SALONI BANSAL,NEW DELHI V. ITO-WARD 1(3)(1), SURAT

ITA 916/SRT/2025

AI Insights

The case involves Saloni Bansal, the appellant, who contested the reassessment of her income for the Assessment Year 2018-19 by the Income Tax Officer (ITO). The reassessment was based on allegations that she had benefited from accommodation entries resulting in Long Term Capital Gains (LTCG) which escaped assessment. The ITO added the entire sale consideration of the shares to her income as unexplained money under section 69A of the Act. The Commissioner of Income Tax (Appeals) upheld this decision, leading to the appeal before the Tribunal. The Tribunal's decision hinged on the procedural lapses in the reassessment process, particularly the failure to provide the assessee with the adverse material and the reasons for reassessment, which are mandatory under section 148A of the Act.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 846057 (ITAT-SURAT)
• Duration Of Justice: 6 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-03-2026
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Surat
• Assessment Year: 2018-2019
• Appeal Filed On: 29-08-2025
• Other Referred Cases: Songwon Specialty Chemicals India (P.) Ltd. vs. ITO, Deepak Agarwal vs. Dy.CIT, Saraswati Petrochem Pvt. Ltd. vs. ITO, Micro Marbles Pvt. Ltd vs ITO
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AJAY UKE
• Assessee Lawyers: SHAANTANU JAIN; SERVING UPON HIM A
• Keywords: Set aside; Difference of opinion; Change of opinion; Capital asset; Opportunity of being heard; Reassessment proceedings; Depreciation; Principle of natural justice; Accommodation entries; Audit objection; Reason to believe; Benefit of exemption; Opportunity of cross examination; Tangible material; Bogus
• Section: 147; 148; 132

Judgement Text

"sug ge आयकर अपीलीय अिधकरण,सूरत Ɋायपीठ, सूरत । IN THE INCOME TAX APPELLATE TRIBUNAL SURAT ‘SMC’ BENCH, SURAT [conducted through Hybrid mode at Ahmedabad Bench] BEFORE SMT.ANNAPURNA GUPTA, ACCOUNTANT MEMBER ITA No.916/SRT/2025 Assessment Year : 2018-19 Saloni Bansal C/o. B-50, LGF South Extension-II New Delhi Delhi – 110 049 Vs The ITO Ward-1(3)(1) PAN: BIUPS 4612 K अपीलाथŎ/ (Appellant) Ů̝ यथŎ/ (Respondent) Assessee by : Shri Shri Shaantanu Jain, Advocate Revenue by : Shri Ajay Uke, Sr.DR सुनवाई की तारीख/Date of Hearing : 17/03/2026 घोषणा की तारीख /Date of Pronouncement: 27/03/2026 आदेश/O R D E R The present appeal has been preferred by the assessee against the order of the Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as ‘CIT(A)’] dated 08/08/2025 passed u/s.250 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) for the Assessment Year (AY) 2018-19. 2. Brief facts relating to the case are that the assessee’s case was reopened on account of information in the possession of the Assessing Officer (AO) that the assessee was the beneficiary of an accommodation entry by way of Long Term Capital Gain (LTCG) amounting to Rs.10,25,662/- which income as per the AO had escaped assessment. Subsequently, during the assessment proceedings, it was revealed that the entire sale consideration of the shares Printed from counselvise.com ITA No.916/SRT/2025 Saloni Bansal vs. ITO Asst.Year : 2018-19 2 was sold was Rs.9,63,859/- and holding the assessee to have taken an accommodation entry to this extent, the entire amount of Rs.9,63,859/- was added to the income of the assessee towards unexplained money u/s.69A of the Act. The order of the AO was confirmed by the Ld. CIT(A). 3. Aggrieved the order of the Ld. CIT(A), the assessee has come up in appeal before me by raising the following grounds: “1. That the Ld. CIT(A) has err3d in law and on facts in upholding the action of the Ld. AO in assessing the income of the Assessee for an amount of Rs.14,84,589/- as against the declared income of Rs.5,20,730/- as against the declare income of Rs.5,20,730/- under the assessment framed u/s.147 r.w.s. 144B of the Act. 2. That the Ld. CIT(A) has erred in law and on facts in upholding the reassessment order passed by Ld. AO u/s.147 r.w.s.144B of the Act despite the lack of proper jurisdiction and non-compliance with the mandatory provisions of the sections 148A, 147 to 151 of the Act. 2.1. That the Ld. CIT(A) has erred in law and on facts in upholding the validity of show cause notice issued u/s.148A(b) of the Act and the order passed u/s.148A(d) of the Act, despite the facts that. same suffered from jurisdiction defect, violate the principles of natural justice and were issued without providing tangible material OR specific information to the Appellant, thereby rendering them legally untenable. 