GULAMAHEMAD HAMIDULLA KHAN,PUNE V. ITO WARD 14(3), PUNE

ITA 165/PUN/2025

AI Insights

The case involves Gulamahemad Hamidulla Khan, who appealed against the order of the Commissioner of Income Tax (Appeals) pertaining to the Assessment Year 2015-16. The primary issue was the reassessment of the assessee's income due to unexplained cash deposits amounting to Rs. 2,20,79,550 in his bank account. The Income Tax Officer reopened the case under section 147 of the Income Tax Act, 1961, following the provisions of the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020. The assessee contested the validity of the reassessment and the additions made to his income, claiming he was a victim of a financial scam involving fraudulent transactions in his name. The Tribunal found that the CIT(A) had dismissed the appeal ex-parte due to non-compliance by the assessee and did not address the merits of the case.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 775287 (ITAT-PUNE)
• Duration Of Justice: 7 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-09-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2015-2016
• Appeal Filed On: 20-01-2025
• Other Referred Cases: Union of India Vs. Rajeev Bansal
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAMNATH MURKUNDE
• Assessee Lawyers: PRAMOD S SHINGTE; PASSING
• Keywords: Set aside; Opportunity of being heard; Reasonable cause; Reassessment proceedings; Unexplained cash credit; Onus to prove; Principle of natural justice; Co-operative Credit Society
• Section: 147; 148; 144; 139

Judgement Text

" आयकर अपीलीय अधिकरण “ए” न्यायपीठ पुणे में । IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH, PUNE BEFORE SHRI R.K. PANDA, VICE PRESIDENT AND MS. ASTHA CHANDRA, JUDICIAL MEMBER आयकर अपील सं. / ITA No.165/PUN/2025 धििाारण वर्ा / Assessment Year : 2015-16 Gulamahemad Hamidulla Khan, Ganesh Nagar, Phursungi, Tal.-Haveli, Pune-412308 PAN : AMBPK7001L Vs. Income Tax Officer, Ward-14(3), Pune अपीलार्थी / Appellant प्रत्यर्थी / Respondent Assessee by : Shri Pramod S Shingte Department by : Shri Ramnath Murkunde Date of hearing : 02-07-2025 Date of Pronouncement : 11-09-2025 आदेश / ORDER PER ASTHA CHANDRA, JM : The appeal filed by the assessee is directed against the order dated 18.11.2024 of the Ld. Commissioner of Income Tax (Appeals)/NFAC, Delhi [“CIT(A)”/“NFAC”] pertaining to Assessment Year (“AY”) 2015-16. 2. Briefly stated the facts are that the assessee is an individual. For AY 2015-16, he filed his return of income u/s 139 of the Income Tax Act, 1961 (the “Act”) on 24.05.2016 declaring total income of Rs.4,45,130/-. Information was received that the assessee has deposited cash amounting to Rs.2,20,79,550/- in his account maintained with Shri Renuka Mata Multi State Urban Co-operative Credit Society Ltd. Accordingly, the case was reopened by issuing a notice u/s 148 of the Act on 21.04.2021 by following the provisions of Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 (hereinafter referred to as „TOLA‟) and subsequent Notification No. 38 dated 27.04.2021 according to which the time limit for issue of notice u/s 148 was extended to 30.04.2021 and 30.06.2021 respectively. However, the assessee failed to make any compliance to the said notice. Printed from counselvise.com 2 ITA No.165/PUN/2025, AY 2015-16 Thereafter, the Jurisdictional Assessing Officer (“JAO”) passed the order u/s 148A(d) of the Act on 26.07.2022 which was duly served upon the assessee. As per the said notice the assessee was required to deliver within 30 days from the service of the notice a return in the prescribed form for the relevant AY 2015- 16 which was not done. The assessee did not respond to the said notice. Thereafter several notices were issued by the Ld. Assessing Officer (“AO”) which also remained un-complied by the assessee. The assessee finally submitted its reply to the last show cause notice issued on 11.04.2023 and also attended virtual hearing on 02.05.2023 to further explain his case. The submissions of the assessee before the Ld. AO are as under : “[3][viii] A show cause notice proposing addition to the total income of the assessee dated 11/04/2023 was issued and served upon the assessee requesting him to furnish reply on or before the fixed compliance date that why should not his unexplained credits of Rs. 2,20,79,550/- u/s 69A of the Act be added to his total income. in respect of the same, the assessee furnished compliance on 22/04/2023 wherein he submitted his computation of income for the A.Y. 2015-16, copy of his Acknowledgement of his ITR filed u/s 148 of the Act for the A.Y. 2015-16 on 22/04/2023 and copy of his Form No. 26AS for the A.Y. 2015-16. The assessee thereafter submitted his reply on 24/04/2023 and requested to be provided an opportunity via video conference [V.C.] to further explain