GEETA SHARMA,SUNAM V. ITO, SUNAM

ITA 491/CHANDI/2025

AI Insights

The case involves an appeal by Geeta Sharma against the orders of the Commissioner of Income Tax (Appeals) and the Income Tax Officer, Sunam, for the assessment year 2015-16. The primary contention was the legality of the notice issued under Section 148 and the subsequent reassessment. The assessee argued that the notice was issued beyond the permissible time limit and without proper jurisdiction, as it was not issued by the designated Assessing Officer but through a faceless assessment process. The Tribunal examined the procedural validity of the notice and the reassessment, referencing several judicial precedents and statutory provisions.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 787279 (ITAT-CHANDIGARH)
• Duration Of Justice: 7 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-11-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2015-2016
• Appeal Filed On: 03-04-2025
• Other Referred Cases: UOI v. Rajeev Bansal [2024] 167 taxmann.com 70 / 301 Taxman 238 (SC), Indo Pacific Finlease Ltd Chandigarh vs PCIT Chandigarh, Kalyan Chillara S/o Kotaiah Naidu vs DCIT, Parveen Kumar Mittal Vs. The Pr. CIT, M/s Westlife Development Ltd, Kiran Singh & Ors. v. Chaman Paswan & Ors., Sushil Kumar Mehta vs Gobind Ram Bohra, Indian Bank vs Manual Govindji Khona, Mavany Brothers vs CIT, P. V. Doshi vs CIT, Dhiraj Suri vs ACIT, Inventors Industrial Corporation Ltd vs CIT
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PREM SINGH
• Assessee Lawyers: RAJIV SALDI
• Keywords: Set aside; Difference of opinion; Change of opinion; Reassessment proceedings; Block assessment; Revision of order; Borrowed satisfaction; CHAPTER IV
• Section: 147; 148; 143(3); 263

Judgement Text

" आयकर अपीलȣय अͬधकरण, चÖडीगढ़ Ûयायपीठ, चÖडीगढ़ IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH, ‘SMC’, CHANDIGARH BEFORE SHRI LALIET KUMAR, JUDICIAL MEMBER आयकर अपील सं./ ITA No. 491/CHD/2025 Ǔनधा[रण वष[ / Assessment Year : 2015-16 Geeta Sharma, City Petroleums Mata Modi Road, Sunam 148028 बना म Vs. ITO, Sunam èथायी लेखा सं./PAN NO: AOBPS2947F अपीलाथȸ/Appellant Ĥ×यथȸ/Respondent Assessee by : Sh. Rajiv Saldi, CA Revenue by : Sh. Prem Singh, Addl. CIT सुनवाई कȧ तारȣख/Date of Hearing : 12-11-2025 उदघोषणा कȧ तारȣख/Date of Pronouncement : 17-11-2025 आदेश/Order This appeal by the assessee is directed against the order of the Commissioner of Income Tax (Appeals), NFAC, dated 19.02.2025, for the assessment year 2015-16. 2. The grounds of appeal raised by the Assessee are as under: - 1. That CIT(A) has failed to give any findings on the legal issue raised before him that no notice U/s 143(2) has been issued by AO Printed from counselvise.com 2 during the entire assessment proceedings despite the fact that in response to notice U/s 148 dated 31.03.2021 the return was filed on 21.04.2021 as such the assessment proceedings are bad in law. 2. That CIT(A) has wrongly and arbitrarily dismissed all the grounds of appeal for non- prosecution, without putting the appellant to the notice in this regard, as all the notices by CIT(A) are sent to wrong email id. 3. Besides, the Assessee has also raised additional grounds of appeal which are as under: 1. That the notice u/s 148 is without jurisdiction as the same is issued beyond the time limit prescribed u/s 149 of the Act. 2. That the notice issued 148 has been issued by the jurisdictional Assessing Officer and the assessment is illegally framed in faceless manner as such the assessment proceedings are bad in law. 4. At the outset, ld. Counsel for the Assessee submitted that the Ld. CIT(A) has failed to give any finding on the legal issue raised before him, and also dismissed the appeal of the Assessee for non-prosecution without service of notice on the Assessee. 5. The facts of the case are that in the present case, the Assessee has submitted that the notice for F.Y. 2015-16 was Printed from counselvise.com 3 issued by the Assessing Officer on 1.4.2022, as per portal whereas the notice was dated 31.3.2021. He has drawn my attention to page 6 of the paper book which is to the following effect:- He has also drawn our attention to notice dated 31.03.2021. The submission of the Assessee was that the notice is that as per the judgement of the Hon'ble Supreme Court in the case UOI v. Rajeev Bansal [2024] 167 taxmann.com 70 / 301 Printed from counselvise.com 4 Taxman 238 (SC) as per which the notice was required to be on or before 31.3.2021 and not on 1.4.2021. Since the notice was issued after the statutory period, the same is liable to be quashed. 6. Furthermore, in addition to the above submission, it was submitted that the addition in the present case was less than Rs. 50 lacs and as per the amended provisions of law, no notice can be issued beyond the period of three years. For the purpose mentioned above, the Ld. AR had drawn my attention to the decision of the Tribunal in the case of ‘Indo Pecific Finlease Ltd Chandigarh vs PCIT Chandigarh’ in ITA Nos. 448 & 449/Chd/2024 order dt. 16.4.2025 and also the decision of the Telangana High Court Common order dated 14.6.2024 pronounced in the in the case of ‘Kalyan Chillara S/o Kotaiah Naidu vs DCIT’ in Writ Petition Nos. 20301 (relevant) alongwith other writ petitions of 2022. 