2.2. That the Ld. CIT(A) has failed to appreciate the fact that the order passed u/s.148A(d) of the Act is based on mere presumption, guess work, wrong set of facts and these are not more than suspicion, making it invalid in eyes of law. 2.3. That the Ld. CIT(A) has erred in conforming the initiation of reassessment proceedings despite the fact that the Ld. AO failed to apply his independent mind while passing the order u/s.148A(d) of the Act to show that there is an income which has escaped assessment, as such the same is not valid in the eyes of law. 2.4. That the Ld. CIT(A) has wrongly upheld the reassessment order u/s.147 r.w.s. 144B of the Act, passed by the Ld. AO as there is the absence of any fresh tangible material which has come to the knowledge of Ld. AO. The reassessment proceedings were thus initiated based on mere change of opinion, which is impermissible in law. 2.5. That the Ld. CIT(A) has erred in upholding the order of the Ld. AO as the sanction approval granted under Section 151 of the Act was mechanical, lacking Printed from counselvise.com ITA No.916/SRT/2025 Saloni Bansal vs. ITO Asst.Year : 2018-19 3 independent reasoning and application of mind by the sanctioning/approving authority, thereby vitiating the reassessment proceedings. 2.6. That the Ld. CIT(A) has erred in law and on facts in upholding the order of Ld. AO as notice issued u/s.148A(b) of the Act, order passed u/s.148A(d) of the Act and the notice issued u/s.148 of the Act are without complying with stationery provisions provided u/s.141A of the Act. 3. That having regards to the facts and circumstances of the case, the Ld. CIT(A) has erred in facts and on law in upholding the action of the Ld. AO in making an addition of Rs.9,63,859/- u/s.69A of the Act on account of sale of shares of M/s.Eicher Motors Ltd. by treating the Long Term Capital Gain of Rs.9,50,748/- as bogus and has further erred in not allowing the bonafide claim of exemption u/s.10(38) of the Act as claimed by the assessee and that too by recording incorrect facts and findings without providing the entire adverse material on record and without observing the principle of natural justice. 3.1. That in any case and in any view of the matter, the action of the Ld. CIT(A) in upholding the action of Ld. AO in making the addition of Rs.9,63,859/- u/s.69A of the Act on account of sale of shares of M/s. Eicher Motors Ltd., by treating the Long Term Capital Gain of RS.9,50,748/- as bogus and not allowing the bonafide claim of benefit of exemption u/s.10(38) of the Act, is bad in law and against the facts and circumstances of the case. 4. That the Ld. CIT(A) as well as the Ld. AO has erred in not providing the copy of the adverse material statement recorded against the Assessee and also erred in not providing and opportunity of cross examination to the Assessee, which has amounted to violation of principles of natural justice. 5. That the assessment so framed, upheld an addition made suffers from perverse findings contrary to the facts on record and without providing the material against Appellant. 6. That the levy of interest under the Act is disputed and as such unsustainable in law besides being excessive. 7. The appellant craves leave for adducing necessary evidence, amendments and explanation including written one to the aforesaid grounds and also raised additional grounds in the course of hearing of the appellate proceedings.” 3.1. As is evident from the above, the assessee has challenged the validity of the assessment framed u/s.147 of the Act on appreciation of grounds and also raised grounds on the merits of the case. Printed from counselvise.com ITA No.916/SRT/2025 Saloni Bansal vs. ITO Asst.Year : 2018-19 4 4. One preliminary argument of the assessee both with respect to the change to the validity of the assessment framed as also to the merits of the addition made was that the reopening was resorted to on the basis of some adverse material in the possession of the AO revealing that the assessee had indulged in transaction of accommodation entry, but the said adverse material was neither confronted to the assessee as required by law before issuing notice u/s.148 of the Act nor it was confronted during the entire assessment proceedings. The contention was accordingly that both the jurisdiction u/s.148 of the Act was vitiated on account of this fact as also the assessment framed. 5. I have heard both the parties. The argument of the Ld. Counsel for the assessee was that as per the applicable provisions of law pertaining to reopening of the case, notice u/s.148 of the Act was to be issued after following the procedure laid down u/s.148A of the Act. The said provisions are as under: Procedure before issuance of notice under section 148. 