OMKAR RAMCHANDRA VELHAL,KOLHAPUR V. INCOME TAX OFFICER, WARD 1(1), KOLHAPUR, KOLHAPUR

ITA 672/PUN/2025

AI Insights

The case involves an appeal by Omkar Ramchandra Velhal against the order of the Commissioner of Income Tax (Appeals) passed under section 250 of the Income Tax Act, 1961, which was based on a reassessment order under sections 147 and 144B. The primary issues in the appeal were the validity of the reassessment proceedings and the addition of Rs.20,00,000 as unexplained receipts under section 68. The Tribunal examined the legal provisions and precedents, particularly focusing on the changes brought by the Finance Act, 2021, and the Supreme Court's interpretation of these changes. The Tribunal found that the reassessment notice was issued beyond the permissible period and thus quashed the proceedings. Furthermore, it was determined that the assessee had adequately explained the source of the Rs.20,00,000, leading to the deletion of the addition.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 713343 (ITAT-PUNE)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-07-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Assessment Year: 2015-2016
• Other Referred Cases: UoI Vs. Rajeev Bansal, Deepak Steel and Power Limited Vs. CBDT, Pratishta Garg Vs. ACIT, Neera Gupta Vs. ITO, Smt.Sunita Purushottam Virgincar Vs. ITO
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: AKNATH ABHANG
• Keywords: Set aside; Reassessment proceedings; Unexplained cash credit; Period of limitation; TDS; Reason to believe
• Section: 147; 148

Judgement Text

" आयकर अपीलीय अिधकरण ”एस एम सी” Ɋायपीठ पुणेमŐ। IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCHES “SMC” :: PUNE BEFORE SHRI VINAY BHAMORE, JUDICIAL MEMBER AND DR.DIPAK P. RIPOTE, ACCOUNTANT MEMBER आयकर अपील सं. / ITA No.672/PUN/2025 िनधाᭅरण वषᭅ / Assessment Year: 2015-16 Omkar Ramchandra Velhal, Plot No.183/3, Omkar Near Ganga Hospital, A Ward Dudhali, Kolhapur – 416012. Maharashtra. V s The Income Tax Officer, Ward-1(1), Kolhapur. PAN: ASIPV6553D Appellant/ Assessee Respondent / Revenue Assessee by None Revenue by Shri Aknath Abhang – Addl.CIT(DR) Date of hearing 23/07/2025 Date of pronouncement 31/07/2025 आदेश/ ORDER PER DR. DIPAK P. RIPOTE, AM: This is an appeal filed by Assessee against the order of ld.Commissioner of Income Tax(Appeal)[NFAC], passed under section 250 of the Income Tax Act, 1961 for the A.Y.2015-16 dated 21.01.2025, emanating from order u/s.147 read with section 144B of the Income Tax Act, 1961, dated 31.01.2023. The Assessee has raised following grounds of appeal : Printed from counselvise.com ITA No.672/PUN/2025 [A] 2 “1. Reopening of the Assessment under Section 147 On the facts and in the circumstances of the case and in law, the Assessing Officer has erred in initiating sec. 148A/148 proceedings vide corresponding notice dated 22.03.2023; it emerges at the outset that the only addition made herein is of Rs.20,00,000/-i.e., less than the prescribed amount of Rs.50 lakhs or more, u/sec. 149(1)(b), as amended vide Finance Act, 2021 w.e.f. 01.04.2021. 2. Jurisdiction: The assessment order passed by the NFAC is invalid and beyond its jurisdiction, as the reassessment proceedings were initiated by the jurisdictional Assessing Officer. The entire reassessment proceedings may kindly be quashed 3. Addition of Rs.20,00,000/- on Account of Unexplained Receipts The learned AO erred in treating the amount received from Shri. Bakare of Rs 20,00,000 as unexplained credits under Section 68. The appellant states that the money received from Shri. Nikhil Vijay Bakare as unsecured loan was repaid and Affidavit regarding the same was submitted by the appellant. Therefore, the addition may be deleted. 4. The appellant craves leave to add to, amend, after, modify or delete the above grounds of appeal or to add a new ground of appeal before or at the time of hearing.” Submission of ld.AR : 2. At the outset of hearing, no one appeared on behalf of the Assessee. Submission of ld.DR : 3. The ld.DR for the Revenue relied on the order of the Assessing Officer and ld.CIT(A). Findings & Analysis : 4. We have heard both the parties and perused the records. In this case, notice u/s.148 was issued on 31.03.2022 for A.Y.2015-16. Printed from counselvise.com ITA No.672/PUN/2025 [A] 3 Copy of the said notice has been submitted by the ld.DR for the Revenue. Order U/s.148A(d) was passed on 30.03.2022. 