7. Per contra, the Ld. DR relied on the order of the lower authorities. 8. I have heard the rival contentions and perused the material available on record. In the present case the Ld. DR Printed from counselvise.com 5 had not drawn my attention to any document contradicting the submissions made on both the points. He had also not filed any document showing that the email was sent on 31/3/2021, though at the portal, it is mentioned that the notice was sent on 1/4/2021. In the absence of the above said documents and evidence I have no other option but to follow the decision of the coordinate Bench. 6. I find that the issue raised is squarely covered by the aforesaid decisions of the Tribunal rendered in the case of ‘Indo Pacific Finlease, Chandigarh vs PCIT’ (supra) wherein the Tribunal referring to the numerous decisions has decided the issue in favour of the Assessee. The relevant part of the order dt. 16.4.2025 is reproduced as under: - “12. We have heard the rival contention of the parties and perused the material available on the record. 13. Before adjudicating the issue at hand, it is pertinent to reproduce the relevant statutory provisions of the Income Tax Act, 1961, and the Income Tax Rules, 1962, which govern the issuance and service of notice under Section 148. The provisions relevant for our consideration are Sections 148, 149, and 282 of the Act, along with Rule 127 of the Rules. These are reproduced below for ready reference: Section 148 – Issue of Notice where Income has Escaped Assessment (1) Before making the assessment, reassessment or recomputation under section 147, the Assessing Officer shall serve on the assessee a notice requiring him to furnish, within such period as may be specified in the notice, a return of his income or the Printed from counselvise.com 6 income of any other person in respect of which he is assessable under this Act, for the relevant assessment year, in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed; (2) The Assessing Officer shall, before issuing any notice under sub-section ( 1), conduct such inquiries, as he deems fit, to obtain prior approval of the specified authority. Section 149 – Time Limit for Notice (1) No notice under section 148 shall be issued for the relevant assessment year— ( a) if three years have elapsed from the end of the relevant assessment year, unless the case falls under clause ( b); ( b) if three years, but not more than ten years, have elapsed from the end of the relevant assessment year, only if the Assessing Officer has in his possession books of account or other documents or evidence which reveal that the income chargeable to tax, represented in the form of asset, which has escaped assessment amounts to or is likely to amount to fifty lakh rupees or more. Section 282 – Service of Notice Generally (1) The service of a notice or summon or requisition or order or any other communication under this Act may be made by delivering or transmitting a copy thereof to the person named therein— (a) by post or by such courier services as may be approved by the Board; or (b) in such manner as provided under the Code of Civil Procedure, 1908; or (c) in the form of any electronic record as provided in Chapter IV of the Information Technology Act, 2000; or (d) by any other means of transmission, including electronic mail or fax message, as the Board may notify. (2) The Board may make rules providing for the addresses (including the address for electronic mail or electronic mail message) to which such communication may be delivered or transmitted. Rule 127 – Service of Notice, Summons, Requisition, Order, and Other Communication (1) For the purposes of sub-section ( 2) of section 282 , the address of the assessee for communication shall be— Printed from counselvise.com 7 (a) the address available in the PAN database of the assessee; or (b) the address available in the return of income furnished by the assessee for the relevant assessment year; or (c) the address available in the last income-tax return furnished; or (d) the address available in the records of the Assessing Officer; or (e) the email address available in the electronic filing account registered by the assessee. (2) The communication shall be deemed to have been delivered— (a) if sent by post—at the time at which it would be delivered in the ordinary course of post; (b) if delivered electronically—at the time of sending the electronic record. 14. Upon a conjoint reading of Sections 148, 149, and 282 of the Income Tax Act, 1961, along with Rule 127 of the Income Tax Rules, 1962, it becomes abundantly clear that a communication shall be deemed to be delivered or transmitted electronically at the moment it is sent to the email address provided in the income tax return furnished by the assessee, or to any other email address available with the Income Tax Department. 