SACHIN BHAGAWAN NALAGE,KOLHAPUR V. INCOME TAX OFFICER WARD 1(1), KOLHAPUR

ITA 888/PUN/2025

AI Insights

This case involves an appeal by Sachin Bhagawan Nalage against the order of the Commissioner of Income Tax (Appeals)/NFAC, Delhi, concerning the assessment year 2017-18. The primary contention revolves around the validity of the re-assessment proceedings initiated under section 148 of the Income Tax Act, which the assessee argued were barred by limitation. The Income Tax Officer had made an addition of Rs. 48,29,995 to the assessee's income based on unexplained cash credits/investments. The CIT(A) remanded the matter back to the Assessing Officer for a fresh assessment, but the assessee raised new legal grounds before the Tribunal, challenging the validity of the notice issued for re-assessment.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 361069 (ITAT-PUNE)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-05-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Assessment Year: 2017-2018
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MANISH MEHTA
• Assessee Lawyers: VAIBHAV R. CHAUGULE
• Keywords: Set aside; Opportunity of being heard; Reasonable cause; Unexplained cash credit; Tax effect
• Section: 147; 148

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL PUNE “B” BENCH : PUNE BEFORE DR. MANISH BORAD, ACCOUNTANT MEMBER AND SHRI VINAY BHAMORE, JUDICIAL MEMBER I.T.A.No.888/PUN/2025 (Assessment Year 2017-18) Sachin Bhagawan Nalage, 1434 C Ward Laxmipuri, Konda Lane, Near Traffic Signal, Kolhapur. PAN : ALDPN 8879 N vs. ITO, Ward-1(1), Kolhapur (Appellant) (Respondent) For Assessee : Shri Vaibhav R. Chaugule, CA For Revenue : Shri Manish Mehta, Addl. CIT Date of Hearing : 15.05.2025 Date of Pronouncement : 21.05.2025 ORDER PER DR. MANISH BORAD, AM: This appeal by the assessee is directed against the order dated 18.01.2025 of the Ld. Commissioner of Income Tax (Appeals)/NFAC, Delhi [“CIT(A)”] for the A.Y. 2017-18 2. The assessee has raised the following grounds of appeal:- “1. The Learned CIT (NFAC) failed to appreciate that the notice u/s 148 though dated as 31/03/2021 was actually issued on 01/04/2021, thereby making the re-assessment proceedings barred by limitations (Rs. 5978135) 2. The Learned CIT (NFAC) in the facts and circumstance of the case, besides setting aside the assessment to the AO for making fresh assessment, ought to have held that the proceedings initiated u/s 147 were bad in law and on that ground alone ought to have cancelled the assessment (Rs. 0) 3. The Learned CIT (NFAC) erred in not adjudicating the grounds against validity of re-assessment proceedings, raised at the time of filing appeal u/s 250 (Rs. 0) 4 The appellant craves leave to add, alter, amend or delete any of the above grounds of appeal (Rs. 0) Total Tax Effect Rs. 59,78,135” 2 ITA.No.888/PUN./2025 (Sachin Bhagawan Nalage) 3. At the outset, learned counsel for the assessee referring to ground No.1 stated that re-assessment proceedings are barred by limitation as notice u/s. 148 of the Act dated 31/03/2021 has been actually issued to the assessee on 01/01/2021. He also referred to certain judicial precedents in support of his contentions. 4. On the other hand, Ld.DR submitted that this legal ground has been raised for the first time before this Tribunal. 5. We have heard the rival contentions of both the parties and perused the record placed before us. We notice that the assessee who is an individual declared total income of Rs. 5,48,658/- in the return of income for the A.Y. 2017-18. Based on the information about the alleged unexplained cash credit/investment of the assessee with M/s. Shri Renuka Mata Multi State Urban Co-op. Credit Society Ltd., the assessee was issued a notice u/sec. 148 of the Act for carrying out the re-assessment proceedings. In the course of the re-assessment proceedings, certain submissions were filed, but they were not sufficient to satisfy the Ld.AO who observed that assessee has categorically failed to furnish any details relating to business/profession activities undertaken by him, details of bank accounts held jointly/individually, the source of investments made by him/father in the above referred credit society and certain other details also. The Ld.AO concluded the proceedings making addition of Rs. 48,29,995/-. 6. The assessee challenged the addition before the Ld. CIT(A) and in Form No.35 along with raising grounds on merits also raised ground challenging the validity of re-assessment proceedings. However, Ld. CIT(A) on considering the submissions filed by the 3 ITA.No.888/PUN./2025 (Sachin Bhagawan Nalage) assessee has remanded the issues back to the file of the Ld.AO observing that the matter requires further verification and accordingly, set aside the assessment to the Ld.AO in terms of the proviso to sec. 251(1)(a) for making fresh assessment. Even though, Ld. CIT(A) has remanded the issues to the Ld.AO, the assessee preferred appeal before this Tribunal and has raised new legal ground challenging the validity of notice issued u/sec. 148 being barred by limitation. Since this legal issue has been raised for the first time, but the same goes to the root cause of the assessment proceedings in question, we admit the legal ground. However, since the same has not been raised before the Ld. CIT(A), there is no finding on the said issue by the first appellate authority and therefore, it needs to be remanded back to the lower authorities. However, since Ld. CIT(A) has also remanded back the issues raised before him to the Ld.JAO, we remit back all the issues in the instant appeal to the file of the Ld.JAO before whom the assessee can raise the necessary issues about the validity of re- assessment, validity of notice issued u/sec. 148 along with issues raised on merits for which a reasonable opportunity of being heard shall be granted to the assessee. The Ld.JAO shall thereafter carryout denovo assessment proceedings in accordance with law. Assessee is also directed to remain vigilant and not to take adjournments unless otherwise required for reasonable cause and furnish all the details in support of grounds of appeal. All the grounds of appeal raised by the assessee are allowed for statistical purposes. 4 ITA.No.888/PUN./2025 (Sachin Bhagawan Nalage) 7. In the result, appeal of the assessee is allowed for statistical purposes. Order pronounced in the open Court on 21.05.2025. Sd/- Sd/- [VINAY BHAMORE] [MANISH BORAD] JUDICIAL MEMBER ACCOUNTANT MEMBER Pune, Dated 21st May, 2025 vr/- Copy to 1. The appellant 2. The respondent 3. The CIT(A), Pune concerned. 4. D.R. ITAT, “B” Bench, Pune. 5. Guard File. By Order //True Copy // Sr. Private Secretary, ITAT, Pune Benches, Pune. "