SMT. LAXMIBEN BHAVANJI SHAH (LEGAL HEIR OF THE LATE SHRI BHAVANJI KHIYASHI SHAH),MUMBAI V. ITO-27(1)(1), , NAVI MUMBAI

ITA 858/MUM/2024

AI Insights

The case involves Smt. Laxmiben Bhavanji Shah, the legal heir of the late Shri Bhavanji K. Shah, who appealed against the reassessment order for the assessment year 2011-12. The reassessment was based on alleged hawala purchases and unexplained cash credits. The Tribunal examined the validity of the notices issued under section 148 and the absence of a notice under section 143(2) before the reassessment. The Tribunal found procedural lapses in the issuance of notices and recording of reasons, leading to the setting aside of the reassessment order.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 470996 (ITAT-MUMBAI)
• Duration Of Justice: 8 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-10-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 30-09-2024
• Assessment Year: 2011-2012
• Appeal Filed On: 26-02-2024
• Other Referred Cases: ACIT & Anr. vs. Hotel Blue Moon [2010] 321 ITR 362 (SC), N Balakrishnan vs. M Krishnamurthy, reported in (1998) 7 SCC 123, Collector, Land Acquisition, Anantnag vs. Mst. Katiji reported in (1987) 2 SCC 107, Jayvantsih N. Vaghela Vs. ITO, reported in (2013) 40 taxman.com 491, Midas Polymer Compounds Pvt. Ltd. dated 25.6.2018, Sreenivas Charitable Trust v. Dy. CIT (280 ITR 357), Venkatadri Traders Ltd. v. CIT (2001) 168 CTR (Mad) 81, Bajaj Hindusthan Ltd. v. Jt. CIT (AT) reported in 277 ITR 1, Mrs. Sandhya Rani Sarkar vs. Smt. Sudha Rani Debi reported in AIR 1978 SC 537, CIT vs. K.S.P. Shanmugavel Nadai and Ors. Reported in 153 ITR 596, CIT vs Tata Sons Ltd reported in 110 taxman.com 115, Rajesh Poddar vs. ITO, reported in 152 taxman.com 98, CIT vs Janak Shantilal Mehta reported in 124 taxman.com 516, PCIT vs. Coal India Ltd. (146 taxmann.com 546, Calcutta), PCIT vs. Archdiocesan Board of Education (456 ITR 453, Kar.)
• Laws Referred To: Income-tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAM KRISHN KEDIA
• Assessee Lawyers: B.V. JHAVERI
• Keywords: Condonation of delay; Set aside; Business income; Opportunity of being heard; Reasonable cause; Reassessment proceedings; Question of law; Unexplained cash credit; Bonafide belief; Period of limitation; Principle of natural justice; Assessment record; Charitable institution; Bogus
• Section: 147; 148; 143(3); 142(1); 143(2); 153; 22; 13; 274; 80IB; 20

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH, MUMBAI BEFORE SMT. BEENA PILLAI, JM & SHRI OMKARESHWAR CHIDARA, AM I.T.A. No.858/Mum/2024 (Assessment Year: 2011-12) Smt. Laxmiben Bhavanji Shah (legal heir of the late Shri Bhavanji Khiyashi Shah) 601, Ornate Co.-op. Housing Society Ltd., 433, R.C. Marg, Chembur, Mumbai- 400071. PAN : AYBPS7269L Vs. Income-tax Officer- 27(1)(1), IT Office, Vashi Railway Station Building, Navi Mumbai- 400020. Appellant) : Respondent) Appellant /Assessee by : Shri B. V. Jhaveri Revenue / Respondent by : Shri Ram Krishn Kedia (Sr. D.R.) Date of Hearing : 30.09.2024 Date of Pronouncement : 30.10.2024 O R D E R Per Beena Pillai, JM: Present appeal filed by the assessee arises out of order dated 31/10/2021 passed by NFAC Delhi, for assessment year 2011-12 on following grounds of appeal: 1. The Commissioner (Appeals) erred in dismissing the appeal of the assessee on the ground that none of the four notices of hearing issued were responded by the assessee. 2. The Commissioner (Appeals) erred in not adjudicating the following ground which is a legal ground and which can be verified from the assessment records: 2 Page | 2 ITA No.858/MUM/2024 Smt. Laxmiben Bhavanji Shah; A. Y.2011-12 \"2. In the alternate and without prejudice, to above, the learned assessing officer has not issued notice under section 143(2) of the Income-tax Act after return filing by way of letter by the assessee hence assessment is not valid.\" 3. The Commissioner (Appeals) erred in not appreciating that completion of any assessment without issuing a notice under section 143(2) of the Act is bad in law and without jurisdiction as held by the Supreme Court in the case of ACIT & Anr. vs. Hotel Blue Moon [2010] 321 ITR 362 (SC). 4. The Commissioner (Appeals) failed to appreciate that out of four notices of hearing only two notices of hearing were sent on email ID of [e-mail] which is not the registered email ID of the assessee and therefore, provision of section 282(1)(d) r.w.rule 127(2)(b) have not been complied with and therefore, the order passed by the CIT(A) on 31st October 2021 is without issuing any notice of hearing and hence it is bad in law and without jurisdiction. 