15. The legislature, for the purpose of service of notice under Section 148, has employed the expressions “delivered” or “transmitted,” and the term “served.” In the present case, although the notice under Section 148 was generated on the CBDT portal on 31st March 2021, the actual service through electronic mode was effectuated only on 1st April 2021. Thus the notice was issued beyond period, hence was not in accordance with law. 16. In our considered view, the issuance of notice beyond the statutory time limit prescribed under Section 149 of the Act, is in direct contravention of the ratio laid down by the Hon’ble Supreme Court in Rajiv Bansal (supra), renders the notice invalid and void ab initio. Accordingly, the notice issued under Section 148 is bad in law. Consequently, the assessment order passed by the Assessing Officer pursuant to such a notice is nonest in the eyes of law and cannot be treated as a valid and lawful order. 17. Having held that the notice issued under Section 148 and the consequent assessment order are bad in law, the next question that arises is whether the learned Principal Commissioner of Income Tax (PCIT) could invoke jurisdiction under Section 263 of the Act to revise such a non-existent and invalid order. Printed from counselvise.com 8 18. In our considered opinion, the learned PCIT lacks the jurisdiction to revise an order which is non est. The exercise of powers under Section 263 presupposes the existence of a valid and legally sustainable assessment order. Unless such an order exists, there can be no question of treating it as erroneous or prejudicial to the interest of revenue. For any order to be revised under Section 263, it must first be in existence and recognized in law as such. 19. In the present case, since the assessment order has been held by us to be invalid and non-existent—having been issued and passed in contravention of the law—we do not find any merit in the contention of the learned Departmental Representative (DR) that the learned PCIT was justified in invoking revisional jurisdiction. Once the foundation of the assessment itself is held to be void ab initio, the consequential revisional proceedings under Section 263 cannot be sustained in law. 20. Lastly in this regard, we may also refer to the decision of the Coordinate Bench referred by the Ld. AR in case of Parveen Kumar Mittal Vs. The Pr. CIT in ITA No 22/Chd/2021 dt. 02/11/2021 wherein the coordinate Bench has held as under:- 14. In the case of M/s Westlife Development Ltd.(supra) the ITAT has, after referring to various case laws held that the legality of the proceedings can be agitated in a subsequent proceeding or even in a collateral proceeding or execution proceeding also. The relevant findings of the ITAT are as under: “7. We have heard both the parties on this issue and also gone through the orders passed by the lower authorities as well as the judgments relied upon before us. In our view, we need to decide following issues, before we go into any other issues or merits of the impugned order: 1. Whether the assessee can challenge the validity of an assessment order during the appellate proceedings pertaining to examination of validity of order passed u/s 263? 2. Whether the impugned assessment order passed u/s 143(3) dated 24-10-2013 was valid in the eyes of law or a nullity as has been claimed by the assessee? 3. If the impugned assessment order passed u/s 143(3) was illegal or nullity in the eyes of law, then, whether the CIT had a valid jurisdiction to pass the impugned order u/s 263 to revise the non est assessment order? In our considered view, since these issues are jurisdictional issues and go to the root of the matter, therefore before dealing with any other issue, we shall first deal with all above three issues one by one, as under: 8. Challenging the jurisdictional defects of assessment order for assailing the jurisdictional validity of the revision order passed u/s 263: The first issue that arises for our consideration is - Printed from counselvise.com 9 whether the assessee can challenge the jurisdictional validity of order passed u/s 143(3) in the appellate proceedings taken up for challenging the order passed u/s 263? If we analyse the nature of both of these proceedings, which are under consideration before us, we find that the original assessment proceedings can be classified in a way as 'primary proceedings'. These are, in effect, basic / foundational proceedings and akin to a platform upon which any subsequent proceedings connected therewith can rest upon. The proceedings initiated u/s 263 seeking to revise the original assessment order is off shoot of the primary proceedings and therefore, these may be termed as 'collateral proceedings' in the legal framework. The issue that arises here is whether any illegality/invalidity in the order passed in the 'primary proceedings' can be set up in the 'collateral proceedings' and if yes, then of what nature? 