4.1 Before the Hon’ble Supreme Court in the case of UoI Vs. Rajeev Bansal 469 ITR 46(SC), Mr.N.Venkataraman, learned Additional Solicitor General of India, made the following submissions on behalf of the Revenue: Quote, “a. Parliament enacted TOLA as a free-standing legislation to provide relief and relaxation to both the assesses and the Revenue during TOLA seeks to relax actions and proceedings that could not be completed or complied with within the original time limits specified under the Income-tax Act, b. Section 149 of the new regime provides three crucial benefits to the assesses: (1) the four-year time limit for all situations has been reduced to three years; (ii) the first proviso to Section 149 ensures that re-assessment for previous assessment years cannot be undertaken beyond sic years; and (iii) the monetary threshold of Rupees fifty lakhs will apply to the re assessment for previous assessment years; f. The Revenue concedes that for the assessment year 2015-16, all notices issued on or after 1 April 2021 will have to be dropped as they will not fall for completion during the period prescribed under TOLA;” Unquote. 4.2 Thus, the Ld.Additional Solicitor General of India submitted before the Hon’ble Supreme Court that for A.Y.2015-16 all the notices issued after 01/4/2021 will have to be dropped. 4.3 In the case under consideration, we have already mentioned that the initial notice u/s.148 was issued 31.03.2022, which is after Printed from counselvise.com ITA No.672/PUN/2025 [A] 4 01/04/2021. Thus, as submitted by Ld.ASG the proceedings initiated for A.Y.2015-16 after 01/04/2021 needs to be dropped. 5. The Hon’ble Supreme Court in the decision of Deepak Steel and Power Limited Vs. CBDT [2025] 174 taxmann.com 144 (SC) vide order dated 2nd April, 2025 has held as under : “5. As the revenue made a concession in the aforesaid decision that is for the assessment year 2015-2016, all notices issued on or after 1st April, 2021 will have to be dropped as they would not fall for completion during the period prescribed under the taxation and other laws (Relaxation and Amendment of certain Provisions Act, 2020). Nothing further is required to be adjudicated in this matter as the notices so far as the present litigation is concerned is dated 25.6.2021.” 6. The Hon’ble Delhi High Court had considered this issue in the case of Pratishta Garg Vs. ACIT WP(C) 16878/2024 order dated 19/12/2024. The relevant paragraphs of the order of the Hon’ble Delhi High Court is reproduced here as under : Quote, “1. The petitioner has filed the present petition, inter alia, praying asunder: \"A. Issue a writ in the nature of Certiorari to quash the impugned notice dated 22.06.2021 issued under section 148 of the Act, and the consequential notice 25.05.2022 issued under section 148A(b) of the Act; the impugned order dated 19.07.2022 passed under section 148A(d) of the Act and the impugned notice dated 19.07.2022 issued under section 148 of the Act in the case of the petitioner for AY 2015- 16; D. Issue any other Writ, order, or Direction which this Hon'ble Court may deem fit and proper in the facts and circumstances of the case, and E. To allow the writ petition with cost in favor of the Petitioner and against the Respondent.\" Printed from counselvise.com ITA No.672/PUN/2025 [A] 5 2. Learned counsel for the Revenue fairly states that the prayers made by the petitioner are required to be allowed as the same are covered by the concession made by the Revenue before the Supreme Court in Union of India and Others vs. Rajeev Bansal: 2024 SCC OnLine SC 2693, 2024 INSC 754, as recorded in paragraph 19 (f) of the said decision. He also submits that the Coordinate Bench of this Court had, after noting the aforesaid concession, allowed a similar petition Ibibo Group Pvt. Ltd. vs. Assistant Commissioner of Income Tax Circle: W.P.(C) 17639/2022 by order dated 13.12.2024. 3. It is relevant to note paragraph 19 (e) and (f) of the decision of the Supreme Court in Union of India and Others vs. Rajeev Bansal, 2024 SCC OnLine SC 2693. The same are set out as under: \"(e) The Finance Act, 2021 (2021) ((2021) 432 ITR (Stat) 52) substituted the fold regime for reassessment with a new regime. The first provisio to section 149 does not expressly bar the application of Taxation and other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020, Section 3 of the Taxation and other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 applies to the entire Income-tax Act, including sections 149 and 151 of the new regime. Once the first proviso to section 149(1)(b) is read with Taxation and other Laws (Relxation and Amendment of Certain Provisions) Act, 2020, then all the notices issued between April 1, 2021 and June 30, 2021 pertaining to the assessment years 2013-2014. 