notice under section 148, is not a mere procedural requirement, but is a condition precedent to the validity of any assessment, reassessment or re-computation to be made under section 147 and it is so because of the use of words “shall serve on the assessee” and also the requirement to the effect “before making the assessment, reassessment or re-computation under section 147” in the section itself- meaning thereby that if no notice under section 148 is issued or if the notice so issued is shown to be invalid, or the service of notice so issued, is shown to be invalid, AO could not proceed with the subsequent proceedings for making assessment, reassessment or re-computation under section 147. Unless, the notice was served on the proper person in the manner prescribed under section 282, the service was insufficient and AO did not have jurisdiction to re-assess the escaped income. Thus, the service of notice under section 148 was no service in the eye of law and all subsequent proceedings including the ex parte assessment framed on 21.12.2016 in assessee’s case were illegal and void ab initio.

[1999] 238 ITR 694 (CAL.) High Court Of Calcutta in Keshab Narayan Banerjee; Section 148, read with section 147 of the Income-tax Act, 1961 – Income escaping assessment – Issue of notice for – Assessment years 1983-84 to 1987-88 – Whether service of notice is condition precedent for passing orders under section 147 – Held, yes – Whether respondent made attempt to serve notice under section 148 to appellant by registered post but it was not shown that either appellant refused to take service of notice or that appellant was not available at his residence or that there was no one willing to accept service on his behalf, service of notice could not be said to be properly effected and, therefore, assessment order passed u/s 147 based on service was also bad in law –Held, yes (In favor of assesee).

For taking any action u/s 148 a valid service of the notice is precondition. For reference kindly refer a direct decision of Shri Chetan Gupta vs. ACIT(2014) 160 TTJ 0009 (Del)For valid assumption of jurisdiction to frame a reassessment, a proper and valid service of notice u/s 148 on assessee is mandatory requirement violation thereof will result in quashing of the reassessment proceedings. Assessee has demonstrated that the notice was issued/sent at an address different than the one mentioned in his return of income. Department also admits that the notice was served not on assessee but on one Shri Ved Prakash who according to assessing officer is a responsible person working for the group entities of assessees family and this amounts to a proper service on assessee. These facts are admitted by the department which are evidenced by the remand report and field correspondence mentioned above. Assessee’s contention that said Ved Prakash was neither his employee nor his authorized agent, remains uncontroverted. Merely because he appeared in some other group entities will not detract the fact that notice was not served on assessee. During the course of reassessment AO was intimated about non service of notices u/s 148 and 143(2) but AO failed to take cognizance of assessee’s intimation and objections. From the assessment record, remand reports, field correspondence and oral contentions, department could not demonstrate before us that notice u/s 148 was served on the assessee for A.Y. 2001-02. In the absence of a valid service of notice u/s 148 on the assessee the reassessment proceedings for AY2001-02 are bad in law, consequently they are quashed. CIT vs. Hotline International Pvt. Ltd 296 ITR 333 (Del); Hotel Blue Moon 321 ITR 362 (SC), followed.

The above decision has been affirmed by the Honble High Court Delhi refer CIT v/s Chetan Gupta 94 CCH 13(Del).

In the case of A.K. Kochandi & Ors.vs. Agricultural Income Tax Officer (1975) 43 CCH 0749 KerHC (1976) 1976 CTR 0072 (KER) : (1977) 110 ITR 0406held that Assessment—Best judgment assessment—Validity—Notice not served on assessee in accordance with Order V, rr. 17, 18 & 19 etc.—Ex parte assessment not valid. On this preposition also kindly refer a direct decision of Jodhpur Bench in the case of Sh. Panna Lal Bhil v/s ITO in dt. 11.06.2014. Where it has been held that the notice u/s 148 of the Act is a jurisdictional notice and its service has to be as per law, failing which the entire edifice built on the basis of that notice will crumble down as a pack of card fall. Copy is enclosed.

Thus on the above legal position of law the notice u/s 148 or proceedings u/s 147/148 and consequent assessment order liable to quashed.