5. The Commissioner (Appeals) ought to have checked the assessment records of the assessee including the original return of income filed along with the profit and loss and balance sheet which clearly show that during the previous year ending on 31st March 2011 relevant to A.Y. 2011-12, there are no purchases effected by the assessee and hence the question of bogus purchases in A.Y. 2011-12 does not arise at all. 6. The Commissioner (Appeals) failed to appreciate that the proceedings before him are quasi-judicial proceedings and therefore, it is incumbent upon him to conform to the rules of natural justice and the cardinal principle of natural justice is that no person should be condemned unheard. 7. The Commissioner (Appeals) failed to appreciate that he has a power to consider whether principles of natural justice have been violated by the AO or not and in the present case the AO passed the order on 19 October 2015 making addition of Rs.51,43,014/- without giving any opportunity of being heard to the assessee. 8. The order of the Commissioner (Appeals) is bad in law and without jurisdiction. 9. Your appellant craves leave to add, alter, amend and delete any of the foregoing grounds of appeal.” 2. At the outset is submitted that there is delay in filing the present appeal before this Tribunal of about 849 days, if at all the date of the impugned order is taken into consideration. It is 3 Page | 3 ITA No.858/MUM/2024 Smt. Laxmiben Bhavanji Shah; A. Y.2011-12 submitted that in order to consider the reason behind the delay in filing the present appeal before this Tribunal following factual details needs to be considered:- 2.1. The Ld.AR submitted that, present assessee before this Tribunal is the wife and legal hair of Late Bhavanji K Shah. It is submitted that, Bhavanji K Shah deceased on 27/01/2018 and that he was 82 years old. It is submitted by the Ld.AR that, during his life time Bhavanji K. Shah and his wife were staying with their younger son Pankaj Bhavanji Shah at, 601, Ornate, R.C.Marg, Chembur, Mumbai 400071. On demise of Bhavanji K. Shah his wife Smt. Laxmiben B. Shah filed documents to appoint her as the legal hair in respect of the proceedings pending before the authorities below during the month of December 2018. 2.2. It is submitted that, as on 26/12/2018, Smt. Laxmiben B. Shah was shown as legal hair of her deceased husband. It was further submitted that along with updating her personal details on the Income tax portal mobile numbers and email ID of both her sons being Sri. Deepak B. Shah and Shri. Pankaj B. Shah were also updated. 2.3.It is submitted that Late. Bhavanji K Shah filed his return of income along with balance sheet and profit and loss account for the year under consideration on 27/07/2011 declaring total income of Rs.4,47,360/-. The return was accepted under section 143 (1) of the act. 2.4. Subsequently, notice under section 148 of the act was issued on 31/07/2014 reopening the assessment for the year under 4 Page | 4 ITA No.858/MUM/2024 Smt. Laxmiben Bhavanji Shah; A. Y.2011-12 consideration. The deceased assessee vide letter dated 27/08/2014 replied to the said notice on 31/07/2014. It is submitted that, the notice under section 148 of the act dated 31/07/2014 was dropped by the Ld. AO as the same was issued without recording reasons as has been stated in the assessment order dated 19/10/2015. 2.5. It is submitted that, ITO ward 22 (2)-1 issued 2nd notice under section 148 of the act, on 07/11/2014 and furnished copy of reasons recorded by ITO ward 27(3)(1) of the act, dated 07/11/2014. It is submitted that, the ITO 27(1)(2) issued notice under section 142 (1) dated 06/05/2015, along with SCN seeking information pertaining to alleged hawala purchase made by the deceased assessee during the year under consideration. The deceased assessee vide letter dated 01/06/2015 filed his reply on 06/05/2015, and denied of any hawala purchases as alleged to be made during the year under consideration. It is submitted that the Ld. AO neither provided details of the parties with whom alleged transactions are said to be made for the year under consideration nor referred any evidences/material, except for stating that the deceased assessee made purchases from party by the name M/s. Look at me Retail Pvt. Ltd. during financial year relevant to the assessment year under consideration, considered to be hawala transactions. 