TaxTMI 
TaxTMI 
2026 (9) TMI 1518
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....years 2018-19 and 2019-2020 respectively and not deciding certain legal grounds. ITA Nos.1896/PUN/2025 and 1894/PUN/2025 filed by the Revenue and ITA Nos.611/PUN/2025 and 608/PUN/2025 filed by the assessee are cross appeals and are directed against the common order dated 18.07.2024 of the Ld. CIT(A), Pune-12 deleting the penalty levied by the Assessing Officer u/s 271E of the Act relating to assessment years 2018-19 and 2019-2020 respectively but not deciding the legal grounds raised before him. For the sake of convenience, all the 10 appeals were heard together and are being disposed of by this common order. 2. There is a delay of 11 days in filing of these appeals before the Tribunal by the assessee for which the assessee has filed condonation applications along with affidavits explaining the reasons for such delay. After considering the contents of the condonation applications filed along with the affidavits and after hearing the Ld. DR, the delay in filing of these appeals is condoned and the appeals are admitted for adjudication. 3. First we take up IT(SS)A No.39/PUN/2024 filed by the Revenue and ITA No.607/PUN/2025 filed by the assessee for assessment year 2019-20. Fact....
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.... that an employee of Disha group Shri Ratnakar Kulkarni has accepted in his statement recorded u/s 132(4) of the Act that the transactions are in cash and have not been entered in the books of account and have been meticulously prepared on the instructions of Devanand Narayan Kotgire (DNK). The fact that these handwritten diaries belong to Dish Group has been accepted by the head accountant of Disha Group Shri Purushottam Binorkar and his name appears in the employee list of Disha group. The Assessing Officer noted that during the course of post-search enquiries in the statement recorded, DNK also accepted the ownership of these diaries. The Assessing Officer noted that these diaries contain the transactions in date-wise manner and appear to be a cash book for such unaccounted receipts and payments and same has been accepted by the accountants in their statements. He noted that in the said diaries the assessee under consideration made cash payment to DNK and also received cash from DNK. The Assessing Officer extracted the financial year-wise receipts and payments and noted that for financial year 2018-19 there is cumulative difference of Rs. 2,97,23,580/-. He, therefore, issued a s....
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....s: Grounds in IT(SS)A No.39/PUN/2024 1. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in holding that the order as 143(3) r.w.s. 153A passed on 30.09.2021 is invalid even after noting that assessment order u/s 143(3) r.w.s. 153A dtd. 30.09.2021 was passed subsequent to the corrected notice us 153A dated 03.08. 2021. 2. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in holding that the order u/s 143(3) r.w.s. 153A dated 30.09.2021 was passed based on the notice issued u/s 153A of the Act, dated 10.02.2021, whereas the said proceedings had abated. 3. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in ignoring the fact that unless the first notice issued u/s 153A is abated no new notice u/s 153A for the year can be issued and order under section 143(3) r.w.s. 153A dated 30.09.2021 was passed on the basis of corrected notice u/s 153A dated 03.08.2021. 4. On the facts and in the circumstances of the case and in law the Ld. CIT(A) has erred in not making inquiry or directing the AO to submit a report as per Section 250(4) bef....
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....s taken on merit 4. On the facts and in the circumstances of the case and in law the learned Assessing Officer erred in making an addition of Rs. 2,97,23,580/- as cumulative difference of cash transaction with credit balance by invoking provision of section 68 r.w.s 115BBE of the Act as unexplained credit. The action of Learned Assessing Officer is contrary to his own presumption that cash receipts from Dattatray N. Kotgire are cash loan entries therefore he initiated independent proceedings for initiating penalty under section 271D and 271E for violating the provision of section 269SS and 269T of the IT Act. 5. On the facts and in the circumstances of the case and in law the learned Assessing Officer erred in passing the order under section 143(3) r.ws. 153A and making an addition of Rs. 2,97,23,580/- on the basis of documents found in the possession of other party search, especially without confronting such document to the appellant, the action being violative of principal of natural justice the entire additions deserve to be deleted. 6. On the facts and in the circumstances of the case and in law the learned Assessing Officer erred in making and additi....
