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Income Tax Appellate Tribunal, DELHI BENCHES, ‘E’ BENCH, NEW DELHI
Before: SHRI S. RIFAUR RAHMAN & SHRI YOGESH KUMAR U.S.
(A.Y 2017-18) Om Kar Singh Vs. ITO House No. 495, Sadarpur Ward – 5 (2) (1) Colony, Sector-45, Noida Noida PAN No.AAIPO0480E Appellant Respondent Assessee by Sh. Amit Goel, CA Sh. Pranav Yadav, Advocate Revenue by Sh. Shankar LalVerma, Sr.DR Date of Hearing 09/09/2025 Date of Pronouncement 29/10/2025 ORDER
PER YOGESH KUMAR, U.S. JM:
1. The present appeal is filed by the Assessee against the order of Ld. Commissioner of Income Tax Appeals/National Faceless Appeal Centre (‘Ld. CIT(A) for short) dated 10/06/2024 for the Assessment Year 2017-
The assesseehas raised following grounds of appeal :-
1. On the facts and circumstances of the case and in law, no notice under section 143(2) was issued/served on the appellant, hence the assessment order passed by the AO is illegal, bad in law and without jurisdiction and CIT(A) erred in not holding so.
2. On the facts and circumstances of the case and in law, the CIT(A) erred in confirming the addition made by the Ld. Assessing Officer of Rs. 1,32,46,215/- on account of alleged unexplained money u/s 69A of the Act.
3. On the facts and circumstances of the case and in law, the notice u/s 148 issued in this case is bad-in-law, illegal, without jurisdiction and barred by limitation and, therefore, the said notice u/s 148 along with assessment order passed on the foundation of such notice are liable to be quashed and CIT(A) erred in not holding so 4. On the facts and circumstances of the case and in law, the reassessment proceedings initiated are contrary to the provisions of law including the specific provisions of section 147 to section 151 of Income Tax Act, 1961 and therefore, the reassessment proceeding initiated along with assessment order passed are liable to be quashed and CIT(A) erred in not holding so. 5. On the facts and circumstances of the case and in law, the order passed by the learned assessing officer and the addition made therein is bad-in-law and CIT(A) erred in not holding so. 6. On the facts and circumstances of the case and in law, the order passed by CIT (A) is against the principles of natural justice. 7. On the facts and circumstances of the case and in law, the CIT(A) erred in not adjudicating the ground of appeal on merit.
Additional grounds of Appeal
“1. On the facts and circumstances of the case and in law, no notice u/s 143(2) was issued/served on the appellant, hence the assessment order passed by the A.O. is illegal, bad in law and without jurisdiction and Ld. CIT(A) erred in not holding so.
2. On the facts and circumstances of the case and in law, the notice u/s 148 issued in this case is bad-in-law, without jurisdiction and barred by limitation and, therefore, the said notice and assessment order passed is liable to be quashed.
3. On the facts and circumstances of the case and in law, the reassessment proceedings initiated are contrary to provisions of Section 147 to Section 151 of the Act and therefore, the assessment order passed is liable to be quashed.
4. On the facts and circumstances of the case and in law, the order passed by the Ld. A.O. and the addition made therein is abd-in-law and Ld. CIT(A) erred in not holding so.”
Brief facts of the case are that,the assessee filed its return of income u/s. 139(1) of the Income Tax Act, 1961 ('Act' for short) for A.Y. 2017-18. The assessment was reopened u/s. 147 of the Act and a notice u/s. 148 of the Act has been issued on 24.03.2021. An assessment order came to be passed on 30.03.2022 Under Section 147 r.w.s. 144 r.w.s. 144B of the Act by making an addition of Rs.1,32,46,215/- u/s. 69A of the Act on account of cash deposited during the year as unexplained money and AO by involving provisions of section115BBE of the Act, imposed 60% rate on the said addition.
3. Aggrieved by the assessment order dated 30.03.2022, Assessee preferred an appeal before the CIT(A). The CIT(A) vide order dated 10.06.2024, dismissed the appeal filed by the assessee by confirming the addition made by the AO. As against the order of the CIT(A) dated 10/06/2024, assessee preferred the present appeal on the grounds mentioned above.
4. The Ld. Counsel for the assessee arguing on Ground No. 4 and additional Grounds of Appeal vehemently submitted that the case of the assessee was selected u/s. 148 of the Act on the reason that the ‘assessee has not filed ITR for A.Y.2017-18’, however the assessee has duly filed the return of income on 15.09.2017 for the year under consideration. Further submitted that, the reasons recorded by the AO is contrary to the fact and in a mechanical manner,wherein not examined so called information and not broughton record the evidence from the information. Thus, the AO committed error in recording the reasons to believe about an alleged escapement of income therefore, the notice issued u/s 148 of the Act has been issued without applying own mind. The Ld. AR relying on judicial precedent in support of his contentions, sought for allowing the Ground No. 4 of the Assessee and sought for setting aside the Assessment Order.
