MANGILAL DATLA,BANSWARA V. INCOME TAX OFFICER, WARD BANSWARA, BANSWARA

ITA 304/JODH/2025

AI Insights

The case revolves around an appeal by Mangi Lal Datla against the orders of the Income Tax Officer (ITO) and the Commissioner of Income Tax (Appeals) [CIT(A)]. The primary contention was the legality of the reassessment proceedings initiated under section 148 of the Income Tax Act, 1961, and the subsequent addition of Rs.1,75,20,300 to the assessee's income, alleged to be unexplained cash deposits. The ITAT found that the notice under section 148 was not properly served, which invalidated the reassessment proceedings. Furthermore, the ITAT accepted the assessee's evidence that no such cash deposits were made, leading to the deletion of the addition.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 669569 (ITAT-JODHPUR)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-06-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2017-2018
• Other Referred Cases: Suresh Kumar Saini v/s ITO Ward 7(4), Jaipur, Mumtaz Hazi Mohamad Memon v/s ITO, Vijay Harish Chandra Patel vs. ITO, Smt. Sushila Chahch v/s ITO, Narain Dutt Sharma vs. ITO, ABDUL MAJEED vs. INCOME TAX OFFICER, Keshab Narayan Banerjee, Shri Chetan Gupta vs. ACIT, Maruti Clean Coal And Power Ltd. vs. ACIT, CIT vs. S. Goyanka Lime & Chemicals Ltd., PAC AIR SYSTEMS P. LTD. vs. ITO, Dhakeshwari Cotton Mills vs. CIT, R.B.N.J. Naidu vs. CIT, Kanpur Steel Co. Ltd. vs. CIT, CIT vs. Kulwant Rai, CIT vs. Shalimar Buildwell Pvt Ltd, CIT vs. Hotline International Pvt. Ltd, CIT vs. Ceban India Ltd, CIT vs. Indo Arab Air Services, CIT vs. Shree Rajasthan Syntex Ltd.
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KARNI DAN
• Assessee Lawyers: SHRAWAN KUMAR GUPTA
• Keywords: Set aside; Opportunity of being heard; Additional evidence; Revised return; Retrospective amendment; Reassessment proceedings; Question of law; Unexplained cash credit; Sale consideration of property below Jantri Value; Period of limitation; Reopening of assessment; Search and seizure; Assessment record; Competent authority; Reason to believe; Tangible material; Borrowed satisfaction; FORM 26AS; Bogus
• Section: 147; 148; 144; 143(3); 142(1); 50C

Judgement Text

"1 IN THE INCOME TAX APPELLATE TRIBUNAL JODHPUR BENCH, JODHPUR. BEFORE: DR. MITHA LAL MEENA, ACCOUNTANT MEMBER & DR. S. SEETHALAKSHMI, JUDICIAL MEMBER I.T.A. No. 304/Jodh/2025 Assessment Year: 2017-18 Mangi Lal Datla 52, Shri Ram Colony, Near Dr. Tali Hospital, Banswara Vs. The ITO, Banswara PAN No. PANNo.:ACXPD0504F Appellant Respondent Appellant by Sh. Shrawan Kumar Gupta, Adv. Respondent by Sh. Karni Dan, Addl.CIT (Sr.DR Date of Hearing 07/05/2025 Date of Pronouncement 25/06/2025 ORDER PER: DR. S. SEETHALAKSHMI, J.M. This is an appeal filed by the assessee against the order of ld. CIT (A), National Faceless Appeal Centre, Delhi dated 03.01.2025 passed under section 250 of the I.T. Act, 1961, for the assessment year 2017-18. The assessee has raised the following grounds of appeal :- ITA No. 304/Jodh/2025 Mangilal Datla, Banswara. 2 “.1.1 The impugned order u/s 147 of the I.T. Act, 1961 dated 31.03.2022 as well as the action taken and notices u/s 147/148 or other notices are illegal, bad in law and on the facts of the case for want of jurisdiction and various other reasons or bared by limitation and further contrary to the real facts of the case, hence the same may kindly be quashed. 1.2 The Ld. AO has grossly erred in law as well as on the fats of the case in passing the assessment order without providing the adequate and reasonable opportunity of being heard in gross breach of law, hence the order may kindly be quashed and entire addition liable to be deleted. 1.3 The ld. CIT(A) has grossly erred in law as well as on the facts of the case in set-aside the assessment to AO for making a fresh assessment without deciding our legal grounds and other grounds of appeal when all the details were available before him and had already been on the record of the ld. AO and nothing new facts and material were/are to be filed by the assessee. Hence the order of the ld. CIT(A) are bad in law, invalid, illegal and on facts of the case, for and various other reasons and hence the same may kindly be quashed. 2. The ld. AO has grossly erred in law as well as on the facts of the case in making the addition of Rs.1,75,20,300/- u/s 69A on account of alleged cash deposits in the bank account as unexplained money, and also erred in not considering the material available on record in their true perspective and sense and the ld. CIT(A) has grossly erred in setaside the same to the ld. AO without considering the details, submissions material available before him. Hence the addition so made by the ld. AO and setting aside by the ld. CIT(A) being totally contrary to the provisions of law and facts on the record and hence same may kindly be deleted in full. 3. The ld. AO has also grossly erred in law as well as on the facts of the case in invoking the provisions of Sec. 115BBE and charging the tax on higher rate and the ld. CIT(A) has grossly erred in setting aside the same to the ld. AO without considering the details, submissions material available before him. Hence the provisions so invoked and tax charged by the ld. AO is being totally contrary to the provisions of law and facts on the record and hence the same may kindly be deleted in full.” 2. Succinctly, the facts as culled out from the records are that the assesseehad no taxable income during the year, as his business from plying of buses was closed due to heavy losses. As such he had not filed his ITR. The AO on the basis of information received from ITBA under AIMS that the assessee had deposited cash ITA No. 304/Jodh/2025 Mangilal Datla, Banswara. 3 aggregating Rs.1,75,20,300/- in his SB A/c, issued notice u/s 148 on 19.03.2021. This notice was never served on the assessee. During the course of assessment proceedings consequent to notice issued u/s 142(1), the assessee flatly denied having made any such cash deposit in his bank account. The assessee sought time to collect the necessary evidence in support of his stand but the ld. AO denied adjournment and completed the assessment simply on the basis of information available with him, without even verifying the facts of cash deposits from the concerned bank. The ld. AO made addition of the entire amount u/s 69A. 3. Aggrieved from the order of Assessing Officer, the assessee preferred an appeal before the CIT(A)on legal grounds as well as on facts. He challenged the assumption of jurisdiction by the AO and addition made by him. On facts, the assessee pleaded before the CIT (A) that the it was on account of a technical glitch on the part of the bank that cash deposits of Rs.19,46,700/- on nine occasions was reflected in his bank account, whereas he had made no such deposits. The assessee filed all the evidences in support of the appeal before the Ld.CIT(A). The Ld. CIT(A) left the legal issue unanswered. He set aside the case to the AO to decide it afresh. 4. Now the assessee is in appeal before the ITAT. He has made the following submissions- ITA No. 304/Jodh/2025 Mangilal Datla, Banswara. 4 “GOA:-1-2: Invalid action u/s 147 rws 148 and Invalid and illegal assessment and invalid set-aside by the ld. CIT(A) and Addition of Rs.1,75,20,300/- on account of alleged cash deposits in the bank account.: 1. The brief facts of the case are that the assessee was a regular IT assessee. But the year he has not filed his ITR being no taxable income. The assessee was having the income from bus hiring and the same was closed due to loss. The ld. AO has issued the notice u/s 148 on 19.03.2021(PB1), on the reason that” Information received from ITBA under AIMS, Multi Year NMS Priority. 1. As per information code SFT 004, the assessee has deposited cash in account other than current account amount of Rs.1,75,20,300/- during the F.Y. 2016-17 assessee has not filed the ITR for A.Y. 2017-18. I have reason to believe that income to the extent of Rs.1,75,20,300/- has escaped assessment u/s 147” (PB3). Then said notice never served upon the assessee (PB 11,19,21). Assessee had received the first notice 142(1) dt. 24.01.2022. 