2. Approval of 12 assessee;s in one letter illegal: Further the ld. Pr. CIT/JCIT has given one consolidated approval of 12 assessee’s through one letter dt. 21.03.2018(PB7) and this show how the Pr. CIT/JCIT has acted in formal way. On perusal of the assessment record and documents it is found that the approval was not in original letter or documents. The document of approval was in the photocopy. Further on the satisfaction on reasons there is no date on signature of the Pr. CIT and JCIT hence it is not clear that when they signed on the reasons recorded by the ld. AO there is no date given by the ld. AO. How the approval of all the12 different assessee’s can be given in one documents, when all are the independent or separate assessee and reasons are different. Thus it all shows how the wrong and illegal manner has been adopted by all the authorities. On this preposition and issue kindly refer the decision of this Honble ITAT in the case of Sh. Satya Naraya Bairwa v/s ITO in & 869/Jp/2018 dt. 15.09.2021 Copy is enclosed, wherein under the same facts and circumstances the Honble ITAT has held that -

“20. The ld. A/R has also drawn our attention on the approval of the Pr. CIT placed at page Nos. 7-8 of the paper book and also from the assessment record placed before us, we found that he has given one consolidated approval of 56 different assessee’s in one shot through one letter dated 29.03.2016 which is even not signed by him but signed by ITO (T&J), who is not a competent authority to give and signed the approval letter, which shows how the PR. CIT has acted in very formal way. When we examined of the assessment record, it is gathered that the approval was in photocopy and not in original or there was no original letter or documents of approval. Further the name of the assessee was at Sr. 46 out of 56 assessee's and even there was no tick on the name of the assessee in the approval list, which creates a doubt that the approval has been received before the issue of notice u/s 148 of the Act as the approval letter lying on the file after issuance of the notice u/s 148 or not before or attached with the notice u/s 148 and may reach in the office of the AO after 31.03.2016. Thus, in our view, approval u/s 151 cannot be given of all the 56 assessee's in a single documents, as all assessee's are the independent and separate also the reason recorded are different in each case and it is not possible that there shall be same reasons. Looking to these facts and record it is also held that the procedures and way of approval and satisfaction is not proper. Here AO initiated proceedings u/s. 147 r.w.s. 148 on basis of information furnished and CIT gave approval without applying his mind in slipshod manner. As approval/sanction given by CIT was without recording his own independent satisfaction as noted above, therefore the reopening was not sustainable as per above judicial pronouncements and irregularities noted. There were clear irregularities and violation of the provision of Sec. 151 of the Act and very foundation of the issuance of the notice u/s 148 was not as per law. Then in that eventuality, we are of the view that the issuance notice 148 of the Act and all the consequent proceedings and assessment order passed was not in accordance with law. The case laws relied upon by the ld. DR are not tenable in the facts and circumstances of present case, therefore, considering the totality of facts and circumstances of the case as well as the judicial pronouncements qua the issue under consideration, we find merit in the contention of the ld AR, therefore, we quash the proceedings U/s 147 of the Act.”

Here is the same position.

3. No income escaped: further it is submitted that the notice u/s 148 can be issued only when there is any escape of income because S. 147 provides that If the Assessing Officer has reason to believe that an income chargeable to tax has escaped assessment for any assessment year, here the assessee has not escaped any income because the assessee has never having the undisclosed or unexplained income. Which shows that there was no escapement of income by the assessee, as the assessee has not purchased the property during the year the same was purchased in the year 1999 by the family members who paid the consideration in the year 1999. Hence if there is neither the escapement of income by the assessee nor proved then the notice issued u/s 148 is invalid.

CIT vs. Shree Rajasthan Syntex Ltd. (2009)313 ITR 231 (Raj.) SLP dismissed (2009) 313 ITR (St.) 27 (SC); Sun. Pharmaceutical Industries Ltd. Vs. DY. CIT (2016)287 CTR(Del.) 621;

The Impugned initiation of assessment proceedings had started by the AO on borrowed satisfaction but not their own which is mandatory condition of the law as provided for re –opening of any assessment. Section 147 of Act clearly specify. In impugned case the Ld. AO had claimed that a certain transaction of bogus LTCG on the basis of statements as recorded of third party and Ld. AO could not have been made any enquiry regarding both the facts and without conducting any enquiry/investigation re-opened the case and issued the notices which is completely based on perverse findings and deserve to be declared as null and void ab initio.