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....54 ITR 212 (SC) is clearly applicable. He submitted that there is no mention of any drop of the first notice issued u/s 153A of the Act. Since there was no search in the case of the assessee, therefore, no 153A notice could have been issued to the assessee. He also relied on the following decisions: i) The decision of Hon'ble Orissa High Court in the case of CIT vs. Sikhya 'O' Anusandhan vide ITA Nos.117 to 123 of 2011 order dated 03.01.2023. ii) The decision of Hon'ble Delhi High Court in the case of PCIT vs. Subhash Khattar vide ITA No.60/2017 order dated 25.07.2017. iii) Shri Fazal Sarang vs. DCIT vide ITA No.1456/Mum/2012 order dated 04.01.2017 for A.Y. 2008-09. 10. The Ld. DR on the other hand submitted that when the assessee did not file her return in response to the second notice u/s 153A of the Act, there is no question of issue of any notice u/s 143(2) of the Act. He submitted that since simultaneous search action was conducted and incriminating material was found in the case of other searched persons, therefore, the decision in the case of PCIT vs. Abhisar Buildwell Pvt. Ltd. (supra) is not applicable to the facts of the present case. 11. ....
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....ce u/s 153A dated 10.02.2021 was not valid as no authorization was issued in the name of the appellant on 22.01.2020. Thus, having held that the notice u/s 153A of the Act dated 10.02.2021 issued by Ld. AO is invalid, accordingly, the assessment order dated 30.09.2021 u/s 143(3) r.w.s. 153A for the AY under consideration is also held to be invalid. The additional ground no. 1 raised by the appellant is therefore allowed. 4.7 Since the order u/s 143(3) r.w.s. 153A of the Act is held to be invalid and bad in law, adjudication of the other issues has become academic only and therefore, these issues are not being adjudicated separately. Thus, adjudication on the rest of the additional grounds and all of the original grounds of appeal is not separately required. 5. With the result, appeal is allowed. 12. He submitted that since the assessee did not file any return in response to the second notice issued u/s 153A dated 03.08.2021, therefore, the Assessing Officer had not issued notice u/s 143(2) of the Act. Even otherwise also referring to the decision of Hon'ble Delhi High Court in the case of Ashok Chaddha vs. ITO reported in (2011) 337 ITR 399 (Del), he submitted ....
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.... at Rs. 4,28,25,240/- as against the returned income of Rs. 1,31,01,660/- by making an addition of Rs. 2,97,23,580/- being the difference between the cash receipts from and cash payments to DNK. We find the Ld. CIT(A) quashed the assessment proceedings on the ground that the Assessing Officer has considered the returns of income filed by the assessee in response to the notice issued u/s 153A dated 10.02.2021 and passed the orders on 30.09.2021 for assessment years 2015-16 to 2019-20 which are based on earlier defective notice issued u/s 153A dated 10.02.2021 and not based on the corrected fresh notice u/s 153A dated 03.08.2021. The reasons of such order have already been reproduced in the preceding paragraphs. It is the submission of the Ld. DR that although the 153A notices dated 10.02.2021 were issued for the years under question by the then Assessing Officer under the impression that the case of the assessee was also covered during the initial search action and the search warrant dated 21.01.2020, however, when he came to know that the assessee was covered under search warrant dated 04.06.2020 only, he issued a fresh notice u/s 153A of the Act dated 03.08.2021 for the year under....
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....ng to discharge his functions properly, the obligation to conduct proper inquiry on facts would naturally shift to the door of the said appellate authority. For such purposes, we only need to point out one step in the procedure in appeal as prescribed in Section 250 of the Income Tax Act wherein, besides it being obligatory for the right of hearing to be afforded not only to the assessee but also the AO, the first appellate authority is given the liberty to make, or cause to be made, "further inquiry", in terms of sub-section (4) which reads as under:- "The Commissioner (Appeals) may, before disposing of any appeal, make such further inquiry as he thinks fit, or may direct the Assessing Officer to make further inquiry and report the result of the same to the Commissioner (Appeals)". 39. The further inquiry envisaged under Section 250(4) quoted above is generally by calling what is known as "remand report". The purpose of this enabling clause is essentially to ensure that the matter of assessment reaches finality with all the requisite facts found. The assessment proceedings re- opened on the basis of preliminary satisfaction that some part of the income has escape....
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....ns on such exercise at verification may not be drawn and adverse inferences reached only on the basis of returning undelivered of the summonses under Section 131. Conversely, with doubts as to the genuineness of some of the parties persisting on account of non-delivery of the processes, the initial burden on the assessee to adduce proof of identity cannot be treated as discharged. 41. We are inclined to agree with the CIT (Appeals), and consequently with ITAT, to the extent of their conclusion that the assessee herein had come up with some proof of identity of some of the entries in question. But, from this inference, or from the fact that the transactions were through banking channels, it does not necessarily follow that satisfaction as to the creditworthiness of the parties or the genuineness of the transactions in question would also have been established. 42. The AO here may have failed to discharge his obligation to conduct a proper inquiry to take the matter to logical conclusion. But CIT (Appeals), having noticed want of proper inquiry, could not have closed the chapter simply by allowing the appeal and deleting the additions made. It was also the obligatio....