2. In response to this notice u/s 142(1) dt. 24.01.2022 assessee has filed a reply and objection dt. 02.03.2022 (PB 11-12 and 16-17). Thereafter the ld. AO has also issued the notice dt. 09.03.2022 and 25.03.2022. In response thereto the assessee has again filed the detailed objection and repaly (PB18-27). 3.However the ld. AO not considered our reply nor decided our objection, rather he has alleged that “As in this case the assessee was issued notice u/s 148 on 19.03.2021 and first notice u/s 142(1) was issued on 21.06.2021 by JAO and on 24.01.2022 by NeFAC. From above it is evident that the assessee has already availed enough time and ample opportunities, but at the end of the assessment submitted his incomplete reply and asked for Two Months adjournment, which clearly shows that the assessee has nothing to say but to delay assessment proceedings. As the assessee deposited large cash i.e. Rs. 1,75,20,300/- in his bank account held with Indusind Bank and failed to explain source of such cash deposits. Considering all the above facts total cash deposits of Rs. 1,75,20,300/- is hereby treated unexplained money u/s 69A r.w.s. 115BBE of the Act”. 4. In first appeal assessee has filed detailed WS(PB32-38) and documents admittedly, however the ld. CIT(A) without considering and without deciding our legal grounds of appeal and legal position, validity of proceedings 5. In first appeal assessee challenged the legality, validity andproceeding u/s 147/148 and also challenged the assessment order as invalid illegal and addition on account of cash deposit of Rs.1,75,20,300/- was also challenged. Vide GOA before CIT(A) attached with form 35. During the course of hearing before the CIT(A) we have filed detailed WS(PB32-38) on all the issues and also filed the paper book which is also filed before your honor. ITA No. 304/Jodh/2025 Mangilal Datla, Banswara. 5 6. The ld. CIT(A) has not considered the same despite all the details, facts, submission, documents and legal position were very well available before the lower authorities. However despite all these the ld. CIT(A) has neither given any finding or decision on the legal issues as well as on the merit of the case rather he setaisde the case to the ld. AO for fresh assessment only by stating as under:- vide page 12 of the CIT(A) order “ In the present appeal, due to the non-providing of the details called for by the Ld.AO, the assessment was completed ex-parte u/s 144 r.w.s.147 rws 144B of the Act. As such, I am of the view that the appellant should be given full opportunity to represent its case, to produce all the necessary evidence which the appellant wishes to rely upon and after considering the entire submissions of the appellant, the Ld.AO should pass the fresh assessment order. Considering the facts and circumstances of the case and the powers vested in me vide proviso in clause (a) of subsection (1) of section 251 of the Act, I hereby set aside the order of the Ld.AO and restore the same back to the file of the Ld.AO with the directions to the Ld.AO to frame the assessment order afresh after giving adequate opportunity of being heard to the appellant. The appellant is also directed to produce all the necessary documentary evidence in support of its claim before the Ld.AO during the set aside assessment proceedings. The order of the Ld.AO is accordingly set aside to the file of the Ld.AO with the above directions. Hence this appeal. SUBMISSIONS: 1.1 At the very outset it is submitted that the ld. CIT(A) has wrongly set-aside the assessment order without deciding the legal grounds of appeal when there was no further verification and examination is required on the legal issue’s, when admittedly the ld. AO in the remand report has not disputed our contentions. And it is the settled position that firstly legal issue is to be decided and if on the legal issue the assessee succeed or having good case then there was no need to set- aside or restore the matter to the AO. The matter is to be restored to the AO by the ld. CIT(A) on merit only after deciding the case against the assessee on legal issues. As per new amended provisions, wef 01.10.2024, in our view the matter to be restored to the AO by the ld. CIT(A) those appeals which have been filed after the 01.10.2024 not before it because it is not retrospective amendment. 1.2. Further on the merit the case when it is the admitted facts that all the details and replies have been considered by the ld. AO and now the assessee is not required to file other details/evidences. Then the matter was to be decided by the ld. CIT(A) itself, for which he has failed to do so. Hence it is prayed that the matter on legal issue and on merit may kindly be considered and decided by your honor. As recently this Honble ITAT in the case of Suresh Kumar Saini v/s ITO Ward 7(4), Jaipur in ITA No. 1256/Jp/2024 dt. 29.01.2025 has decided the legal grounds of appeal, even not decided by the ld. CIT(A). Copy is enclosed. ITA No. 304/Jodh/2025 Mangilal Datla, Banswara. 6 2. Now on the legal issue and merit we rely upon on our WS, paper book, additional evidence, remand report and comments on remand report etc, which may kindly consider. 1. Incorrect or wrong Reasons: At the very outset it is submitted that the reasons recorded itself was wrong, incorrect and without material on record at the time of recording of reasons. Because in the reasons recorded the ld. AO mentioned that “Information received from ITBA under AIMS, Multi Year NMS Priority. 1. As per information code SFT 004, the assessee has deposited cash in account other than current account an amount of Rs.1,75,20,300/- during the F.Y. 2016-17 assessee has not filed the ITR for A.Y. 2017-18. I have reason to believe that income to the extent of Rs.1,75,20,300/- has escaped assessment u/s 147” (PB3) However the assessee has not deposited these amount in the bank account as we had stated the same from starting vide our letter to Bank Manager dt. 02.03.2022 (PB14-15) letter to AO dt.02.03.2022(PB16-17) 12.03.2022 and 26.03.2022(PB18-27) in support we had also filed the form 26AS original as well as revised from which it is clear that the bank has revised the form 26AS and reversed the entries and correct the entries(PB28 to 31B) hence we had established that assessee has not deposited such cash. Thus, when the very reasons are wrong or incorrect then all the proceedings are invalid. 1.2 Hence when the reason for reopening itself is wrong, incorrect and without material and altogether reverse then all the proceedings are void ab-initio and liable to be quashed. 1.2.1 On this preposition we would like to draw your kind attention on direct decision Honble Gujarat High Court in the case of Mumtaz Hazi Mohamad Memon v/s ITO 408 ITR 268(Guj.) on the very same issue, wherein the Honble Court has held that “11. In this context, we have noted that the reasons proceeded on two fundamental grounds. One, that the property in question was sold for a sum of Rs. 1,18,95,000/- and two; that the assessee had not filed the return and that therefore his 1/3rd share out of the sale proceeds was not offered to tax. Both these factual grounds are totally incorrect as is now virtually admitted by the Revenue. It is undisputed that the assessee had actually filed the return of income for the said assessment year and income also offered his share of the declared sale consideration to tax as capital gain. The Assessing Officer may have dispute with respect to computation of such capital gain, he cannot simply dispute the fact that the assessee did file the return. Importantly, even the second factual assertion of the Assessing Officer in the reasons recorded is totally incorrect. He has referred to said sum of Rs. 1,18,95,000/- as a sale price of the property. The assessee had produced before the Assessing Officer, the sale deed in which, the sale consideration disclosed was Rs. 50 lakhs. 12. The Assessing Officer may be correct in pointing out that when the sale consideration as per the sale deed is Rs. 50 lakhs but the registering authority has valued the property ITA No. 304/Jodh/2025 Mangilal Datla, Banswara. 