Here in impugned case AO’s self-satisfaction regarding escapement of income is not bringing on record which is mandatory condition of law under section 147 of Income Tax Act, 1961, it could have been come only after conducting enquiry and investigation but Ld. AO did not make such therefore complete re-assessment proceedings come under suspicious circle, various honorable courts propounded and led on this aspect and issue direction to handle such situation.

Similarly in the case of CIT v. Indo Arab Air Services (2016) 130 DTR 78/ 283 CTR 92 (Delhi)(HC) it was held that mere information that huge cash deposits were made in the bank accounts could not give the AO prima facie belief that income has escaped assessment. The AO is required to form prima facie opinion based on tangible material which provides the nexus or the link having reason to believe that income has escaped assessment. The AO was also required to examine whether the cash deposits were disclosed in the return of income to form an opinion that income has escaped assessment.

The power to reopen an assessment is conditional on the formation of a reason to believe that income chargeable to tax has escaped assessment. The power is not akin to a review. The existence of tangible material is necessary to ensure against an arbitrary exercise of power. Aventis Pharma Ltd. vs. ACIT (2010) 323 ITR 570 (Bom).

In the matter of Varshaben Sanatbhai Patel v. ITO (2016) 282 CTR 75 (Guj.)(HC) Hon’ble Gujarat High court held that:-

“S. 147 : Reassessment – Within four years – The basis of formation of belief by the AO that income liable to tax has escaped assessment must form part of reasons recorded by him – AO could not initiate reassessment proceedings merely on the basis of information supplied by DGIT (Inv.) which is an external source of material not forming part of reasons recorded – Thus basic requirement of section 147 was not satisfied and the reassessment notices were quashed. [S. 143(1)] For the relevant assessment years, the returns filed by the assessee were processed under section 143(1). Subsequently, the AO issued notice under section 148 seeking to reopen the assessment on ground that on verification of details available on record, it was found that assessee had made bogus purchases and to that extent profit had escaped assessment from tax. The assessee filed its objections to the reopening of assessment. The AO passed an order rejecting the objections raised by the petitioner which showed that the reopening was based on material received from the DGIT (Inv.), Mumbai, pursuant to inquiries made by him (the DGIT). On writ filed by the petitioner against reassessment, the HC observed that the material on the basis of which the AO sought to assume jurisdiction under section 147 of the Act, was the information received from an external source viz., from the DGIT and not the material on record as reflected in the reasons recorded. Since the belief of the AO was not based upon the material on record, but on some other material from an external source which did not find reference in the reasons recorded by him, it was held that the basic requirement of section 147 was not satisfied. Hence, the HC quashed and set aside the impugned notices under section 148 of the Act. (AY. 2009-10 to 2011-12)”

In an identical matter of “Hitesh Ashok Vaswani Vs DCIT (ITAT Ahmedabad) dated 12/11/2020” Hon’ble ITAT Ahemdabad held that “the information received from investigation wing, emanating from the search records would not per se empower the Assessing Officer to exercise the power of reassessment. Such information with regard to escapement of income which comes into possession of an Assessing Officer has to be processed and, on the basis, thereof an opinion has to be formed objectively before issuing notice under Section 148 of the Act to an assessee”:-

“87. Coming to the second question of the assessee, we note that the power of reassessment is conferred on the Assessing Officer by the provisions of Section 147/148 of the Act. But such power is subject to the certain conditions laid down under Section 147/148/149/151 of the Act. One of the very first condition is that before issuing notice under Section 148 of the Act for reassessment proceeding under Section 147 of the Act the AO must have reason to believe that income has been escaped assessment. Thus the AO for that purpose has to record a satisfaction note which must fulfill the parameters of the undefined expression ‘reason to believe’. The expression ‘reason to believe’ occurring in Section 147 of the Act has been interpreted by various Hon’ble High Courts as well as the Hon’ble’ Supreme Court of India in numerous cases. The question in the present case is as to whether the information received from the investigation wing/search team would constitute ‘reason to believe’ empowering the Assessing Officer to reopen the assessment. Indeed the ‘reason to believe’ being a condition precedent for reopening the assessment is a question of jurisdiction.