148A. (1) Where the Assessing Officer has information which suggests that income chargeable to tax has escaped assessment in the case of an assessee for the relevant assessment year, he shall, before issuing any notice under section 148 provide an opportunity of being heard to such assessee by serving upon him a notice to show cause as to why a notice under section 148 should not be issued in his case and such notice to show cause shall be accompanied by the information which suggests that income chargeable to tax has escaped assessment in his case for the relevant assessment year. (2) On receipt of the notice under sub-section (1), the assessee may furnish his reply within such period, as may be specified in the notice. (3) The Assessing Officer shall, on the basis of material available on record and taking into account the reply of the assessee furnished under sub-section (2), if any, pass an order with the prior approval of the specified authority determining whether or not it is a fit case to issue notice under section 148. Printed from counselvise.com ITA No.916/SRT/2025 Saloni Bansal vs. ITO Asst.Year : 2018-19 5 (4) The provisions of this section shall not apply to income chargeable to tax escaping assessment for any assessment year in the case of an assessee where the Assessing Officer has received information under the scheme notified under section 135A. Explanation.—For the purposes of this section and section 148, \"specified authority\" means the specified authority referred to in section 151.] 5.1. As per the said provisions, the AO is required to conduct a preliminary enquiry with respect to the information in his possession suggesting escapement of income. He is also required to provide an opportunity of hearing to the assessee as to why notice u/s.148 of the Act should not be issued on the basis of information suggesting escapement of income and also the results of enquiry conducted by him and after considering the reply of the assessee, he has to decide on the basis of material available on record including the reply of the assessee whether it is a fit case for issuing the notice u/s.148 of the Act. Thus, issuance of notice u/s.148 of the Act requires a preliminary exercise to be carried out by the AO so as to ensure that reopening is resorted to only in those cases, where the information in possession of AO suggests escapement of income. If as a result of preliminary enquiry of the information in his possession and after receiving assessee’s reply after confronting with the information it transpires that there is no case of escapement of income, then the AO need not to issue notice u/s.148 of the Act. Thus, the provisions of section 148A of the Act ensure that there is no arbitrary exercise of reopening of cases of assessees and is only in those cases where information suggests escapement of income of the assessee. 6. Now, the case of Ld. Counsel for the assessee before me is that in terms of the provisions of section 148A(b) of the Act, the information in the possession of the AO including that collected during enquiry conducted by him needed to be given to the assessee for seeking his reply to the same. He Printed from counselvise.com ITA No.916/SRT/2025 Saloni Bansal vs. ITO Asst.Year : 2018-19 6 contended that in the facts of the present case the said information was not supplied to the assessee despite specific request made by the assessee in this regard. His contention was that in a number of decisions by courts it has been held that where the due process prescribed by law of sharing information available with the assessee as required u/s.148A(b) of the Act is not followed by the AO, the AO cannot assume valid jurisdiction to issue notice u/s.148 of the Act. 6.1 In this regard, he drew my attention to, first, the facts relating to the issue pointing out that notice u/s.148A(b) of the Act dated 17/03/2022 contained copy of information shared with the assessee as contained in Annexure-A of the notice, which were placed before me at page No.3 of the paper-book, is reproduced hereunder: “ANNEXURE In your case information has been received through insight portal from the DDIT (Inv), Rohtak that during the course of search action in the case of Trade Next Securities Limited (Erstwhile Lifeline Securities Limited) along with one beneficiary of long term capital gain exempt U/s. 10(38) of the Act, it was found that the assessee and family members have taken long term capital gain accommodation entries. During the course of search in the case of Shri Deepak Batra, CA, Rohtak at his residence and office, it was found that various clients of Shri Deepak Batra have taken accommodation entries of non-genuine LTCG/STCG through investment in reputed stocks. The modus operandi is that the shares are credited off-market to the demat account of beneficiary assesseee just before the day of sale and the purchase of shares is shown in back date by issuing forged contract notes. On the day of purchase shown, neither shares were present with the broker nor were they purchased on exchange in the name of beneficiary assessee. INCOME TAX DEPARTMENT As per the information provided by DDIT (Inv), Rohtak through insight portal which is available on record, you have one of such person who have taken accommodation entries of non genuine LTCG amounting to Rs. 10,25,622/- during the F.Y. 2017- 18 relevant to A.