HEMANT JYOTIRAM GHADGE,MUMBAI V. CIT(A), INCOME TAX DEPT., MUMABI

ITA 2616/MUM/2025

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Mr. Hemant Jyotiram Ghadge appealed against the order passed by the National Faceless Appeal Center/Commissioner of Income Tax (Appeals), which was based on a reassessment under section 147 following a search and seizure operation. The Tribunal noted a procedural error in the application of sections 147 and 153C of the Income Tax Act, 1961, leading to the quashing of the notice and assessment order. The Tribunal acknowledged the delay in filing the appeal due to the previous tax consultant's inaction but found the delay to be unintentional and bonafide, imposing a condition of depositing Rs.11,000 in the Revenue Department.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 398140 (ITAT-MUMBAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-06-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2012-2013
• Other Referred Cases: Sejal Jewellery and Anr. Vs. Union of India and Ors.
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P D CHOUGULE; LD.
• Assessee Lawyers: NIKHIL NATEKAR; LD
• Keywords: Search and seizure; Accommodation entries
• Section: 147; 148; 144; 153A; 69

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH “SMC”, MUMBAI BEFORE SHRI NARENDER KUMAR CHOUDHRY, JUDICIAL MEMBER ITA No.2616/M/2025 Assessment Year: 2012-13 Mr. Hemant Jyotiram Ghadge, RH-4, E-21, Sector No.6, Vashi, Navi Mumbai-400 703 PAN: ALYPG0638F Vs. Commissioner of Income Tax (Appeals), ITO, Ward-42(2)(3), Kautilya Bhavan, Mumbai – 400 051 (Appellant) (Respondent) Present for: Assessee by : Shri Nikhil Natekar, Ld. A.R. Revenue by : Shri P D Chougule, Ld. Sr. D.R. Date of Hearing : 05.06.2025 Date of Pronouncement : 05.06.2025 O R D E R Per : Narender Kumar Choudhry, Judicial Member: This appeal has been preferred by the Assessee against the order dated 22.10.2024, impugned herein, passed by the National Faceless Appeal Center (NFAC)/ Ld. Commissioner of Income Tax (Appeals) (in short Ld. Commissioner) u/s 250 of the Income Tax Act, 1961 (in short ‘the Act’) for the A.Y. 2012-13. ITA No.2616/M/2025 Mr. Hemant Jyotiram Ghadge 2 2. At the outset, it is observed that there is a delay of 106 days in filing of the instant appeal, on which the Assessee, by filing duly sworn affidavit, has claimed that he is an engineer by qualification and doesn't possess any tax knowledge, therefore for the taxation matters, has to rely upon the Tax Consultant, who would take care of the compliances in the tax payments but somehow the previous consultant of the Assessee failed in attending and making the submissions before the Income Tax Authorities and even at appellate stage and therefore the Assessee had to engage another consultant who made the Assessee aware of the impugned order and therefore the appeal was immediately filed, but with a delay of 106 days. The delay is neither intentional not malafide but because of the communication/non-action of the earlier consultant. On the contrary, the Ld. D.R. refuted the claim of the Assessee. Though the contention raised by the Assessee with regard to delay, appears as bald allegation, however the delay could not have given any benefit and therefore considering the reason stated by the Assessee as bonafide and unintentional, this Court is inclined to condone the delay in filing of the instant appeal, however, subject to deposit of Rs.11,000/- in the Revenue Department under “other heads” within 15 days from today. 5. Coming to the merits of the case, admittedly the case of the Assessee was reopened by recording reasons u/s 147 of the Act and issuing the notice dated 28.03.2018 u/s 148 of the Act, on the basis of search and seizure action conducted in the case of M/s. Bhagwati Developers and its group concern on 15.10.2018, which resulted into making the additions of Rs.36,55,000/- on account of on money and Rs.35,00,000/- remaining cost of the flat, which was treated as un-explained investment u/s 69 of the Act, vide assessment order dated 17-12-2019 u/s 147 & 144 of the Act. Thus, the Assessee has claimed that order would have been passed under section 153C of the Act