DCIT, CENTRAL CIRCLE-1, AURANGABAD V. SMT. ASHA B. KADAM, PUNE

ITA 1896/PUN/2024

AI Insights

The case involves multiple appeals related to the assessment years 2018-19 and 2019-20, concerning the income tax assessments of Smt. Asha Bhagwanrao Kadam, an individual engaged in investment and household management. The primary legal contention revolves around the validity of the notices issued under section 153A of the Income Tax Act, 1961, following a search operation. The Assessing Officer made significant additions to the assessee's income based on unaccounted cash transactions, which were contested. The CIT(A) initially quashed the assessment order, leading to appeals by both the Revenue and the assessee. The Tribunal's decision to restore the matter to the CIT(A) emphasizes the need for a detailed examination of the procedural and substantive aspects of the case.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 831338 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 4 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-01-2026
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: misc
• Appeal Filed On: 12-09-2024
• Other Referred Cases: PCIT vs. Abhisar Buildwell Pvt. Ltd., CIT vs. Sikhya  Anusandhan, PCIT vs. Subhash Khattar, Shri Fazal Sarang vs. DCIT, CIT vs. Jansampark Advertising & Marketing Limited, Ashok Chaddha vs. ITO, B. Kubendran vs. DCIT, Tarsem Singla vs. DCIT, CIT vs. Promy Kuriakose
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: S AMOL KHAIRNAR
• Assessee Lawyers: PRAMOD S SHINGTE
• Keywords: Set aside; Opportunity of being heard; Unexplained cash credit; Document seized; Documents seized; Principle of natural justice
• Section: 148; 143(3); 142(1); 132; 153A; 68; 131

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH “A”, PUNE BEFORE SHRI R. K. PANDA, VICE PRESIDENT AND Ms. ASTHA CHANDRA, JUDICIAL MEMBER IT(SS)A Nos.39 & 40/PUN/2024 Assessment year : 2019-20 DCIT, Central Circle – 1, Aurangabad Vs. Smt. Asha Bhagwanrao Kadam A-3/201, Karishma Society, Opp. Karve Road, Kothrud, Pune – 411038 PAN: AARPK2868D (Appellant) (Respondent) ITA Nos.1894, 1895 & 1896/PUN/2024 Assessment years : 2019-20, 2018-19 & 2018-19 DCIT, Central Circle – 1, Aurangabad Vs. Smt. Asha Bhagwanrao Kadam A-3/201, Karishma Society, Opp. Karve Road, Kothrud, Pune – 411038 PAN: AARPK2868D (Appellant) (Respondent) ITA Nos.607 to 611/PUN/2025 Assessment years : 2019-20 & 2018-19 Smt. Asha Bhagwanrao Kadam A-3/201, Karishma Society, Opp. Karve Road, Kothrud, Pune – 411038 Vs. DCIT, Central Circle – 1, Aurangabad PAN: AARPK2868D (Appellant) (Respondent) Assessee by : Shri Pramod S Shingte Department by : S/Shri Amol Khairnar, CIT-DR and Vidya Ratna Kishore Date of hearing : 16-12-2025 Date of pronouncement : 19-01-2026 Printed from counselvise.com 2 IT(SS)A Nos.39 & 40/PUN/2024 ITA Nos.1894 to 1896/PUN/2024 ITA Nos.607 to 611/PUN/2025 O R D E R PER BENCH: IT(SS)A No.39/PUN/2024 filed by the Revenue and ITA No.607/PUN/2025 filed by the assessee are cross appeals and are directed against the order dated 16.07.2024 of the Ld. CIT(A), Pune-12 relating to assessment year 2019-2020. IT(SS)A No.40/PUN/2024 and ITA No.1895/PUN/2025 filed by the Revenue and ITA Nos.610/PUN/2025 and 609/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 271D of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) relating to assessment 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 Printed from counselvise.com 3 IT(SS)A Nos.39 & 40/PUN/2024 ITA Nos.1894 to 1896/PUN/2024 ITA Nos.607 to 611/PUN/2025 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. Facts of the case, in brief, are that the assessee is an individual engaged in the business of carrying on the role of an investor along with handling the household responsibilities. She filed her return of income on 16.10.2019 declaring total income of Rs.1,48,82,180/-. The return was revised on 19.11.2019 declaring total income of Rs.1,46,76,910/-. A search action u/s 132 of the Act was conducted in Disha (Kotgire) Group of Aurangabad, Pune and Kolkata on 21.01.2020. The Kotgire Group is headed by Shri Devanand Narayan Kotgire (DNK in short) of Aurangabad and the main concerns of the group are under the brand name of DISHA. The group is engaged in real estate activity involving plotting activity and construction and sale of flats and shops. The group has also entered into partnerships with many persons for real estate activity