Υ. 2018-19. Printed from counselvise.com ITA No.916/SRT/2025 Saloni Bansal vs. ITO Asst.Year : 2018-19 7 In view of the above, you are requested to show cause as to why a notice U/s. 148 of the Act should not be issued on the basis of the information which suggests that income of Rs. 1025622/- chargeable to tax has escaped assessment in your case for A.Y.2018-19. Your reply/explanation, if any, should reach the undersigned through faceless manner within 8 days of receipt of this letter, failing which it shall be presumed that you have nothing to say in the above matter and the proceedings shall be dealt with, in accordance with the provisions of section 148A of the I.T. Act.” 6.2 Referring to the same, the Ld. Counsel for the assessee contended that the information shared with the assessee was only in relation to the information provided by the DDIT (Inv), Rohtak on the Insight Portal revealing that during the course of search action in the case of Trade Next Securities Limited (Erstwhile Lifeline Securities Limited) and during the course of search in the case of Shri Deepak Batra, it was found that various clients of Shri Deepak Batra had taken accommodation entries of non- genuine LTCG/STCG through investment in stocks. That the assessee was one of the beneficiaries of such transaction amounting to Rs.10,25,622/-. 6.3 The Ld. Counsel for the assessee, thereafter, drew our attention to the reply filed by the assessee to the impugned notice, which was placed before me at page Nos.5 to 7 of the paper-book, the contention which are reproduced as under: “Date: 22-03-2022 To The Assessing Officer Ward-1(3)(1) Surat Respected Sir Sub:-Reply to Notice U/S 148A Clause (b) of the IT Act 1961 in case of Saloni Bansal for AY 2018-19. PAN BIUPS4612K Kindly refer to your notice DIN: ITBA/AST/F/148A(SCN)/2021-22/1040937192(1) dated 17-03-2022. Printed from counselvise.com ITA No.916/SRT/2025 Saloni Bansal vs. ITO Asst.Year : 2018-19 8 It is respectfully submitted as under: 1.) That during the year under consideration the assessee has earned Long Term Capital Gain amounting to Rs 9,50,748/- claimed exempt U/S 10(38) of the IT Act 1961. 2.) That the said shares were purchased offline on 27/02/2004 from Sub Broker M/S Alfa Finsec for consideration of Rs 7425/- and sold on 19/12/2017 online through broker M/S Indus Portfolio Pvt Ltd and earned LTCG of Rs 9,50,748/-, claimed exempt U/S 10(38) of the IT Act 1961. Copy of the Purchase Bill, Copy of financial ledger of Broker M/S Indus portfolio pvt ltd, Copy of Demat account transaction statement of the assessee is being filed. Sec 10(38) states as under: Any income arising on from the transfer of a long-term capital asset, being an equity share in a company or a unit of an equity oriented fund or unit of a business trust shall be exempt provided- a) The transaction of sale of such equity shares or unit is entered into on or after 1.10.2004; and b) Such transaction is chargeable to securities transaction tax under the chapter. In other words, exemption of income arising on transfer of equity share acquired on or after 1.10.2004 shall be available only if the acquisition of share is chargeable to Securities Transaction Tax under chapter VII of the Finance (No 2) Act, 2004. It is further submitted that there is no-where in the IT Act mentioned that on the date of purchase the shares must be transferred to the assessee or it must be held by the sub-broker or purchased on exchange in the name of assessee by the said sub-broker. The only requirement is purchase of shares by the assessee. Hence as stated modus operandi is just on the basis of assumptions, conjectures and surmises only. Hence, the assessee has complied with all the necessary conditions for claiming exemption U/S 10(38) of the IT Act, 3.) Now regarding the information received from insight portal from the DDIT(Inv), Rohtak, It is submitted that the assessee has no relation with Trade Next Securities Ltd (Erstwhile Lifeline Securities Ltd), moreover the assessee heard these names from this SCN only. And the assessee has not made any purchases or sold the shares through this broker. Further Sh Deepak Batra CA is the assessee counsel for filing Income Tax Returns only, when enquired from him, Sh Deepak Batra told that during search at his office and residence no adverse material in relation to the assessee was found. Further as stated in above notice the assessee claimed LTCG of Rs 10,25,622/- whereas the assessee has claimed only Rs 9,50,748/- as exempt LTCG during the year under consideration. Printed from counselvise.com ITA No.916/SRT/2025 Saloni Bansal vs. ITO Asst.Year : 2018-19 9 4.) Your good self is also requested to kindly provide to the assessee any adverse material against the assessee or statement against the assessee of any person who says the assessee has taken accommodation entries. 