TaxTMI 
TaxTMI 
2026 (5) TMI 1140
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....-17 2. The assessee, in this appeal has raised the following grounds of appeals: "1. THAT CIT(A) has partly allowed the appeal after considering the submission of the assessee but without going through the documents submitted during the assessment u/s 148A and u/s 148, ground of appeal along with the certain details as attached to the form 35, documents reply and submitted by the assessee during the assessment proceedings. The assessee has filled the written submission which was also not considered by the CIT(A). 2 THAT the CIT(A) has ignored the fact that Assessee has submitted all necessary the documents before the AO during the assessment proceeding and appeal in written submission related to the transactions. The assessee has submitted the documents such as a copy of ledger accounts, a copy of invoices, Copy of LR copy. Confirmation etc. Moreover, AO/CIT(A) has simply relied upon the investigation report only and does not gone through the various documents submitted by the assessee, which are collaborated with the books of accounts and the bank statement submitted by the assessee. THAT the CIT(A) has ignore the fact that all documents were already submitted....
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....rowed the reason from the investigation report and information uploaded on the insight portal. 7. THAT no information was provided by the AO which was specifically requested by the assessee during the assessment and or before the CIT(A) 8. THAT notice u/s 148 dated 19.04.2021 issued is without the approval of the Competent/Specified Authority as specified in the Act. Since, in the present case, the authority approval is not the competent authority, the notice issued under section 148 is void ab initio and illegal. Therefore, the same should have to be withdrawn. The notice was issued by range 4(1) Ahmedabad, who is not having any authority to give the approval u/s 151, Therefore, the said notice is to be treated as void ab initio. 9. Failed to provide the final assessment order in the case of Sanjay Govindram Agarwal and Others to demonstrate how the said amount was treated in his assessment as the same income cannot be taxed in two hands. 10. THAT the department has not provided the opportunity of the cross-verification of the person on whose statement the AO has relied upon, and considered that the assessee is one of the beneficiaries of the am....
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....ve and search carried out by the department, it was critically stated that these banking transactions were belong to the employee/person related to Shri Sanjay Agarwal and they have given the statement on oath and accepted that the bank account was operated and run by them. It is very surprising that after the search and statement taken during the search (on which the AO has relied upon), now at the time of assessment, AO concluded that the firm does not exist, specifically when the PAN is linked and verified. If the firm is not in existence, then how was the bank account opened by the banks through which the amount was transferred, and the assessment of the person done by the department in the past? It is also an accepted fact that the income of the persons who have given the statements was assessed by the department regularly. Therefore, the contention of the department that the party is not in existence cannot be accepted and therefore, the addition made should have to be deleted. 15. The assessee during the assessment proceedings has stated that the assessee has not carried out any business transaction with the said parties ie. Sanjay Tibrewal and Group. The bank trans....
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....and ignoring the fact that the said transactions are duly recorded in the books, is without applying his own mind. That the AO has ignored the explanations and documents submitted by the assessee and giving all relevant information and passed the order u/s 147 of Income Tax Act, 1961. 19. From the above details, it is very much clear that there is a deposit transaction of Rs 96.12,050/- (including Rs. 6,00,000/- which was cheque bounced) in the account of the assessee from Sanjay Tibrewal and Group which were received on behalf of sales parties. Ignoring the said fact, without applying the mind AO has just passed the Assessment order and made the addition of Rs. 96,12,050/- (In spite of ignoring the above facts as discussed). Therefore, the AO has passed the order without verifying the details or applying his mind, which is mechanical. Hence, the addition made should have been. deleted. 20. That on the facts and circumstances of the case and in law, the learned, assessing officer has failed to understand the true nature of transactions (deposits) and based on his own theory treated them as unexplained cash credit and treated as accommodation entries. 21. ....
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....hat on the facts and circumstances of the case and in law, the learned AG has passed order u/s 147 r.w. 144B of the Income Tax Act, 1961, which is Bad in Law and against the principles of natural justice. 26. That the learned AO has erred in not considering the actual facts and circumstances of the case and also not considering/appreciating the evidence, supporting details and documents submitted by the appellant. His act is based on presumption, assumption, surmises, conjectures and suspicions. 27. That the Id. assessing officer grossly erred in deliberately ignoring several reasonable, plausible submissions which had a material bearing on the impugned case and ignoring the same was unjustified, bad in law, is in utter violation of the principle of natural justice and ought to have been considered. No consideration is unjustified, bad in law and the entire approach deserves to be deprecated. 28. That on the facts and in the circumstances of the case, the Id. Assessing Officer grossly erred in creating an illegal demand of Rs. 69,18,360/-against the assessee-appellant. 29, That on the facts and in the circumstances of the case, the Id. The assess....