including persons of Manjeet (Rajpal) Group, Pride group and Loharuka group. The assessee was also covered in the said search action u/s 132 of the Act conducted at Aurangabad. A search warrant was issued u/s 132 of the Act in the name of the assessee. A notice u/s 153A of the Act was also issued on 10.02.2021. The assessee in response to Printed from counselvise.com 4 IT(SS)A Nos.39 & 40/PUN/2024 ITA Nos.1894 to 1896/PUN/2024 ITA Nos.607 to 611/PUN/2025 the said notice filed her return of income electronically on 20.05.2021 declaring total income of Rs.1,31,01,660/- and agricultural income of Rs.1,42,561/-. The Assessing Officer thereafter issued a notice u/s 143(2) of the Act on 30.06.2021 which was duly served on the assessee. Subsequently notice u/s 142(1) of the Act along with a detailed questionnaire dated 21.09.2021 was issued to the assessee. The assessee in response to the same submitted various details as called for from time to time. 4. During the course of assessment proceedings the Assessing Officer noted that during the course of search u/s 132 of the Act at the business and residential premises of different members / associate concerns of the Manjeet Disha group of Aurangabad on 21.01.2020 some pocket diaries were seized at the residential premises of Shri Ratnakar Kulkarni who is an accountant in Disha group. The seized documents contain records of cash transactions pertaining to various concerns and individuals of Disha, Rajpal, Price and Loharuka groups for the past 10 years. These documents are in the form of small pocket diaries and contain the details of cash transactions which have been maintained very meticulously. He noted 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 Printed from counselvise.com 5 IT(SS)A Nos.39 & 40/PUN/2024 ITA Nos.1894 to 1896/PUN/2024 ITA Nos.607 to 611/PUN/2025 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 show cause notice asking the assessee to explain as to why the provisions of section 269SS and 269T of the Act should not be initiated. In absence of any reply filed by the assessee, the Assessing Officer held that the assessee has nothing to explain in this regard. He, therefore, invoking the provisions of section 68 r.w.s. 115BBE of the Act, made addition of Rs.2,97,23,580/- to the total income of the assessee and determined the income at Rs.4,28,25,240/-. 5. Before the Ld. CIT(A) the assessee, apart from challenging the addition on merit, raised an additional ground challenging the validity of the assessment on the ground that the order passed u/s 143(3) r.w.s. 153A of the Act dated 30.09.2021 was in consequence to a notice issued u/s 153A of the Act dated 10.02.2021 which Printed from counselvise.com 6 IT(SS)A Nos.39 & 40/PUN/2024 ITA Nos.1894 to 1896/PUN/2024 ITA Nos.607 to 611/PUN/2025 is invalid and void ab initio as there was no authorization against the assessee. Further, no incriminating material whatsoever was found in the case of the assessee. It was argued that the proceedings u/s 153A of the Act could not have been initiated and only the proceedings u/s 153C could have been initiated on the basis of the alleged incriminating material found in the possession of Disha group of cases. 6. Based on the arguments advanced by the assessee the Ld. CIT(A) quashed the assessment order dated 30.09.2021 passed u/s 143(3) r.w.s. 153A of the Act treating the same as invalid by observing as under: Printed from counselvise.com 7 IT(SS)A Nos.39 & 40/PUN/2024 ITA Nos.1894 to 1896/PUN/2024 ITA Nos.607 to 611/PUN/2025 Printed from counselvise.com 8 IT(SS)A Nos.39 & 40/PUN/2024 ITA Nos.1894 to 1896/PUN/2024 ITA Nos.607 to 611/PUN/2025 Printed from counselvise.com 9 IT(SS)A Nos.39 & 40/PUN/2024 ITA Nos.1894 to 1896/PUN/2024 ITA Nos.607 to 611/PUN/2025 Printed from counselvise.com 10 IT(SS)A Nos.39 & 40/PUN/2024 ITA Nos.1894 to 1896/PUN/2024 ITA Nos.607 to 611/PUN/2025 Printed from counselvise.com 11 IT(SS)A Nos.39 & 40/PUN/2024 ITA Nos.1894 to 1896/PUN/2024 ITA Nos.607 to 611/PUN/2025 Printed from counselvise.com 12 IT(SS)A Nos.39 & 40/PUN/2024 ITA Nos.1894 to 1896/PUN/2024 ITA Nos.607 to 611/PUN/2025 Printed from counselvise.com 13 IT(SS)A Nos.39 & 40/PUN/2024 ITA Nos.1894 to 1896/PUN/2024 ITA Nos.607 to 611/PUN/2025 7. Aggrieved with such order of the Ld. CIT(A), the Revenue is in appeal before the Tribunal by raising the following grounds: 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) Printed from counselvise.com 14 IT(SS)A Nos.39 & 40/PUN/2024 ITA Nos.1894 to 1896/PUN/2024 ITA Nos.607 to 611/PUN/2025 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) before holding the order 143(3) r.w.s. 153A dtd. 30.09.2021 to be invalid when as per the order of Hon'ble Delhi High Court in the case of CIT Vs Jansampark Advertising & Marketing Limited [375 ITR 373 (Delhi)], CIT(A) was required to conduct inquiry u/s 250(4) in cases of incomplete facts on record and incomplete inquiry by AO. 5. 