2014-2015, 2015- 2016, 2016-2017, and 2017-2018 will be within the period of limitation as explained in the tabulation below : Assessment Year Within Years Expiry of Limitation read with TOLS for (2) (3) Within Six Years (4) Expiry of Limitation read with TOLA for (4) (5) 2013-2014 31.03.2017 TOLA not applicable; 31.03.2020 30.06.2021 2014-2015 31.03.2018 TOLA not applicable. 31.03.2021 30.06.2021 2015-2016 31.03.2019 TOLA not applicable; 31.03.2022 TOLA not applicable. 2016-2017 31.03.2020 TOLA not applicable. 31.03.2023 TOLA not applicable. 2017-2018 31.03.2021 TOLA not applicable. 31.03.2024 TOLA not applicable. Printed from counselvise.com ITA No.672/PUN/2025 [A] 6 (f) The Revenue concedes that for the assessment year 2015-2016, all notices issued on or after April 1, 2021 will have to be dropped as they will not fall for completion during the period prescribed under the Taxation and other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020.\" 4. In view of the aforesaid, the impugned order dated 19.07.2022 issued under Section 148(A)(d) of the Income Tax Act, 1961 (hereafter the Act) as well as the notice dated 19.07.2022 issued under Section 148 of the Act in respect of AY 2015-16 are liable to be set aside. It is so directed. 5. The petition is allowed in the aforesaid terms. 6. Pending application also stands disposed of.”,Unquote. 6.1 Similarly, Hon’ble Delhi High Court in the case of Neera Gupta Vs. ITO WP(C) 17352/2024 vide order dated 17/12/2024 allowed the petition of the assessee. 7. The facts of the Pratishta Garg case(supra) and Neera Gupta Case (supra) are identical to the assessee under consideration. Similarly, the facts of the case Deepak Steel and Power Limited(supra) are identical to the facts of the present assessee’s case. 8. No decision of Hon’ble Jurisdictional High Court has been brought to our notice. 8.1 Therefore, respectfully following the decisions of Hon’ble Supreme Court(supra), Hon’ble Delhi High Court(supra) and the Printed from counselvise.com ITA No.672/PUN/2025 [A] 7 submission made by Ld.Additional Solicitor General before Hon’ble Supreme Court, the Order u/s.148A(d) and the notice u/s.148 are quashed. 9. As per the order u/s.148A(d), the Assessing Officer-ITO, Ward-1(1), Kolhapur has stated that Income to the extent of Rs.1,30,00,000/- has escaped assessment for A.Y.2015-16. The relevant paragraph 6 and 7 of the order us/.148A(d) are reproduced here as under : “6. I have therefore reason to believe that income to the extent of Rs.1,30,00,000/- has escaped assessment for A.Y.2015-16, within the meaning of sec. 147 read with provision and explanation to the said section and it is evident that this is a fit case made out for issue of notice u/s 148 rw.s. 151 of the I.T. Act, 1961 for the A.Y.2015-16 to assess income in the case 7. In this case, more than three years have been elapsed from the end of the assessment year under consideration and the quantum of income chargeable to tax represented in the form of asset, which has escaped assessment, is above Rs. 50 lakhs the approval is sought from the specified authority u/s.151 i.e. Pr. CCIT, Pune. Therefore, an approval of the Pr. CCIT Pune to re-open the assessment u/s.147/148 of the Act, is sought u/s.148A(d) & subsequent issue of notice u/s.148 for A.Y.2015-16 in the present case, if approved.” Printed from counselvise.com ITA No.672/PUN/2025 [A] 8 10. In the paragraph 3 of the impugned order u/s.148A(d), the ITO has reproduced information which was available on Insight Portal. The same is reproduced here as under : TDS- 194IA (P) TDS Statement – Payment of consideration for purchase of immovable property (Section 194IA) OMKAR RAMCHANDRA VELMAL 1 Amount paid or credited 65,00,000 AIR-006 Purchased immovable property valued at Rs 30,00,000 or more JT SUB REGISTRAR HAVELI 13 PUNE 1 Amount 65,00,000 11. Based on the above referred chart which was available on Insight Portal, the ITO-Ward-1(1), Kolhapur concluded that he has reason to believe that income to the extent of Rs.1,30,00,000/- has escaped assessment. 