ADITYA JAGDISH LAHOTI ,MUMBAI V. ACIT CIRCLE 23(1), MUMBAI

ITA 265/MUM/2025

AI Insights

The case involves Aditya Jagdish Lahoti, who appealed against the order of the CIT(A) confirming the income assessed by the Assessing Officer at Rs.6,50,36,075 for the Assessment Year 2014-15. The assessment was based on information from a search operation at a third party's location, which revealed large cash deposits in Lahoti's account. The primary legal contention was the validity of the notice issued under section 148 of the Income-tax Act, 1961, and the applicability of section 153C instead of section 147. The Tribunal dismissed the appeal, noting that the CIT(A) had set aside the original assessment for a de novo assessment by the AO, and all issues were to be reconsidered.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 633341 (ITAT-MUMBAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-06-2025
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2014-2015
• Other Referred Cases: UOI Vs. Rajeev Bansal [2024] 167 taxmann.com 70 (SC), Godrej Industries Vs. ACIT [2024] 160 taxmann.com 13 (Bombay), ITO 10(3)(1), Mumbai Vs. Pushpak Realities Pvt. Ltd. (ITA No. 4812, 4814, 4816/MUM/2024), Hexaware Technologies Ltd. Vs. ACIT, Circle 15(1)(2), [2024] 162 taxmann.com 225 (Bombay)
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: ADITYA RAI
• Assessee Lawyers: AJINKYA M. VAISHAMPAYAN
• Keywords: Set aside; Unexplained cash credit; Peak credit
• Section: 147; 148; 142(1); 132; 68