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 dtd. 30.09.2021 was invalid and did not take cognizance of the corrected notice u/s 153A dated 01.08.2021 which may be verified by calling for records of the assessment proceedings. 6. On the facts and in the circumstances of the case and in law, the order of the Ld. CIT(A) may be set aside and order passed under section 143(3) r.w.s. 153A dated 30.09.2021 may be upheld. 7. The appellant craves leave to add, alter, modify, delete and amend any of the grounds, as per the circumstances of the case. 8. The assesse in the cross appeal has raised the following grounds: Grounds in ITA Ns.607/PUN/2025 1. On the facts and in the circumstances of the case and in law the learned Assessing Officer erred in initiating proceeding under section 153A by issuing notice dated 03/08/2021, without realizing the fact that no incriminating material whatsoever has been found in case of appellant and therefore entire proceedings are bad in law. Printed from counselvise.com 15 IT(SS)A Nos.39 & 40/PUN/2024 ITA Nos.1894 to 1896/PUN/2024 ITA Nos.607 to 611/PUN/2025 2. On the facts and in the circumstances of the case and in law the learned Assessing Officer erred in initiating proceedings under section 153A on the basis of alleged incriminating material which was found in the possession of Disha Group search conducted on 21/01/2020, under such circumstances the proceeding ought to have been initiated under section 153C of IT Act and therefore notice under section 153A is bad in law and consequential proceedings are not tenable in the eyes of law. 3. On the facts and in the circumstances of the case and in law the learned Assessing Officer erred in passing order under section 143(3) r.w.s 153A dated 30/09/2021, without specifying the DIN and Notice Number as envisaged in CBDT circular No. 19/2019 dated 14/08/2019 and therefore the relevant notice is invalid and consequently orders also becomes invalid. Without prejudice to the above ground following ground on is 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 addition of Rs.2,97,23,580/- on protective basis as according to him same amount will be added to the total income in hand of Devanand Narayanrao Kotgire on substantive basis, your appellant prays for deletion of entire addition. Your appellant prays for deletion of entire addition. Your appellant craves for to add, alter amend, modify, delete any or all grounds of appeal before or during the course of hearing in the interest of natural justice. 9. The Ld. Counsel for the assessee at the outset heavily relied on the order of the Ld. CIT(A) in quashing the assessment order passed u/s 143(3) r.w.s. 153A of Printed from counselvise.com 16 IT(SS)A Nos.39 & 40/PUN/2024 ITA Nos.1894 to 1896/PUN/2024 ITA Nos.607 to 611/PUN/2025 the Act. He submitted that the Assessing Officer initially issued a notice u/s 153A of the Act on 10.02.2021 for assessment years 2014-15 to 2019-20. However, when it was pointed to the Assessing Officer that there was no initial authorization against the assessee while sealing her bank lockers, the Assessing Officer issued a fresh notice u/s 153A of the Act on 03.08.2021. He submitted that the assessee in response to the first notice issued u/s 153A of the Act on 10.02.2021 had filed the return of income for all the six assessment years on 20.05.2021. The Assessing Officer had issued notice u/s 143(2) of the Act on 30.06.2021 on the basis of return filed on 20.05.2021 for assessment years 2014-15 to 2019-2020. When the Assessing Officer issued notice u/s 153A of the Act on 03.08.2021, although the assessee had not filed any return of income, however, the Assessing Officer considered the returns of income filed by the assessee earlier in response to the notice issued u/s 153A of the Act dated 10.02.2021 and passed the orders u/s 143(3) r.w.s. 153A of the Act. Since the order passed by the Assessing Officer is on the basis of return filed earlier