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

Ground No. 2 : Addition of Rs.28,02,415/- on account of alleged unexplained investment in purchase of property. FACTS : Kindly refer facts mentioned in GOA 1.

SUBMISSION: “1. No provisions has been applied by the ld. AO: At the very outset it is submitted that the ld. AO made the addition of Rs.28,02,415/- but he has not invoked or applied any provisions of law while making the addition. The ld. AO has not stated under what provision of law he has made the addition and under what head whether, under business or trading income, agriculture income, capital gain or u/s 48, 56 or u/s 68 or 69. Thus the addition so made without any provision of act is also against the law and liable to be deleted on this ground alone. When the ld. AO has not invoked any provision of Act/law then also how the ld.AO can make the addition. When in the law and in the Act for each and every offence specific provisions are given to held any person as victim defaulter, then without applying any provision for that a person cannot be taxed and penalized. When the ld. AO himself has not stated that under what provision the assessee liable to be taxed or penalized or under what provision his offence falls then how the addition can be made.

On this preposition we also would like to draw your kind attention toward the recent decision of this Honble ITAT in the case of Arvind Kumar Nehra V/s ITO Ward 7(1), Jaipur 32/Jp/2024 dt 10.04.2024 where it has been held

“It is also noteworthy to mention from the entire conspectus of the case that the AO has also not invoked any provisions of IT Act while making the lump Sum addition of Rs.50,00,000/- for cash deposits in the bank account during the Demonetization Period, Unsecured Loan & capital introduced. Hence, in our view lump-sum addition cannot be made under these accounts. The AO must have referred the specific amount with specific details and documents which he has not provided and as to what basis lump sum addition has been made and also failed to mention that on which account and as to what amount of addition consists of. It is also noted that the AO has not stated under which provisions or section he has made the lump-sum addition either u/s 68 or 69 or 69A or trading or u/s 56 i.e. other sources. It may be worthwhile to mention that when in the Act for every additions, the provisions or section has been provided by the legislature, otherwise there shall be no meaning of the Act. Hence the addition is wrongly made against the Act . (vide page 21-22 of the order).”

The same has also been held recently in the case of Rajendra Kumar Meena v/s ITO Swaimodhopur in dt. 2507.2024.

In the case of M/S. Pasari Casting And Rolling Mills ... vs Income-Tax Department Through Its ... on 25 January, 2024 in W.P. (T) No. 1850/2022 dt. 25.01.2024 where it has been held that “ Furthermore, the recorded reason is also silent under which provision of the Act the additions are sought to be made i.e. whether Section 68, Section 69A, Section 69B, Section 69C or any other provisions of the Act. It is not the case of the Revenue that the Petitioner has paid any cash to the so-called accommodation entry provider to obtain the accommodation entry to plough back own funds, hence, there is no ground/material to form reasonable belief of any accommodation entry. (Refer PCIT Vs. Meenakshi Overseas P. Ltd. reported in [2017] 395 ITR 677 (Del).

In the case of Oryx Fisheries Pvt. Ltd. Vs. UOI reported in (2010) 13 SCC 427, it is held by the Hon'ble Supreme Court that the show cause notice should give the noticee a reasonable opportunity of making objections against proposed charges indicated in the notice and the person proceeded against must be told the charges against him so that he can make his defense and prove his innocence. In the entire course of the proceeding, at no stage the Petitioner is made aware of the provisions of law which have been contravened and/or under which the additions are sought to be made which is in gross violation of the principles of natural justice and the procedure adopted by the Department is not fair or proper.

In the case of New Delhi Television Ltd. Vs. DCIT reported in [2020] 424 ITR 607 (SC), it is held by the Hon'ble Apex Court that the Assessee must be put to notice of all the provisions on which the Department relies.

Hence also the addition is liable to be deleted in full.

