PRIME CO OPERATIVE BANK LTD,SURAT V. THE ASSISTANT COMMISSIONER OF INCOME-TAX, CIRCLE 1(1) (1) SURAT, SURAT

ITA 845/SRT/2025

AI Insights

The case involves Prime Cooperative Bank Ltd., the appellant, contesting an order from the Commissioner of Income-Tax (Appeals), which confirmed the validity of an assessment made under Section 148A(d) of the Income-tax Act, 1961. The appellant argued that the assessment was made in violation of natural justice and lacked jurisdiction as it was not conducted by a Faceless Assessing Officer as required. Additionally, issues were raised regarding the reopening of the assessment and the addition of Rs. 10,50,00,000 to the bank's income, which the appellant claimed had a clear source. The Tribunal referenced a similar case involving the same appellant for a different assessment year, where it was decided that the matter should be remanded back for a fresh assessment considering the legal and jurisdictional issues.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 831391 (ITAT-SURAT)
• Duration Of Justice: 5 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-01-2026
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: misc
• Appeal Filed On: 11-08-2025
• Other Referred Cases: Rajeev Bansal (167 taxmann.com 70), Eyegear Optics India Pvt. Ltd. vs. DCIT, Shamrao Gopal Benake vs. ITO, Tours5 Com
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MUKESH JAIN
• Assessee Lawyers: HIMALI MISTRY
• Keywords: Set aside; Opportunity of being heard; Principle of natural justice
• Section: 147; 148; 144

