PRASANNA PURPLE MOBILITY SOLUTIONS PRIVATE LIMITED,SHANIWAR PETH, PUNE V. ASSISTANT COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE-1(3), PUNE, GULTEKDI, PUNE

MA 22/PUN/2025

AI Insights

The case involves Prasanna Purple Mobility Solutions Pvt. Ltd., which filed two Miscellaneous Applications against the orders of the Income Tax Appellate Tribunal concerning the reopening of their assessment for the assessment year 2011-12. The primary issues were the validity of the reopening of the assessment and the additions made under section 68 of the Income Tax Act, 1961, concerning unexplained cash credits. The Tribunal initially upheld the reopening but did not address all the legal arguments presented by the assessee regarding the disclosure of material facts. Upon review, the Tribunal found that certain material facts and documents had been overlooked and thus allowed the applications, directing further hearings on the unresolved issues.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 787195 (ITAT-PUNE)
• Duration Of Justice: 8 month(s) 23 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 20-11-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2011-2012
• Appeal Filed On: 27-02-2025
• Other Referred Cases: ITO Vs. Tech Span India Pvt. Ltd.
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: BHARAT ANDHALE
• Assessee Lawyers: NIKHIL S. PATHAK
• Keywords: Difference of opinion; Change of opinion; Reassessment proceedings; Unexplained cash credit; Reopening of assessment
• Section: 148; 143(3); 68

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL PUNE “B” BENCH :: PUNE BEFORE SHRI MANISH BORAD, ACCOUNTANT MEMBER & Ms. ASTHA CHANDRA, JUDICIAL MEMBER M.A.Nos. 22 & 23/PUN/2025 (Arising out of ITA No.871/PUN/2023 & C.O. No.03/PUN/2024) (Assessment Year : 2011-12) Prasanna Purple Mobility Solutions Private Ltd., 396, Near Ahilyadevi High School, Shaniwar Peth, Pune Maharashtra. PAN : AAACO 9763 H Vs. ACIT, Central Circle-1(3), Pune. Applicant Respondent ORDER PER : MANISH BORAD, AM: These Misc. Applications u/s. 254(2) of the Income Tax Act, 1961 (for short, „Act‟) filed by the assessee are arising out of the common order passed by this Tribunal in ITA No. 871/PUN/2023 & CO No. 03/PUN/2024, dated 05/08/2024. 2. First we will take up MA No. 22/PUN/2025 filed against the cross objection i.e. CO No. 03/PUN/2024, dated 05/08/2024. 3. Learned counsel for the assessee referring to the contents of this Misc. Application submitted that in the impugned order deciding the assessee‟s cross objection, the assessee has Assessee by : Shri Nikhil S. Pathak, AR Revenue by : Shri Bharat Andhale – Addl.CIT-DR Date of hearing : 10.10.2025 Date of pronouncement : 20.11.2025 Printed from counselvise.com MA Nos.22 & 23/PUN/2025 (M/s. Prasanna Purple Mobility Solutions P. Ltd.) 2 challenged the validity of reopening of assessment on following two counts:- (a) Change of opinion; and, (b) No failure on the part of the assessee to disclose fully and truly material facts in the return of income which was selected for scrutiny assessment completed u/s. 143(3) of the Act and reopening has been carried out beyond four years from the end of the relevant assessment year. 4. Learned counsel for the assessee referring to para Nos. 9 & 10 of the impugned order submitted that this Tribunal has only dealt with first limb of legal issue i.e. change of opinion and held that there is no change of opinion and therefore reopening of assessment is valid. However, the Hon'ble Tribunal has not dealt with second limb of legal ground raised in the cross objection. 5. On the other hand, learned Departmental Representative (DR) supported the order of this Tribunal. 6. We have heard rival contentions and perused the records placed before us. We, on going through the grounds raised by the assessee in cross objection and also the affidavit of the counsel Mr. Ankit Gattani, who appeared before this Tribunal at the time of hearing and made submissions challenging the validity of the notice issued u/s. 148 of the Act as well as validity of reopening proceedings on two legal grounds:- (a) As the notice issued u/s. 148 of the Act is based on change of opinion therefore, the same Printed from counselvise.com MA Nos.22 & 23/PUN/2025 (M/s. Prasanna Purple Mobility Solutions P. Ltd.) 3 is invalid (b) Notice issued is beyond 04 years from the end of the relevant assessment year and the original assessment order has been completed u/s. 143(3) of the Act and there is no failure on the part of the assessee to disclose fully and truly the material facts. We further note that this Tribunal while dealing with the legal issue raised in the cross objection has held as follows:- “9. We heard the rival submissions and perused the material on record. In the present case, the original assessment proceedings was completed u/s.143(3) vide order dated 28.03.2014. From the perusal of the assessment order, it would suggest that the issue of receipt of share capital/share premium was never examined by the AO. Therefore, it cannot be said that the AO formed an opinion as to the genuineness or otherwise of the transaction of receipt of share capital/share premium. Therefore, it cannot be said that it is a mere change of opinion. In this regard, reference can be made to the decision of Hon’ble Supreme Court in the case of ITO Vs. Tech Span India Pvt. Ltd.