2. Correct facts misinterpreted by the ld. CIT(A):- 2.1 As the assessee is an agriculturist since long period, has not filed her return on income being no taxable income during the year . The ld. AO on the basis of information received from Income tax officer (I&CI) Alwar letter No 157 dated 23.10.2017 along with copy of registry dated 29.10.2010 has issued notice u/s 148 of the income tax act 1961 .

2.2 As we have already stated above that the assessee has not received any notice u/s 148 dated 27.03.2018. And also nor any notice u/s 142(1) and 144 of the Income tax Act 1961dated 18.10.2018, 05.12.2018. Thus the assessee could not submit her reply before the ld. AO despite non services of notices the ld. AO passed the order u/s 144 of the Income tax Act 1961 by making an addition of Rs. 28.02.415/- as Income from alleged undisclosed sources under the head "Income from other sources" for the A.Y 2011-12. The reason for making addition by the ld. AO was the assessee’s share of Rs. 28,02,415/- in purchase of property jointly with other persons namely Smt. Vimla Devi.

2.3 No any notice served upon the assessee:Further without serving the notices u/s 142(1), 144 or SCN no addition can be made in the entire assessment order the ld.

AO has only stated that the notice issued but he has not brought any proof of service of notice and he has not stated that what recourses he has adopted for service of notice. Hence also the assessment order is illegal invalid and liable to be quashed as well as the addition is also liable to be deleted in full. 2.4 Further as the correct facts are that that the assessee has made a purchase registry of agricultural land Khasra number 3415 rakba 4.87 hectre from Kanhaiya Lai S/o Sukh Lai, Yogesh Kumar S/o Nanga, Smt Kamli W/o Nangaa, Kavita D/o of Nanga resident of Dholawas Tehsil Lalsot along with Vimla Devi w/o Shri Deen Dayal on dated 29.10.2010 for Rs 49,00, 000/-. The registry cost was 7,04,830/-. Total Cost Rs 56,04,830/-. But the above land was purchased and taken possession by her husband Sh. Ram Sahay S/o Sukdev R/o Daglov Tehsil Dausa along with Smt Rukmani W/o Shri Ramphool on dated 25.05.1999 at a sales consideration of Rs 4,00,000/- and made payment of sales consideration in cash also vide sales agreement dated 25.09.1999 duly notarized and possession has been taken by the purchaser on that date i.e 25.05.1999. At the time of this agreement and it had been decided by both the parties that registry can be done any time when the purchaser required the same. And he can do agricultural work, construction etc on that agricultural land.

On the basis of agreement dated 25.05.199 during the year 2010-11, Ram Sahay S/o Sukh Dev has decided to do registry of its share in above agricultural land in the favour of his Wife Smt. Prabhati Devi and Smt Rukhmani Devi W/o Shri Ram Phool has decided to do registry of her share in above agricultural land in favour of her daughter in law Smt. Vimla Devi W/o Deen Dayal. Thus during the year 2010-11 no financial transaction was executed for purchase of above Khasra number 3415 rakba 4.87 hectre by the purchaser of above land because the possession of the above possession and payment has already been done by purchaser family member on dated 25.05.1999.

As per income tax act 1961, the transfer of immovable assets will be deemed when the possession of assets was handed over to purchaser by seller and payment of sales consideration has been completed. In our case possession was handed by the seller to purchaser on dated 25.05.1999 and payment of sales consideration was also made on 25.05.1999. So the actual transfer of this immovable agriculture land was done on dt. 25.05.1999 as per definition of transfer of immovable assets under I T Act 1961. Hence, the addition made by the ld. AO of Rs 28,02,415/- in A.Y. 2011-12 is illegal and unjustified because transfer of assets has already been taken place on dt. 25.05.1999 say A.Y 2000-2001. In support we had filled the copy of purchases agreement dated 25.05.1999(PB17-19) and copy of purchases registry dated 29.10.2010(PB8-16) before the ld. CIT(A).