in response to the defective notice u/s 153A of the Act and not based on the corrected fresh notice u/s 153A of the Act dated 03.08.2021, therefore, the Ld. CIT(A) was fully justified in quashing the assessment order as invalid. Further, no notice u/s 143(2) of the Act was issued to the assessee before completion of the assessment on the basis of correct 153A notice issued by the Assessing Officer. He submitted that no incriminating material whatsoever was found during the course of search, therefore, the decision of Hon’ble Supreme Court in the case of PCIT vs. Abhisar Buildwell Pvt. Ltd. Printed from counselvise.com 17 IT(SS)A Nos.39 & 40/PUN/2024 ITA Nos.1894 to 1896/PUN/2024 ITA Nos.607 to 611/PUN/2025 reported in (2023) 454 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. Referring to the decision of Hon’ble Delhi High Court in the case of CIT Vs Jansampark Advertising & Marketing Limited reported in 375 ITR 373 (Del), he submitted that the Ld. CIT(A) in the instant case has not applied his mind before quashing the assessment proceedings, hence the same is void ab initio. The Ld. DR filed a copy of the report obtained from the field which reads as under: Printed from counselvise.com 18 IT(SS)A Nos.39 & 40/PUN/2024 ITA Nos.1894 to 1896/PUN/2024 ITA Nos.607 to 611/PUN/2025 Printed from counselvise.com 19 IT(SS)A Nos.39 & 40/PUN/2024 ITA Nos.1894 to 1896/PUN/2024 ITA Nos.607 to 611/PUN/2025 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 that the Hon’ble High Court in the said decision has held that the issue of notice u/s 143(2) of the Act is not mandatory for finalization of assessment u/s 153A of the Act. 13. Referring to the decision of Hon’ble Madras High Court in the case of B. Kubendran vs. DCIT reported in (2021) 434 ITR 161 (Mad), he submitted that the Printed from counselvise.com 20 IT(SS)A Nos.39 & 40/PUN/2024 ITA Nos.1894 to 1896/PUN/2024 ITA Nos.607 to 611/PUN/2025 Hon’ble High Court in the said decision has held that in framing an assessment under section 153A, due regard must be given to the principles of natural justice, which requirement will stand satisfied either by issuance of notice under section 143(2) or a questionnaire under section 142(1). 14. Referring to the decision of Hon’ble Punjab and Haryana High Court in the case of Tarsem Singla vs. DCIT reported in (2016) 385 ITR 138 (P&H), he submitted that the Hon’ble High Court in the said decision has held that there is no mandatory requirement of issuance of notice u/s 143(2) of the Act in respect of assessment proceedings u/s 153A of the Act. 15. Referring to the decision of Hon’ble Kerala High Court in the case of CIT vs. Promy Kuriakose reported in (2016) 386 ITR 597 (Ker), he submitted that the Hon’ble High Court in the said decision has held that there is no requirement of notice u/s 143(2) of the Act for completing an assessment u/s 153C and if that is so the question of time limit prescribed under the proviso to section 153A(2) of the Act does not have any relevance for assessment proceedings u/s 153C of the Act. He accordingly submitted that since the Ld. CIT(A) has not considered the facts properly and has quashed the assessment proceedings on the ground that the Assessing Officer completed the assessment on the basis of return filed in response to the first notice issued u/s 153A of the Act, the same is liable to be quashed. He, however, submitted that since the Ld. CIT(A) has not decided the appeal on merit, Printed from counselvise.com 21 IT(SS)A Nos.39 & 40/PUN/2024 ITA Nos.1894 to 1896/PUN/2024 ITA Nos.607 to 611/PUN/2025 he has no objection if the matter is restored to his file with a direction to decide the grounds on merit. 16. We have heard the rival arguments made by both the sides, perused the orders of the Assessing Officer and the Ld. CIT(A) and the paper book filed on behalf of the assessee. We have also considered the various decisions cited before us. We find the Assessing Officer in the instant case completed the assessment u/s 143(3) r.w.s. 153A of the Act on 30.09.2021 determining the total income of the assessee 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 Printed from counselvise.com 22 IT(SS)A Nos.39 & 40/PUN/2024 ITA Nos.1894 to 1896/PUN/2024 ITA Nos.607 to 611/PUN/2025 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 consideration. Further the Assessing Officer has issued notice u/s 142(1) of the Act to the assessee after issue of the second notice u/s 153A of the Act dated 03.08.2021. Since the assessee has not filed any return in response to the second notice, the question of issue of notice u/s 143(2) does not arise. It is also his submission that even otherwise also in case of assessment u/s 143(3) r.w.s. 153A of the Act no notice u/s 143(2) of the Act is required. It is also his submission that since the Ld. CIT(A) has not adjudicated the issue on merit, the same may be restored to the file of the Ld. CIT(A) for fresh adjudication. 