8.1. We have analysed this issue carefully. There is no doubt that after passing of the original assessment order, the primary (i.e. original proceedings) had come to an end and attained finality and, therefore, outcome of the same cannot be disturbed, and therefore, the original assessment order framed to conclude the primary proceedings had also attained finality and it also cannot be disturbed at the instance of the assessee, except as permitted under the law and by following the due process of law. Under these circumstances, it can be said that effect of the original assessment order cannot be erased or modified subsequently. In other words, whatever tax liability had been determined in the original assessment order that had already become final and that cannot be sought to be disturbed by the assessee. But, the issue that arises here is that if the original assessment order is illegal in terms of its jurisdiction or if the same is null & void in the eyes of law on any jurisdictional grounds, then, whether it can give rise to initiation of further proceedings and whether such subsequent proceedings would be valid under the law as contained in Income Tax Act? It has been vehemently argued before us that the subsequent proceedings (i.e. collateral proceedings) derive strength only from the order passed in the original proceedings (i.e. primary proceedings). Thus, if order passed in the original proceedings is itself illegal, then that cannot give rise to valid revision proceedings. Therefore, as per law, the validity of the order passed in the primary (original) proceedings should be allowed to be examined even at the subsequent stages, only for the limited purpose of examining whether the collateral (subsequent) proceedings have been initiated on a valid legal platform or not and for examining the validity of assumption of jurisdiction to initiate the collateral proceedings. If it is not so allowed, then, it may so happen that though order passed in the original proceedings was illegal and thus order passed in the subsequent proceedings in turn would also be illegal, but in absence of a remedy to contest the same, it may give rise to an 'enforceable' tax liability without authority of law. Therefore, the Courts have taken this view that jurisdictional aspects of the order passed in the primary proceedings can be examined in the collateral Printed from counselvise.com 10 proceedings also. This issue is not res integra. This issue has been decided in many judgments by various courts, and some of them have been discussed by us in followings paragraphs. 8.2. In a matter that came up before Hon'ble Supreme Court in the case of Kiran Singh & Ors. v. Chaman Paswan & Ors., [1955] 1 5CR 117 the facts were that the appellant in that case had undervalued the suit at Rs.2,950 and laid it in the court of the Subordinate Judge, Monghyr for recovery of possession of the suit lands and mesne profits. The suit was dismissed and on appeal it was confirmed. In the second appeal in the High Court the Registry raised the objection as to valuation under Section 11. The value of the appeal was fixed at Rs.9,980. A contention then was raised by the plaintiff in the High Court that on account of the valuation fixed by the High Court the appeal against the decree of the court of the Subordinate Judge did not lie to the District Court, but to the High Court and on that account the decree of the District Court was a nullity. Alternatively, it was contended that it caused prejudice to the appellant. In considering that contention at page 121, a four Judge Bench of Hon'ble Supreme Court speaking through Vankatarama Ayyar, J. held that: \"it is a fundamental principle well-established that a decree passed by a Court without jurisdiction is a nullity, and that its invalidity could be set up whenever and wherever it is sought to be enforced or relied upon, even at the stage of execution and even in collateral proceedings. A defect of jurisdiction, whether it is pecuniary or territorial, or whether it is in respect of the subject-matter of the action, strikes at the very authority of the Court to pass any decree and such a defect cannot be cured even by consent of parties.