However the ld. CIT(A) has wrongly stated that “The sale agreement also states that the total consideration of Rs.4,00,000/- was paid at the time of agreement in the year 1999. It is however, not clear how the payment is made i.e. whether in cash or by cheque. Moreover no evidence of payment of Rs.4,00,000/- is furnished and the only aversion about the payment is in the agreement. As on perusal of the page 2 para 1 PB (PB 19) where it has been written that “ we the seller had received entire amount in cash from the purchasers and given the real physical possession before us” (और हम �व�ेता गणनी �ेतागण से �व�य धन क� स�पूण� रा�श अपने �ह�से अनुसार �ेतागण से रोकड़ी �ा�त कर उ�त �व�य क� गयी भू�म पर क�जा वा�त�वक �प से क�जा हमारे समान करा �दया|)Thus when the payment had given in cash then how the ld. CIT(A) can say that no mode of payment is given. How the ld. CIT(A) can say there is no evidence of payment when in the agreement itself it is mentioned, if he was having any doubt he could have asked to the ld. AO to make the inquiry from the seller and purchaser, and when the payment was made by the family member in the year 1999, then how the ld. CIT(A) can ask for the source in this year and when the payment has been made by the family members.

Further the other allegation of the ld. CIT(A) that “It may be pointed out that all the transaction of immovable property are necessarily required to be register with a Registrar of Properties alongwith the payment of registration cost for giving the transaction legal and enforceable title to the parties. There is no option with transacting parties to either not register the document or register it at later date. Though the parties to the transaction may have agreed to postpone the registration of document to a later date, they do not have such option and the legal rights in the property are created only upon the registration of document and payment of requisite charges. The mere fact that the purchaser was permitted to carry out agricultural activity in the land does not allowed the transaction to become legal and enforceable. The purchase deal is not complete without registration (which is the case happens in 2010).”

However on perusal of these allegations it is clear that the same are baseless and far from the act and there is no link with the income tax act. The observations of the ld. CIT(A) are based on assumption, presumptions and suspicion and has intentionally and blindly ignored these very vital facts of the case and proceeded on their own guess work, assumption, presumption and suspicion and it is the settled legal position that no addition can be the basis of suspicion, assumptions’ and presumption. An allegation remains a mere allegation unless proved. Suspicion may be strong however cannot take the place of reality, are the settled principleskindly refer Dhakeshwari Cotton Mills 26 ITR 775 (SC) also refer R.B.N.J. Naidu v/s CIT 29 ITR 194 (Nag), Kanpur Steel Co. Ltd. v/s CIT 32 ITR 56 (All).Also refer CIT v/s KulwantRai 291 ITR 36( Del). In CIT v/s Shalimar Buildwell Pvt Ltd 86 CCH 250(All) it has been held that the AO made the addition merely on suspicion which was not desirable in the eye of law.

Further in the income tax act nowhere given any prohibition that an agreement must be registered and payment made earlier shall not be accepted in want of the registration of the agreement. Here the matter of source and payment not of the registration of the documents. And the documents can be registered at any time. And in the income tax only condition of payment of full consideration and possession which had already been fulfilled in the present case and the ld. CIT(A) has not disprove the same with the help of any documentary evidences. For transfer definition kindly see definition in sec 2(47) of the IT Act.

Hence all the above details may kindly be considered and taken on records.

Prayer: Hence in view of the above facts, circumstances and legal position entire addition may kindly be deleted in full.”

6.1 Before me, the ld. A/R of the assessee submitted that the assessee was not served with the notice under section 148 of the Act. In this regard, he also submitted that the assessment order was silent in respect of service of notice on the assessee, the assessment order only mentioned that the notice under section 148 was issued. The AO has not placed any evidence that the notice under section 148 was served on the assessee. In this regard, the ld. A/R placed reliance on various cases laws. For taking any action under section 148 a valid service of the notice is pre-condition. Reference is made to judgment of Hon’ble Delhi High Court in case of Shri Chetan Gupta vs. ACIT (2014) 160 TTJ 09 (Del.). For valid assumption of jurisdiction to frame a reassessment, a proper and valid service of notice u/s 148 on assessee is mandatory requirement violation thereof will result in quashing of the reassessment proceedings. Assessee has strongly demonstrated that the notice was not served on him, on the contrary, AO also has not brought on record any evidence that the notice was actually served on the assessee. Reference is also made to the decision of Hon’ble Calcutta High Court in the case of Keshab Narayan Banerjee, 238 ITR 694(Cal.) wherein the question was Whether service of notice is condition precedent for passing orders under section 147 – Held, yes – Whether respondent made attempt to service notice under section 148 to appellant by registered post but it was not shown that either appellant refused to take service of notice or that appellant was not available at his residence or that there was no one willing to accept service on his behalf, service of notice could not be said to be properly effected and, therefore, assessment order passed under section 147 based on service was also bad in law – Held, yes.

