JAVEED KHAN AHEMAD KHAN,YAWAL V. INCOME TAX OFFICER WARD 2(1), JALGAON

ITA 2738/PUN/2024

AI Insights

The case involves Javeed Khan Ahemad Khan, the appellant, who did not file a return of income for the Assessment Year 2017-18. The Income Tax Officer (ITO) initiated reassessment proceedings based on substantial cash deposits in the appellant's bank account, leading to a best judgment assessment under section 69A of the Income Tax Act, 1961, adding unexplained money to the appellant's income. The appellant contested the validity of the reassessment and the additions made, which were initially set aside by the CIT(A) due to lack of adequate opportunity given to the appellant to present his case. The Tribunal, referencing a Delhi High Court decision, found that it lacked jurisdiction to decide on grounds not arising from the first appellate authority's order and thus remanded the case back to the CIT(A) for a fresh decision.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 791343 (ITAT-PUNE)
• Duration Of Justice: 11 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-12-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2017-2018
• Appeal Filed On: 21-12-2024
• Other Referred Cases: CIT v. Panna Devi Saraogi [1970] 78 ITR 728 (Cal.), Smt. Ritu Devi v. CIT [2004] 141 Taxman 559 (Mad.), E. Vittal v. Appropriate Authority [1996] 221 ITR 760 (AP), UOI v. Ashish Agrawal - [(2022) 138 taxmann.com 64 (SC)], Divine Infracon Pvt. Ltd. Vs PCIT [(2025) 171 taxmann.com 92 (Del)]
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Matter Remanded
• Court: TRIBUNAL
• Department Lawyers: BHARAT ANDHALE
• Assessee Lawyers: SHUBHAM N. RATHI VIRTUAL
• Keywords: Set aside; Opportunity of being heard; Reasonable cause; Reassessment proceedings; Principle of natural justice; Validity of assessment
• Section: 144; 142(1)