The Ld. DR vehemently submitted that the assessment proceedings have been initiated in accordance with law and with an intention to recover the proper tax due from the assessee. The proceedings have been initiatedstrictly following the provisions of Act, which requires no interference in the hands of the Tribunal. Thus, sought for dismissal of the Appeal of the Assessee.
6. The Ld. DR has also submitted that written submissions which is reproduced as under:-
In the above case, it is humbly submitted that I have argued that first of all, additional grounds should be decided, and then the case should be decided, but the Hon'ble Bench has heard the matter on the basis of reasons recorded by the AO. It is observed in one other case, which was presented by me, that the Hon'ble Bench allowed the filing of a written submission after hearing the case. Hence, in the interest of justice, I am submitting following facts before the Hon'ble Bench, which may be relevant in the present appeal:
The lid. Counsel of the appellant has pointed out some
procedural defects in the reasons recorded by the AD, which are as under.
(a) The assessee has filed ITR physically in ASK, and AO has mentioned in reasons that the assessee has not filed any ITR for the AY 2017-18.
In this regard, it is submitted that the case was reopened in the NMS category, and on verification by the AO, it was revealed that "No IT'R" was filed by the appellant. On perusal of the copy of ITR-V, it is seen that it was physically submitted on 16.09.2017. The correctness of ITR can be examined by the AO only. It was validly filed or not, and due taxes were properly paid or not. If it was received in AO's office, why is it not uploaded or processed?
(b) Approval by the Joint CIT or by the Pr. CIT:
In this regard, it is submitted that approval was granted by the Sh. Pramod Kumar Verma, JCIT Range-1 Noida, which is as per the provisions of section 151 of the I.T. Act, 1961.
However, in the last part of the reasons, the Principal
Commissioner of Income Tax is mentioned, which appears to be an inadvertent typographical error that may be cured u/s 292B of the Act.
In view of the above fact, it is prayed that the above facts may be considered in the interest of justice.
We have heard the parties and perused the material. The case of the assessee was reopened u/s. 147 of the Act. The main reason for reopening was that ‘assessee has not filed ITR for A.Y. 2017-18’. The said fact of‘not filing of ITR’has been repeatedly mentioned in the reasons recorded by the Assessing Officer. The copy of the reasons recorded which has been attached along with the approval accorded 151 of the Act is reproduced as under : -
ANNEXURE
“The assessee, Shri Omkar Singh PAN: AAIPO0480E is an Individual. The assessee has not filed ITR for the A.Y. 2017-18.
2 As per information under Multi Year NMS (Non-filer Management
System) received through the Systems in the case of the aforesaid viz. Shri Omkar Singh it is revealed that he has deposited cash of Rs. 82,085,400/- during FY 2016-17 corresponding to AY 2017-18.
On perusal of ITS data it is noticed that the assessee has also deposited Rs. 7,00,97,620/-. Thus total cash deposited by the assessee during F.Y.2016-17 corresponding to A.Y. 2017-18 is Rs.
15,21,83,020/- (Rs. 82085400+70097620). The assessee also has interest and contract income from Mother dairy Fruit & Vegetable
Private Limited and Punjab National Bank 34,197/- and 43,646/- respectively.
3. On perusal of the ITS/26 AS data reveals that the assessee has deposited cash of Rs. 15,21,83.020/- in current account and also income from Interest and contract services during the Α.Υ. 2017-18
4. During the preliminary verification of this transaction, it is found
that the assessee has not filed ITR for the year under consideration ie. A.Y. 2017-18. It is further revealed from perusal of the E-filing
Portal that the assessee has not filed any ITR for any of the year.
5. From the above facts, it is established that the assessee was under obligation to file his ITR for the AY 2017-18, as the cash
deposited exceeds the maximum amount which is not chargeable to tax, therefore, not only he was required to file his ITR but had to pay due taxes, but he neither filed his ITR nor paid taxes.
6. In view of the above, on the basis of information available on record, I have reasons to believe that income of Rs. 15,22,60,863/-, chargeable to tax, as stated above, has escaped assessment for AY 2017-18 within the meaning of provisions of section 147 of the I.T. Act, 1961.
