TaxTMI 
TaxTMI 
2026 (9) TMI 232
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....and liable to be quashed. 2. That the learned Assessing Officer has erred in reopening the assessment under sections 147/148 of the Income-tax Act, 1961. The learned CIT(A) has further erred in law and on facts in upholding the validity of such reassessment proceedings, which are arbitrary, illegal, invalid, without jurisdiction, void ab initio and liable to be quashed. 3. That the notice under section 148 and the order passed under section 148A(d) are bad in law, the learned Assessing Officer having disregarded the detailed reply and evidences filed in response to notice under section 148A(b).The learned CIT(A) further erred in declining to adjudicate this jurisdictional defect by merely observing that an order under section 148A(d) is not appealable under sections 246/246A. 4. That the reopening of assessment is based on contradictory and incorrect AIR/26AS, acted upon mechanically without proper enquiry, verification or application of mind, rendering the impugned reopening arbitrary, illegal and bad in law. 5. That the learned CIT(A) erred in law in upholding the reopening on the basis of contradictory and incorrect AIR/26AS information, which....
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.... of his savings bank account No. xxxx9769 as well as his NRI account No. xxxx1517. The AO thereafter passed an order under section 148A(d) of the Act on 07.04.2023 holding it to be a fit case for issue of notice under section 148 of the Act and issued the notice on the same date. In response, the assessee filed his return declaring a total income of Rs 2,16,060. 4. In the course of the reassessment proceedings the assessee once again explained, with reference to his bank statements, that only a single cash deposit of Rs 2,00,000 dated 11.04.2018 had been made during the year, the source being his own earlier cash withdrawals. The AO accepted that the deposit was of Rs 2,00,000 and not Rs 10,00,000, holding in paragraph 3.1 of the assessment order as under: "On perusal of the reply of the assessee and bank account statement of the assessee of the account no. xxxx9769 maintained with Bank of Baroda it is observed that the assessee has made cash deposits of Rs. 2,00,000/- in his said bank account and not Rs. 10,00,000/-. Further, on perusal of 26AS of the assessee for the year under consideration, it is also observed that there is Rs. 12,00,000/- (Rs.2,00,000/- for 6 times....
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....never looked at, and that such an order is without jurisdiction. Reliance was placed on R.K. Buildcreations (P.) Ltd. v. ITO [2024] 462 ITR 478 (Raj.) and BenaiferVispi Patel v. ITO [2025] 475 ITR 704 (Bom.). The learned Departmental Representative (hereinafter referred to as "the learned DR") supported the orders of the authorities below and submitted that the information available with the AO was sufficient to form the belief that income had escaped assessment and that the assessee had been given full opportunity during the reassessment proceedings. 7. We have heard the rival contentions and perused the material available on record. Since grounds no. 1 to 6 assail the very assumption of jurisdiction under section 147 of the Act, we take them up first, for if the assessee succeeds thereon the assessment framed in consequence cannot survive. 8. The first infirmity is that the information which set the proceeding in motion did not accord with Form 26AS. The show cause notice dated 20.03.2023 proceeded on the footing that cash deposits of Rs 10,00,000 stood reflected in the bank account of the assessee. On a perusal of Form 26AS we find six entries of Rs 2,00,000 each reported ....
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....as per the procedure prescribed under section 148A of the Act and cannot stand judicial scrutiny." Their Lordships further held in paragraph 16 that the requirement of passing a speaking order after considering the reply and the material on record "goes to the root of the jurisdiction for initiating the proceedings under section 148 of the Act". If an order which reproduces one reply but omits to deal with a further reply is unsustainable, an order which records that no reply was filed at all, when a reply was in fact filed within time, must stand on a weaker footing still. The case before us is stronger than that in R.K. Buildcreations (P.) Ltd. (supra). 11. The other limb of the matter, namely reliance upon electronic information without verifying it against the material furnished by the assessee, is covered by Benaifer Vispi Patel (supra). The Hon'ble Bombay High Court held in paragraph 26 of the judgment as under: "26. Thus, to presume that the scheme of Section 148 read with Section 148A and Section 135A of the Act in all cases would operate on defect-free information cannot be accepted, even when information under Section 135A of the Act is available and the el....