17. We find some force in the above arguments of the Ld. DR. A perusal of the comments of the DCIT which has already been reproduced in the preceding paragraphs shows that after the Assessing Officer noticed the mistake that no search has taken place in the case of the assessee on the basis of search warrant dated 21.01.2020, he dropped the first proceedings initiated u/s 153A of the Act dated 10.02.2021 and fresh proceeding were initiated by issuing notice u/s 153A dated 03.08.2021. A perusal of the copies of the order sheet entries shows that the notices u/s 142(1) of the Act were duty issued subsequent to the second notice dated 03.08.2021 issued u/s 153A of the Act. Under these circumstances, we are unable to accept the order of the Ld. CIT(A) in quashing the assessment order dated 30.09.2021 passed u/s 143(3) r.w.s. 153A of the Act holding the same to be invalid. We find the Hon’ble Delhi High Court in the case of CIT vs. Jansampark Printed from counselvise.com 23 IT(SS)A Nos.39 & 40/PUN/2024 ITA Nos.1894 to 1896/PUN/2024 ITA Nos.607 to 611/PUN/2025 Advertising and Marketing P. Ltd. (supra) has held that the 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 obligation of the first appellate authority, as indeed of the Tribunal, to have ensured that effective inquiry was carried out. The relevant observations of Hon’ble High Court from para 38 onwards read as under: “38. The provision of appeal, before the CIT (Appeals) and then before the ITAT, is made more as a check on the abuse of power and authority by the AO. Whilst it is true that it is the obligation of the AO to conduct proper scrutiny of the material, given the fact that the two appellate authorities above are also forums for fact-finding, in the event of AO failing 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 escaped assessment, particularly when some unexplained credit entries have come to the notice (as in Section 68), cannot conclude, save and except by reaching satisfaction on the touchstone of the three tests mentioned earlier; viz. the identity of the third party making the payment, its creditworthiness and genuineness of the transaction. Whilst it is true that the assessee cannot be called upon to adduce conclusive proof on all these three questions, it is nonetheless legitimate expectation of the process that he would bring in some proof so as to discharge the initial burden placed on him. Since Section 68 itself declares that the credited sum would have to be included in the income of the assessee in the absence of explanation, or in the event of explanation being not satisfactory, it naturally follows that the material submitted by the assessee with his explanation must itself be wholesome or not Printed from counselvise.com 24 IT(SS)A Nos.39 & 40/PUN/2024 ITA Nos.1894 to 1896/PUN/2024 ITA Nos.607 to 611/PUN/2025 untrue. It is only when the explanation and the material offered by the assessee at this stage passes this muster that the initial onus placed on him would shift leaving it to the AO to start inquiring into the affairs of the third party. 40. The CIT (Appeals), as also the ITAT, in the case at hand, in our view, unjustifiably criticized the AO for not having confronted the assessee with the facts regarding return of some of the summons under Section 131 or not having given opportunity for the identity of all the share applicants to be properly established. The order sheet entries taken note of in the order of CIT (Appeals) seem to indicate otherwise. The order of CIT (Appeals), which was confirmed by ITAT in the second appeal, does not demonstrate as to on the basis of which material it had been concluded that the genuineness of the transactions had been duly established. There is virtually no discussion in the said orders on such score, except for vague description of the material submitted by the assessee at the appellate stage. Whilst it does appear that the time given to the