7 on the date of sale at Rs. 1,18,95,000/- for stamp duty calculation, section 50C of the Act would apply, of course, subject to the riders contained therein. However, this is not the cited reason for reopening the assessment. The reasons cited are that the assessee filed no return and that 1/3rd share of the assessee from the actual sale consideration of Rs. 1,18,95,000/- therefore, was not brought to tax. These reasons are interconnected and interwoven. In fact, even if these reasons are seen as separate and severable grounds, both being factually incorrect, Revenue simply cannot hope to salvage the impugned notice. Through the affidavit-in-reply a faint attempt has been made to entirely shift the centre of the reasons to a completely new theory viz. the possible applicability of section 50C of the Act. The reasons recorded nowhere mentioned this possibility. Reasons recorded, in fact, ignored the fact that the sale consideration as per the sale deed was Rs. 50 lakhs and that the assessee had by filing the return offered his share of such proceeds by way of capital gain.” 1.2.2 In the case of Vijay Harish Chandra Patel vs. ITO 400 ITR 167(Guj.) (2018) where it has been held that” When very basis for reopening no longer survives, assumption of jurisdiction u/s 147 by AO by issuing notice u/s 148 was without authority of law and could not be sustained. However the ld. AO nowhere stated that what documents he was having with him at the time of recording the reason for the information that there was cash deposits of Rs.55,00,000/-. Hence the observation are wrong and baseless and her own and liable to be ignored. 1.2.3 Recently the Honble ITAT Jaipur Bench Jaipur in the case of Smt. Sushila Chahch v/s ITO in ITA No. 683/Jp/2019 dt. 30.03.2021 has quashed the notice as well as assessment order under the same facts and circumstances of the case, copy of order is enclosed. Where it has been held that” In light of aforesaid discussion and following the decision referred supra, where the very foundation for reopening the case is vitiated given that the assessee has filed her return of income disclosing the transaction of sale of immovable property for the specified consideration and offering the same to tax, there cannot be any reasons to believe that income has escaped assessment for the very same transaction the assumption of jurisdiction u/s 147 cannot be sustained and the subsequent proceedings are hereby directed to be set-aside. Also refer Shri Narain Dutt Sharma vs. ITO (ITA No.203/JP/2017 dated 07.02.2018). 1.2.4 Also refer recent decision of Honble Delhi High Court in the case of Catchy Prop- Build(P.)Ltd v/s ACIT [2022] 145 taxman.com 510 (Delhi) dt.17.10.2022. 1.2.6 In the case of Rames Bhojprasad Gupta vs. ITO ITA No. 476/SRT/2019, Feb 7, 2022 (2022) 64 CCH 0090 SuratTrib it has been held That Reassessment—Reopening of assessment— AO on basis of AIR information noted that assessee made deposit in his bank account in PNB— AO recorded that in response to notice under section 148; assessee neither filed return of income nor responded—Assessing Officer ultimately by-passing assessment order made addition on account of undisclosed cash deposits PNB'—Assessing Officer also disallowed disallowance ITA No. 304/Jodh/2025 Mangilal Datla, Banswara. 8 under Chapter-VI-A by taking view that no such deduction claimed in original return of income and no evidence to substantiate such deductions were filed—CIT(A) observed that pattern of withdrawal support contention of assessee is that deposit in bank were pertaining to business of its scrap—Accordingly, accepted transaction—CIT(A) on basis of pattern of deposit and withdrawal in PNB concluded that assessee shifted a part of his business turnover to undisclosed bank account—CIT(A) calculated profit on account of undisclosed sales, credit in bank account and accordingly worked out addition and directed Assessing Officer that while computing income of assessee—Held, Assessing Officer recorded that assessee filed return in his return of income and revised return of income, as \"It was also noted by undersigned that assessee had returned income of Rs.3,56,170/- in his return of income and in revised return of income, assessee returned income of Rs.5,00,660—Thus, during re-assessment, Assessing Officer was very well aware i.e., return was filed by assessee—AO recorded that on verification of details in ITD, it was seen that assessee has not filed return and assessee has not complied with verification letter—Assessing Officer has not recorded as to how said notice was served upon assessee or not—Reasons recorded was provided by AO vide letter dated 21.09.2017 which was received by assessee on 23.09.2017 and subsequently assessment order passed on 29.09.2017 by taking view that despite repeated notice and show cause assessee was not made proper compliance—On similar ground of reasons of reopening wherein Assessing Officer recorded that assessee has not filed return and in fact, return was filed by assessee, re-assessment were held as invalid by co-ordinate Bench of this Tribunal, in case of Rinakumar A. Shah ( ITA No. 172/AHD/2017 holding that Assessing Officer may have dispute with respect to computation of such capital gain, he cannot simply dispute fact that assessee did not file return—Entire reasoning recorded by AO for initiation of reassessment proceeding and issuance of notice under section 148 was on wrong and incorrect facts that assessee has never filed return of income, and in fact, it was filed—Initiation of reassessment proceeding u/s.147 and notice under section 148 and all subsequent proceedings and orders have been issued, conducted, passed without having valid jurisdiction, and therefore, same are bad-in-law and hence, same is quashed—CIT(A) estimated income @ 51.84% on account of undisclosed sales—Assessee claimed that he has shown book net book profit @ 11.45% and in subsequent year Assessing Officer has made addition @ 10% of net profit in assessment order passed under section 143(3—It is settled law that only profit element embedded in undisclosed sale or purchases is to be added not substantial part of transaction—When in subsequent assessment year in AY 2011- 12, AO himself made addition only @ 10% of net profit in assessment order passed under section 143(3); book profit shown by assessee @ 11.45% for year under consideration was reasonable and justified—Therefore, assessee also succeeded on merit—Assssee’s appeal allowed. 1.2.7 The Honble Jurisdictional Raj. High Court in the case of ABDUL MAJEED vs. INCOME TAX OFFICER in D.B. Civil Writ Petition No. 7853/2022 Jun 29, 2022(2022) 114 CCH 0245 RajHC (2022) 216 DTR 0305 (Raj), (2022) 327 CTR 0733 (Raj) it has been held “ Reassessment—Issuance of notice under section 148 after proceedings under Section 148A (d)— Writ petition seeks to assail correctness and validity of order passed by respondent, whereby, ITA No. 304/Jodh/2025 Mangilal Datla, Banswara. 9 after initiating proceedings under Section 148A (d) on formation of an opinion that income chargeable to tax has escaped assessment, authority proceeded to issue notice under Section 148—Respondent issued notice under clause (b) of Section 148A on basis of certain information which suggested that income chargeable to tax for assessment year 2015-2016 has escaped assessment within meaning of Section 147—Notice stated that assessee did not disclose this amount of cash deposit during relevant financial year and, therefore, on that basis, proceedings are required to be initiated—Competent authority proceeded to pass an order for issuance of notice under Section 148—Thereafter, a notice under Section 148 has been issued to petitioner- assessee—Held, After amendment carried out in income tax under Finance Act, 2021, even before proceedings under Section 148 could be drawn, law requires an order to be passed under Section 148A by conducting an enquiry in manner provided under Section 148A and satisfaction to be arrived at on basis of material available on record that income chargeable to tax has escaped assessment for relevant assessment year—Provision is explicitly clear that Assessing Officer shall, before issuing any notice under Section 148, conduct enquiry, details of which have been contained in Sub Clause (a) (b) & (c), which requires seeking prior approval of specified authority with respect to information; providing an opportunity of being heard to assessee and consideration of reply of assessee—Sub-Clause (d) of Section 148A mandates that after conducting enquiry by affording an opportunity of hearing and consideration of reply, authority shall decide, on