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....nate Bench of the Tribunal in the own cases of the assessee vide consolidated order dated 24.04.2025 (supra) with the lead case in ITA No.1243/Ahd/2025 after duly deliberating upon the legal position in the facts and circumstances of the case has decided this issue in favour of the assessee. The relevant part of the order of the Tribunal dated 24.04.2025 (supra), for the sake of ready reference, is reproduced as under: "Applicability of Section 153C vis-à-vis Sections 147/148 of the Act : 38. The Ld. Counsel for the assessee has raised another Jurisdictional Ground, contending that the reopening of the assessment under sections 147/148 of the Act is bad in law and void ab initio because the Assessing Officer (AO) bypassed the mandatory provisions of Section 153C of the Act. 39. The Ld. Counsel submitted that the entire basis for reopening the assessment was the incriminating material (Excel sheets/bank statements) seized during the course of the search conducted under Section 132 of the Act at the premises of Shri Sanjay Govindram Agrawal (Sanjay Tibrewal Group). It was argued that when incriminating material pertaining to a "person other than the ....
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....he Assessing Officer to invoke Sections 147/148 of the Act: * Group A Cases (Navratna Group): In these cases, during the search, an Excel sheet was found. However, the subsequent reopening under Section 148 was not based merely on that seized Excel sheet. The searched entity (Navratna Group) subsequently approached the Income Tax Settlement Commission (ITSC) and made a categorical, post-search admission regarding the receipt of "on-money" in cash, submitting a reconciled list of purchasers. The Hon'ble High Court upheld the reopening in Group A cases, holding that this subsequent admission before the ITSC constituted "independent, post-search material." Since the AO relied on this independent material and not just the raw seized documents, the invocation of Sections 147/148 was held to be justified. * Group B Cases (K-Star Group) & Group C Cases (Flamingo / Sanjay Govindram Agarwal): In these groups, the reassessment under Sections 147/148 was initiated solely on the basis of the incriminating material found during the search of the third parties. The Hon'ble High Court noted that the Assessing Officer of the searched entity had merely supplied the materia....
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....n the present case formed his "reason to believe" exclusively from the investigation report and the bank statements seized during the search on the Sanjay Tibrewal Group. The Revenue has completely failed to bring any material on record to show that the Assessing Officer of the searched person ever recorded the mandatorily required "satisfaction note" before transmitting the information to the AO of the present assessee. 47. Furthermore, unlike the Group A cases before the High Court, the Revenue has not demonstrated the existence of any independent, post-search material (such as a separate admission by the searched party before a Settlement Commission or an independent inquiry) outside of the raw search material. The entire edifice of the reopening rests solely on the documents and statements obtained during the search of the third party. 48. Therefore, the special provisions of Section 153C of the Act, which contain a non-obstante clause overriding Sections 147/148, are strictly attracted to the facts of this case. The Assessing Officer was legally barred from bypassing Section 153C and resorting to the general provisions of Sections 147/148 of the Act. The assu....
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....sessee to the notice issued u/s 148A(b). 22.06.2022 9 Any further adjournment was asked by the assessee. NO 10 Date of further notice issued after the reply of the assessee or provided any additional details which were not provided by the AO in the initial notice issued u/s 148A(b). 05.07.2022 11 Date on which the assessee has replied to the subsequent notice issued. Copy of reply attached herewith. 11.07.2022 12 Date of the end of the survival period (u/s 149) after receipt of the reply u/s 148A(c) i.e. 20.06.2022 02.09.2022 13 Last date as per section 148A(d) after receipt of the reply u/s 148A(c) i.e. within one month from the end of the month in which the reply was received under section 148A(c) i.e. 22.06.2022 31.07.2022 14 Date of which the order and section 148A(d) is passed by the AO and notice u/s 148 was issued (under New regime) 17.08.2022 8. The learned counsel has further submitted that it has been fairly admitted by the Ld. DR, after calling for the comments of the Assessing Officer, that the subsequent notice issued by the AO on 05.07.2022 did not have any relevancy. Neither the assessee had sought any exten....
