NASHIT SUHAIL ANSHARI ,MUMBAI V. INCOME TAX OFFICER WARD 30(1)(1), MUMBAI

ITA 4416/MUM/2025

AI Insights

The case involves Nashit Suhail Ansari, the appellant, contesting the reassessment order for the assessment year 2018-19 issued by the National Faceless Assessment Centre (NFAC) under the Income Tax Act. The primary legal contention was the validity of the notice issued under section 148, which was challenged on the grounds of improper sanction as per section 151. The appellant also contested the merits of the reassessment, which included the addition of income from Bitcoin transactions deemed unexplained by the Assessing Officer. The Tribunal's decision hinged on both the procedural validity of the notice and the substantive merits of the reassessment.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 773073 (ITAT-MUMBAI)
• Duration Of Justice: 2 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-09-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2018-2019
• Appeal Filed On: 07-07-2025
• Other Referred Cases: Vodafone Idea Limited v. Deputy Commissioner of Income Tax, Circle-5(2)(1), Mumbai & Ors. [Writ Petition No. 2768 of 2022(Bom)], Kishanchand Chellaram v. CIT (1980) 125 ITR 713, Andaman Timber Industries v. of Central Excise (Civil Appeal No. 4228 of 2006), Siemens Financial Services (P) Ltd vs DCIT, Union of India vs Rajiv Bansal
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIKASH CHANDRA
• Assessee Lawyers: DEVENDRA JAIN
• Keywords: Set aside; Invalid notice; Reassessment proceedings; Question of law; Opportunity of cross examination; Borrowed satisfaction
• Section: 147; 148