2.6. It is submitted that, the deceased assessee at the relevant point of time denied any transaction with such party by the name M/s. Look at me Retail Private Limited, or any other party/ 5 Page | 5 ITA No.858/MUM/2024 Smt. Laxmiben Bhavanji Shah; A. Y.2011-12 parties in any of the previous year or subsequent year. Hence it is submitted that the question of alleged hawala purchases for the year under consideration does not arise. The Ld. AO however issued one more notice under section 148 of the act along with notice under section 142 (1) of the act on 30/07/2015 seeking details. It is submitted that the deceased assessee once again replied vide letter dated 15/10/2015 requesting to provide the reasons recorded before issuance of notice under section 148 of the act. However the Ld. AO passed assessment order under section 143 (3) of the act read with section 147 of the act on 19/10/2015 making addition of ₹51,43,014/- as unexplained cash credits received by the deceased assessee on 26/10/2015. 2.7. It is submitted by legal heir on behalf of the deceased assessee that, the assessment order was passed without furnishing any material relied by the Ld.AO and without giving proper hearing to her deceased husband which is against the principles of natural justice. It is thus argued that the said assessment order is bad in law and without jurisdiction. The Ld.AR submitted that physical copy of the assessment order was received at the residence being 601, Ornate, R.C.MArg, Chembur, Mumbai 400071. Aggrieved by the order of the Ld.AO, the deceased husband filed appeal before the Ld.CIT(A) against the assessment order dated 19/10/2015. 6 Page | 6 ITA No.858/MUM/2024 Smt. Laxmiben Bhavanji Shah; A. Y.2011-12 2.2.1. It is submitted that, while the appeal was pending before FAA, the assessee never received any notice of hearing at the email ID registered on the portal, post demise of her husband issued on 17/07/2021 and 27/10/2021 by the faceless assessment centre. It is further submitted that the impugned order was sent to email ID of the assessee’s grandson, Mr. Neel Deepak Shah, which was not the registered mail id as per the income tax portal. 2.2.2. It is submitted that the assessee was not in the knowledge of the impugned order having passed by the Ld.CIT(A) till 28/12/2023. Upon being informed about the impugned order having passed the assessee immediately took necessary steps to file appeal before this Tribunal on 26/02/2024. It is argued that, as the intimation regarding the impugned order having passed came to the knowledge of the assessee on 28/12/2023, the assessee filed appeal within the period of limitation, and therefore the same may be treated as filed within the period of limitation. 2.2.3. In support reliance was placed on the decision of Hon’ble Supreme Court in case of N Balakrishnan vs. M Krishnamurthy, reported in (1998) 7 SCC 123. The decision of Hon’ble Supreme Court in case of Collector, Land Acquisition, Anantnag vs. Mst. Katiji reported in (1987) 2 SCC 107. It is submitted by the Ld.AR that Hon’ble Gujarat High Court in case of Jayvantsih N. Vaghela Vs.ITO, reported in (2013) 40 taxman.com 491. It was held that; It is a cardinal principle of law that normally by and large the appeals are required to be decided on merits rather than dismissing the same are technical grounds like delay et cetera unless it is found that there 7 Page | 7 ITA No.858/MUM/2024 Smt. Laxmiben Bhavanji Shah; A. Y.2011-12 was gross negligence on the part of the assessee and/or there was any modified intention on the part of the assessee in not referring appeal within the of limitation and/or in filing the appeal belatedly. 2.2.4. The Ld.AR prayed for the delay to be condoned, as it was absolutely unintentional and there was no mala filed on behalf of the assessee in not referring the appeal within the period of limitation before the Ld.CIT(A). 2.2.5. On the contrary the Ld.DR vehemently opposed condonation of delay. It is submitted that, notices were sent to the mail ID of assessee’s grandson, and is inconceivable that the mail ID was never verified during the relevant period. The Ld.DR submitted that, unless the assessee provided the details to the authorities the email ID will not be taken into consideration to issue notices and the impugned order. He thus submitted that the delay has to be computed from the date of the impugned order against which the assessee filed the appeal. The Ld.AR vehemently submitted that in such facts of the case proper justification has been made out by the assessee to consider the condonation of huge delay. The Ld.DR thus vehemently opposed the delay to be condoned. We have perused the submissions advanced by both sides in the light of records placed before us. 2.2.6 In the present facts, it is necessary to examine whether the reason stated by the assessee to seek condonation of delay before this