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL SURAT BENCH, SURAT BEFORE DR. B.R.R. KUMAR, VICE-PRESIDENT Ms SUCHITRA KAMBLE, JUDICIAL MEMBER ITA No.845/Srt/2025 (Assessment Year: 2016-17) Prime Co operative Bank Ltd., Prime house, Plot no.B-Ind-123, Udyognagar Sangh, Central Road no.9, Udhna, Surat-394210. [PAN : AAAAP5507G] Vs. The Assistant Commissioner of Income Tax, Circle-1(1)(1) Surat. (Appellant) .. (Respondent) Appellant by : Ms Himali Mistry, AR Respondent by: Shri Mukesh Jain, CIT. DR Date of Hearing 20.01.2026 Date of Pronouncement 22.01.2026 O R D E R PER DR. B.R.R. KUMAR, VICE-PRESIDENT:- This appeal has been filed by the Assessee against the order dated 30.07.2025 passed by the Ld. Commissioner of Income-Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi (“the CIT(A) in short), under Section 250 of the Income-tax Act, 1961 (“the Act”), relating to the Assessment Year 2016-17. 2. The assessee has raised the following grounds of appeal: (1) Ex-parte (1) The learned CIT(A) was not justified in passing ex-parte order when the appellant was in the process of identifying the documents and compiling the response. (2) The appellant deserves an opportunity of being heard, which is a corner stone to the natural justice. (II) Validity of the assessment Printed from counselvise.com ITA No. 845/Srt/2025 Asst. Year : 2016-17 - 2– (1) The CIT(A) was not justified in confirming validity of the assessment on the grounds of 148A(d) order which deals with reopening and not with the ground where the appellant challenged that assessment made in a post haste, defeating natural justice requiring to be quashed, particularly when the appellant requested to submit details in a fortnight's time. (2) The CIT(A) not having dealt with the ground by seeking remand, the matter may be restored to the lower authority (3) With the assessment having been framed by the Jurisdictional Assessing Officer instead of Faceless Assessing Officer, the assessment lacks jurisdiction and is required to be quashed. (III) Reopening (1) The reopening under notice u/s. 148 and order u/s. 148A(d) dated 23-7-2022 being beyond the surviving period as per the Supreme Court decision in case of Rajeev Bansal (167 taxmann.com 70), are bad in law and are required to be quashed (2) With the statutory approval u/s. 151 taken from PCIT instead of PCCIT, the reopening suffers from the required legal approval in terms of Supreme Court decision in case of Rajeev Bansal (167 taxmann.com 70), the reopening fails to satisfy required conditions of reopening. (3) With the notice u/s 148 and order u/s 148A(d) passed by the Jurisdictional Assessing Officer instead of Faceless Assessing Officer, reopening is required to be cancelled. (4) Even otherwise, reopening having been done without satisfying valid conditions of reopening, reopening is required to be dropped (IV) Addition of Rs. 10,50,00,000 (1) With Rs. 10,50,00,000 having clear source with the appellant, the addition is required to be deleted. (2) The learned CIT(A) ought to have appreciated that the AO erred seriously in making addition while seeking confirmations from the customers who had deposited cash into bank without realizing that the appellant is a bank where it deals with humongous amount of volume each day and that it is simply impractical and difficult to obtain confirmations from the customers (3) On the facts and circumstances of the case, the addition so made is unwarranted and is required to be deleted. (V) Miscellaneous: (1) All of the above grounds are without prejudicial to one another. (2) The appellant craves leave to add, alter or vary any of the grounds of appeal. 3. At the outset, the Ld.Counsel for the assessee fairly submitted that the issue raised by the assessee stands covered by the order of the Tribunal in the assessee’s own case in ITA No.19/Srt/2025 for AY 2013-14 dated 10.11.2025. For the sake of ready reference, the operative portion of said order is reproduced as under: Printed from counselvise.com ITA No. 845/Srt/2025 Asst. Year : 2016-17 - 3– 7. We have heard both the parties and perused the materials available on record. We have also deliberated on the decision relied upon by Id. AR of the appellant. It is an undisputed fact that the appellant had raised four grounds of appeal (13 sub-grounds) before the CIT(A), which include jurisdictional and legal issues on validity of reopening and issue of notice u/s 148 of the Act. Such grounds are at serial Nos. 1 and 2 of the grounds of appeal (8 sub-grounds) before CIT(A). The CIT(A) has not decided the jurisdictional and legal grounds and has simply set aside the order of AO and referred the case back to AO for making a fresh assessment. The Co-ordinate Benches of Hyderabad in case of Eyegear Optics India Pvt. Ltd. vs. DCIT, in ITA No.1347 & 1291/Hyd/2024, dated 14.05.2025, held that where assessment was reopened in case of assessee u/s 147 of the Act and was completed u/s 144 of the Act disallowing some expenditures, the CIT(A) instead of summarily setting aside matter to the file of AO for making fresh assessment, ought to have taken a call as regards specific ground based on which validity of jurisdiction that was assumed by AO or framing re-assessment was assailed by assessee before him. The Tribunal set aside the order of CIT(A) and restored the matter to his file with a direction to adjudicate the specific jurisdictional ground. Further, under similar facts and circumstances, the Pune Tribunal in the case of Shamrao Gopal Benake vs. ITO, in ITA No. 1036/Pun/2025, dated 12.08.2025 has also set aside the order of CIT(A) and remanded the matter back to his file with a direction to decide the appeal afresh adjudicating all the grounds including legal grounds raised by the assessee. In case of Tours5 Com (supra), the ITAT, Hyderabad has also held that the power to set aside order u/s 144 of the Act does not absolve the CIT(A) from adjudicating legal issues, particularly validity of jurisdiction assumed by AO for making assessment or reassessment. The facts of the instant appeal are similar to the facts of the cases cited supra. We do not find any reason to deviate from the findings of the co-ordinate Benches (supra). Therefore, we set aside the order of CIT(A) and remand the matter back to his file with a direction to decide the appeal afresh by adjudicating of the grounds including the jurisdictional and legal grounds raised by the appellant after providing reasonable opportunity of being heard to assessee. Accordingly, appeal of assessee is allowed for statistical purposes. 4. In the absence of any change in factual matrix and legal proposition brought to our notice, the appeal of the assessee is hereby allowed for statistical purposes. 5. In the result, the appeal of the assessee is allowed for statistical purposes. The order is pronounced in the open Court on 22.01.2026. Sd/- (SUCHITRA KAMBLE) Sd/- (DR. B.R.R. KUMAR) JUDICIAL MEMBER VICE-PRESIDENT (True Copy) Surat; Dated 22.01.2026 **mv Printed from counselvise.com ITA No. 845/Srt/2025 Asst. Year : 2016-17 - 4– आदेश की Ůितिलिप अŤेिषत/Copy of the Order forwarded to : 1. अपीलाथŎ / The Appellant 2. ŮȑथŎ / The Respondent. 3. संबंिधत आयकर आयुƅ / Concerned CIT 4. आयकर आयुƅ ) अपील ( / The CIT(A)- 5. िवभागीय Ůितिनिध , आयकर अपीलीय अिधकरण , /DR,ITAT, Surat, 6. गाडŊ फाईल / Guard file. आदेशानुसार/ BY ORDER, TRUE COPY सहायक पंजीकार (Asstt. Registrar) आयकर अपीलीय अिधकरण ITAT, Surat 1. The date on which the file goes to the Assistant Registrar for signature on the order 2. Date of Dispatch of the Order…………………………………… Printed from counselvise.com "