Judgement Text

"1 ITA No.4416/Mum/025 NashitSuhail Ansari IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH, MUMBAI BEFORE SHRI PAWAN SINGH, JUDICIAL MEMBER ITA No. 4416/MUM/2025 (AY: 2018-19) (Physical hearing) Nashit Suhail Ansari C 1/3, Kailashchandra CHS Ltd Mahindra Nagar Dayabhai Patel Road, Malad East, Mumbai-400 097 PAN : BLNPA7046M Vs National Faceless Assessment Centre / Income-tax Officer, Wad 30(1)(1) Kautilya Bhavan, Bandra (E), Mumbai-400 051 Appellant / Revenue Respondent / Assessee Assessee by Shri Devendra Jain, Advocate Revenue by Shri Vikash Chandra, Addl.CIT Date of Institution 07.07.2025 Date of hearing 10.09.2025 Date of pronouncement 26.09.2025 Order under section 254(1) of Income Tax Act PER PAWAN SINGH, JUDICIAL MEMBER; 1. This appeal by assessee is directed against the order of ld. CIT(A) / NFAC dated 21.05.2025 for A.Y. 2018-19. The assessee has raised following grounds of appeal: “1. In the facts and circumstances of the case and in law, the Learned CIT(A) has erred in passing the impugned Assessment Order under section 147 r.w.s 144B, in consequence of an invalid order u/s 148A(d) which was passed without a valid sanction u/s 151, as held by Jurisdictional High Court in case of Vodafone Idea Limited v. Deputy Commissioner of Income Tax, Circle-5(2)(1), Mumbai &Ors. [Writ Petition No. 2768 of 2022(Bom). 2. In the facts and circumstances of the case and in law, the Learned CIT(A) has erred in upholding the action of the Ld. Assessing Officer of initiating the reassessment proceedings u/s 147 of the Act merely on the basis of suspicion without being in possession of any information which suggest escapement of income from assessment. 3. In the facts and circumstances of the case and in law, the Learned CIT(A) has erred in upholding the action of the Ld. Assessing Officer of issuing notice u/s 148 on borrowed satisfaction merely relying on the basis of alleged information received without any independent application of mind thereon. 4. In the facts and circumstances of the case and in law, the Learned CIT(A) has erred in upholding the action of the Ld. Assessing Officer of completing the assessment u/s 147 read with section 144B, without providing the material or information in his possession and without providing any opportunity of cross examination of the witnesses relied upon Printed from counselvise.com 2 ITA No.4416/Mum/025 NashitSuhail Ansari by the Assessing Officer and thus violating the law laid down by Honorable Supreme Court in the case of KishanchandChellaram v. CIT (1980) 125 ITR 713 and Andaman Timber Industries v. of Central Excise (Civil Appeal No. 4228 of 2006). 5. In the facts and circumstances of the case and in law, the Learned CIT (A) has erred in upholding the action of the Ld. Assessing Officer in treating the sale of bitcoin as unexplained income and has erred in confirming the addition of Rs. 11,28,013/ as unexplained income under the head of Income from other sources. 6. The appellant craves leave to add, alter, delete or modify all or any of the above grounds of appeal. All the above grounds are without prejudice to each other.” 2. Vide application dated 10/09/2025, the assessee has raised the following additional ground of appeal:- \"In the facts and circumstances of the case and in law, the Learned CIT (A) has erred in passing the impugned Assessment Order under section 147 r.w.s 144B, in consequence of an invalid order u/s 148A(d) which was passed without a valid sanction u/s 151, as held by Jurisdictional High Court in case of Vodafone Idea Limited v. Deputy Commissioner of Income Tax, Circle-5(2)(1), Mumbai &Ors. [Writ Petition No. 2768 of 2022(Bom)]\" 3. Rival submissions of the parties have been heard and record perused. The Ld. authorised representative (ld AR) of the assessee submits that he has raised additional ground of appeal vide application dated 10/09/2025. The additional ground of appeal is purely legal and no new facts have to be brought on record for adjudication of additional ground of appeal. The facts relevant for adjudication of additional ground of appeal are emanating from the orders of lower authorities or the material available on record. In support of additional ground of appeal, the Ld. AR of the assessee submits that case of assessee was reopened for A.Y. 2018- 19 vide notice u/s 148 dated 19/04/2022. Admittedly, the case of assessee was reopened beyond three years from the end of the relevant assessment year and thus, the AO was required to obtain prior approval of Principal Chief Commissioner of Income Tax (PCCIT) or Chief Commissioner of Income Tax (CCIT) and not of Principal Commissioner of Income Tax. The AO obtained approval of Principal Commissioner of Income Tax, Mumbai-17, copy of notice u/s 148 is placed on record. The Ld.AR of the assessee submits that since no valid approval is Printed from counselvise.com 3 ITA No.4416/Mum/025 NashitSuhail Ansari obtained by AO, therefore, the action initiated on invalid notice u/s 148 is void ab initio. To support his submission, the Ld.AR relied on the decision of jurisdictional High Court in Vodafone Idea Ltd vs DCIT in Writ Petitio No.2708 of 2022 dated 06/02/2022. 4. On merit, the Ld.AR of the assessee submits that case of assessee was reopened on the basis of inside information available with the AO that assessee indulged in transaction of Bitcoins during the financial year and no return of income was filed. The Ld.AR submits that assessee was a student during the relevant financial year and made purchase of Bitcoin of Rs.4,10,000/- and sold at Rs.4,58,594/- and earned profit of Rs.48,594/-. Such profit was declared in the return filed in response to notice u/s 148. The assessee was having valid reason for not filing return of income as income of assessee was below the taxable limit for filing return of income. The AO made addition on the basis of information with him without providing / sharing such information with the assessee. The assessee furnished bank statement. Still, the AO made addition on the basis of mere information without doing any independent investigation of fact. The Ld. CIT(A) confirmed the action of AO. Thus, the assessee has a good case on merit as well as on legality. 5. On the other hand, the Ld. Sr -DR for the revenue, on the admission of additional ground submits that the Bench may take decision in accordance with law. On merit of additional ground of appeal, the Ld. Sr -DR for revenue submits that the decision of jurisdictional High Court in Vodafone Idea Ltd vs DCIT (supra) relied on by Ld. AR is based on the decision of Bombay High Court in Siemens Financial Services (P) Ltd vs DCIT reported in 457 ITR 675, has been set aside by Hon’ble Apex Court in Union of India vs Rajiv Bansal dated 03/10/2024 reported in (2021) 167 taxmann.com 70 (SC). Thus, the decision of Vodafone Idea Ltd vs DCIT Printed from counselvise.com 4 ITA No.4416/Mum/025 NashitSuhail Ansari (supra) relied on by Ld.AR has no application for the facts of the case. On merit, the Ld. CIT-DR supported the orders of AO and Ld. CIT(A). 6. In rejoinder submission, the Ld.AR of the assessee submits that question of law before Hon’ble Apex Court in UOI vs Rajiv Bansal (supra) is recorded at para 18 of said judgement. First question of law in the said case relates to applicability of TOLA [Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020] and second question of law regarding the issue of notice u/s 148 under new regime between July and September, 2022. The Hon’ble Apex Court in para 114 of the said decision has made finding in sub para (d) & (e). Sub para (d) of para 114 of said decision relates to time period extended by way of TOLA and sub para e relates to applicability of section 151 of old regime and that para 115 of the said judgement is not completely set aside various decisions referred in para 115. 7. I have considered the rival submission of both the parties and have gone through the orders of lower authorities carefully. There is no dispute that case of assessee for A.Y. 2018-19 was reopened by issuing notice u/s 148 dated 19/04/2022. The AO in para 3 of notice u/s 148 has clearly mentioned that notice issued after obtaining prior approval of Principal CIT, Mumbai-17 on 19/09/2022. Admittedly, case of assessee for A.Y. 2018-19 was reopened beyond three years from the end of the relevant assessment year and thus, as per the provisions of section 151 of the Act, the AO was required to obtain the prior approval of Principal CCIT or CCIT and not from Principal CIT, as has been held by Hon’ble jurisdictional High Court in Vodafone Idea Ltd vs DCIT (supra). So far as objection of Ld. CIT-DR is concerned, I find no merit in his submission that decision in Siemens Financial Services (P) Ltd vs DCIT (supra) which was followed in Vodafone Idea Ltd vs DCIT (supra) has been completely set aside. Thus, considering the decision of Hon’ble Printed from counselvise.com 5 ITA No.4416/Mum/025 NashitSuhail Ansari jurisdictional High Court in Vodafone Idea Ltd vs DCIT (supra), I find that approval obtained by AO from Principal CIT is not valid. Hence, notice u/s 148 is invalid; consequently, the subsequent action thereon including assessment order is void ab initio. Thus, the assessee succeeds on the additional ground of appeal. 8. Even on merit, I find that assessee, in response to show cause notice clearly stated that as per his bank statement, he has purchased Bitcoin at Rs.4,10,000/- and made sale at Rs.4,58,594/- and that he has earned only Rs.48,594/-. The AO without bringing any adverse material, has made addition on sale of Bitcoin on the basis of information available with him without bringing any adverse material on record. No investigation or enquiry was carried out by him before making the addition. Thus, the assessee also succeeds on merit. 9. In the result, the appeal of the assessee is allowed. Order was pronounced in the open Court on 26/09/2025. Sd/- PAWAN SINGH JUDICIAL MEMBER MUMBAI, Dated: 26/09/2025 Pavanan Copy of the order forwarded to: (1) The Assessee; (2) The Revenue; (3) The PCIT / CIT (Judicial); (4) The DR, ITAT, Mumbai; and (5) Guard file. By Order Assistant Registrar ITAT, Mumbai Printed from counselvise.com "