6.2 The ld. A/R has also drawn my attention on the approval of the Pr. CIT placed at page no. 7 of the paper book and also from the assessment record placed before me, I found that the ld. CIT (A) has given one consolidated approval of 12 different assessees in one short through one letter dated 21.03.2018 which is even not signed by him but signed by ITO, who is not a competent authority to give and sign the approval letter, which shows how the Pr.CIT has acted in very formal way. It is also noticed from the assessment record that the approval was in photocopy and not in original or there was no original letter or documents of approval. Further, on the satisfaction on reasons, there is no date on signature of the Pr. CIT and JCIT hence it is not clear that when they signed on the reasons recorded by the AO, there is no date given by the AO. How the approval of all the 12 different assesses can be given in one document, when all are independent or separate assessee and reasons are different.

Thus it all shows that wrong and illegal manner has been adopted by all the authorities.

On this preposition and issue, reference is made to decision of Coordinate Bench of the Tribunal in the case of Shri Satya Narayan Bairwa vs. ITO in & 869/JP/2018 dated 15.09.2021 wherein it has been held as under :-

“20. The ld. A/R has also drawn our attention on the approval of the Pr. CIT placed at page Nos. 7-8 of the paper book and also from the assessment record placed before us, we found that he has given one consolidated approval of 56 different assessee’s in one shot through one letter dated 29.03.2016 which is even not signed by him but signed by ITO (T&J), who is not a competent authority to give and signed the approval letter, which shows how the PR. CIT has acted in very formal way. When we examined of the assessment record, it is gathered that the approval was in photocopy and not in original or there was no original letter or documents of approval. Further the name of the assessee was at Sr. 46 out of 56 assessee's and even there was no tick on the name of the assessee in the approval list, which creates a doubt that the approval has been received before the issue of notice u/s 148 of the Act as the approval letter lying on the file after issuance of the notice u/s 148 or not before or attached with the notice u/s 148 and may reach in the office of the AO after 31.03.2016. Thus, in our view, approval u/s 151 cannot be given of all the 56 assessee's in a single documents, as all assessee's are the independent and separate also the reason recorded are different in each case and it is not possible that there shall be same reasons. Looking to these facts and record it is also held that the procedures and way of approval and satisfaction is not proper. Here AO initiated proceedings u/s. 147 r.w.s. 148 on basis of information furnished and CIT gave approval without applying his mind in slipshod manner. As approval/sanction given by CIT was without recording his own independent satisfaction as noted above, therefore the reopening was not sustainable as per above judicial pronouncements and irregularities noted. There were clear irregularities and violation of the provision of Sec. 151 of the Act and very foundation of the issuance of the notice u/s 148 was not as per law. Then in that eventuality, we are of the view that the issuance notice 148 of the Act and all the consequent proceedings and assessment order passed was not in accordance with law. The case laws relied upon by the ld. DR are not tenable in the facts and circumstances of present case, therefore, considering the totality of facts and circumstances of the case as well as the judicial pronouncements qua the issue under consideration, we find merit in the contention of the ld AR, therefore, we quash the proceedings U/s 147 of the Act.”

Looking to these facts and record, it is also held that the procedures and way of approval and satisfaction is not proper. Here, the AO initiated proceedings under section 147 read with section 148 on basis of borrowed information received from the Sub Registrar for valuation of the immovable property, without verifying the correctness of the information and CIT gave approval without applying his mind in slipshod manner. As approval/sanction given by CIT was without recording his own independent satisfaction as noted above, therefore, the reopening was not sustainable as per above judicial pronouncements and irregularities noted. Thus, in that eventuality, I am of the view that the issuance of notice under section 148 of the IT Act and all the consequent proceedings and assessment order passed was not in accordance with law. The case laws relied upon by the ld. D/R are not tenable in the facts and circumstances of the present case, therefore, considering the totality of facts and circumstances of the case as well as the judicial pronouncements qua the issue under consideration, I find merit in the contention of the ld. A/R, therefore, I quash the proceedings under section 147 of the Act.