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....ndment of Certain Provisions) Act. 2020 (hereinafter referred to as "TOLA") and various notifications issued thereunder (these reassessment notices hereinafter referred to as "extended reassessment notices"). 2. These extended reassessment notices were issued by the Assessing Officers under the provision of section 148 of the Income-tax Act, 1961 (hereinafter referred to as "the Act") following the procedure prescribed under various sections pertaining to reassessment namely sections 147 to 151. as they existed prior to their amendment by the Finance Act, 2021 (hereinafter referred to as "old law"). With effect from 1 April 2021, the old law has been substituted with new sections 147-151 (hereinafter referred to as the "new law"). 3. Hon'ble Supreme Court has held that these extended reassessment notices issued under the old law shall be deemed to be the show cause notices issued under clause (b) of section 148A of the new law and has directed Assessing Officers to follow the procedure with respect to such notices. It has also held that all the defences available to assessee's under section 149 of the new law and whatever rights are available to the Assessing ....
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....limit specified under the provisions of clause (b) of sub-section (1) of this section, as they stood immediately before the commencement of the Finance Act. 2021. ............ ........... 8.0 Procedure required to be followed by the Assessing Officers to comply with the Supreme Court judgment: 8.1 The procedure required to be followed by the Jurisdictional Assessing Officer/Assessing Officer, in compliance with the order of the Hon'ble Supreme Court, is as under: * The extended reassessment notices are deemed to be show cause notices under clause (b) of section 148A of the Act in accordance with the judgment of Hon'ble Supreme Court. Therefore, all requirement of new law prior to that show cause notice shall be deemed to have been complied with. * The Assessing Officer shall exclude cases as per clarification in paragraph 7.1 above. Within 30 days i.e. by 2nd June 2022, the Assessing Officer shall provide to the assessee's, in remaining cases, the information and material relied upon for issuance of extended reassessment notices. * The assessee has two weeks to reply as to why a notice under section 148 of the A....
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....available. He has submitted that it has also been specifically clarified that the AO has to follow the timeline as laid down u/s 148A(d) of the Act and that the order u/s 148A(d) of the Act has to be passed within one month from the end of the month in which the reply is received by him from the assessee. The Ld. Counsel has further submitted that the above instructions of the CBDT are binding upon the Assessing Officer. 11. The Ld. DR, on the other hand, has submitted that as per the law laid down by the hon'ble Supreme Court in the case of Rajeev Bansal (supra), the AO was left with the surviving period of 72 days from the date of furnishing the reply by the assessee on 22.06.2022 which was upto 02.09.2022; whereas the AO has passed the order u/s 148A(d) of the Act and issued notice u/s 148 of the Act on 17.08.2022 itself, therefore, the AO has acted well within the limitation period prescribed. 12. It is pertinent to mention here that the identical issue has been raised by the assessee in its other bunch of appeals i.e. ITA NO. 1243/Ahd/2025; 1244/Ahd/2025 & 1222/Ahd/2025 for Assessment Years 2013-14, 2014- 15 & 2020-21 respectively, decided by the Co-Ordinate Ahmedabad Be....
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....ecific flagged information that the assessee was a beneficiary of alleged accommodation entries, the Assessing Officer issued a notice under section 148A(b) of the Act, provided the transaction details to the assessee, and called for an explanation. After considering the assessee's reply, the Assessing Officer passed a detailed order under section 148A(d). Since the Assessing Officer followed the statutory procedure and applied his mind to the specific information and the assessee's reply before issuing the notice under section 148, the charge of acting on mere "borrowed satisfaction" without independent application of mind cannot be sustained. Therefore, this legal ground raised by the assessee is dismissed." 14. The facts and the issue involved being identical, respectfully following the above findings of the Co-ordinate Bench of the Tribunal, this issue is, accordingly, decided against the assessee and in favour of the Revenue. Issue No.4: Whether the assessment order is bad in law as the AO has not followed the direction of the Hon'ble Supreme Court as given in the case of Union of India vs. Ashish Agarwal (Supra) and provided the information in parts an....