11.1 The said order u/s.148A(d) has been approved by Pr.Chief Commissioner of Income Tax-Pune. 11.2 However, on careful study of so-called information which was available in Insight Portal, anyone can understand that the said information pertains to purchase of immovable property of Rs.65,00,000/-, which has been reported by TDS Statement and by Joint Sub-Registrar, Haveli. However, erroneously the ITO-Ward- 1(1), Kolhapur recorded the satisfaction of escapement of income of Printed from counselvise.com ITA No.672/PUN/2025 [A] 9 Rs.1,30,00,000/-. This shows that there is no application of mind by the ITO-Ward-1(1), Kolhapur. Had the ITO perused the copy of purchase agreement, he would have understood the nature of transaction. The Hon’ble Jurisdictional High Court in the decision of Smt.Sunita Purushottam Virgincar Vs. ITO 466 ITR 238 vide order dated 04.07.2024 has observed as under : “19. The next reason cited by the Revenue for rejecting the explanation is, \"Copy of the Sale Deed was not available at the time of recording of reasons\". We find that even such reasoning is fallacious and not tenable in law. The information from the office of the Sub Registrar's for any registration is duly transmitted to the respondents. The execution of such Sale Deed was already on record. In such a case if the respondents fail to take note of the document which was available for transmission to the respondents from the Sub-Registrar's office, in our view, the assumption of jurisdiction will have to be regarded as erroneous. In any case, we find that at the time of passing of the order dated 16.07.2021, the Sale Deeds (which were available) ought to have been taken into consideration.” 12. Erroneously, even the Senior Officers who has approved the order u/s.148A(d) has not bothered to understand that there was duplication of figures. Therefore, for all the reasons discussed above, the order u/s.148A(d) is bad in law. Hence, the consequential Assessment Order is void ab initio. Accordingly, Ground No.1 raised by the assessee is allowed. Printed from counselvise.com ITA No.672/PUN/2025 [A] 10 13. Accordingly, for all the reasons discussed above, the Ground No.1 raised by the assessee is allowed. Ground No.3 (Addition of Rs.20 lakhs) : 14. In the Assessment Order, passed u/s.147 r.w.s. 144B of the Act, for A.Y.2015-16, the Assessing Officer finally held that out of total payment of Rs.65,00,000/-, Assessee could not explain the source of Rs.20,00,000/- and hence, Assessing Officer (AO) made the addition of Rs.20,00,000/- u/s.69C of the Act. During the Assessment Proceedings, the Assessee had explained that Assessee is an Engineer. Assessee had taken a loan of Rs.20,00,000/- from Nikhil Bakare. Assessee had also filed copy of bank statement of Mr.Nikhil Bakare before the Assessing Officer. Assessee also filed copy of confirmation and Affidavit of Mr.Nikhil Bakare, which is duly Notarized. In the Affidavit, Mr.Nikhil Bakare had accepted that he had given Loan of Rs.20,00,000/- to Assessee i.e. Omkar Ramchandra Velhal, by Cheque No.31094 drawn on State Bank of Hyderabad(now State Bank of India). In the Affidavit, it is further submitted that Assessee has returned the said amount on 02.03.2016 Printed from counselvise.com ITA No.672/PUN/2025 [A] 11 by Cheque. The Assessee also submitted before the Assessing Officer that Cheque No.31094 was directly given to the Builder. 15. All these facts are recorded in the Assessment Order. Inspite of submitting all these documents, the Assessing Officer made an addition of Rs.20,00,000/-, stating that Assessee failed to explain the source of Rs.20,00,000/- alleged to have been obtained as loan from Mr.Nikhil Bakare. We have perused all these documents and it is observed that Assessee has fulfilled the onus casted on him. Therefore, there is no merit in the addition of Rs.20,00,000/- made by the Assessing Officer. Therefore, we direct the Assessing Officer to delete the addition of Rs.20,00,000/-. Accordingly, Ground No.3 raised by the Assessee is allowed. 16. Ground No.4 – Assessee has not altered or amended any ground, hence, Ground No.4 is dismissed. Ground No.2 : 17. This Ground is regarding Jurisdiction of NFAC. Since we have decided Ground No.1 and 3 in favour of assessee, we do not intend to adjudicate Ground No.2, accordingly, Ground No.2 is dismissed as unadjudicated. Printed from counselvise.com ITA No.672/PUN/2025 [A] 12 18. In the result, appeal of the assessee is Partly Allowed. Order pronounced in the open Court on 31 July, 2025. Sd/- Sd/- VINAY BHAMORE Dr.DIPAK P. RIPOTE JUDICIAL MEMBER ACCOUNTANT MEMBER पुणे / Pune; ᳰदनांक / Dated : 31 July, 2025/ SGR आदेशकᳱᮧितिलिपअᮕेिषत / Copy of the Order forwarded to : 1. अपीलाथᱮ / The Appellant. 2. ᮧ᭜यथᱮ / The Respondent. 3. The CIT(A), concerned. 4. The Pr. CIT, concerned. 5. िवभागीयᮧितिनिध, आयकर अपीलीय अिधकरण, “एस एम सी” बᱶच, पुणे / DR, ITAT, “SMC” Bench, Pune. 6. गाडᭅफ़ाइल / Guard File. आदेशानुसार / BY ORDER, // TRUE COPY // Senior Private Secretary आयकर अपीलीय अिधकरण, पुणे/ITAT, Pune. Printed from counselvise.com "