5.) Under these circumstances it is prayed that Notice U/S 148 of the 1 T Act should not be issued to the assessee.” Thanking You Yours Faithfully Sd/- (SALONI BANSAL)” 6.4 Referring to the same, he pointed out that the assessee had categorically stated that the transaction undertaken by the assessee did not tally in relation to any fact noted by the AO in his reasons/information supplied to the assessee pointing out that : (i) The Capital Gain earned by the assessee amounted to Rs.9,50,748/- and not Rs.10,25,622/- as noted by the AO from the information. (ii) That the shares were transacted through broker M/s. Indus Portfolio Pvt. Ltd. and not through Trade Next Securities Ltd. (Erstwhile Lifeline Securities Ltd.) which as per the information with the AO indulged in providing accommodation entries to the assessee. (iii) That Shri Deepak Batra was the assessee’s counsel and was filing income-tax return only and not carrying out any transactions in shares for the assessee and Shri Deepak Batra has categorically told him that no adverse material in relation to the assessee was found during the search. Printed from counselvise.com ITA No.916/SRT/2025 Saloni Bansal vs. ITO Asst.Year : 2018-19 10 He further pointed out from paragraph No.4 of the said letter that the assessee had requested to provide all adverse material against the assessee or statement against the assessee of any person saying that the assessee had taken accommodation entries. 6.5 Thereafter, the Ld. Counsel for the assessee drew my attention to the order passed by the AO u/s. 148 A(d) of the Act along with which notice u./s.148 of the Act issued to the assessee. He pointed out that the AO neither considered the reply of the assessee pointing out that his transaction was not the same as noted by the AO in his reasons nor did the AO supply adverse material to the assessee before passing the order u/s.148A(d) of the Act. The copy of the order passed u/s.148A(d) of the Act was placed at page Nos.11 to 17 of the paper-book. Referring to the same, he drew our attention to the conclusion of the AO at page No.15 of the order after considering the reply of the assessee, which is reproduced hereunder: “The reply filed by the assessee has been verified/analysed with the data available with the Department and found that the same is not tenable and acceptable in view of the following: 1. The assessee's case was emerged the course of search action conducted in the case of Trade Next Securities Limited (Erstwhile Lifeline Securities Limited) along with one beneficiary of long term capital gain exempt U/s 10(38) of the Act, it was found that the assessee and family members have taken long term capital gain accommodation entries. Search action was also conducted in the case of the assessee's counsel Shri Deepak Batra, CA, Rohtak, 2. During the course of search, it was established that the assessee is one of the beneficiary of LTCG. 3. The assessee has not denied that She has not made trading of shares during the year and has claimed exempt LTCG from such activities. 4. As per the return of income, the assessee has shown exempted long term capital gain from sale of shares at Rs. 9,50,748/-, 5. It was established during the course of search that the data seized contain systematic record of cash and cheque transactions along with details of the purchaser and completion of Printed from counselvise.com ITA No.916/SRT/2025 Saloni Bansal vs. ITO Asst.Year : 2018-19 11 transaction. In such cases, the whole amount has been received in cash and then part cash has been returned to the tune of cheque payment received. In such a circumstance, the data shown by the assessee and that seized could never match. 6. Regarding the assessee's contention to provide the adverse material against the assessee as well as the statement of the person who says the assessee has taken accommodation entries, it is to be stated here that: In this aspect, supply of evidence/documents, supplying of documents/evidences is not required as long as the information, which is in possession of the AO suggesting escapement of income, is supplied to the assessee and that has been done issuing notice u/s.148A(b) of the Act. It has been duly communicated to the assessee that this office is in possession of information which revealed that it was found that the assessee and family members have taken long term capital gain accommodation entries. The fact was further confirmed during the course of search in the case of the assessee's counsel Shri Deepak Batra, CA.” 6.6 Referring to the same, he pointed out that the AO had only reproduced the information in his possession without dealing with the factual contentions made by the assessee in his reply to notice u/s.148A(b) of the Act pointing out the factually inaccuracies in the information relating to the assessee with the AO. He contended that the AO had merely reiterated the information without dealing with the reply of the assessee. He further pointed out that the AO categorically stated that there was no need to supply the evidences or documents and it was only the information which needed to be shared with the assessee. 