his case. [3][ix] in light of the request for an opportunity to further explain his case via video conference, an opportunity was provided to the assessee vide an Intimation for scheduling personal hearing through video conferencing [Hereinafter referred to as V.C.J Notice on 26/04/2023 of personal hearing through video conferencing on 02/05/2023 at 04:00 PM and the relevant link and password for the same was also shared with the assessee in the aforementioned notice. The assessee attended the V.C. granted to him at the scheduled time of 04:00 PM on 02/05/2023 and made various submissions in respect of the assessment proceedings in his case. The submissions of the assessee are summarized as under- [a] The assessee came to know about the transactions in his bank account maintained with SRMSCS only after notices were issued to him during the 148A proceedings: [b] The assessee has shown all his bank accounts in his ITR filed for the A.Υ. 2015-16: [c] SRMSCS created a dummy account in the name of the assessee and carried out fraudulent transactions through it; [d] Assessment case have been opened against him also for the A.Y. 2014-15 and A.Y. 2016-17 for his unexplained transactions in SRMSCS, [e] SRMSCS being a local bank has carried out the fraud by doing off-the record transactions and that the assessee has been framed; [f] The assessee made reference to his bank statement citing that the pattern of deposits followed by withdrawal in his bank account is reflective of fraudulent Printed from counselvise.com 3 ITA No.165/PUN/2025, AY 2015-16 transactions. The assessee further submitted that as per his bank account statement, there were several withdrawals by different persons and deposits made at different places located more than 500 KM apart. The assessee stated that in light of the above facts, it is clear that he had not made the above transactions in his bank account: [g] The assessee submitted that he was procuring bank account statement of SRMSCS as the reason for his non-compliance against the statutory notices of the Act issued to him during his proceedings and [h] The assessee questioned the opening of the assessment proceedings in his case u/s 147 of the Act.” 2.1 However, the above submission of the assessee was not found to be acceptable by the Ld. AO. The Ld. AO proceeded to complete the assessment u/s 147 r.w.s. 144B of the Act and made an addition of Rs.2,20,79,550/- u/s 69A r.w.s. 115BBE of the Act as unexplained money on the ground that the assessee failed to explain the nature and source of the cash deposits, to the returned income of Rs.4,45,130/- as computed u/s143(1)(a) of the Act. The relevant finding and observation of the Ld. AO is reproduced below : “Rebuttal of the submission of the assessee- The assessee showed all his bank accounts in his ITR for the A.Y. 2015-16 and was unaware of the existence of his bank account with SRMSCS. The assessee claimed that he was completely unaware of the bank account in SRMSCS and he came to know about it only during his 148A proceedings. Thereafter, the assessee submitted that SRMSCS created a dummy account in his name by doing fraud and off-the record transactions. The above submission of the assessee is not found to be acceptable as his bank account in SRMSCS has been opened in his name and his PAN is linked to it and he is its legal owner and as such the Onus is always upon him to substantiate the transactions made in it. However, instead of discharging the Onus, the assessee has refuted all claims of ownership of the bank account by merely stating that it is his although all evidences point it to being his. Further, the assessee did not furnish any documentary evidence which corroborates his submission in the above matter. The assessee claimed that a fraud has been carried out by using his name in the concerned bank account maintained with SRMSCS with which he had nothing to do. However, if that were so, it is also the responsibility of the assessee to report that fraud to the appropriate authorities by filing a complaint. However, after 09 months towards the end of his assessment proceedings, the assessee decides to deny all ownership of the aforementioned bank account without furnishing anything to substantiate his claims of the fraud or his reporting of the same before the appropriate authority, etc. In light of the above discussions, the contention of the assessee is not found to be tenable. The assessee stated that the pattern of transactions of regular deposits and withdrawals and deposits made at various places 500KM or more apart and withdrawals by various parties whom he never conducted business show that the transactions do not relate to him. The above submission of the assessee is also not found to be acceptable as the assessee is found to be the owner of the aforementioned