\" 8.3. This judgment was subsequently followed by Hon'ble Supreme Court in the landmark case of Sushil Kumar Mehta vs Gobind Ram Bohra, (1990) 1 SCC 193, wherein an issue arose whether a decree can be challenged at the stage of execution and whether a decree which remained uncontested operates as res-judicata qua the parties affected by it. Hon'ble apex court, taking support from aforesaid judgment, observed as under: \"In the light of this position in law the question for determination is whether the impugned decree of the Civil Court can be assailed by the appellant in execution. It is already held that it is the Controller under the Act that has exclusive jurisdiction to order ejectment of a tenant from a building in the urban area leased out by the landlord. Thereby the Civil Court inherently lacks jurisdiction to entertain the suit and pass a decree of ejectment. Therefore, though the decree was passed and the jurisdiction of the Court was gone into in issue Nos. 4 and 5 at the ex-parte trial, the decree there-under is a nullity, and does not bind the appellant. Therefore, it does not operate as a res judicata. The Courts below have committed grave error of law in holding that the decree in the suit operated Printed from counselvise.com 11 as res judicata and the appellant cannot raise the same point once again at the execution.\" 8.4. Similar view has been taken by Hon'ble Supreme Court by following aforesaid judgments recently in the case of Indian Bank vs Manual Govindji Khona reported in 2015 (3) SCC 712. Further, similar view was emphasized by Hon'ble Bombay High Court (GOA Bench) in the case of Mavany Brothers vs CIT (Tax Appeal No 8 of 2007) in its order dt 17th April, 2015 wherein it was held that an issue of jurisdiction can be raised at any time even in appeal or execution. 8.5. The aforesaid principles, enunciated by the Apex Court in the case of Kiran Singh & Ors. v. Chaman Paswan & Ors, supra were reiterated by the Apex Court in the cases of Superintendent of Taxes vs Onkarmal Nathmal Trust (AIR 1975 SC 2065) and Dasa Muni Reddy v. Appa Rao (AIR 1974 SC 2089). In the first of these decisions it was pointed out that revenue statutes protect the public on the one hand and confer power upon the State on the other, and the fetter on the jurisdiction is one meant to protect the public on the broader ground of public policy and, therefore, jurisdiction to assess or reassess a person can never be waived or created by consent. This decision shows that the basic principle recognized in Kiran Singh (supra) is applicable even to revenue statutes such as the Income Tax Act. Dasa Muni Reddy (supra) is a judgment where the principle of 'coram non judice' was applied to rent control law. It was held that neither the rule of estoppel nor the principle of res ludicata can confer the Court jurisdiction where none exists. Here also the principle that was put into operation was that jurisdiction cannot be conferred by consent or agreement where it did not exist, nor can the lack of jurisdiction be waived. 8.6. These judgments were subsequently noticed by Hon'ble Gujarat High Court in the case of P. V. Doshi 113 ITR 22(Gujrat). This case arose under the Income Tax Act with reference to the provisions of Section 147 dealing with re-assessment. The facts were that the assessment was sought to be reopened under Section 147 and notice under section 148 was issued. Validity of reopening was not challenged upto Tribunal and additions were challenged on merits only. The Tribunal restored the matter to the Assessing Officer with some directions to reexamine the issue on merits. When the matter came back to the assessing officer the assessee specifically raised the point of jurisdiction to reopen the assessment, contending that the notice of reopening was prompted by a mere change of opinion. The AO rejected plea of the assessee but the AAC accepted this ground and also held the reassessment to be bad in law on jurisdictional ground. Against the order of the AAC the Revenue went in appeal before the Tribunal and specifically raised the plea that the question of jurisdiction to reopen the assessment having been expressly given up by the assessee in the appeal against the reassessment order in the first round, the Printed from counselvise.com 12 assessee was debarred from raising that point again before the AAC and the AAC was equally wrong in permitting the assessee to raise that point which had become final in the first round and in adjudicating upon the same. The plea of the Revenue impressed the Tribunal which took the view that after its earlier order in the first round of proceedings the matter attained finality with regard to the point of jurisdiction which was given up before the AAC and not agitated further and that in the remand proceedings what was open before the Assessing Officer was only the question whether the addition was justified on merits and the point regarding the jurisdictional aspect was not open before the Assessing Officer. According to the Tribunal, the assessee having raised the point in the first round and having given it up could not revive it in the second round of proceedings where the issue was limited to the merits of the additions. In this view, the Tribunal accepted the Revenues plea. The assessee thereafter carried order of the Tribunal in reference before the Gujarat High Court. The High Court after considering various judgments of the Supreme Court on the point of jurisdiction to reopen the assessment and also after specifically discussing the judgment