7. In this case, no return of income was filed for the year under consideration. The assessee has filed ITR for the A.Y. 2014-15,
2018-19,2019-20 and 2020-2021. Accordingly, in this case, no assessment was made and the only requirement to initiate proceedings u/s 147 is reason to believe which has been recorded above.
8. It is pertinent to mention here that in this case the assessee has chosen not to file return of income for the year under consideration
although the total income of the assessee has exceeded the maximum amount which is not chargeable to tax as discussed in above and the assessee was assessable under the Act. In view of the above, the provisions of clause (a) of Explanation 2 to Sec 147 are applicable to facts of this case and the AY under consideration is deemed to be a case where income chargeable to tax has escaped assessment.
9. In this case more than four year have not been lapsed from the end assessment year under consideration, hence, necessary
sanction to issue notice u/s. 148 of the Income Tax Act is being obtained simultaneously / separately from Principal Commissioner of Income Tax as per provisions of section 151 of the Act.
8. As could be seen from the reasons recorded, the AO was under the firm opinion that assessee has not filed the return for 2017-18.
However, it is a matter of fact that the assessee has filed return of income on 15.09.2017 which fact has also been even mentioned by the A.O. himself in assessment order. Thus, the AO while issuing notice u/s. 148 of the Act, has not applied his mind and the notice has been issued in a mechanical manner.
9. Further it is evident from the reasons that the AO has reopened the case of the assessee in believe that assessee has not filed return of income during the year under consideration as the case of the Assessee reopened. In view of provisions of clause (a) of Explanation-2 to Section147 of the Act and the said provision is applicable only in a case where assessee has not filed return of income.
10. In the case of Deepak Wadhwa Versus Asstt. Commissioner of Income Tax, Circle 31(1), reported in 2021 (3) TMI 332, held that Reopening of assessment u/s 147 whether notice issued prior to the THAT:- Notice under Section 148 of the Act was issued after obtaining requisite concerned officer obtaining necessary administrative approval HELD administrative approval, we are not satisfied with the explanation given in the counter affidavit all, it can be called, as an explanation) been made to explain what is stated in paragraph 1 of the impugned order dated 28.09.2018. Further, held as under:-
‘as far as the other aspect is concerned, in our view, since the proof put in place by the petitioner-assessee with regard to the acknowledgement of return filed for AY 2011-2012 has not been disputed by the Revenue, as noticed above, the challenge to the impugned notice and the impugned order will have to be sustained. Therefore, for the foregoing reasons, we are inclined to quash the impugned notice dated 27.03.2018 as also the impugned order dated 28.09.2018. It is ordered accordingly.’
The Hon'ble High Court of Gujrat in the case of Sagar Enterprises Versus Assistant Commissioner. 2001 (12) TMI 18 –Hon'ble High Court it was held as under: -
When the matter came up for hearing earlier, it was submitted on behalf of the petitioner that the reasons recorded to the following effect are factually incorrect.
The assessee-firm is engaged in the business of construction. The said firm came into existence vide partnership deed dated October 1, 1990. Therefore, the relevant previous year for the firm for filing its first return of income would be October 1, 1990 to March 31, 1991. On a perusal of the records it is noted that no return for the assessment year 1991-92 has been filed by the assessee-firm. As per Explanation 2(a) to Section 147 the following shall be deemed to be a case where income chargeable to tax has escaped assessment
Therefore, Mr. Kaji, learned counsel appearing on behalf of the petitioner, sought time to place on record the details about the filing of the return. Along with the affidavit-in-rejoinder, xerox copies of the following documents have been annexed. (1) Intimation dated March 9, 1992, issued under Section 143(1)(a) of the Act
(ii) Acknowledgment dated August 28, 1991, of filing of return for the assessment year 1991-92.
(iii) Statement of income for the assessment year 1991-92.
5. At the time of hearing, originals of all the three documents have been produced for perusal of the court.
On going through the reasons recorded and the documents which have been produced on affidavit, it is apparent that the reasons which are recorded are de hors the facts available on record. Mr. Mihir Joshi, learned standing counsel appearing on behalf of the respondent, stated that in para. 2 of the reasons recorded, the respondent has also referred to action under Section 132 of the Act which was carried out at the premises of one Shri G.D. Shah in February. 1992, and has submitted that at least that part of the reasons would survive vesting the respondent with jurisdiction to initiate and continue action under Section 147 of the Act.
7. On going through the entire reasons recorded, it can be seen that in the penultimate paragraph, the respondent has further recorded as under:
"Further, the assessee was required to file the return of the income for the assessment year 1991-92 which the assessee has failed. Moreover, it was the duty of the assessee to declare this transaction and to file the return of income for the assessment year 1991-92. The assessee has failed on both these counts. Therefore, the escapement of assessment of income is solely attributable to the assessee."