but not u/s 147 of the Act as the case ITA No.2616/M/2025 Mr. Hemant Jyotiram Ghadge 3 was reopened u/s 147 of the Act, on the basis of search and seizure action exclusively but not otherwise and therefore the Notice dated 28.03.2018 u/s 148 of the Act along with Assessment order dated 17-12-2019 u/s 147 & 144, is liable to be quashed, specifically in view judgment of the Hon'ble Jurisdictional High Court in the latest case of Sejal Jewellery and Anr. Vs. Union of India and Ors. (writ petition No.3057 of 2019 and Ors.) decided on 18.02.2025, wherein it has been held as under: “22. Applying the principles of law as discussed hereinabove, we are of the clear opinion that the foundation of the present case was certainly a search action which was undertaken by the Revenue against one Shilpi Jewellers Pvt. Ltd. and in such search and seizure action, materials were seized and such materials were further explored and enquired. Such enquiry revealed significant information in regard to M/s. Green Valley Gems Pvt. Ltd., which according to the Revenue had provided accommodation entries to the petitioner, in which it was also revealed that Green Valley Gems Pvt. Ltd. was a shell company. We do not find that the record would indicate something which is not on the basis of such new materials gathered under the search and seizure action under Section 132. If this be the case, then certainly the provisions of Section 153C read with Section 153A would be applicable, as held by the Supreme Court in Abhisar Buildwell P. Ltd. (supra) when the Court interpreted the effect and purport of Section 153C and 153A, as also held by the Rajasthan High Court in Shyam Sunder Khandelwal (supra). 23. Insofar as Mr. Suresh Kumar's contention supporting the proceedings under Section 147 and 148 of I.T. Act are concerned, for the aforesaid reasons, such contention would in fact go contrary to the intention of the legislature as depicted by the provisions of Section 153A and 153C of the I.T. Act. There would not be any difficulty in accepting the proposition as canvassed by Mr. Suresh Kumar, referring to the decision of the Supreme Court in Phool Chand Bajrang Lal (supra), however, the facts in the present case are distinct. There cannot be any doubt on the position in law when the Revenue intends to proceed purely on materials relevant for an action under Section 148 read with Section 147. We have already observed that the provisions ITA No.2616/M/2025 Mr. Hemant Jyotiram Ghadge 4 of Sections 147, 148 vis-a-vis Section 153A and Section 153 are quite compartmentalized. To avoid any overlapping of these provisions, the legislature in its wisdom has thought it appropriate to provide for an independent effect, to be given under Section 153A read with Section 153C by incorporating the \" non-obstante\" clause, in these provisions, which carves out an exception to any normal/regular action being resorted under Section 147. 24. In this view of the matter, we are of the clear opinion that the impugned notice under Section 147 of the I.T. Act and all actions consequent thereto are required to be held to be without jurisdiction and bad in law. The petition is accordingly allowed in terms of prayer clauses (a) and (b).\" 6. Thus, respectfully following the dictum of the Hon’ble High Court in the above judgment and considering the non-obstante clause enshrined in sections 153A and 153C of the Act and peculiar facts and circumstances of this case, the notice dated 28-03-2018 u/s 148 of the Act along with assessment order dated 17.12.2019 u/s 144 r.w.s. 147 of the Act, is quashed. 7. As the above sated notice u/s 148 of the Act along with assessment order is quashed, thus this Court is inclined not to delve into other grounds raised by the Assessee, as the adjudication of the same would prove futile exercise. 8. In the result, the appeal of the Assessee is allowed. Order pronounced in the open court on 05.06.2025. Sd/- (NARENDER KUMAR CHOUDHRY) JUDICIAL MEMBER * Kishore, Sr. PS ITA No.2616/M/2025 Mr. Hemant Jyotiram Ghadge 5 Copy to: The Appellant The Respondent The CIT, Concerned, Mumbai The DR Concerned Bench //True Copy// By Order Dy./Asstt. Registrar, ITAT, Mumbai. "