NATHARAM PANAJI CHOUDHARY,PUNE V. I.T.O. WARD 8(1), PUNE, PUNE

ITA 1825/PUN/2024

AI Insights

The case involves Natharam Panaji Choudhary, the appellant, who contested the reassessment order issued by the ITO, Ward-8(1), Pune, for the Assessment Year 2017-18. The reassessment was based on transactions with M/s. Shri Renuka Mata Multi State Urban Co-operative Credit Society Ltd., which were initially believed to be significantly higher than reported. The ITO issued a notice under section 148 of the Income Tax Act, suspecting income had escaped assessment. The reassessment added unexplained money of Rs. 18,79,514 under section 69A, increasing the assessed income to Rs. 22,33,114. The appellant's appeal to the CIT(A) on the merits was unsuccessful, leading to the current appeal before the Tribunal, which raised new legal challenges regarding the validity of the notice and reassessment proceedings.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 47229 (ITAT-PUNE)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-04-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2017-2018
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VISHAL A MAKAWANE
• Assessee Lawyers: BHARAT KUMAR
• Keywords: Reassessment proceedings; Co-operative Credit Society
• Section: 147; 148; 69A

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCHES “SMC”, PUNE BEFORE DR.MANISH BORAD, ACCOUNTANT MEMBER AND MS. ASTHA CHANDRA, JUDICIAL MEMBER आयकर अपील सं. / ITA No.1825/PUN/2024 Assessment Year : 2017-18 Natharam Panaji Choudhary, S. No. 15/2, Gulve Vasti, Indriyani Nagar, S.O., Pune City, Pune-411026 PAN : AEZPC2060D Vs. ITO, Ward-8(1), Pune Appellant Respondent आदेश / ORDER PER DR. MANISH BORAD, AM : This appeal at the instance of assessee is directed against the order of the Ld. CIT(A)/National Faceless Appeal Centre, Delhi dated 11.06.2024 which is arising out the order u/s. 147 r.w.s. 144 of the Act for Assessment Year 2017-18 framed by ITO, Ward-8(1), Pune. 2. Brief facts of the case are that the assessee is an individual and filed his return of income for A.Y. 2017-18 on 31.03.2018 declaring total income of Rs.3,53,600/-. The Ld. Assessing Officer based on the information about the assessee having entered into the transactions with M/s. Shri Renuka Mata Multi State Urban Co-operative Credit Society Ltd. and that the transaction amount is not commensurate to the turnover of Appellant by : Shri Bharat Kumar Revenue by : Shri Vishal A Makawane Date of hearing : 15.01.2025 Date of pronouncement : 07.04.2025 ITA No.1825/PUN/2024 2 income declared by the assessee, issued notice u/s. 148 of the Act with reasons to believe that the income has escaped assessment. Subsequently, statutory notices were duly served upon the assessee to carry out the reassessment proceedings and after making the addition u/s. 69A of the Act for unexplained money at Rs. 18,79,514/-, income assessed at Rs.22,33,114/-. 3. Aggrieved, the assessee preferred an appeal before the Ld. CIT(A) only raising the grounds on merits that the addition made u/s. 69A of the Act but failed to succeed. Now, the assessee is in appeal before the Tribunal by raising following grounds of appeal : “1. On the facts and circumstances of the case in Law, Ld. CIT(A). CIT(A) erred in confirming reopening u/s 148 of the Income Tax Act, 1961, which is bad in Law. 2. On the facts and circumstances of the case in Law, Ld. CIT(A). CIT(A) erred in confirming addition u/s 69A of Rs.18,79,514/-. 3. The assessee craves leave to add, alter or amend the existing grounds of appeal on or before the date of hearing.” 4. From going through the above grounds, we notice that ground No. 1 has been raised for the first time challenging the validity of notice u/s 148 of the Act and challenging the reassessment proceedings. We, however, on perusal of the impugned order notice that the assessee raised only one ground and that ground was regarding the merits of the case. Therefore, the legal issue has been raised for the first time before this Tribunal. 5. Ld. Counsel for the assessee stated that the reopening is invalid because in the reasons to believe the alleged transactions between the assessee and M/s. Shri Renuka Mata Multi State Urban Co-operative Credit Society Ltd. was alleged at ITA No.1825/PUN/2024 3 Rs.2,73,70,303/- but after analyzing of the information during the assessment proceedings the amount was found to be only Rs.18,79,514/-. It thus shows that the Ld. Assessing Officer had not made proper application of mind prior to issuing notice u/s. 148 of the Act. So far as, on merits of the case are concerned, the Ld. Counsel for the assessee referred to the submissions filed before the lower authorities. 6. On the other hand, the Ld. Departmental Representative stated that this legal issue has been raised very first time and therefore the matter needs to be restored to the ld. CIT(A). 7. We have heard the rival contentions and perused the record placed before us. We find that the assessee has raised legal issue for the first time and challenged the validity of notice issued u/s. 148 of the Act. The submissions made by the Ld. Counsel for the assessee indicates that the reasons to believe the Ld. Assessing Officer has referred to the transactions of Rs.2,73,70,303/- made by the assessee with M/s. Shri Renuka Mata Multi State Urban Co-operative Credit Society Ltd. but after issuing notice u/s. 148 of the Act and then analyzing the bank statement during the course of reassessment proceedings, the Ld. Assessing Officer observed that the assessee had deposited the used amount of cash amounting to Rs.18,79,514/-. This indicates about the variation in quantum of income alleged to have escaped. Based on this fact, the assessee has raised legal issue but since the issue has been raised for the first time before this Tribunal, we deem it proper to restore the legal issue challenging the validity of reopening and validity of notice issued u/s. 148 of the Act to the file of Ld. CIT(A) for necessary adjudication in accordance with law after providing reasonable opportunity of hearing to the assessee. Since, the legal issue has been restored to the file of Ld. CIT(A) ITA No.1825/PUN/2024 4 dealing with the merits of the case would be pre-mature and merely academic in nature. Even on merits of the case also, the Ld. CIT(A) can re-adjudicate the issue considering the submissions of the assessee and also taking note of nature of transactions if any entered into by the assessee with M/s. Shri Renuka Mata Multi State Urban Co-operative Credit Society Ltd. Effective grounds of appeal raised by the assessee are allowed for statistical purposes. 8. In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced on this 07th day of April, 2025. Sd/- Sd/- (ASTHA CHANDRA) (MANISH BORAD) JUDICIAL MEMBER ACCOUNTANT MEMBER पुणे / Pune; ददन ंक / Dated : 07th April, 2025. RK आदेश की प्रतितलतप अग्रेतिि / Copy of the Order forwarded to : 1. अपील र्थी / The Appellant. 2. प्रत्यर्थी / The Respondent. 3. The Pr. CIT concerned. 4. तिभ गीय प्रतितनति, आयकर अपीलीय अतिकरण, “ए” बेंच, पुणे / DR, ITAT, “A” Bench, Pune. 5. ग र्ड फ़ इल / Guard File. आदेश नुस र / BY ORDER, // True Copy // Senior Private Secretary आयकर अपीलीय अतिकरण, पुणे / ITAT, Pune. "