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....2022, through e-filing portal only. Your response would be considered for passing order under Section 148A(d) in your case." 16. The Learned Counsel has thereafter referred to the letter of the assessee dated 11.07.2022 whereby it was informed to the Assessing Officer that the information provided by him vide his letter dated 05.07.2022 was not relevant to the case of the assessee for the assessment year under consideration. 17. The Learned Counsel, therefore, has submitted that the AO did not supply the full and correct information within the stipulated period alongwith notice u/s 148A(b) of the Act as directed by the Hon'ble Supreme Court in the case of Union of India vs. Ashish Agrawal (supra). He, therefore, has submitted that the subsequent proceedings as well as the assessment order passed by the AO u/s 147 of the Act was bad in law. 18. The Learned DR was requested to give his comments upon the aforesaid contentions of the assessee whereby he admitted that the subsequent information sent by the AO vide letter dated 05.07.2022 was not relevant for the case of the assessee for assessment year under consideration. A report in this respect was called upon from the AO to....
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....sessment proceedings. The assessee has filled the written submission which was also not considered by the CIT(A). 2. THAT the CIT(A) has ignored the fact that Assessee has submitted all necessary the documents before the AO during the assessment proceeding and appeal in written submission related to the transactions. The assessee has submitted the documents such as a copy of ledger accounts, a copy of invoices, Copy of LR copy, Confirmation etc. Moreover, AO/CIT(A) has simply relied upon the investigation report only and does not gone through the various documents submitted by the assessee, which are collaborated with the books of accounts and the bank statement submitted by the assessee. THAT the CIT(A) has ignore the fact that all documents were already submitted before the AO during the assessment proceeding u/s 148A and U/s 148 as specified here in above as facts of the case. Therefore, these documents cannot be treated as Additional documents. the CIT(A) has observed that the Assessee has not submitted the documents before the AO during the assessment proceeding, and now, after 18 months, the assessee has submitted the documents such as a copy of ledger accou....
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...., the authority approval is not the competent authority, the notice issued under section 148 is void ab initio and illegal. Therefore, the same should have to be withdrawn. The notice was issued by range 4(1) Ahmedabad, who is not having any authority to give the approval u/s 151, Therefore, the said notice is to be treated as void ab initio. 9. Failed to provide the final assessment order in the case of Sanjay Govindram Agarwal and Others to demonstrate how the said amount was treated in his assessment as the same income cannot be taxed in two hands. 10. THAT the department has not provided the opportunity of the cross-verification of the person on whose statement the AO has relied upon, and considered that the assessee is one of the beneficiaries of the amount. Simply relying on the statement of the person (mainly when there is no direct evidence available that the transaction was carried out by the assessee simply receiving the amount in the bank account does not mean that the assessee is the beneficiary of the amount) cannot be reason o make addition unless and until there is another evidence which collaborate with the statements. Therefore, without giving an ....
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....nt, AO concluded that the firm does not exist, specifically when the PAN is linked and verified. If the firm is not in existence, then how was the bank account opened by the banks through which the amount was transferred, and the assessment of the person done by the department in the past? It is also an accepted fact that the income of the persons who have given the statements was assessed by the department regularly. Therefore, the contention of the department that the party is not in existence cannot be accepted and therefore, the addition made should have to be deleted. 15. The assessee during the assessment proceedings has stated that the assessee has not carried out any business transaction with the said parties ie. Sanjay Tibrewal and Group. The bank transactions (i.e. amount received by the assessee in its bank account) are on behalf of the parties with whom the assessee has carried out the sale transactions for which the details were already provided to the AO along with the confirmation, and once again attached herewith for your ready reference. Therefore, whether the various firm (Sanjay Tibrewal and Group) exists or not does not make any difference, since the as....
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....the assessee from Sanjay Tibrewal and Group which were received on behalf of sales parties. Ignoring the said fact, without applying the mind AO has just passed the Assessment order and made the addition of Rs. 33,69,062/- (In spite of ignoring the above facts as discussed). Therefore, the AO has passed the order without verifying the details or applying his mind, which is mechanical. Hence, the addition made should have been deleted. 20. That on the facts and circumstances of the case and in law, the learned, assessing officer has failed to understand the true nature of transactions (deposits) and based on his own theory treated them as unexplained cash credit and treated as accommodation entries. 21. That the AO has accepted that the amount is duly accounted in the books and credited to the respective parties to whom the sales were made, and hence the amount is already included in the income of the Assessee Company. Therefore, there is no transaction, which is unaccounted in the books of the assessee and therefore, the addition made by the AO should have been deleted. 22 THAT the AO/CIT(A) has made Addition of Rs. 67,381/- i.c. 2 percent commission char....