basis of material available on record, including reply of assessee, whether or not it is a fit case for issuance of notice under Section148, by passing an order— Notice which was issued to petitioner-assessee by invoking jurisdiction under Section 148A(d) by authority was based on information regarding undisclosed cash deposits reflected by various transactions, which according to authority, was more than Rs.52,00,000—However, when petitioner-assessee filed his reply, he clearly disclosed that total amount of cash deposits in bank by him was only Rs.19,39,000/- and not Rs.52,75,000/- as alleged in notice—Assessee along with his reply annexed complete bank statements showing all debit and credit transactions—Total transactions, which have been shown, do not exceed amount as has been stated by petitioner- assessee—While considering reply and bank statements, competent authority did not dispute transactions, which were placed before it along with reply filed by petitioner- assessee— Therefore, very basis of initiation of proceedings that income exceeding more than Rs.50,00,000/- had escaped assessment, was factually not correct—But then, authority thereafter, without disputing transactions, proceeded to pass an order for issuance of notice under Section 148—Provisions contained in Section 148A (d) referred to hereinabove, clearly show that decision has to be taken on basis of material available on record—Material available on record before authority did not disclose any cash deposit or any other transactions which can be said to have escaped assessment, which was more than Rs.50,00,000—Had it been a case of opening of case within a period of three years having elapsed from end of relevant assessment year, order of authority could be well justified on touch stone of legal requirement as embodied under Section 148A—However, in present case, undisputedly it is a case where more than three years have elapsed from end of relevant ITA No. 304/Jodh/2025 Mangilal Datla, Banswara. 10 assessment year—In that case, in order to initiate proceeding under Sections 148, it is not only required to be shown that some income chargeable to tax has escaped assessment, but also that it amounts to or is likely to amount to Rs.50,00,000/- or more than for that year—Only on basis that cash deposits of Rs. 19,39,000/- chargeable to tax have escaped assessment, without anything more, authority was not justified in jumping to conclusion that assessee may have more bank accounts—If such an interpretation is placed on provision of Section 148A (d) with reference to expression ‘material available on record’, then in that case, it will open flood gate and even without availability of any material, authority would be initiating proceedings under Section 148, which will completely frustrate object of incorporation of Section 148A in Act—It is well settled principle of interpretation that taxing statute is required to be construed strictly— Impugned order and proceedings are unsustainable in law—Assessee’s petition allowed”. Also refer Rajhans Processor v/s UOI in DB c Civit Writ Petition No. 16985/2021 dt. 05.01.2023 of Raj. High Court. In the case of Vijay Harish chandra Patel vs. ITO 400 ITR 167(Guj.) (2018) where it has been held that “When very basis for reopening no longer survives, assumption of jurisdiction u/s 147 by AO by issuing notice u/s 148 was without authority of law and could not be sustained.” 2. Notice u/s 148 of the IT Act not properly: 2.1 The Ld. AO has erred in framing there assessment order without serving notice u/s 148 properly to the appellant and therefore assessment is made without jurisdiction and deserved to be quashed. 2.2 In the instant case the notice u/s 148 of the IT act was not served upon the assessee. As the Ld. AO has issued the Notice U/s 148 on dt. 19/03/2021 and in the assessment proceedings we had objected the same during the assessment order vide letter to AO (PB18-22) and the Ld. AO has nowhere stated provided the proof that the Notice has been served upon the assessee. And also on perusal of portal it is cleared that the notice has also not been sent on Email also no proof of service notice, on being demanded the certified copies of documents after assessment the ld. AO in response thereto the ld. AO has given the documents but he has not given the proof of service of notice u/s 148 only one proof of service of notice u/s 142 was given which is dt. 24.02.2022(PB13) and also in the assessment record the same was not available. Thus it has been proved that the notice u/s 148 has not been served, still if your honor is having any doubt the ld. AO may kindly be asked for the same. 2.3 The Ld. AO is silent so far as on its duly served upon the assessee in demand the same and the same notice was not received by the assessee with in time as prescribed by law. Assesseehas come to know about the said notice only on receiving the notice u/s 142(1) dt. 24.01.2022. Hence the assessee has filed the objection regarding the notice u/s 148 not served through letter as above. However the ld. AO has neither decided the objection nor given any rebuttal and reply in ITA No. 304/Jodh/2025 Mangilal Datla, Banswara. 11 the assessment order, which proves that the notice has not been served upon the assessee. And it is settled legal position of law that the proper service of the notice u/s 148 on the assessee is mandatory, without service of notice the subsequent proceedings are invalid and illegal and liable to be dropped. Thus the assessment order u/s 144/147 is bad in law and deserved to be quashed as the mandatory condition for reopening of the assessment could not have been fulfilled. Proper service of the notice u/s 148 is mandatory condition upon the assessee but Ld. AO could not have been served the notice as issued u/s 148 admittedly as per record. 2.4 Further, notice issued u/s 148 is primary condition of law to initiate the re-assessment proceedings under section 147 could not have been served properly to the assessee appellant therefore mandatory condition could not have been fulfilled. The proper service of notice u/s 148 is a jurisdictional requirement that must be mandatorily complied with and in the absence of the same, the proceedings should not be initiated on the assessee. 2.5 The same contention is favored by many land mark judgment which are as follows; Honorable ITAT, Agra Bench in M/s K.P. Cold Storage Vs ITO ITA No. 145/Agra/2018 had held that; In the present case AO on basis of information received from the ADIT(Inv.) that there were huge cash deposits in the bank accounts maintained by assessee during the period F.Y 2008-09, had issued notice under section 148 which culminated into assessment framed determining total income at Rs. 2,21,60,400/- as against Rs.12,45,390/- originally returned by assessee. Assessee contended that no notice under section 148 was served upon assessee and ex- parte assessment was completed without serving any notice under section 148 till the completion of assessment which rendered the assessment order to be held void-ab-initio. It was held a valid service of a valid notice under section 148, is not a mere procedural requirement, but is a condition precedent to the validity of any assessment, reassessment or re-computation to be made under section 147 and it is so because of the use of words “shall serve on the assessee” and also the requirement to the effect “before making the assessment, reassessment or re-computation under section 147” in the section itself- meaning thereby that if no notice under section 148 is issued or if the notice so issued is shown to be invalid, or the service of notice so issued, is shown to be invalid, AO could not proceed with the subsequent proceedings for making assessment, reassessment or re-computation under section 147. Unless, the notice was served on the proper person in the manner prescribed under section 282, the service was insufficient and AO did not have jurisdiction to re-assess the escaped income. Thus, the service of notice under section 148 was no service in the eye of law and all subsequent proceedings including the ex parte assessment framed on 21.12.2016 in assessee’s case were illegal and void ab initio. [1999] 238 ITR 694 (CAL.) High Court Of Calcutta in Keshab Narayan Banerjee; Section 148, read with section 147 of the Income-tax Act, 1961 – Income escaping assessment – Issue of notice for – Assessment years 1983-84 to 1987-88 – Whether service of notice is condition precedent for passing orders under section 147 – Held, yes – Whether respondent made attempt ITA No. 304/Jodh/2025 Mangilal Datla, Banswara. 