account for reasons already discussed above and any cash deposited in it or withdrawn from it irrespective of the pattern is always within his cognizance with him being the owner. In the above context, the above Printed from counselvise.com 4 ITA No.165/PUN/2025, AY 2015-16 submission of the assessee is found to be nothing but concocted afterthought of the assessee. The assessee cited procuring bank account statement of SRMSCS as reason for non-compliance to statutory notices of the Act. However, the submission of the assessee in respect of the above matter is not found to be acceptable as the assessee never submitted any request for adjournment or furnished any other compliance other than the bank account statement during his assessment proceedings, although he was receiving the statutory notices regularly and seeing them regularly too. This only shows that the assessee had without any cogent or justifiable reason remained non-compliant till date during his assessment proceedings and decided to furnish compliance towards its end. The assessee questioned the grounds of re-opening his assessment proceedings u/s 147 of the Act in his case. In the above context, it is stated that the case of the assessee has been opened as per the procedure laid down in the Act after obtaining prior approval of the Pr. CCIT, Pune in view of the Instructions issued by CBDT dated 11/05/2022 in consonance with the direction of the Hon'ble Supreme Court dated 04/05/2022 in the Civil Application No. 3005/2022. [3][x] A notice u/s 143(2) of the Act dated 02/05/2023 was issued to the assessee in respect of the return of income filed by him u/s 148 of the Act on 22/04/2023. However, the assessee did not furnish any compliance in respect of the same. Summary of evidence/information gathered and analyzed- [4] The assessee's bank account statement for the F.Y. 2014-15 of his account maintained with M/s. Shri Renuka Mata Multi State Urban Co-Operative Credit Society Ltd (SRMSCS) was examined and it is seen there has been regular credits aggregating to Rs. 2,20,79,550/- in them followed by immediate cash withdrawals of the same. The same is non-commensurate with the meagre income of Rs. 4,45,130/- declared by him in his ITR. In light of the same, the nature and sources of the credits are unexplained. Inference made- [5] The assessee has been provided with ample opportunities in view of the Principle of Natural Justice to furnish reply with supporting documentary evidences in respect of the nature and sources of the credits received by him in his bank account maintained with SRMSCS as the Onus (Burden of Proof) is upon him to furnish reply in respect of the same. However, the assessee has failed te-explain the same Further, in view of the above discussion, it is seen that the quantum of credits received by the assessee of Rs. 2,20,79,550/- is non-commensurate with the income declared in his ITR u/s 139 of the Act of Rs. 4,45,130/- and as such the nature and sources of the credits cannot be ascertained during the year under consideration. Hence, the nature and sources of the credits of Rs. 2,20,79,550/- made in his bank account remains unexplained in view of the provisions of section 69A of the Act. In the above context, Rs. 2,20,79,550/- is treated as his unexplained money u/s 69A of the Act and added to the total income of the assessee to be taxed as per the provisions of section 115BBE of the Act.” Printed from counselvise.com 5 ITA No.165/PUN/2025, AY 2015-16 3. There was non-compliance to the notices issued by the Ld. CIT(A)/NFAC. The Ld. CIT(A)/NFAC therefore dismissed the appeal of the assessee by passing an ex-parte order observing as under : “6.2 During the appellate proceedings, sufficient opportunities have been provided to the appellant for furnishing submission/evidences in support of grounds of appeal. However, the appellant did not furnish any explanation/evidences. Accordingly, it is clear that the appellant has not discharged the burden of proof as required under the respective provisions. Hence, the grounds of appeal are not allowed.” 4. Dissatisfied, the assessee is in appeal before the Tribunal raising the following grounds of appeal : “1. On the facts and in the circumstances of the case and in law the learned Assessing Officer erred in initiating reassessment proceedings under section 147 for AY 2015-16 without appreciating the first proviso to section 1498 which restricts the reopening as per the old provision of section 147 and therefore the reopening made u/s 147 is time barred and consequential needs to be deleted. 2. On the facts and in the circumstances of the case and in law the learned Assessing Officer erred in initiating reassessment proceedings under section 147 by issuing notice under section 148 dated 26/07/2022 without specifying the DIN & Notice No 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. 