(2018) 92 taxmann.com 361 (SC) wherein the Hon’ble Supreme Court held as under : “12. Before interfering with the proposed re-opening of the assessment on the ground that the same is based only on a change in opinion, the court ought to verify whether the assessment earlier made has either expressly or by necessary implication expressed an opinion on a matter which is the basis of the alleged escapement of income that was taxable. If the assessment order is non-speaking, cryptic or perfunctory in nature, it may be difficult to attribute to the assessing officer any opinion on the questions that are raised in the proposed re-assessment proceedings. Every attempt to bring to tax, income that has escaped assessment, cannot be absorbed by judicial intervention on an assumed change of opinion even in cases where the order of assessment does not address itself to a given aspect sought to be examined in the re-assessment proceedings.” 10. Since in the present case during the course of original assessment proceedings, the AO had not formed any opinion in respect of receipt of share capital/share premium, it cannot be said that the reassessment proceedings are prompted by mere change of opinion. Therefore, we uphold the validity of the reassessment proceedings in view of law laid down by Hon’ble Apex Court in the case of Tech Span India Pvt. Ltd. (supra).” 7. From going through above findings of the Tribunal, we notice that this Tribunal has only dealt with first limb of the legal arguments and held that the notice issued u/s. 148 of the Act is Printed from counselvise.com MA Nos.22 & 23/PUN/2025 (M/s. Prasanna Purple Mobility Solutions P. Ltd.) 4 not based on change of opinion and, therefore, the same is valid. However, there is no discussion about second limb of legal argument regarding validity of reopening in spite of the reopening after four years the original assessment completed u/s. 143(3) of the Act and whether there was any failure on the part of the assessee to disclose fully and truly the material facts. Ld. DR failed to controvert the contentions made by the learned counsel for the assessee. We therefore, find merit in the Misc. Application filed by the assessee and accordingly, allow the same and direct the Registry to re-fix the cross objection No. 03/PUN/2024 in due course for the limited purpose of adjudicating the second limb of legal issue raised by the assessee as to whether under the given facts and circumstances of the case where reopening has been carried out after completion of 04 years from the end of the relevant assessment year and that the original assessment has been completed u/s. 143(3) of the Act and there being no failure on the part of the assessee to disclose fully and truly the material facts relating to the reasons recorded for issuing notice u/s. 148 of the Act, whether such issuance of notice u/s. 148 of the Act and re-assessment proceedings are invalid and bad in law. 8. In the result, Misc. Application filed by the assessee in MA No. 22/PUN/2025 is allowed as per the terms indicated above. 9. Now, we take up MA No. 23/PUN/2025. Learned counsel for the assessee through this Misc. Application stated that this Tribunal, while dealing with the merits of the case and confirming the additions made by the Ld.AO u/s. 68 of the Act has not dealt with various material facts placed before this Tribunal as well as the facts dealt by Ld.CIT(A) in detail. It is submitted that the issue is regarding unexplained cash credit u/s. 68 of the Act and the assessee was required to explain the nature and source of the Printed from counselvise.com MA Nos.22 & 23/PUN/2025 (M/s. Prasanna Purple Mobility Solutions P. Ltd.) 5 alleged credit and also identity and creditworthiness of the cash creditors and genuineness of the transactions. The assessee supported the findings of Ld.CIT(A) and also submitted various documents before this Tribunal and this Tribunal has confirmed the action of the AO of making addition u/s. 68 of the Act observing as follows:- (relevant extract) “16. The principles that can be deduced from the above decisions are that mere production of incorporation details, PAN Numbers, etc. receipt of money through banking channel prove the Identity and creditworthiness of investors but not the genuineness of the transaction is not established by merely contending that transaction was done through banking channel or account payee instrument. The assessee company has to discharge the onus cast upon it by demonstrating as to how the two parties are known to each other, the manner and mode by which the parties approached each other, whether transaction was entered through written agreement to protect the investment, creditworthiness, objects and purpose for which the investment was made. In the present case, these facts and information are within the exclusive knowledge of the assessee company. The fact that the assessee company received huge share capital/share premium when the Rainbow Ventures Limited is a loss making company triggered the doubts in the mind of the AO as to the genuineness of the very transaction. Further, the AO gave a finding that it is nothing but unaccounted money of the assessee company. This allegation had not been proved to be wrong by the assessee company. In the circumstances, the order of the CIT(A) is bereft of factual discussion on the above aspects. Nor the assessee company filed any evidence or material in an attempt to discharge the onus cast upon it in terms of provisions of section 68 of the Act. Therefore, the finding of the CIT(A) to the extent of deleting the addition on account of share capital/share premium from the above parties is reversed. In the absence of any material on record discharging the onus cast upon the asseseee company in terms of provisions of section 68 of the Act, we are not inclined to remand the matter to the lower authorities. Accordingly, the assessment order is restored and the appeal filed by the Revenue stands allowed. 