PRADEEP BIHARISING BUNDELE,JALNA V. ITO WARD-1, JALNA

ITA 754/PUN/2025

AI Insights

The case involves Pradeep Biharising Bundele, the appellant, contesting an assessment order for the assessment year 2012-13, which was passed under sections 144, 143(3), and 147 of the Income Tax Act, 1961. The appellant challenged the jurisdiction and validity of the assessment order, arguing that it should have been conducted under section 153C, following a search under section 132 in a third party's case. The Tribunal admitted the legal issue raised for the first time and set aside the order, remanding it for a fresh assessment by the CIT(A).

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 775883 (ITAT-PUNE)
• Duration Of Justice: 5 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-09-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2012-2013
• Appeal Filed On: 21-03-2025
• Other Referred Cases: National Thermal Power Company Ltd. Vs. CIT, Divine Infracon Pvt. Ltd. Vs PCIT
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHASHANK OJHA
• Assessee Lawyers: HARSHIT KABRA VIRTUAL
• Keywords: Set aside; Reasonable cause; Principle of natural justice; Reason to believe; Validity of assessment; Borrowed satisfaction; Co-operative Credit Society
• Section: 143(3); 132; 234B

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCHES “B”, PUNE BEFORE DR.MANISH BORAD, ACCOUNTANT MEMBER AND SHRI VINAY BHAMORE, JUDICIAL MEMBER आयकर अपील सं. / ITA No.754/PUN/2025 Assessment Year : 2012-13 Pradeep Biharising Bundele, Plot No.89, Near Ganapati Mandir, Agrasen Nagar, Jalna 431203, Maharashtra PAN: ASUPB2136J Vs. ITO, Ward 1, Jalna Appellant Respondent आदेश / ORDER PER DR. MANISH BORAD, ACCOUNTANT MEMBER : The captioned appeal at the instance of assessee pertaining to A.Y. 2012-13 is directed against the order dated 17.02.2025 of National Faceless Appeal Centre (NFAC) Delhi passed u/s.250 of the Income-tax Act, 1961 (hereinafter also called ‘the Act’) arising out of Assessment Order dated 09.12.2019 passed u/s.144 r.w.s143(3) & 147 of the Act. 2. Assessee has raised following grounds of appeal : 1. The Assessment order passed under See 144 rws 143(3) & 147 of the Income Tax Act, 1961 is without jurisdiction, void and bad in law. A search under Sec 132 was conducted in the case of M/s. Renuka Mata Multi State Ur. Co-operative Credit Society Ltd on 26/05/2017. Appellant by : Shri Harshit Kabra (Virtual) Respondent by : Shri Shashank Ojha Date of hearing : 19.08.2025 Date of pronouncement : 12.09.2025 Printed from counselvise.com ITA No.754/PUN/2025 Pradeep Biharising Bundele 2 Once proceedings have been commenced on the basis of search and material seized in search or post search inquiry in respect of third party and the said information made available by the A.O. of search party, the provisions of sec. 153C of the Act are applicable for assessment in the case of third party, this excludes the application of sections 147 and 148 of the Act and hence the notice issued under sec.148 and proceedings under sec.147 of Income Tax Act, 1961 are illegal and void ab initio. Thus, the order passed by the learned AO u/s. 144 rws 143(3) & 147 is not valid liable to be quashed. 2. Legality of assessment order u/s 147. i) The learned Assessing Officer has erred in invoking the provisions of Explanation 2(a) of sec 147 instead Explanation 2(ca) of sec 147 of the Act for reasons recorded, when information received by A.O. from DCIT Central Circle 4(4) Mumbai. ii) The provisions of sec 153C provides that persons relating to whom some material is found in search or post search inquiry of some other person shall be assessed under sec 153C of the Act and reasons shall be recorded under Explanation 2(ca) of sec 147 of the Act. iii) The approval of higher authorities under sec 151 on wrong forming reason to believe and details of escapement of income in respect of Cash deposit & invoking Sec 69A Explanation 2(a) of see 147 instead Explanation 2(ca) of sec 147 of the Act and subsequently the notice issued u/s. 148 on such invalid approval is void. iv) The notice issued under Sec 148 and proceedings under Explanation 2(a) of Sec 147 is void ab initio and assessment order passed under section 144 rws. 143(3) &147 is bad in law which may kindly be quashed. v) The assessing officer has not independently applied his mind to the facts of this case and has merely relied upon information received from DCIT Central Circle 4(4) Mumbai which amounts to borrowed satisfaction, which is impermissible in the eyes of the law and therefore the addition needs to be deleted in the interest of equity and justice. vi) The satisfaction of Joint CIT/Addl CIT is not according to the Sec 151(2) of the I.T. Act, 1961. vii) The date for sanction obtained u/s. 151 from the Pr. CIT to the proposal is missing/unknown, hence the sanction obtained to the approval is not valid for the reason that it not clear whether sanction obtained before the issuance of notice u/s. 148 or after issuance of notice. Printed from counselvise.com ITA No.754/PUN/2025 Pradeep Biharising Bundele 3 3. Whether the learned CIT(A) is justified in setting matter back to the learned A.O. without considering merits of case and legal grounds of appeal raised by me. Thus, the order passed by CIT(A) is a cryptic order without any cogent discussion on merit. 