assessee for proving the identity of the third party was too short, and further that it is probably not always possible for the assessee placed in such situation to be able to enforce the physical attendance of such third party (who, in the case of share applicants vis-à-vis a company, would be individuals at large and may not be even in direct or personal contact), the curtains 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 obligation of the first appellate authority, as indeed of ITAT, to have ensured that effective inquiry was carried out, particularly in the face of the allegations of the Revenue that the account statements reveal a uniform pattern of cash deposits of equal amounts in the respective accounts preceding the transactions in question. This necessitated a detailed scrutiny of the material submitted by the assessee in response to the notice under Section 148 issued by the AO, as also the material submitted at the stage of appeals, if deemed proper by way of making or causing to be made a \"further inquiry\" in exercise of the power under Section 250(4). This approach not having been adopted, the impugned order of ITAT, and consequently that of CIT (Appeals), cannot be approved or upheld. Printed from counselvise.com 25 IT(SS)A Nos.39 & 40/PUN/2024 ITA Nos.1894 to 1896/PUN/2024 ITA Nos.607 to 611/PUN/2025 43. In the result, the questions of law stand answered in favour of the Revenue though with a direction that the matter of assessment arising out of notice under Section 148 Income Tax Act issued on 18.04.2007 for AY 2004-05 in respect of the assessee would stand remitted to the CIT (Appeals) for fresh consideration/adjudication in accordance with law. 44. In above view, the contentions of the assessee respecting the validity of the assessment, as preserved for consideration by this court by order dated 29.08.2014 in ITAT No. 289/2014, would also be examined by the CIT (Appeals). Given the fact that such objections have a bearing on the issue of jurisdiction, consideration of such contentions of the assessee must precede the scrutiny of the questioned credit entries from the perspective of Section 68. 45. The appeal is disposed of in above terms.” 18. Respectfully following the decision of Hon’ble Delhi High Court cited (supra), we deem it proper to restore the issue to the file of the Ld. CIT(A) with a direction to adjudicate the issue afresh and in accordance with law after obtaining the remand report from the Assessing Officer regarding the chronology of events that led to the issue of second notice by the Assessing Officer and as to whether any return has been filed by the assessee in response to the same or not and whether notice u/s 142(1) were issued or not and whether the assessment order was passed based on the first defective notice u/s 153A or the correct second notice u/s 153A. Needless to say, the Ld. CIT(A) shall decide the issue as per fact and law 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. Printed from counselvise.com 26 IT(SS)A Nos.39 & 40/PUN/2024 ITA Nos.1894 to 1896/PUN/2024 ITA Nos.607 to 611/PUN/2025 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 directions. 21. In the result, all the appeals filed by the Revenue as well as the assessee are allowed for statistical purposes. Order pronounced in the open Court on 19th January, 2026. Sd/- Sd/- (ASTHA CHANDRA) (R. K. PANDA) JUDICIAL MEMBER VICE PRESIDENT पुणे Pune; दिन ांक Dated : 19th January, 2026 GCVSR Printed from counselvise.com 27 IT(SS)A Nos.39 & 40/PUN/2024 ITA Nos.1894 to 1896/PUN/2024 ITA Nos.607 to 611/PUN/2025 आदेश की प्रतितिति अग्रेतिि/Copy of the Order is forwarded to: 1. अपील र्थी / The Appellant; 2. प्रत्यर्थी / The Respondent 3. 4. The concerned Pr.CIT, Pune DR, ITAT, ‘A’ Bench, Pune 5. ग र्ड फ ईल / Guard file. आदेशानुसार/ BY ORDER, // True Copy // Assistant Registrar आयकर अपीलीय अदिकरण ,पुणे / ITAT, Pune S.No. Details Date Initials Designation 1 Draft dictated on 14.01.2026 Sr. PS/PS 2 Draft placed before author 16.01.2026 Sr. PS/PS 3 Draft proposed & placed before the Second Member JM/AM 4 Draft discussed/approved by Second Member AM/AM 5 Approved Draft comes to the Sr. PS/PS Sr. PS/PS 6 Kept for pronouncement on Sr. PS/PS 7 Date of uploading of Order Sr. PS/PS 8 File sent to Bench Clerk Sr. PS/PS 9 Date on which the file goes to the Office Superintendent 10 Date on which file goes to the A.R. 11 Date of Dispatch of order Printed from counselvise.com "