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....w after providing due opportunity of being heard to the assessee. The grounds raised by the Revenue are accordingly allowed for statistical purposes. 19. Since we have restored the appeal filed by the Revenue to the file of the Ld. CIT(A), therefore, the appeal filed by the assessee is also restored to the file of the Ld. CIT(A) for fresh adjudication. 20. So far as the remaining appeals are concerned, the same relate to the order of the Ld. CIT(A) in deleting the penalty levied by the Assessing Officer u/s 271D and 271E of the Act. While the Revenue has filed the appeals challenging the deletion of penalty by the Ld. CIT(A) we find the assessee has filed the appeals raising certain legal issues. Since the Ld. CIT(A) has deleted the penalty on the ground that the order passed by the Assessing Officer on the basis of the first notice issued u/s 153A which was defective one and has not adjudicated the various legal grounds raised by the assessee in her appeal and since we have already restored the appeal filed by the Revenue to the file of the Ld. CIT(A) for fresh adjudication, therefore, we deem it proper to restore all these appeals to the file of the Ld. CIT(A) with similar ....
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.... promise or other undue Influence was brought to bear on the above deponent (s). The statement was read over/ explained in the local stato deponent, who signed the statement in token of having understood its contents and of agreeing that it had been correctly recorded. 7. . The following other important persons were present in the place of search and elther tock an S.No. Name of the person Relationship - 8. The search commenced on 21.01.2020 at 08:45 A.M. The proceedings were closed on PM Beeldend Le temnoty concluded for day to be 22.01.2020 at 11:35 P.M. as finally concluded / as temporarily concluded for the day to Before leaving the above mentioned place of search the entire search party again offered us and It is certified that it has been correctly recorded. Signature of the Panchas with Date :- Witness No.1 WitnessNo.2 Signature of the Authorized Officer 109 Signature of person receiving the copy of the Panchanama (with date) Je 22/01/2020 Name: - Shri Ganesh S. Rakh Designation: - DDIT(Inv.), Unit-11(2), Pune Designation Name: Rahul B Kadam Position in relationship to "A" _Self Date: - 22.01.2020 .3 The Ld. AO had initia....
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....contact the come proceedings on we, along with the foresaid officers, before only whinger commencement of proceedings today inspected the seals which had been placed on the date and found them to be The above-mentioned search party offered themselves for personal Survey, A search of the above-mentioned place was carried out by the said party in our happened in the premises. Nothing untoward/the events narrated in the enelesure. 5. In the course of the search :- .In and seized a) The following were found anseize (sheets) Books of account and documents as per Annexure NIL (sheet Bullion, i.e. gold, silver etc., as per Annexure NIL (sheets) Annexure NIL (sheets) ) Cash as per gamente etc., which have been inventorised separately for each place from where recovered, as Annexur Silver articles and silverware as per Annexure NIL (sheets) The following were found but not seized Books of account and documents as per Annexure NIL Marks of identincation were placed on these in the inventory prepared, viz Ammers NIL, The other valuable articles or things (including money) as per Annexure NIL (Separate inventories of jewellery, ornaments, silverware, etc., where prepare....
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.... High School, 463, Stavely Road Pune-411001 Sir, Sub .: Departmental appeal before the ITAT, Pune in the case of Smt. Asha B. Kadam (PAN-AARPK2868D), for A.Y.s 2018-19 & 2019-20: - reg. Ref .: E-mail dated 22/07/2025 from your office. 0-0-0 With refer to the above 2. Through the e-mail under reference, the undersigned has been directed to state or clarify whether assessment in the above-mentioned assessee for the A. Y.s 2018-19 & 2019-20 were completed u/s. 153A notice dated 10/02/2021 or 153A notice dated 03/08/2021. "On going through assessment folder in r/o the assessee for both the years, it is seen that the notices u/s. 153A of the Act, dated 10/02/2021 were issued for the years in question by then A.O. under impression that the assessee's case was also covered through the initial search action and the search warrant dated 21.01.2020. However, during the search assessment proceedings it was seen that the assessee's was covered under search warrant dated 04/06/2020 only. Accordingly, the first proceedings-initiated u/s. 153A dated 10/02/2021 were abetted and fresh proceedings were initiated by issuing of notice u/s. 153A dated 03/08/2021 for the year....