of the Supreme Court in Onkarmal Nathmal Trust (supra) and Dasa Muni Reddy (supra) held that the Tribunal was in error in holding that the question of jurisdiction became final when it passed the earlier remand order. It was held that neither the question of res judicata nor the rule of estoppel could be invoked where the jurisdiction of an authority was under challenge. According to Hon'ble Gujarat High Court, the rule of res judicata cannot be invoked where the question involved is the competence of the Court to assume jurisdiction, either pecuniary or territorial or over the subject matter of the dispute. Hon'ble High Court further held that since neither consent nor waiver can confer jurisdiction upon the Assessing Officer where it did not exist, no importance could be attached to the fact that the assessee, in the first round of proceedings, expressly gave up the plea against the erroneous assumption of jurisdiction by the assessing authority. According to the Hon'ble Court, the \"finality or conclusiveness could only arise in respect of orders which are competent orders with jurisdiction and if the proceedings of reassessment are not validly initiated at all, the order would be a void order as per the settled legal position which could never have any finality or conclusiveness. If the original order is without jurisdiction, it would be only a nullity confirmed in further appeals'. In this view of the matter, Hon'ble High Court finally answered the reference in favour of the assessee. 8.7. It is further noted that many of these judgments were discussed and followed by the co-ordinate bench of the Tribunal in the case of Indian Farmers Fertilizers Co-operative Ltd vs KIT 105 lTD 33 (Del), wherein a similar issue had arisen. In this case, the issue raised before the bench was whether it is open to the assessee, not having appealed against the reassessment order, to set up or canvass its correctness in collateral proceedings taken for rectification thereof u/s 154. The bench minutely analysed Printed from counselvise.com 13 law in this regard and applying the principle of 'coram non judice' and following aforesaid judgments of the supreme court, it was held that if an assessee seeks to challenge the reassessment proceedings as being without jurisdiction, when action for rectification is sought to be taken on the assumption of the validity of the reassessment order, then the assessee has to step in and protect its interests and the liberty to question even the validity of the reassessment proceedings ought to be given to it.......\" (emphasis supplied) 8.8. Similar view was taken in another decision of the Tribunal in the case of Dhiraj Suri vs ACIT 98 lTD 87 (Del). In the said case, appeal was filed by the assessee before the Tribunal against the levy of penalty. In the appeal challenging the penalty order, the assessee challenged the validity of block assessment order which had determined the tax liability of the assessee on the basis of which penalty was levied subsequently. The revenue objected with respect to the ground of the assessee raising jurisdictional issues of assessment proceedings in the appeal against the penalty order. After analysing the legal position, as clarified by Hon'ble Gujrat High Court in the case of P.V. Doshi, supra and Hon'ble Bombay High Court in the case of Jainaravan Babulal vs CIT. 170 ITR 399, the bench held as that if the block assessment itself is without jurisdiction then there is no question of levy of any penalty u/s. 158BFA(2) and therefore it is open to the assessee to set up the question of validity of the assessment in the appeal against the levy of penalty. 8.9. We also derive support from another judgement of Hon'ble Bombay High Court in the case of Inventors Industrial Corporation Ltd vs CIT 194 ITR 548 (Bombay) wherein it was held that assessee was entitled to challenge the jurisdiction of the AO to initiate re- assessment proceedings before the CIT(A) in the second round of proceedings, even though he had not raised it in earlier proceedings before the Assessing Officer or in the earlier appeal. 8.10. Thus, on the basis of aforesaid discussion we can safely hold that as per law, the assessee should be permitted to challenge the validity of order passed u/s 263 on the ground that the impugned assessment order was non est and we hold accordingly.\" 15. Ld. DR was unable to point out any decision holding to the contrary. Therefore the objection of the Ld. DR to the argument of the Ld.Counsel for the assessee challenging the legality of the present proceedings u/s 263 of the Act, by contesting the validity of the original proceedings u/s 147 of the Act, we hold merits no consideration and is dismissed. 