7. The Ld. Counsel for the assessee, thus, demonstrated that the AO had passed order u/s.148A(d) of the Act and assumed jurisdiction to issue notice u/s.148 of the Act, without considering the reply of the assessee to the notices issued u/s.148A(b) of the Act and without confronting the assessee with all adverse material available. 8. He, thereafter, drew my attention to the decision of the Hon’ble High Court Gujarat in the case of Songwon Specialty Chemicals India (P.) Ltd. Printed from counselvise.com ITA No.916/SRT/2025 Saloni Bansal vs. ITO Asst.Year : 2018-19 12 reported in (2024) 169 taxmann.com 184 (Guj.), SLP of the Department against which order was dismissed by the Hon’ble Apex Court in its decision reported in (2025) 180 taxmann.com 292 (SC). Copies of both the orders were placed before me. Referring to the decision of the Hon’ble Jurisdictional High Court in the case of Songwon Specialty Chemicals India (P.) Ltd., the Ld. Counsel for the assessee pointed out that the Hon’ble Court in the said decision had categorically held that the order passed u/s.148A(d) of the Act ignoring the reply of the assessee and not controverting the facts stated by the assessee therein was not sustainable in law and, therefore, the jurisdiction assumed, for issuing the notice u/s.148 of the Act is bad in law. He drew our attention to paragraph Nso.8 to 13 of the order of the Hon’ble High Court in the case of Songwon Specialty Chemicals India (P.) Ltd.(supra), the same is reproduced hereunder: “On perusal of the above observations given in the impugned orders, it is apparent that the Assessing Officer has not taken into consideration the reply filed by the assessee stating in no uncertain terms that the assessee has claimed the depreciation from Assessment Year 2015-16 and the same has been accepted during the course of the regular assessment for the Assessment Years 2015-16 and 2016-17 and therefore, the Assessing Officer could not have reopened the assesssment for the subsequent years for Assessment Years 2017-2018 and 2018-2019 on the same facts which were earlier available with the Assessing Officer during the previous two years of 2015- 2016 and 2016-2017. The Assessing Officer has conveniently ignored such facts and has reiterated what is stated in the audit objections. Thus, there is total non application of mind on behalf of the respondent Assessing Officer which is also reiterated in the affidavit-in-reply filed pursuant to the order dated 24th September, 2024 passed by this Court. 9. In such circumstances, we are of the opinion that the impugned notice as well as the order passed under Section 148 and Section 148A(d) of the Act respectively are not tenable as the Assessing Officer could not have assumed jurisdiction in view of the audit objection which is contrary to the facts and evidence on record, more particularly when the department itself has accepted and granted depreciation on the goodwill claimed by the assessee for the earlier years. No reassessment proceedings could have been initiated by the respondent-Assessing Officer on the basis such audit objection. Printed from counselvise.com ITA No.916/SRT/2025 Saloni Bansal vs. ITO Asst.Year : 2018-19 13 10. It is true that as per provision of Section 148 as amended from 1.4.2021 even the audit objection can be considered for reopening the assessment as part of \"information\". However, it does not mean that merely because the audit objection is raised, the Assessing Officer is bound to issue notice under Section 148 of the Act merely by reiterating what is stated in the audit objection ignoring the facts of the case and contents of the reply filed by the assessee pursuant to the notice issued under section 148A(b) of the Act. 11. Therefore, the impugned order passed under Section 148A(d) of the Act cannot be sustained as it can be said to be a fit case in reopen the assessment by any stretch of imagination. 12. It is pertinent to note that merely producing of audit objection in the order under Section 148A(d) of the Act ignoring the reply filed by the assessee is nothing but non application of mind on the part of the respondent-Assessing Officer. The Assessing Officer merely reproduced the contents of the reply filed by the hereinabove without considering the facts that the audit objection contained various factual mistake which is assessee without dealing with the same, which is apparent from the extract of the order reproduced pointed out by the petitioner to the effect that the depreciation on the goodwill was being granted from the Assessment Year 2015-16 onwards to the petitioner and therefore, there is no question of escapement of income for the year under consideration by holding that the petitioner wrongly claimed the depreciation for the Assessment Year 2018-2019. The impugned order is therefore, contrary to the record and liable to be quashed and set aside. 