10. In the course of hearing, learned counsel for the assessee referring to the above findings of this Tribunal stated that Hon'ble Tribunal has observed that it is not known whether there was a written agreements between the assessee and the cash creditors Printed from counselvise.com MA Nos.22 & 23/PUN/2025 (M/s. Prasanna Purple Mobility Solutions P. Ltd.) 6 namely, Rainbow Ventures Ltd., Mauritius and Ambit Pragma Fund Scheme-1. Learned counsel for the assessee referring to para 24 of the Ld. CIT(A)‟s order stated that it has been mentioned that Share Subscription and Shareholders Agreement (SSSHA) between the assessee and the alleged two cash creditors has been filed which is duly registered and stamp duty of Rs. 12,43,100/- has also been paid and even the AO was asked to submit remand report in respect of SSSHA. However, Hon'ble Tribunal while confirming the addition has wrongly observed that no shareholders agreement is filed and therefore this is stated to be an apparent mistake in the impugned order. 11. Learned counsel for the assessee also submitted that this Tribunal has held that finding of Ld. CIT(A) is bald and he has failed to discuss as to what the enquiries revealed and how the results of enquiry satisfied the identity, creditworthiness and genuineness of the transactions. Again reference has been made at para Nos. 27 to 49 of the Ld. CIT(A)‟s order, where it has been stated that after examining the facts, the assessee has proved three limbs to show that identity, creditworthiness of the cash creditors is proved and that genuineness of the transaction has been entered. 12. Learned counsel for the assessee has also submitted that this Tribunal has further assumed incorrect facts and not referred and considered the similar issue dealt by Ld.AO in subsequent years. He stated that the investments made by M/s. Rainbow Printed from counselvise.com MA Nos.22 & 23/PUN/2025 (M/s. Prasanna Purple Mobility Solutions P. Ltd.) 7 Ventures Ltd., Mauritius in the subsequent years has been accepted by the Ld.AO, but the investments made in the year under consideration as treated as doubtful. Similarly, it is stated that M/s. Ambit Pragma Fund Scheme-1 is a SEBI regulated Venture Capital Fund registered with SEBI and that the IL & FS is a trustee of the said fund and that the money raised from investors have been invested in assessee‟s-company as well as other logistic companies, and these facts were also noted by the Ld.CIT(A) but again they have not been considered by this Hon'ble Tribunal in adjudicating the issue of addition u/s. 68 of the Act. Concluding his arguments, learned counsel for the assessee submitted that all these important facts that goes to the root cause of examining the applicability of provision of section 68 of the Act on the investments received by the assessee company from two investors; namely, Rainbow Ventures Ltd., Mauritius and Ambit Pragma Fund Scheme-1 have not been considered by this Tribunal which clearly indicates that the impugned order suffers from serious apparent mistakes and the impugned finding has been arrived at without adjudication of various material facts referred above and placed before this Tribunal during the course of hearing. 13. On the other hand, ld.DR vehemently argued supporting the findings of this Tribunal. 14. We have heard rival contentions and gone through the averments made in the Misc. Application and also submission of Printed from counselvise.com MA Nos.22 & 23/PUN/2025 (M/s. Prasanna Purple Mobility Solutions P. Ltd.) 8 the learned counsel for the assessee through which, an apparent mistake has been indicated in the impugned order. It is apparent that various documentary evidence which the assessee has placed before this Tribunal as well as Ld.CIT(A) to explain the nature and source of the alleged cash credit as well as to prove the identity and creditworthiness of the investor companies i.e. cash creditors and also genuineness of the transactions have not been examined by this Tribunal while dealing with the issue of addition u/s. 68 of the Act. It is a settled judicial precedent that this Tribunal is not allowed to review its own order, however, if there are apparent mistakes in such order, which we find in the instant case that various documents, remand report of the Ld.AO, Share Subscription and Shareholders Agreement, one of the alleged investor is SEBI registered fund, investments received by the assessee from one of the alleged cash creditors in other assessment years accepted by the Revenue authorities, have not been dealt with by this Tribunal before arriving at the finding of confirming the addition u/s. 68 of the Act. We, therefore, find that apparent mistake has crept in the impugned order and, therefore, recall the impugned order and direct the Registry to place ITA No. 871/PUN/2023 at its original number and re-fix it for hearing in due course along with Cross Objection No. 03/PUN/2024 and inform both the parties. Misc. Application filed by the assessee in MA No. 23/PUN/2025 is allowed. Printed from counselvise.com MA Nos.22 & 23/PUN/2025 (M/s. Prasanna Purple Mobility Solutions P. Ltd.) 9 15. To sum up, both the Misc. Applications bearing MA Nos. 22 & 23/PUN/2025 filed by the assessee are allowed as per terms indicated above. Order pronounced in open Court on this 20th day of Nov., 2025. Sd/- sd/- (ASTHA CHANDRA) (MANISH BORAD) JUDICIAL MEMBER ACCOUNTANT MEMBER Pune / Dated : 20th November, 2025. Vr/- Copy of the Order forwarded to : 1. The Appellant. 2. The Respondent. 3. The Pr. CIT concerned. 4. DR, ITAT, “B” Bench, Pune. 5. Guard File. BY ORDER // True Copy // Assistant Registrar ITAT, Pune. Printed from counselvise.com "