4. Invalid Reasons u/s. 147 and Invalid Approval u/s 151 of the Act. Whether the reasons recorded without verifying my bank statement by the learned AO is a valid reason for Sec 147 of the Act. In para 5 of reasons for reopening of the assessment u/s. 147 of the Act, the learned AO has stated that the assessee has made substantial cash deposits in bank account. Further, in para 6 of reasons the learned AO has stated the assessees income was chargeable to tax has escaped assessment at least to the extent of Rs.72,31,766/- on account of cash deposits from undisclosed sources u/s 69/69A of the I.T. Act 1961, which is incorrect, therefore the reasons recorded by the learned AO is invalid and as such approval of higher authorities is in mechanical, in routine manner, on incorrect information from JAO, without verifying the facts, my bank statement is not a valid approval. 5. The learned Assessing Officer has grievously erred in law and on facts in invoking provisions of Sec. 234A, 234B & 234C and imposed interest of Rs.17,03,958/- towards late filing of return of income without providing an opportunity of hearing so that there is gross violation of principles of natural justice. There is no mention in the assessment order nor in any of the notices/show cause notice regarding charging of interest u/s 234A, 234B & 234C of the I. T. Act, 1961. 6. Penalty Proceedings. Whether the learned A.O. has justified in initiating penalty proceedings u/s 271(1) (c) for concealed the particulars of income and furnished inaccurate particulars, which may kindly be dropped. 7. The appellant may kindly be allowed to add and amend the grounds of appeal.” 3. At the outset, ld. Counsel for the assessee referring to the legal issues raised in the grounds of appeal submitted that the assessment proceedings deserves to be quashed because the proceedings ought to have been carried out u/s.153C of the Act as ld. Assessing Officer (AO) has referred to the search action u/s.132 of the Act carried out in the case of Renuka Mata Multi Printed from counselvise.com ITA No.754/PUN/2025 Pradeep Biharising Bundele 4 State Urban Cooperative Credit Society Ltd. on 26.05.2017. He also submitted that once the proceedings have been commenced on the basis of search and material seized in search and based on such enquiry in respect of third party the provisions of section 153C of the Act are applicable for search in the case of third party. This excludes the application of section 147 and 148 of the Act and hence the notice u/s.148 and proceedings u/s.147 of the Act are illegal and void ab initio. 4. On the other hand, ld. DR submitted that this legal issue has been raised for the first time before this Tribunal and there was no occasion or the ld.CIT(A) to deal with legal issue. 5. We have heard the rival contentions and perused the record placed before us. So far as the admission of legal issue at the stage of this Tribunal is concerned, we find that the said legal grounds needs to be admitted in light of judgment of Hon’ble Apex Court in the case of National Thermal Power Company Ltd. Vs. CIT (1998) 299 ITR 383 (SC). However, this legal issue was not raised before ld.CIT(A). 6. The issue of Tribunal’s power to adjudicate the ground raised before it in second appeal which did not pass through first appeal came for consideration before the Hon’ble Delhi High Court in the case of ‘Divine Infracon Pvt. Ltd. Vs PCIT’ [2025, 171 taxmann.com 92 (Del)], wherein their Hon’ble Lordship vide para 13 have categorically held that, the Tribunal has no jurisdiction to proceed to decide the ground which did not arise from the impugned order passed by first appellate authority, irrespective of such ground was raised in first appeal or not. Printed from counselvise.com ITA No.754/PUN/2025 Pradeep Biharising Bundele 5 7. For the aforestated reason, we deem it fit to set-aside the impugned order to the file of Ld. CIT(A) to admit the legal ground and adjudicate the same along with all other grounds de-novo in accordance with law and pass a speaking order as contemplated u/s.250(6) of the Act. Ld.CIT(A) in the set aside proceedings shall afford reasonable opportunity of hearing to the assessee. Assessee is also directed to remain vigilant and not to take adjournment unless otherwise required for reasonable cause. Impugned order is set aside and all the grounds raised in the instant appeal are allowed for statistical purposes. 8. In the result, appeal of the assessee is allowed for statistical purposes. Order pronounced on this 12th day of September, 2025. Sd/- Sd/- (VINAY BHAMORE) (MANISH BORAD) JUDICIAL MEMBER ACCOUNTANT MEMBER पुणे / Pune; \u0001दनांक / Dated : 12th September, 2025. Satish आदेश क\u0002 \u0003ितिलिप अ ेिषत / Copy of the Order forwarded to : 1. अपीलाथ / The Appellant. 2. \u000eयथ / The Respondent. 3. The Pr. CIT concerned. 4. िवभागीय ितिनिध, आयकर अपीलीय अिधकरण, “B” ब\u0014च, पुणे / DR, ITAT, “B” Bench, Pune. 5. गाड\u0004 फ़ाइल / Guard File. आदेशानुसार / BY ORDER, // True Copy // Senior Private Secretary आयकर अपीलीय अिधकरण, पुणे / ITAT, Pune. Printed from counselvise.com "