On merits :

Without invoking the provision of Act/law, the AO cannot make the addition. For each and every offence, specific provisions are given in the law/Act to hold any person as victim defaulter, therefore, without applying any provision for that a person cannot be taxed and penalized. As the AO himself has not stated under what provision the assessee is liable to be taxed or penalized or under that provision his offence falls, therefore, addition cannot be made against the assessee. On this preposition, I rely on the recent decision of Coordinate Bench of the Tribunal in the case of Arvind Kumar Nehra vs. ITO Jaipur in dated 10.04.2024 wherein it has been held as under :-

“It is also noteworthy to mention from the entire conspectus of the case that the AO has also not invoked any provisions of IT Act while making the lump Sum addition of Rs.50,00,000/- for cash deposits in the bank account during the Demonetization Period, Unsecured Loan & capital introduced. Hence, in our view lump-sum addition cannot be made under these accounts. The AO must have referred the specific amount with specific details and documents which he has not provided and as to what basis lump sum addition has been made and also failed to mention that on which account and as to what amount of addition consists of. It is also noted that the AO has not stated under which provisions or section he has made the lump-sum addition either u/s 68 or 69 or 69A or trading or u/s 56 i.e. other sources. It may be worthwhile to mention that when in the Act for every additions, the provisions or section has been provided by the legislature, otherwise there shall be no meaning of the Act. Hence the addition is wrongly made against the Act . (vide page 21-22 of the order).”

Similar view has been taken by the Coordinate Bench of the Tribunal in the case of Rajendra Kumar Meena v/s ITO Swaimodhopur in dated 25.07.2024.

I draw strength from the judgment of Hon’ble Jharkhand High Court at Ranchi In the case of M/S. Pasari Casting And Rolling Mills ... vs. Income-Tax Department in W.P.

(T) No. 1850/2022 dated 25.01.2024 wherein it has been held that “ Furthermore, the recorded reason is also silent under which provision of the Act the additions are sought to be made i.e. whether Section 68, Section 69A, Section 69B, Section 69C or any other provisions of the Act. It is not the case of the Revenue that the Petitioner has paid any cash to the so-called accommodation entry provider to obtain the accommodation entry to plough back own funds, hence, there is no ground/material to form reasonable belief of any accommodation entry. (Refer PCIT Vs. Meenakshi Overseas P. Ltd. reported in [2017] 395 ITR 677 (Del).

I rely on the judgment of Hon’ble Supreme Court in the case of Oryx Fisheries Pvt. Ltd. Vs. UOI reported in (2010) 13 SCC 427, wherein the Hon'ble Supreme Court has observed that the show cause notice should give the noticee a reasonable opportunity of making objections against proposed charges indicated in the notice and the person proceeded against must be told the charges against him so that he can make his defense and prove his innocence. In the entire course of the proceeding, at no stage the Petitioner is made aware of the provisions of law which have been contravened and/or under which the additions are sought to be made which is in gross violation of the principles of natural justice and the procedure adopted by the Department is not fair or proper.

In the case of New Delhi Television Ltd. Vs. DCIT reported in [2020] 424 ITR 607 (SC), it is held by the Hon'ble Apex Court that the Assessee must be put to notice of all the provisions on which the Department relies.

As stated herein above, the recorded reason/impugned assessment order is silent under which provision of the Act the addition is sought to be made. It is well settled that the reasons cannot be supplemented by assessment order or affidavit.

Unless the assessee is put to the notice as to the exact contravention or provisions of law under which assessment or additions are sought to be made, the assessee cannot defend his case.

8. Having regards to the facts and circumstances of the case and the case law cited above, I set aside the findings of the revenue authorities and the addition made and sustained by the lower authorities deserves to be deleted. Therefore, I allow the present appeal on merits as well.

Order pronounced in the open court on 01/10/2024.