13. In view of the foregoing reasons, both these petitions succeed and impugned notice issued under Section 148A(6) of the Act dated 10th February, 2024 as well as impugned order passed under Section 148A(d) of the Act dated 30th March, 2024 and the impugned notice issued under Section 148 of the Act dated 30th March 2024 are hereby quashed and set aside. Rule is made absolute to the aforesaid extent. No order as to costs.” 9. He further drew our attention to the decision of the ITAT Delhi Bench passed in ITA Nos.2305/Delhi/2025 and Others, dated 15/10/2025 in the case of Deepak Agarwal vs. Dy.CIT pointing out therefrom the decision of Hon’ble Delhi High Court in the case of Saraswati Petrochem Pvt. Ltd. vs. ITO reported in 470 ITR 47, wherein the Hon’ble High Court dealt with the factual impact of non-supply of relied upon the material with reasons u/s.148A of the Act by holding as under: Printed from counselvise.com ITA No.916/SRT/2025 Saloni Bansal vs. ITO Asst.Year : 2018-19 14 “5 On fatal impact of non supply of relied upon material with reasons u/s148(2) of the Act, reference was made by Id. Counsel to Coordinate bench decision in ITO vs B.C. Enterprises ITA No.4972/Del/2024 (CO 08/DEL/2025) for AY 2018-2019 decided on 04.04.2025. Further reference was made to Hon'ble Delhi High court decision in case of Saraswati Petrochem Pvt. Ltd vs ITO 470 ITR 47, where in for this issue, the Hon'ble Court observed as follows:- \"The AO had not furnished either a copy of the letter dated 12.03.2018 received from the ITO (Nahan) or the copy of the intimation received from the ADIT(Inv)/Unit- 4(2), New Delhi along with the document containing the reason to believe. Likewise, the AO did not supply copies of the FIR and chargesheet while furnishing the document containing the \"reason to believe.” \"17.1 The first and foremost principle of law, to which the AO must be wedded, is the obligation cast on him to furnish material and information that helped him to form a belief that income, otherwise chargeable to tax, had escaped assessment. Admittedly, the AO had in his possession a letter dated 12.03.2018 addressed to him by ITO (Nahan), which in turn contained the intimation supplied by ADIT (Inv)/Unit-4(2), It appears that the information furnished suggested that cash deposits had been made in the account bearing no. 083005000211 maintained with the ICICI bank by Ram Singh, the proprietor of Para Impex Chem, out of which monies were remitted via RTGS to the two bank accounts of the petitioner/assessee maintained with HDFC Bank Neither the letter nor the intimation of the ADIT(Inv)/Unit-4(2), New Delhi was furnished to the petitioner/assessee \"19. We are of the opinion that the AO did not have the tangible material on record that could have persuaded him to form a belief that income, otherwise chargeable to tax, had escaped assessment. The AO did not carry forward the enquiry process once he had received communication from ITO (Nahan). As noticed above, the AO did not furnish either the letter dated 12.03.2018 received from ITO (Nahan) or the relevant intimation received from the ADIT(Inv)/Unit-4(2) New Delhi, along with the document containing \"reason to believe\" Had the AO furnished the documents, he would have been able to reach a firmer conclusion that crossed the threshold of suspicion and conjecture.” 5.1 Hon'ble Rajasthan High court decision in case of Micro Marbles Pvt. Ltd vs ITO 457 ITR 569, was also relied where, Hon'ble High Court held as follows:- \"The petitioner in the grounds to the petition has taken a categorical stand that the respondents failed to furnish the information which formed the basis for reopening the assessment. It was not even provided with the statement of Deepak Jain, on which heavy reliance was being placed. There is no averment in the reply of the respondents anywhere that any such information or a copy of the statement was supplied to the petitioner along with the reasons to believe. Printed from counselvise.com ITA No.916/SRT/2025 Saloni Bansal vs. ITO Asst.Year : 2018-19 15 28. In view of the above, the reasons to believe, as supplied to the petitioner, on the face of it are incomplete and do not afford the petitioner due and proper opportunity to file objections against such reassessment. The non-supply of the above material is within the teeth of the directions of the Division Bench of the Delhi and Bombay High Courts. 