12 to serve notice under section 148 to appellant by registered post but it was not shown that either appellant refused to take service of notice or that appellant was not available at his residence or that there was no one willing to accept service on his behalf, service of notice could not be said to be properly effected and, therefore, assessment order passed u/s 147 based on service was also bad in law –Held, yes (In favor of assesee). For taking any action u/s 148 a valid service of the notice is precondition. For reference kindly refer a direct decision of Shri Chetan Gupta vs. ACIT(2014) 160 TTJ 0009 (Del)For valid assumption of jurisdiction to frame a reassessment, a proper and valid service of notice u/s 148 on assessee is mandatory requirement violation thereof will result in quashing of the reassessment proceedings. Assessee has demonstrated that the notice was issued/sent at an address different than the one mentioned in his return of income. Department also admits that the notice was served not on assessee but on one Shri Ved Prakash who according to assessing officer is a responsible person working for the group entities of assessees family and this amounts to a proper service on assessee. These facts are admitted by the department which are evidenced by the remand report and field correspondence mentioned above. Assessee’s contention that said Ved Prakash was neither his employee nor his authorized agent, remains uncontroverted. Merely because he appeared in some other group entities will not detract the fact that notice was not served on assessee. During the course of reassessment AO was intimated about non service of notices u/s 148 and 143(2) but AO failed to take cognizance of assessee’s intimation and objections. From the assessment record, remand reports, field correspondence and oral contentions, department could not demonstrate before us that notice u/s 148 was served on the assessee for A.Y. 2001-02. In the absence of a valid service of notice u/s 148 on the assessee the reassessment proceedings for AY2001-02 are bad in law, consequently they are quashed. CIT vs. Hotline International Pvt. Ltd 296 ITR 333 (Del); Hotel Blue Moon 321 ITR 362 (SC), followed. The above decision has been affirmed by the Honble High Court Delhi refer CIT v/s Chetan Gupta 94 CCH 13(Del). In the case of A.K. Kochandi&Ors.vs. AGRICULTURAL INCOME TAX OFFICER(1975) 43 CCH 0749 KerHC (1976) 1976 CTR 0072 (KER) : (1977) 110 ITR 0406held that Assessment—Best judgment assessment—Validity—Notice not served on assessee in accordance with Order V, rr. 17, 18 & 19 etc.—Ex parte assessment not valid. On this preposition also kindly refer a direct decision of Jodhpur Bench in the case of Sh. Panna Lal Bhil v/s ITO in ITA No. 453/Jd/2013 dt. 11.06.2014. Where it has been held that the notice u/s 148 of the Act is a jurisdictional notice and its service has to be as per law, failing which the entire edifice built on the basis of that notice will crumble down as a pack of card fall. Copy is enclosed. ITA No. 304/Jodh/2025 Mangilal Datla, Banswara. 13 3. Objection decided: Further after receiving the notice u/s 142(1) we filed the objection against the issuance of notice or proceedings u/s 148 vide letter dt. 02.03.2022, 09.03.2022 and 26.03.2022 (PB111-27). However the ld. AO has not decided the objection u/s 148 which was mandatory as per law and settled legal position of law. The Honble Raj. High Court in the case of M/s K.C. Mercantile V/s DCIT Circle-2, Jaipur in DBIT No. 292/2016 dt. 07.11.2017 it has been held. Before proceeding with the matter, it is not out of place to mention that the law declared by the Supreme Court in GKN Driveshafts (supra) clearly held that the preliminary objection is to be decided as the first, it cannot be decided subsequently. The argument which has been canvassed by the assessee is required to be considered very seriously more particularly in view of the observations made by the Supreme Court in the case of KSS Petron Private Ltd (supra) which is followed in Hotel Blue Moon (supra), the law declared by the Supreme Court is taken in true spirit whether it will open a second inning in his own. Section 153(3) is to be read very cautiously as 153 powers are given to the Department, the Court has to look into whether the law declared by the Supreme Court is given away or protected. In the present case, as the Assessing Officer has clearly ignored the law declared by the Supreme Court, in that view of the matter, the issues which are raised in the matter, the Tribunal ought not to have remitted back for reassessment since period of limitation has already expired as the authority will get extended time of limitation beyond 9 months which is not the object of the Income Tax Act. In that view of the matter, on issue No. 1 and 2, the order of reassessment passed by the Tribunal is declared null and void. The questions are answered in favour of assessee and against the Department. Recently this Honble Tribunal in the case of in the case of Yashpal Agrawal the Honble ITAT In ITA No. 268/Jp/2023 dt. 30.06.2023 has quashed the assessment order on the grounds that the objections filled by the assessee against the proceedings u/s 147/148 has not been decided here is also the same position and the also Mahendra Sharma v/s ITO Ward 3(1), Jaipur in ITA No.654/Jp/2023 dt.25.03.2025. Thus on the above legal position of law the notice u/s 148 or proceedings u/s 147/148 and consequent assessment order liable to quashed. 4. Non application of mind by the higher authorities:- Further on perusal of the approval and assessment record it has come to know that in the satisfaction the ld. JCIT has mentioned only that “Aprooved”. The ld. JCIT has given the approval and satisfaction in the mechanical manner, he has not recorded his own satisfaction. As on perusal of the reason recorded(PB3-4) and ITA No. 304/Jodh/2025 Mangilal Datla, Banswara. 14 approval u/s 151 (PB2) by the without competent authority it is clearly proved that they have not applied the mind on the reasons recorded they have only expressed or mentioned Approved by the JCIT on the reason forwarded. While as per decision of Pr. CIT vs. N. C. Cables Ltd.(2017) 98 CCH 0010 DelHC it has been held that Section 151 of the Act clearly stipulates that the CIT, who is the competent authority to authorize the reassessment notice, has to apply his mind and form an opinion. The mere appending of the expression ‘approved’ says nothing. It is not as if the CIT has to record elaborate reasons for agreeing with the noting put up. At the same time, satisfaction has to be recorded of the given case which can be reflected in the briefest possible manner. In the present case, the exercise appears to have been ritualistic and formal rather than meaningful, which is the rationale for the safeguard of an approval by a higher ranking officer. For these reasons, the Court is satisfied that the findings by the ITAT cannot be disturbed. On this preposition kindly also refer Also refer Maruti Clean Coal And Power Ltd. vs. ACIT (2018) 400 ITR 0397 (Chhattisgarh) In the case of CIT vs. S. Goyanka Lime & Chemicals Ltd. (2015) 231 TAXMAN 0073 (MP) it has been held that While according sanction, the Joint Commissioner, Income Tax has only recorded so “Yes, I am satisfied” If the case in hand is analysed on the basis of the aforesaid principle, the mechanical way of recording satisfaction by the Joint Commissioner, which accords sanction for issuing notice under section 147, is clearly unsustainable and we find that on such consideration both the appellate authorities have interfered into the matter. In doing so, no error has been committed warranting reconsideration. (para 7) As far as explanation to Section 151, brought into force by Finance Act, 2008 is concerned, the same only pertains to issuance of notice and not with regard to the manner of recording satisfaction. That being so, the said amended provision does not help the revenue. No question of law involved in the matter, warranting reconsideration appeals are, therefore, dismissed. Also refer PAC AIR SYSTEMS P. LTD. vs. ITO (2020) 58 CCH 0001 Del Trib it has been held that Reassessment—Income escaping assessment—Assessee filed present appeal challenging order of CIT(A) wherein, AO’s action was accepted—Assessee contended that AO had erred in assumption of jurisdiction u/s 147/148 based on invalid and mechanical approval granted by Addl. CIT—Held, approval granted by Addl. CIT was a mechanical and without application of mind, which was not valid for initiating re-assessment proceedings, because from said remarks, it was not coming out as to which material; information; documents and which other aspects went gone through and examined by Addl. CIT for reaching to satisfaction for granting approval—Thereafter, AO had mechanically issued notice u/s 148—Reopening in assessee’s case for AY in dispute was bad in law and deserved to be quashed—Approval granted by Addl. CIT was a mechanical and without application of mind, which was not valid for initiating reassessment proceedings issue of notice u/s 148 and was not in accordance with s. ITA No. 304/Jodh/2025 Mangilal Datla, Banswara. 