8. Therefore, it is apparent that the factor of non-filing of the return for the assessment year 1991-92 has overbearingly weighed with the respondent for arriving at the satisfaction about the failure on the part of the assessee and escapement of assessment of income.
9. On the basis of the same, even for the sake of argument, if the contention raised by Mr. Joshi is taken into consideration, the settled legal position is that in such circumstances, it would not be possible to say with certainty as to which factor would have weighed with the officer concerned and once it is shown that an irrelevant fact has been taken into consideration, to what extent the decision is vitiated would be difficult to say. On this count alone, the petition requires to be accepted. - - - - - - - - - - - - ---- - - - - - - - - - -
Therefore, taking into consideration the totality of the circumstances and the facts which have come on record, it is apparent that the respondent him self is not sure as to the year of taxability and whether the said item requires to such a situation, it is not possible to agree with the stand of the Revenue that be taxed in the assessment year 1991-92 or the assessment year 1992-93. In any income could be stated to have escaped the assessment for the assessment Year 1991-92 as a consequence of any failure or omission on the part of the assessee.
The petition is therefore allowed. The impugned notice dated October 3. 1997 (annexure R) is quashed and set aside.”
12. The Co-ordinate Bench of the Tribunal in the case of VijenderNath Gupta Versus Income-tax Officer, Ward-34 (5), New Delhi. 2025 (4) TM1 996, held as under: -
7. The first contention of the ld. counsel is that without quantifying the amount of escapement for the purpose of section 149 of the Act, the reopening has been done. In this context, as we consider the form for recording of reasons for obtaining approval available at page No.64 in para 6, the AO has quantified the escaped income at Rs. 12,73,65,912/-. However, based upon the narration of facts in the reasoning, the Id. DR was unable to justify as to how this amount in absolute figures has been arrived. Merely writing of an amount which is otherwise not getting justified from the facts as narrated only needs an inference that as for the purpose of section 149(1), for the purpose of assumption of jurisdiction for reopening beyond a period of four years there was lack of application of mind by the Id. AO. The attention of this Bench was drawn by the Id. counsel to the order of the Jaipur Bench of the Tribunal in the case titled ITO vs. Satya Narayan Parwal, order dated 28.12.2004 wherein the Revenue was challenging the order of the Id.CIT(A) alleging that quantification of escaped income was necessary at the stage of recording of reasons and it was held by the coordinate Bench that the recording of the amount of escapement was obligatory on the part of the AO.
Then, as we go through the format for recording the reasons and for obtaining approval, we find that the AO specifically mentions applicability of clause (a) of Explanation 2 to section 147. In column 8, the AO mentions that the assessment is proposed to be made for the first time and then records that no voluntary return has been filed by the assessee. Further, in column 9 of this proforma for obtaining approval of the competent authority, the Id. AO observes specifically that there has been no original assessment.
These facts as narrated when examined in the light of the reasons for reopening it appears that the fact of the assessee filing the return and that it was processed u/s 143(1) of the Act has not at all been taken cognizance of by the Id. AO and he merely relied whatever information reached the Investigation Wing and how it was examined. It appears that the AO has merely reproduced the facts coming up from the Investigation Wing and added his remark of escapement of income. It is coming up from the reopening to credit the To (Inv.) had called for all the relevant information with regard to credit and debit entries in the bank accounts which were filed before the ITO (Inv.). However, not a word of the same has been examined by the ld. AO to show as to if this information has been part of the assessee's return.
The aforesaid also established that authority granting the approval has also not entered into the facts of the case by application of mind. The non application of mind to information to record a live link of information with the escapement of income thus not being there the reasons for reopening suffer fatal defect and thus we are inclined to allow this ground no. 2. The appeal is allowed. The impugned assessment order is quashed.
13. Considering the above facts and circumstances as the AO has recorded wrong reason for reopening, the case of the assessee was based on borrowed satisfaction and in absence of any independent verificationmade by the A.O., by following the ratio laiddown by the Hon’ble High Courts and the Tribunal (supra), we find merit in the contentions of the Ld. AR that the AO while issuing notice u/s. 148 of the Act has not applied his mind, therefore, the entire assessment proceedings arevitiated. Accordingly, for the aforesaid reasons, the assessmentorder confirmed by the order of CIT(A) is hereby quashed.
In the result, the appeal of the assessee is allowed.
As we have quashed the assessment order on the ground of non- application of mind in issuing Notice u/s 148 of the Act as the notice has been issued on the wrong reasons recorded, all other grounds of Appeal requires no adjudication.
Order pronounced in the open court on 29th October, 2025.