16. Having said so, coming to the facts of the present case before us, the assessee’s argument in support of his contention that the original proceedings in the present case, u/s 147 of the Act, was invalid, is the insufficiency of information leading to the formation of belief of escapement of income, which it is settled Printed from counselvise.com 14 law, is an essential prerequisite for reopening the case u/s 147 of the Act. 17. We have patiently heard at length the arguments of both the parties in this regard and have also carefully perused the contents of the reasons recorded for reopening the case of the assessee placed before us at Paper Book page No.15. We find merit in the contention of Ld.Counsel for the assessee that the reasons recorded do not demonstrate sufficient information in the possession of the AO to lead to the formation of belief of escapement of income. In fact the information available with the AO could not have lead to the formation of belief of escapement of any income at all. 18. As per the reasons recorded by the AO, the belief of escapement of income is based on the information of cash deposits in the bank account of the assessee remaining unexplained on account of no return of income of the assessee available in the system of the department and no explanation regarding the source of the same furnished by the assessee to ITO, Ward-4 (para 7 of the reasons reproduced above). 19. As it turns out the only valid information in the possession of the AO, while recording reasons for escapement of income, was the fact of cash deposits in the bank account of the assessee amounting to Rs.4.17 crores and no other information. The non availability of return of the assessee in the income tax systems(ITS) has no implications and carries no weight for the formation of opinion that the source of cash deposits has remained unexplained since it does not mean and is not equivalent to the fact of no return having been filed by the assessee. On the contrary, we find, that the fact in the present case is that return was filed by the assessee which fact is noted by the AO also in his reason mentioning the recording of this fact by the ITO, Ward-4. The AO, in truth, was clueless and uncertain of the fact whether return of income was filed by the assessee or not. 20. Further, even the assessee not responding to inquiries conducted by the AO, NMS, i.e. ITO Ward-4 regarding the cash deposits, we find, is of no relevance for forming opinion of the cash deposits being unexplained, since as rightly pointed out by the Ld.Counsel for the assessee, it is the AO of the assessee whose satisfaction is crucial for reopening and it cannot be a borrowed satisfaction. Also, as pointed out to us by the Ld.Counsel for the assessee and not controverted by the DR, the jurisdiction of the AO, NMS, lay with regard to non-filer assessees only, while the assessee had duly communicated the fact of his having filed his return of income for the impugned year. This fact, we find, stands corroborated by the contents of the reasons itself which note that the ITO, Ward-4, who had jurisdiction in the NMS system, had noted in his sheet that the assessee had filed return for assessment year 2011-12 i.e. the impugned year. Therefore the AO, NMS, had no jurisdiction Printed from counselvise.com 15 over the assessee and the assessee was therefore not required to give any explanation regarding the source of cash deposited to him. Therefore the fact of no explanation of the cash deposits being given by the assessee to ITO, Ward 4, was irrelevant for the formation of belief of escapement of income. 21. What transpires from the above facts therefore is that the AO only had information of cash deposits in the bank account of the assessee, which fact on its own, cannot lead to the belief of escapement of income. What is crucial and important for assuming the jurisdiction to reopen the case of an assessee u/s 147 of the Act is the “belief of the AO of the escapement of income”. The mere fact that the cash is found deposited in the bank account may lead to a suspicion at best but it definitely cannot lead to belief of escapement of income. The cash deposit may be justified by the facts and figures revealed in the income tax return filed by the assessee. In any case there has to be more information in the possession of the AO to form belief that the cash deposits represent assesses own escaped income. In the present case we find that the AO has no categorical information in his possession either regarding the fact of return having been filed by the assessee nor any other information to the effect that the source of the cash deposits was unexplained. No inquiries were independently conducted by the AO regarding the source of cash deposits, which would have surely assisted in the formation of belief of escapement of income with regard to the same. 22. The reasons recorded therefore do not justify the assumption of jurisdiction by the AO to reopen the case of the assessee u/s 147 of the Act. The order passed u/s 147 of the Act therefore is clearly not a valid order in the eyes of law. 23. The collateral proceedings on the said order, u/s 263 of the Act, are therefore, we agree, not sustainable in law. The order passed by the Ld. PCIT u/s 263 of the Act is accordingly set aside. 