15 151 thus, notice issued u/s 148 was invalid and accordingly, reopening in this was bad in law and therefore, same was hereby quashed—Assessee’s appeal partly allowed. In the case of Gorika Investment And Export (P) LTD. vs. ITO (2018) 53 CCH 0168 DelTribReopening—Income escaping assessment—Validity thereof—Assessee filed return of income declaring income which was processed u/s. 143(1)—AO issued notice u/s. 148 after recording reasons that income of assessee had escaped assessment—AO framed assessment u/s. 143(3) r.w.s. 147 by making addition—CIT(A) upheld order of AO—Held, in CIT Vs N.C. Cables Ltd., it was held that CIT(A) who was competent authority to authorize reassessment notice had to apply his mind and form opinion—Mere appending of expression ‘approved’ says nothing— Satisfaction had to be recorded of given case which could be reflected in briefest possible manner—Exercise appears to had been ritualistic and formal rather than meaningful, which was rationale for safeguard of approval by higher ranking officer—AO initiated proceedings u/s. 147 r.w.s. 148 on basis of information furnished by Directorate of Investigation Unit and CIT gave approval without applying his mind in slip-shod manner—As approval/sanction given by CIT was without recording satisfaction, reopening was not sustainable—Assessee’s appeal allowed. TARA ALLOYS LTD. vs. ITO (2018) 63 ITR (Trib) 0484 (Delhi)Reassessment—Income escaping assessment—Validity thereof—Case of assessee was selected for scrutiny as per provisions of section 147 and 151 and accordingly notice u/s 148 was issued to assessee— Proceedings u/s 147/148 were initiated after recording reasons on basis of information received from Investigation Wing of Department on basis of search and seizure operation—During course of assessment proceedings, assessee was specifically asked to explain and justify transaction with G received as share application money/share capital and why same should not be disallowed or added in income of assessee—AO held that it was camouflage just to introduce its own fund through entry operator therefore amount was added in income of assessee company as unexplained u/s 68—CIT(A) confirmed reassessment and addition made by AO of share capital and unexplained cash credit—Held, notice u/s 148 could be quashed if ‘belief’ was not bona fide or one based on vague, irrelevant and non-specific information—Basis of belief should be discernible from material on record which was available with AO when he recorded reasons— There should be link between reasons and evidence/material available with AO—Commissioner had simply affixed “approved” at bottom of note sheet prepared by ITO technical—ITO could not have had reason to believe that income had escaped assessment by reasons of assessee ’s failure to disclose material facts and if Commissioner had read report carefully he could not have come to conclusion that this was fit case for issuing notice u/s 148—Commissioner had simply put “approved” and signed report thereby giving sanction to AO—Nowhere Commissioner had recorded satisfaction note, not even in brief after applying his mind—After expiry of four years from end of relevant assessment year, notice u/s 148 should not be issued unless Commissioner was satisfied that it was fit case for issue of such notice—Reassessment proceedings and notice being bad in law were quashed—Assessee’s appeal allowed. ITA No. 304/Jodh/2025 Mangilal Datla, Banswara. 16 Also refer a recent judgment of this Honble ITAT in the case of Sh. Anshuman Singh v/s ACIT Circle-1 Jaipur in ITA No.733 & 739/JP/2023 dt. 10.04.2024. 5. No signed on the notice u/s 148: As on perusal of the notice u/s 148(PB1) it is clear that there is no signature either physically or digitally and the notice u/s 148 and approval are of the same date 19.03.2021 and both are not signed. Hence the notice u/s 148 and consequent assessment are illegal invalid and void-ab-inito and liable to be quashed. 6. No income escaped: Further it is submitted that the notice u/s 148 can be issued only when there is any escape of income because S. 147 provides that If the Assessing Officer has reason to believe that an income chargeable to tax has escaped assessment for any assessment year, here the assessee has not deposited such cash amount in the bank account as already sated above and not escaped any income. Which shows that there was no escapement of income by the assessee, as the assessee is having income below taxable. Hence if there is neither the escapement of income by the assessee nor proved then the notice issued u/s 148 is invalid. 7. The Reasons for Reopeningof the assessment not valid:- That the learned AO has grossly erred both in law and facts where the assesseehas not deposited the such alleged cash deposited. Hence it cannot be said that the there was any failure on the part of assesse to disclose truly and fully all material facts necessary for assessment. The finding of concealed income has disproved by the 26AS itself. The reopening is based on wrong information provided by the third partystatement , which have No evidentiary value and the ld. AO and Authorities has never made any inquiry before issuing the notice u/s 148. As the reasons as recorded by the ld. AO for reopening the assessment was totally presumptive/assumptive/surmises and vague in the air only in a mechanical manner because assessee never deposited such alleged cash deposit. Thus the re-assessment proceedings in this case were only based on presumption/suspicion and were thus not validly initiated. The Ld. AO recorded the reasons without pointing out his own any finding regarding concealed income and about how the assessee has failed to disclosed fully and truly material facts while the assesse has done all the compliance on his part in this regard, therefore complete re-assessment proceedings void ab initio and bad in law and deserve to be quashed. 8. Re-assessment is based on borrowed satisfaction; The Ld. AO has issued notice u/s 148 on the basis of borrowed information from the SFT-004 Code, without verifying the correctness of the information and therefore re-assessment proceedings is absolutely bad in law and without jurisdiction and further AO not recorded his satisfaction and re-assessment is based on borrowed satisfaction which was not sufficient to confer power on the AO to initiate reassessment proceedings against assessee. ITA No. 304/Jodh/2025 Mangilal Datla, Banswara. 