3. On the facts in the circumstances of the case and in law the learned Assessing Officer erred in initiating the reassessment proceeding under the new provisions of section 147 as inserted by finance act 2021, on the basis of information gathered during the search conducted on M/s Renukamata Multistate Urban Co-operative Credit Society, therefore the action is illegal as the proceedings ought to have been initiated u/s 153C, therefore consequential order passed is bad in law and deserves to be struck down. 4. On the facts in the circumstances of the case and in law the learned Assessing Officer erred in passing order u/s 144 r.w.s. 147 without appreciating the submissions made by the appellant stating that appellant is a victim of financial scam for which appellant's name was utilised and therefore the entire addition is not justified. 5. Without prejudice to the above grounds, on the facts in the circumstances of the case and in law the learned Assessing Officer erred in making an addition of Rs. 2.20.79,550/- u/s 69A, being, total of entire credit side of the bank account of the appellant, without appreciating the submissions made by appellant in this regard. 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.” Printed from counselvise.com 6 ITA No.165/PUN/2025, AY 2015-16 5. The Ld. AR submitted that the assessee has also challenged the validity of reassessment proceedings before the Tribunal apart from challenging the addition on merits. Relying on the decision of the Hon‟ble Supreme Court in the case of Union of India Vs. Rajeev Bansal (2024) 167 taxmann.com 70 (SC), he submitted that as per the said decision the due date of issuing notice u/s 148 of the Act for AY 2015-16 as applicable to the instant case is 31.03.2021 and hence the second notice issued by the Ld. JAO u/s 148A(d) of the Act on 18.07.2022 is barred by limitation. 6. The Ld. DR, on the other hand, opposed the above submissions of the Ld. AR. The Ld. AR submitted that the assessee failed to respond to various notices issued by the Ld. CIT(A)/NFAC without there being any reasonable cause and hence he was completely justified in dismissing the appeal of the assessee ex-parte. 7. We have heard the rival arguments made by both the sides, perused the paper book filed by the Ld. AR on behalf of the assessee as well as various judicial precedents relied upon by the Ld. AR. Admittedly, there was non- compliance by the assessee before the Ld. AO/CIT(A). From the perusal of the order of the Ld. CIT(A), we find that he has dismissed the appeal of the assessee on account of assessee‟s failure to furnish submissions/evidences/ explanation in support of grounds of appeal in spite of several opportunities granted to him. Before us, the Ld. Counsel for the assessee has raised an additional ground i.e. Ground No. 1 challenging the validity of reassessment proceedings and has relied on the decision of Hon‟ble Supreme Court in the case of Union of India Vs. Rajeev Bansal (supra) in support thereof. We find that this ground was not raised earlier before the Ld. CIT(A)/NFAC. The Ld. CIT(A)/NFAC has passed the impugned order ex-parte qua the assessee without dwelling into the merits of the case. Considering the totality of the facts and in the circumstances of the case enumerated above, we deem it fit, in the interest of justice and fair play, to set aside the order of Ld. CIT(A)/NFAC and restore the matter back to his file to adjudicate the issue afresh by passing a speaking order on merits as per fact and law including the legal ground challenging the validity of reassessment proceedings after allowing one final opportunity of being heard to the assessee. The assessee shall provide the requisite support in terms of submitting the relevant documents/evidence as may be required/called upon on the appointed date without seeking any Printed from counselvise.com 7 ITA No.165/PUN/2025, AY 2015-16 adjournment under any pretext unless required for a sufficient cause, failing which the Ld. CIT(A)/NFAC shall be at liberty to pass appropriate order as per law. We direct and order accordingly. 8. In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open court on 11th September, 2025. Sd/- Sd/- (R.K. Panda) (Astha Chandra) VICE PRESIDENT JUDICIAL MEMBER पुणे / Pune; दिन ांक / Dated : 11th September, 2025. रदि आदेश की प्रधिधलधप अग्रेधर्ि / Copy of the Order forwarded to : 1. अपील र्थी / The Appellant. 2. प्रत्यर्थी / The Respondent. 3. The Pr. CIT concerned. 4. दिभ गीय प्रदिदनदि, आयकर अपीलीय अदिकरण, “ए” बेंच, पुणे / DR, ITAT, “A” Bench, Pune. 5. ग र्ड फ़ इल / Guard File. //सत्य दपि प्रदि// True Copy// आिेश नुस र / BY ORDER, िररष्ठ दनजी सदचि / Sr. Private Secretary आयकर अपीलीय अदिकरण ,पुणे / ITAT, Pune Printed from counselvise.com "