24. Before us arguments were made on the merits of the case also but since we have set aside the order passed by the Ld.PCIT allowing the legal ground raised by the assessee, the adjudication on merits is merely academic and is therefore not being dealt with by us. 25. The appeal of the assessee is allowed in above terms. 21. We have not referred to the other decisions cited by the learned Authorized Representative (Ld. AR) for the sake of brevity, as they pertain to the same issue. The learned Departmental Representative (Ld. DR) has also not brought to our notice any contrary judgment rendered either by any High Court or by the Hon’ble Supreme Court on the issue at hand. In the absence of any binding precedent to the contrary, we are bound to follow the decision of the coordinate Bench as relied upon by the Ld. AR. Printed from counselvise.com 16 22. Accordingly, we allowed the appeal of the assessee and struck down the order passed by the ld. PCIT u/s 263 of the Act.” 4. I further find that an identical issue was decided by this Bench in ITA No.1040/CHD/2024 with C.O. No.41/CHD/2024. The finding of the Tribunal read as under: “6. We have duly considered the rival contentions and gone through the record carefully. Admittedly, notice under Section 148 was issued after the Notification issued by the Ministry of Finance, Government of India on 29.03.2022. The notice under Section 148 has been issued on 29.03.2023 i.e. almost one year from the Notification. Thus, facts of other year are squarely applicable. The issue in dispute is covered by the judgement of Hon'ble jurisdictional High Court which read as under : “DEEPAK SIBAL, J. (Oral) 1. Challenge made through the instant petition is to the notice dated 01.03.2025 (Annexure P-l) issued to the petitioner by the respondents tinder Section 148 of the Income Tax Act, 1961. The primary ground of challenge raised by the petitioner is that the impugned notice has been issued by the Jurisdictional Assessing Officer which could not have been done because in terms of the notification dated 29.03.2022 (Annexure P-2), issued by the Ministry of Finance. Government of India, the impugned notice could have been issued only by way of faceless assessment. 2. In support of his afore submission, learned counsel for the petitioner places reliance on the following two judgments of this Court:- i. CWP-15745-2024, titled Jatinder Singh Bhangu Vs. Union of India and others, decided on 19.07.2024; and ii. CWP-21509-2023, titled Jasjit Singh Vs. Union of India and others, decided on 29.07.2024. 3. Learned counsel for the respondents does not dispute the fact that the case of the petitioner is covered in his favour by the law laid down through the aforesaid two judgments rendered by two different co-ordinate Benches of this Court in Jatinder Singh Bhangu and Jasjit Singh’s case (supra). . 4. In the light of the above, in terms of the law laid down in Jatinder Singh Bhangu's and Jasjit Singh's cases (supra) the impugned notice dated 01.03.2025 (Annexure P-1) issued by the Jurisdictional Assessing Officer, is hereby quashed with liberty to the respondents to proceed against the petitioner in accordance with law. 5. The petition is allowed in the above terms. [DEEPAK SIBAL] Printed from counselvise.com 17 JUDGE [ LAPITA BANERJI] 30.04.2025 JUDGE 7. Respectfully following the judgement of the Hon'ble High Court, we allow the ground of appeal of Cross Objection and hold that notice issued under Section 148 of the Income Tax Act in assessment year 2019-20 is bad in the eyes of law. It was without jurisdiction. Accordingly, re-assessment order is quashed.” 5. Apart from this order, there are large number of judgements at the end of the Jurisdictional High Court including in the case of Disha Gupta (supra). 6. Respectfully following the judgement, we quash the re- assessment order because notice u/s 148A(1) was issued on 31.03.2022 as observed by the JAO in the assessment order. Accordingly, this plea of the assessee is allowed and re- assessment order is quashed. The appeal of the assessee is allowed. 7. In the result, appeal of the assessee is allowed.” 6. Therefore, following the decisions of Coordinate Bench mentioned hereinabove, I find merit in the submissions made by the Ld. AR of the Assessee and held that the orders passed by the Assessing Officer and sustained by the CIT(A) are not sustainable in the eyes of law and are accordingly quashed. The appeal of the Assessee stands allowed. Order pronounced on 17-11-2025. Sd/- ( LALIET KUMAR ) Judicial Member “आर.क े.” Printed from counselvise.com 18 आदेश कȧ ĤǓतͧलͪप अĒेͪषत / Copy of the order forwarded to : 1. अपीलाथȸ/ The Appellant 2. Ĥ×यथȸ/ The Respondent 3. आयकर आयुÈत/ CIT 4. ͪवभागीय ĤǓतǓनͬध, आयकर अपीलȣय आͬधकरण, चÖडीगढ़/ DR, ITAT, CHANDIGARH 5. गाड[ फाईल/ Guard File सहायक पंजीकार/ Assistant Registrar Printed from counselvise.com "