17 CIT vs. Shree Rajasthan Syntex Ltd. (2009)313 ITR 231 (Raj.) SLP dismissed (2009) 313 ITR (St.) 27 (SC); Sun. Pharmaceutical Industries Ltd. Vs. DY. CIT (2016)287 CTR(Del.)621; The Impugned initiation of assessment proceedings had started by the AO on borrowed satisfaction but not their own which is mandatory condition of the law as provided for re – opening of any assessment. Section 147 of Act clearly specify. In impugned case the Ld. AO had claimed that a certain transaction of bogus LTCG on the basis of statements as recorded of third party and Ld. AO could not have been made any enquiry regarding both the facts and without conducting any enquiry/investigation re-opened the case and issued the notices which is completely based on perverse findings and deserve to be declared as null and void ab initio. Here in impugned case AO’s self-satisfaction regarding escapement of income is not bringing on record which is mandatory condition of law under section 147 of Income Tax Act, 1961, it could have been come only after conducting enquiry and investigation but Ld. AO did not make such therefore complete re-assessment proceedings come under suspicious circle, various honorable courts propounded and led on this aspect and issue direction to handle such situation. Similarly in the case of CIT v. Indo Arab Air Services (2016) 130 DTR 78/ 283 CTR 92 (Delhi)(HC) it was held that mere information that huge cash deposits were made in the bank accounts could not give the AO prima facie belief that income has escaped assessment. The AO is required to form prima facie opinion based on tangible material which provides the nexus or the link having reason to believe that income has escaped assessment. The AO was also required to examine whether the cash deposits were disclosed in the return of income to form an opinion that income has escaped assessment. The power to reopen an assessment is conditional on the formation of a reason to believe that income chargeable to tax has escaped assessment. The power is not akin to a review. The existence of tangible material is necessary to ensure against an arbitrary exercise of power. Aventis Pharma Ltd. vs. ACIT (2010) 323 ITR 570 (Bom). The ld. DR has not stated that what was the sufficient material and not provided the same till date. As per the assessment order and reasons recorded it is clear that the notice has been issued only on the basis of information not on any material (i.e. bank statement) and such material has not been disclosed till date. For that we have already submitted in our WS that the reopening is based on the borrowed satisfaction. 9. Further kindly consider our WS before the ld. CIT(A) (PB32-38) as WS before your honor. ITA No. 304/Jodh/2025 Mangilal Datla, Banswara. 18 Prayer: In view of the above facts , circumstances the case and legal position the notice as well as the assessment may kindly be quashed. Submissions on GOA-2: Addition of Rs. 1,75,20,300/- on account of alleged cash deposit in the bank account. 1. As we have already stated thatassessee has never deposited such cash in the bank account. As during the course of assessment we had filed to the Bank and RBI (PB7-10) thereafter the Bank has revised the 26AS information (PB31-31B) and also bank has also issued the certificate(PB10). Hence when it has been proved that no such cash deposited was in the bank, then there is no question of making the addition. As the ld. AO has made the addition only on the basis of information, without seeing and having the bank statement when during the course of assessment we had explained the same and brought in the notice of the ld. AO, but the ld.AO without making any inquiry from the bank has made wrong addition which is illegal and invalid rather he wrongly alleged that the assessee has not filed the details and replay which is absolutely wrong looking the above facts, reply and details. The ld. AO has made wrong huge additionblindly and without brining any evidence on record, which is not permissible in the eye of law and liable to be deleted. 2. However the ld. AO has intentionally and blindly ignored these very vital facts of the case and proceeded on their own guess work, assumption, presumption and suspicion and it is the settled legal position that no addition can be the basis of suspicion, assumptions’ and presumption. An allegation remains a mere allegation unless proved. Suspicion may be strong however cannot take the place of reality, are the settled principleskindly refer Dhakeshwari Cotton Mills 26 ITR 775 (SC) also refer R.B.N.J. Naidu v/s CIT 29 ITR 194 (Nag), Kanpur Steel Co. Ltd. v/s CIT 32 ITR 56 (All).Also refer CIT v/s KulwantRai 291 ITR 36( Del). In CIT v/s Shalimar Buildwell Pvt Ltd 86 CCH 250(All) it has been held that the AO made the addition merely on suspicion which was not desirable in the eye of law. 3. Further kindly consider our WS before the ld. CIT(A) (PB32-38) as WS before your honor. Prayer: Therefore in view of the above facts , circumstances of the case and legal position the notice as well as the assessment may kindly be quashed and the addition may kindly be deleted in full. 5. The Ld. AR of the assessee in support of the contention so raised in the written submission, placed reliance on the following evidence / records: ITA No. 304/Jodh/2025 Mangilal Datla, Banswara. 19 S.No. Particulars Page No. 1. Copy of Notice U/s 148 dt. 19.03.2021. 1 2. Copy of approval u/s 151 dt19.03.2021. 2 3. Copy of reasons recorded u/s 148. 3-6 4. Copy of letter to Bank andRBI dt. 15.09.2021 and reply by the Bank. 7-10 5. Copy of letter to AO dt.02.03.2022 and also to Bank 11-15 6. Copy of Objection against notice and proceedings vide letter to AO dt. 02.03.2022, 12.03.2022 and 26.03.2022. 16-27 7. Copy of Form 26AS original and revised. 28-31 8. Copy of WS to CIT(A) 32-38 6. The ld. DR is heard who relied on the findings of the Ld. CIT(A).He vehemently argued that as the evidence produced before the CIT(A) needed to be examined, the order was rightly set aside to the AO, and the same may kindly be sustained. 7. We have heard the rival contentions and perused the material placed on record vide the paper book, as well as the relevant provisions of law and the case laws cited by the Ld.AR in support of his case. 8. Vide Ground No.1, the assessee challenged the proceedingson various legal grounds. We first take up the ground relating to non-service of notice issued u/s 148, as it would confer the jurisdiction to AO to assess. It is a contention of the appellant that he was never served notice u/s 148. The first service of any notice ITA No. 304/Jodh/2025 Mangilal Datla, Banswara. 20 [notice u/s 142(1) dated 24.01.2022] relating to these proceedings was made on him, through post received by him on 25.02.2022. He duly intimated the fact of non-receipt of notice issued u/s 148 through his reply dated 12.03.2022, filed to the AO. The AO neversaid that the allegation of non-service of notice u/s 148 is incorrect. In spite of the fact of non-service brought to his knowledge, the AO in his wisdom, neither got the notice served on the assessee nor intimated the reasons for reopening his case, but went on to complete the assessment, adding the impugned amount without making any enquiry whatsoever, particularly when the assessee flatly denied having made any such cash deposit in his account. During the first appellate proceedings, the issue was again raised, which remained unadjudicated. During the proceedings before us, again the Ld.AR agitated the non-service of the notice stating that it is the primary jurisdictional requirement, which was not complied with, by the AO. The Ld.DR could not place on record any evidence to prove the service of the said notice. Now, reference is to be made to the relevant statutory provisions in this regard. Firstly, I refer to sub-section (1) of section 148, which reads as under: \"148(1) Before making the assessment, reassessment or recomputation under section 147 the Assessing Officer shall serveon the assessee a notice requiring him to furnish within such period, as may be specified in the notice a return of his income or he income of any other person in respect of which he is ITA No. 304/Jodh/2025 Mangilal Datla, Banswara. 21 assessable under this Act during the previous year corresponding to the relevant assessment year, in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed, and the provisions of this Act shall, so far as may be apply accordingly as if such return were a return required to be furnished section 139.