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL PUNE “A” BENCH : PUNE BEFORE DR. MANISH BORAD, ACCOUNTANT MEMBER & SHRI VINAY BHAMORE, JUDICIAL MEMBER I.T.A.No.2738/PUN/2024 (Assessment Year 2017-2018) Javeed Khan Ahemad Khan, Babuji Pura, Pinjar Wada, Yawal, Maharashtra. PAN : DFDPK 2746 Q vs. ITO, Ward-2(1), Jalgaon (Appellant) (Respondent) For Assessee : Shri Shubham N. Rathi (virtual) For Revenue : Shri Bharat Andhale, Addl.CIT (virtual) Date of Hearing : 03.12.2025 Date of Pronouncement : 08.12.2025 ORDER PER : MANISH BORAD, AM This appeal at the instance of the assessee is directed against the order of National Faceless Appeal Centre (NFAC)/ Commissioner of Income Tax (Appeals), Delhi [“CIT(A)”], dated 22/10/2024 passed under section 250 of the Income Tax Act, 1961 (“Act”), which is arising out of assessment order u/s.147 r.w.s. 144 r.w.s. 144B of the Act, dated 22/05/2023 for the Assessment Year (AY) 2017-18. Printed from counselvise.com 2 ITA.No.2738/PUN./2024 (Javeed Khan Ahemad Khan) 2. Brief facts of the case are that assessee is an individual and did not file return of income for A.Y. 2017-18. Based on the information about cash deposits of ₹ 3,10,81,973/- and deposits other than current account of ₹ 21,79,000/- in bank account, Ld. Assessing Officer (AO) issued notices u/s.148A(d) and 148 of the Act. Assessee did not respond to any of the notices. Even notice issued u/s. 142(1) also remained unattended. Ld.AO passed the best judgment assessment and made addition u/s. 69A of the Act for unexplained money at ₹ 3,32,60,973/-. 3. Dissatisfied with the additions, assessee preferred appeal before the Ld.CIT(A) raising the grounds against the addition made u/s. 69A of the Act and also challenged the validity of assessment proceedings as well as notice issued u/s. 148 of the Act. However, during the course of hearing, partial compliance was made and the Ld.CIT(A) set aside the assessment order and remanded back it to the Ld.AO for fresh decision observing as follows:- “I have considered the assessment order of AO, and the submission of the appellant assessee. During the course of appellate proceedings, the appellant furnished replies alongwith substantiating documentary evidences in support of its grounds of appeal. From the reply and documents filed by the appellant, it can be concluded that if the sufficient opportunities for being heard were provided, the assessee would have provided the material as sought through the notices. Further, various High Courts and Hon'ble Apex court also held that assessee should be provided adequate opportunity of being heard. The opportunity of being heard should be real, reasonable and effective. The same should not be for the name sake. It should not be a paper Printed from counselvise.com 3 ITA.No.2738/PUN./2024 (Javeed Khan Ahemad Khan) opportunity. This was so held in CIT v. Panna Devi Saraogi [1970] 78 ITR 728 (Cal.). In Smt. Ritu Devi v. CIT [2004] 141 Taxman 559 (Mad.), time of just one day was given to the assessee to furnish reply. This was held as a denial of opportunity. As held in E. Vittal v. Appropriate Authority [1996] 221 ITR 760 (AP), where a decision is based upon a document in a proceeding, a copy of the same should be provided to the affected party. Otherwise, it would violate the principles of natural justice as the opportunity of being heard should be an effective opportunity and not an empty formality. Denial of opportunity may make an order void. Limitation of time cannot stand in the way of not giving adequate opportunity. The principle is inviolable. Accordingly, considering the facts and circumstances of the case that the impugned assessment order was passed ex-party by the A.O, in my considered opinion, the interest of justice will be well served, if the appellant is given an opportunity to present his case before the A.O. Accordingly, the impugned assessment order is set-aside, and the matter is restored back to the file of A.O for decision afresh. The A.O shall give proper opportunity to the Appellant to present his case. In the result the appeal is allowed for statistical purposes.” 4. Aggrieved, assessee is now in appeal before this Tribunal. 5. Learned counsel for the assessee made reference to the following grounds of appeal raised before this Tribunal which includes various legal issues:- “1. The Learned Commissioner of Income Tax (Appeals) ['the Ld. CIT'] has erred in confirming the validity of initiation of reassessment proceedings. (₹ 2,56,94,102) 2. On the facts and in the circumstances of the case, the Learned Income Tax Officer, Ward 2(1), Jalgaon [\"The Ld. JAO\"] has initiated the reassessment proceedings without fulfilling the preconditions required to initiate the reassessment proceedings U/s 148-151 of the Act. Further, the Ld. AO failed to follow the directions as provided by the Hon'ble Apex Court in case of UOI v. Ashish Agrawal - [(2022) 138 taxmann.com 64 (SC)]. 3. The Ld. JAO has erred in assuming the jurisdiction to issue the notice u/s 148 which is in non-compliance to the provisions of section 151A of the Act. It is submitted Printed from counselvise.com 4 ITA.No.2738/PUN./2024 (Javeed Khan Ahemad Khan) that in the facts and in the circumstances of the case and in law, the notice issued u/s 148 of the Act in the present case is bad in law and therefore deserves to be quashed. 4. The Ld. CIT(A) erred in not considering that notice issued u/s 148 of the Act by the Ld. JAO is void ab initio as the notice is issued contrary to the CBDT Circular No. 19/2019 dated 14.08.2019.” 6. Learned counsel for the assessee, however, fairly admitted some legal issues have been raised that before this Tribunal for the first time and there was no occasion for the Ld.CIT(A) to deal with these grounds. 7. On the other hand, Ld. Departmental Representative (DR) supported the orders of lower authorities. 8. We have heard rival contentions and perused the records placed before us. We observe that assessee is subjected to addition u/s. 69A of the Act for unexplained cash deposits. Assessee has not participated in the assessment proceedings. Thereafter, assessee has raised certain grounds raising legal issues before the Ld.CIT(A) challenging the validity of the assessment proceedings. The Ld.CIT(A), on observing that assessee has not participated in the assessment proceedings, has restored all the issues to the Ld.AO for denovo assessment. Now assessee is in appeal before this Tribunal raising various legal issues contending that re-assessment proceedings is invalid and notice issued u/s. 148 of the Act is without jurisdiction. Admittedly, some of the legal issues have been raised before this Tribunal for the first time and also Printed from counselvise.com 5 ITA.No.2738/PUN./2024 (Javeed Khan Ahemad Khan) certain legal issues raised before the Ld.CIT(A) remained to be adjudicated. 9. The issue of Tribunal’s power to adjudicate the ground raised before it in second appeal which did not pass through first appeal came for consideration before the Hon’ble Delhi High Court in the case of Divine Infracon Pvt. Ltd. Vs PCIT [(2025) 171 taxmann.com 92 (Del)], wherein their Hon’ble Lordship vide para 13 have categorically held that the Tribunal has no jurisdiction to proceed to decide the ground which did not arise from the impugned order passed by first appellate authority, irrespective of such ground was raised in first appeal or not. 10. In the light of the above judgment, we are of the considered view, the issues raised in the instant appeal deserve to be restored to the file of Ld.CIT(A) for necessary adjudication and to be decided in accordance with law as contemplated in section 250(6) of the Act. Needless to mention that Ld.CIT(A) shall afford a reasonable opportunity of being heard to the assessee to file additional documents. If needed Ld.CIT(A) may call for a remand report from the Jurisdictional Assessing Officer. The assessee is also directed to remain vigilant and not to take unnecessary adjournments unless required for reasonable cause. Grounds of appeal raised by the assessee are allowed for statistical purposes. Printed from counselvise.com 6 ITA.No.2738/PUN./2024 (Javeed Khan Ahemad Khan) 11. In the result, appeal of the Assessee is allowed for statistical purposes. Order pronounced in the open Court on 08.12.2025. Sd/- Sd/- [VINAY BHAMORE] [MANISH BORAD] JUDICIAL MEMBER ACCOUNTANT MEMBER Pune, Dated 08th December, 2025 vr/- Copy to 1. The appellant 2. The respondent 3. The CIT(A), Pune concerned. 4. D.R. ITAT, “A” Bench, Pune. 5. Guard File. By Order //True Copy // Assistant Registrar, ITAT, Pune. Printed from counselvise.com "