Judgement Text

"IN THE INCOME-TAX APPELLATE TRIBUNAL “A” BENCH, MUMBAI BEFORE SHRI SANDEEP GOSAIN, JUDICIAL MEMBER & SHRI PRABHASH SHANKAR, ACCOUNTANT MEMBER ITA no.265/MUM/2025 (A.Y. 2014-15) Aditya Jagdish Lahoti, 27/31, 4th Floor, Bootwala Building, Old Hanuman Lane, Kalbadevi, Mumbai 400 002, Maharashtra v/s. बनाम Assistant Commissioner of Income Tax, Circle– 23(1), 113, 1st Floor, Matru Mandir, Tardeo Road, Mumbai – 400007, Maharashtra स्थायी लेखा सं./जीआइआर सं./PAN/GIR No: AJRPL0027C Appellant/अपीलार्थी .. Respondent/प्रतिवादी Appellant by : Shri Ajinkya M. Vaishampayan, AR Respondent by : Shri Aditya Rai, (Sr. DR) Date of Hearing 04.06.2025 Date of Pronouncement 09.06.2025 आदेश / O R D E R PER PRABHASH SHANKAR [A.M.] :- The present appeal arising from the appellate order dated 22.11.2024 is filed by the assessee against the order passed by the Learned Commissioner of Income-tax (Appeals)/National Faceless Appeal Centre, Delhi [hereinafter referred to as “CIT(A)”] pertaining to assessment order passed u/s. 147 r.w.s. 144 of the Income-tax Act, 1961 [hereinafter referred to as “Act”] dated 25.05.2023 for the Assessment Year [A.Y.] 2014-15. P a g e | 2 ITA 265/Mum/2025 A.Y. 2014-15 Aditya Jagdish Lahoti 2. The grounds of appeal are as under:- On facts and in law, 1. The Ld. CIT(A)-NFAC erred in confirming the income assessed by the Ld. Assessing Officer at Rs.6,50,36,075/- without adjudicating all the grounds and basically based on information derived in the course of search at the place of third party can be assessed only u/s 153C of the Act. 2. The Ld. CIT(A)-NFAC erred in not adjudicating the validity of notice issued u/s 148 r.w.s. 149. The notice issued u/s 148, for A.Y. 2014-15 is invalid and liable to be squashed in light of the decisions of a) The Hon'ble Supreme Court in the case of UOI Vs. Rajeev Bansal [2024] 167 taxmann.com 70 (SC) and b) The Hon'ble Bombay High Court in the case of Godrej Industries Vs. ACIT [2024] 160 taxmann.com 13 (Bombay) and c) The Hon'ble ITAT Mumbai 'C' Bench in the case of ITO 10(3)(1), Mumbai Vs. Pushpak Realities Pvt. Ltd. (ITA No. 4812, 4814, 4816/MUM/2024). 3. The notice u/s 148 by the Jurisdictional Assessing Officer, instead of Faceless Assessing Officer is invalid and illegal, liable to be quashed in the light of the decision of Hon'ble Bombay High Court in the case of Hexaware Technologies Ltd. Vs. ACIT, Circle 15(1)(2), [2024] 162 taxmann.com 225 (Bombay). 4. The action of the Ld. Assessing Officer to issue Notice u/s 148 and completing the assessment u/s 147 is bad in law as the alleged cash deposit is noticed in the search at the place of third party and cannot be assessed u/s 147 instead of section 153C of the Act. 3. Brief facts of the case are that the assessee is an Individual whose return of income for the A.Y. 2014-15 was filed admitting a total income of Rs.2,29,020/. Subsequently, the ld.AO received information that a search operation carried out u/s 132 of the Act in the case of Shri Renuka Mata Multi State Urban Cooperative Credit Society on 26.05.2017 revealed the details of huge cash deposits in case of certain the account holders. As per the information, the assessee had deposited cash of Rs.6,47,61,345/- in his bank account. Hence, the assessment was P a g e | 3 ITA 265/Mum/2025 A.Y. 2014-15 Aditya Jagdish Lahoti reopened u/s 147 of the Act by issuing a notice u/s 148 of the Act on 23.07.2022. However, the assessee did not file any return of income in response to the notice issued. Later, the AO issued further notices as well as show cause notice but the assessee did not respond to any of them. Accordingly, the AO treated the entire cash deposit as unexplained credit u/s 68 of the Act and added back to the total income returned by the assessee in the original return of income filed. He completed the assessment u/s 147 r.w.s.144 of the Act by assessing the total income at Rs.6,50,36,075/-. 4. In the subsequent appeal, the ld.CIT(A) observed that during the course of appeal proceedings, the assessee challenged the notice issued u/s 148 of the Act on multiple grounds. The assessee claimed that there were several cash deposits and withdrawals. In order to verify the details of cash deposited and cash withdrawn summary, he specifically asked to furnish the cash book. However, the assessee admitted that no regular books of account were maintained and hence requested to consider the peak credit only, as against addition of entire cash deposit as unexplained money. He further noticed that the assessee did not file any return of income in response to the notice issued u/s 148 of the Act and also wilfully not responded to various notices issued u/s P a g e | 4 ITA 265/Mum/2025 A.Y. 2014-15 Aditya Jagdish Lahoti 142(1) of the Act. It is for this reason, the AO completed the assessment u/s 147 r.w.s. 144 of the Act. Keeping in view all these facts, the ld.CIT(A) set-aside the assessment order passed to the AO to pass a fresh assessment order by providing adequate opportunities to him. The assessee was also directed to co-operate with the AO during the course of assessment proceedings by furnishing the details of sources of investment. 5. We have carefully considered all the relevant facts of the case. We notice that the ld.CIT(A) has already set aside the assessment order which was passed ex parte due to non-compliance by the assessee and restored the order to the file of the AO for de novo assessment. We do not find any infirmity in the appellate order. The authority of CIT(A) is now also empowered to set aside any assessment order passed u/s 144 of the Act as per proviso to section 251(1)(a) of the Act w.e.f.1.10.2024 as per Finance (No.2) Act,2024.In such a situation, we are of the considered view that the appeal filed by the assessee before us is frivolous and infructuous since all the issues being raised in this appeal are already restored to the AO for fresh consideration and the assessee has been allowed liberty to furnish relevant details before the AO for due P a g e | 5 ITA 265/Mum/2025 A.Y. 2014-15 Aditya Jagdish Lahoti consideration. Accordingly, we do not find any merit in the appeal which is, therefore, dismissed. Order pronounced in the open court on 09.06.2025. Sd/- Sd/- SANDEEP GOSAIN PRABHASH SHANKAR (न्याययक सदस्य /JUDICIAL MEMBER) (लेखाकार सदस्य/ACCOUNTANT MEMBER) Place: म ुंबई/Mumbai ददनाुंक /Date 09.06.2025 Lubhna Shaikh / Steno आदेश की प्रयियलयि अग्रेयिि/Copy of the Order forwarded to : 1. अपीलार्थी / The Appellant 2. प्रत्यर्थी / The Respondent. 3. आयकर आयुक्त / CIT 4. विभागीय प्रविविवि, आयकर अपीलीय अविकरण DR, ITAT, Mumbai 5. गार्ड फाईल / Guard file. सत्यावपि प्रवि //True Copy// आदेशानुसार/ BY ORDER, उि/सहायक िंजीकार (Dy./Asstt. Registrar) आयकर अिीलीय अयिकरण/ ITAT, Bench, Mumbai. "