\" Thus, the mandate of section 148 is that notice should be served on the assessee. It is not disputed that the notice under section 148 has not been served on the assessee. There is also nothing on record to suggest that the notice was served on the assessee even after it was pointed out that notice was not served on him. Therefore, the issue to be decided in the instant case is that if the notice is not served on the assessee, who is named in the notice,whether Assessing officer will acquire a legal or valid jurisdiction to proceed in the matter or not. I find that there are plethora of judgements on this particular issue, viz. Hon’ble Supreme Court in Y. Narayan Chetty vs. ITO (1959) 35 ITR 388 (SC); CIT vs. Thayaballi Mulla Jeevaji Kapasi (1967) 66 ITR 147 (SC); and CIT vs. Kurban Hussain IbrahimjiMithiborwala (1971) 82 ITR 821 (SC) which have held that the notice prescribed by section 148 cannot be regarded as a mere procedural requirement. It is only if the said notice is served on the assessee that the ITO would be justified in taking proceedings against the assessee. If no notice is issued/served or if the notice issued is shown to be invalid, then the proceedings taken by the ITO would ITA No. 304/Jodh/2025 Mangilal Datla, Banswara. 22 be illegal and void. Hon’ble Delhi High Court in case of CIT vs. Hotline International Pvt. Ltd. (296 ITR 0333) has held that in the absence of a valid service of notice u/s 148 on the assessee, the reassessment proceedings are bad in law. Hon’ble Punjab & Haryana High Court in case of CIT vs. Ceban India Ltd. ITA No. 85 of 2009, Jul 7, 2009 has held that in absence of notice being served, the AO had no jurisdiction to make assessment. ITAT Visakhapatnam in the case of Smt.Kakarla Guna Vidya Saraswathi vs. ITO, held as under – The requirement of both the issuance and service of such notice upon the assessee for the purposes of Section 147 and 148 of the Act are mandatory jurisdictional requirements. Order passed is liable to be quashed on account of non-service of notice u/s 147/148. The ratio of the above judgments and those relied upon by the appellant is that there has to be service of notice as per law and mere participation in the proceedings will not validate the assessment proceedings. Acquiescence on the part of the assessee cannot confer jurisdiction which otherwise is lacking from the very beginning. The Assessing Officer can proceed to complete assessment only after proper service of notice in accordance with law and unless such notice had duly been served, the Assessing Officer cannot be said to have been duly clothed with the jurisdiction to pass the assessment order. ITA No. 304/Jodh/2025 Mangilal Datla, Banswara. 23 It is settled law that it is the duty of the revenue to establish that the service of an order or a notice was made on the assessee himself or on somebody duly authorized by him in that behalf. When the assessee pleads that he has not been properly served with any notice, it is for the Department to place the relevant material to substantiate the plea that the assessee was served with prior notice. In the present case, no material is on record to show that the notice was served on the assessee. Till date, despite repeated requests made on behalf of the appellant and even before the proceedings before us, the AO has not been able to provide evidence of service of notice. The most fundamental requirement on service has not been established. The ratio of the decisions cited above had also been consistent that acquiescence is not going to confer jurisdiction which otherwise is lacking from the very beginning. As observed earlier, the Assessing Officer can proceed to complete the re- assessment only when he issued notice and served the same on the assessee. In view of these findings, the Assessing Officer cannot assume jurisdiction to complete assessment for want of notice even though assessee had appeared before him and also participated in the reassessment proceedings. The procedural irregularities can be waived off by the assessee, but at the same time the conduct of the assessee in participating in assessment proceedings will not be sufficient to confer the jurisdiction on the Assessing Officer, without service of notice on the ITA No. 304/Jodh/2025 Mangilal Datla, Banswara. 24 assessee. It was fundamental requirement to get the notice served on the assessee before proceeding to complete the reassessment and as it is lacking, this jurisdictional defect cannot be cured.Therefore, it is held that as there was no service of notice under section 148 of the Act, the re-assessment proceedings are void ab-initio and thus liable to be quashed. As a result, the basic legal issue raised by the appellant vide Ground No. 1 is allowed. The assessee has also raised various other legal grounds, like non-consideration of objection raised, non-application of mind by higher authorities, unsigned notice, reasons based on borrowed satisfaction, etc., which we do not deem proper to delve into, as we have quashed the assessment order on jurisdictional issue. 9. Vide Ground No.2, the assessee has challenged the addition of Rs.1,75,20,300/-. We find that the during the appellate proceedings, complete evidence which clearly established that no cash deposits were made by the assessee in his bank account, were adduced before the Ld. CIT(A). The corrected Form- 26AS and the letter from the concerned bank clarifying the issue were before the Ld. CIT(A), on the basis of which he could have deleted the addition and allowed the ground raised by the assessee. The Legislature has conferred very wide powers upon the Appellate Commissioner once an appeal is preferred to him by the assessee. An appeal is only a rehearing or a retrial. In the absence of any statutory inhibitions or restrictions, CIT(A) has precisely the same powers, exercisable in the ITA No. 304/Jodh/2025 Mangilal Datla, Banswara. 25 same manner and to the same extent, as the AO has, in the first instance. The powers of the CIT(A) are in the nature of reassessment and once an assessment order is brought before CIT(A), his power is not restricted to examining only those aspects of the assessment about which the assessee makes a grievance but his powers range over the whole assessment to correct the AO not only with regard to a matter raised by the assessee in appeal but also with regard to any other matter which has been considered by the AO and determined in the course of assessment. Under sec 250(4) of the Income-tax Act, the CIT(A) is competent to make such further enquiry as he thinks fit or cause further enquiries to be made by the Income-tax Officer, under remand. He is further empowered to make such fresh assessment and determine, where necessary, the amount of tax payable on the basis of such fresh assessment. The CIT(A) ought to have deleted the addition on the basis of Form-26AS or called remand report from the AO, and thereafter decided the issue. But he shunned from his duty. We further observe that the CIT(A) misdirected himself in setting aside the matter to the AO to decide it afresh, taking shelter of the proviso inserted to section 251(1)(a) brought about w.e.f.01.10.20204. The Memorandum explaining the provisions to the Finance Act, 2024 (Clause 77) clearly stated that in cases of Best Judgement Assessment made u/s 144 where the assessee remains unresponsive to the notices issued by AO, the assessment may be set aside. In the instant case, order u/s 144 was passed ITA No. 304/Jodh/2025 Mangilal Datla, Banswara. 26 as the assessee had not filed his ITR. From the records, it is observed that the assessee filed replies to all notices received by him. In these circumstances, the CIT(A) ought to have decided the appeal on merits rather than setting it aside to the AO for fresh consideration. As the assessee has already lost a considerable time and money, agitating an issue which was the outcome of inadvertent error on the part of Bank and equally inconsiderate and indifferent approach by the Department saddling him with tax liability for no fault of his, we, after examining the aforesaid documents, delete the addition made, instead of setting it aside to the AO. The ground of appeal, thus stands allowed. 10. In the result, the appeal filed by the assessee is allowed, both on legal issue as well as on facts. Order pronounced under Rule 34(4) of the Income Tax (Appellate Tribunal) Rules, 1963 by placing the details on the notice board. Sd/- Sd/- (Dr. Mitha Lal Meena) (DR. S. Seethalakshmi) Accountant Member Judicial Member Dated 25/06/2025 Santosh- Sr. P.S Copy of the order forwarded to: (1)The Appellant (2) The Respondent (3) The CIT ITA No. 304/Jodh/2025 Mangilal Datla, Banswara. 27 (4) The CIT (Appeals) (5) The DR, I.T.A.T. True Copy By order "