29. The submission of Shri Bissa that reasons to believe cannot be equated with the final conclusion and as long as the Assessing Officer has sufficient material to demonstrate that he had bonafidely formed the opinion that the income chargeable to tax has escaped assessment, the requirement of law stands satisfied is of no avail as there are no two opinions on the above aspect. Sufficiency of material is one thing and supply of the same is another, which is mandatory in nature. Therefore, the non- supply of the material referred to in the reasons to believe would be enough to render the proceedings bad, even though the material for forming the opinion may be sufficient. 30. The argument of Shri Bissa is that information furnished by the Deputy Director of Income Tax, Investigation, by itself is sufficient for reopening the proceedings, more particularly when the said information was confirmed from other sources. Again the sufficiency of the information is not in question, nor its confirmation. What is questionable is the effect of its non-supply, to which there is no answer. 31. Thus, in the light of the decisions of the Delhi and the Bombay High Courts, as referred to above, the non-supply of the material, especially the documents of entry in the books of Mis. Sanmatri Gems Pvt. Ltd. and the statement of Deepak Jain recorded under Section 132 (4) of the Act, is sufficient to vitiate the proceedings.\" 10. In light of the above, it was contended before me that as per the decisions of the decisions of the Hon’ble High Courts, the AO was duty bound to supply all adverse material to the assessee along with the copies of reasons in terms of the provisions of section 148A(b) of the Act and the non- supply of the same was fatal to the assumption of jurisdiction u/s.148 of the Act. That in the facts of the present case the AO having not supplied the relevant material, the jurisdiction assumed by the AO by issuing notice u/s.148 of the Act to frame assessment u/s.147 of the Act was bad in law. 11. The Ld. DR though vehemently objected to the contention raised by the assessee, however, was unable to counter the factual contention made by the Printed from counselvise.com ITA No.916/SRT/2025 Saloni Bansal vs. ITO Asst.Year : 2018-19 16 Ld. Counsel for the assessee that neither was adverse material pertaining to the alleged accommodation entry taken by the assessee supplied to the assessee along with the copies of reasons in the notice issued u/s.148A(b) of the Act, nor despite the specific request made by the assessee in his letter filed in response to notice issued u/s.148A(b) of the Act and also that the reply of the assessee was not considered by the AO pointing out factual inaccuracies in the facts noted by him relating to alleged escapement of income of the assessee, which were fatal to the issue, while passing order u/s 148A(d) of the Act. He was also unable to distinguish the case laws relied upon by the Ld.Counsel for the assessee , particularly the jurisdictional High Court , holding order passed u/s 148A(d) and notice issued u/s 148 of the Act without considering assesses reply to notice u/s 148A(b) of the Act and without confronting all adverse material to the assessee, to be invalid. 12. In view of the above, since the provisions of law as interpreted by Courts have held that the AO is mandatorily required to provide all adverse material to the assessee for seeking his response to the same in terms of section 148A(b) of the Act for a valid assumption of jurisdiction to issue notice u/s.148 of the Act and non-supply of the same is fatal to assumption of jurisdiction and the facts in the present case demonstrating clearly that the AO had not supplied the relevant adverse material to the assessee, I have no hesitation in holding that the order passed by the AO u/s.148A(d) of the Act and the consequential issuance of notice u/s.148 of the Act is in violation of the provisions of law. The order passed u/s 147 of the Act clearly is without valid jurisdiction is directed to be quashed. Printed from counselvise.com ITA No.916/SRT/2025 Saloni Bansal vs. ITO Asst.Year : 2018-19 17 13. Since I have quashed the assessment order passed on the above legal issue, the other legal arguments raised by the assessee as also the merits of the case are mere academic in nature and I do not deal with this. 14. In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the Court on 27/03/2026 Sd/- ( ANNAPURNA GUPTA ) ACCOUNTANT MEMBER अहमदाबाद/Ahmedabad, िदनांक/Dated 27/03/2026 टी.सी.नायर, व.िन.स./T.C. NAIR, Sr. PS True Copy आदेश की Ůितिलिप अŤेिषत/C o p y o f th eO rd e r fo rw a rd e d to : 1. अपीलाथŎ / T h eA p p e lla n t 2. ŮȑथŎ / T h eR e sp o n d e n t . 3. संबंिधत आयकर आयुƅ / C o n c e rn e dC IT 4. आयकर आयुƅ ) अपील ( / T h eC ITA ( )- 5. िवभागीय Ůितिनिध , अिधकरण अपीलीय आयकर , सूरत /A R IT A T S u ra t A h m e d a b a d , , / . 6. गाडŊ फाईल / G u a rdfile . आदेशानुसार/ B YO R D E R , ȑािपत Ůित T ru eC o p y // // सहायक पंजीकार A s stt R e g is tra r ( . ) आयकर अपीलीय अिधकरण, IT A TS u ra t A h m e d a b a d , / Printed from counselvise.com "