TaxTMI 
TaxTMI 
2026 (6) TMI 1025
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....ncome Tax Act, 1961 for the assessment year 2015-16. 2. In the present appeal Assessee has raised the following grounds: 1. That the CIT(A) has erred in facts and in law in confirming the addition made by the AO at Rs. 19375600 /- on account of cash deposited in bank and Rs. 7500000/-on account of investment in FDRs during the year under consideration. 2. That the CIT(A), while confirming the addition made by the Assessing Officer, has grossly erred both in law and on facts in ignoring the fact that the notice issued under section 148 dated 01.04.2022 is barred by limitation, as per the 1st proviso to section 149 of the Income Tax Act, 1961. 3. That the CIT(A) has erred in law and on facts in upholding the addi....
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....rring, fixed and savings deposits for its members and non-members. The CIT(A) further failed to consider that the increase in member deposit and FDR deposits as reflected in liability side of the balance sheet constituted the source of the FDRs for which addition has been erroneously sustained. 6. That the CIT(A) erred in confirming the addition made by the AO without appreciating that the notice under section 148(b) was issued solely on the basis of incorrect facts reflected on the Insight Portal, in violation of Instruction No. 299/10/2022-Dir(Inv.III)/647dated 22.08.2022, which mandates that prior to issuance of a notice under section 148, there must be a proper verification of facts from the concerned bank, and not merely relia....
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....firmed the addition of Rs. 75,00,000/- on account of FDRs. 5. The assessee is now in appeal before the Tribunal and has challenged both the validity of reopening as well as the additions sustained on merits. 6. The Ld. AR, drawing our attention to the detailed written submissions placed on record, submitted that the entire reassessment proceedings are bad in law on multiple jurisdictional defects. It was contended that the notice issued under section 148 dated 01.04.2022 is barred by limitation in terms of the first proviso to section 149, as the period of six years for the assessment year 2015-16 expired on 31.03.2022 and, therefore, the notice issued thereafter is void ab initio. It was further submitted that the first proviso to se....
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....ibed limit and the accounts are subjected to audit under the Co-operative Societies Act. With regard to the addition on account of FDRs, it was submitted that the same are sourced from explained funds, including maturity of earlier FDRs and business receipts, and that sustaining such addition results in double taxation. 10. Per contra, the Ld. DR relied upon the orders of the lower authorities. 11. We have heard the rival submissions and perused the material available on record, including the detailed submissions placed by the assessee. At the outset, we deem it appropriate to address the foundational issue relating to the validity of proceedings initiated on the basis of an incorrect PAN. The record reveals that the notice under sect....
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.... also furnished complete details of such PAN to the Assessing Officer. However, the Assessing Officer, without adverting to or dealing with the said reply, proceeded in a mechanical manner to issue notice under section 148 on the basis of an incorrect and non-operative PAN. Such an approach reflects a patent non-application of mind and a failure to discharge the statutory mandate enshrined under section 148A(c) of the Act. 13. We are unable to countenance such action, as it is contrary to both the letter and the spirit of the reassessment provisions. The requirement to consider the assessee's reply and to record a reasoned satisfaction is not an empty formality but a jurisdictional pre-condition. Failure to adhere to the same vitiates th....
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....de by the Assessing Officer and partly sustained by the Ld. CIT(A) are not sustainable. The Ld. CIT(A) himself has recorded a finding that the Assessing Officer had proceeded on incorrect facts by double counting the cash deposits. The assessee has furnished detailed explanation supported by books of account demonstrating that the deposits represent business receipts. The Revenue has failed to bring any material on record to rebut these explanations. 17. The rejection of books of account merely on the ground that they were not audited under section 44AB is also not justified, particularly when the turnover of the assessee does not exceed the prescribed limit and the accounts are otherwise maintained and subjected to statutory audit under....