Tribunal are sufficient to condone the delay and whether, there exists sufficient cause for not presenting the appeal before Ld.CIT(A) within the period of limitation under the statute. The 8 Page | 8 ITA No.858/MUM/2024 Smt. Laxmiben Bhavanji Shah; A. Y.2011-12 assessee must show that, it was diligent in taking appropriate steps and the delay was caused notwithstanding the due diligence. We note that, it is for the party concerned to explain the reasons for delay and it is not the function of concerned authorities often to find cause for delay. Thereafter the Court/authority has to examine, whether the sufficient cause has been made out by for condoning the delay, and whether such cause is reasonable or not. 2.2.7. In the present facts of the case, the assessee explained the delay in filing the appeal before the Ld.CIT(A) was for the reason that the notice of hearing issued and the order passed by the Ld. CIT(A) was not sent on the mail ID registered with this IT Portal. It is submitted that the impugned notice was sent to the mail ID of assessee’s grandson who never check his mails regularly. This being the position, it constitutes sufficient cause for filing the appeals belatedly. We note that the relevant perios when the appeal was pending before the FAA, it was Covid going on and the assessee was under the bonafide belief that the appeal was still pending. 2.2.8. Having regard to the submissions by the Ld.AR and the affidavit filed by the legal heir of Late Bhavanji K Shah, we are of the opinion that the reasons stated therein does not lead to the conclusion that the assessee deliberately failed to file the appeal before the Tribunal within the period of limitation We not therefore admitted fact that, after the demise of Bhavanji K Shah the legal hair was immediately brought on record and all 9 Page | 9 ITA No.858/MUM/2024 Smt. Laxmiben Bhavanji Shah; A. Y.2011-12 necessary details for correspondence have been provided to the authorities which has been accepted and is reflecting on the portal. We fail to understand the reason why the Ld. CIT(A) issued notices of an email ID which was not the registered mail ID on the portal of Bhavanji K Shah. In our view there was sufficient cause that precluded the legal hair of the assessee from attending the hearing before the Ld. CIT(A) and also not able to file the appeal before this Tribunal within the period of limitation upon passing of the impugned order. 2.2.9. We refer to the decision of Hon’ble Cochin Bench of this Tribunal in the case of Midas Polymer Compounds Pvt. Ltd. dated 25.6.2018, condoned the delay of 2819 days by observing as follows: “6. We have heard the rival submissions and perused the record. There was a delay of 2819 days in filing the appeal before the Tribunal. The assessee has stated the reasons in the condonation petition accompanied by an affidavit which has been cited in the earlier para. The assessee filed an affidavit explaining the reasons and prayed for condonation of delay. The reason stated by the assessee is due to inadvertent omission on the part of Shri Unnikrishnan Nair N, CA in taking appropriate action to file the appeal. He had a mistaken belief that the appeal for this year was filed by the assessee as there was separate Counsel to take steps to file this appeal before the ITAT. Therefore, we have to consider whether the Counsel’s failure is sufficient cause for condoning the delay. The Madras High Court considered an identical issue in the case of Sreenivas Charitable Trust v. Dy. CIT (280 ITR 357) and held that mixing up of papers with other papers are sufficient cause for not filing the appeal in time. The Madras High Court further observed that the expression \"sufficient cause\" should be interpreted to 10 Page | 10 ITA No.858/MUM/2024 Smt. Laxmiben Bhavanji Shah; A. Y.2011-12 advance substantial justice. Therefore, advancement of substantial justice is the prime factor while considering the reasons for condoning the delay. 6.1 On merit the issue is in favour of the assessee. But there is a technical defect in the appeal since the appeal was not filed within the period of limitation. The assessee filed an affidavit saying that the appeal was not filed because of the Counsel’s inability to file the appeal. The Revenue has not filed any counter affidavit to deny the allegation made by the assessee. While considering a similar issue the Apex Court in the case of Collector, Land Acquisition v. Mst. Katiji and Ors. (167 ITR 471) laid down six principles. For the purpose of convenience, the principles laid down by the Apex Court are reproduced hereunder: (1) Ordinarily, a litigant does not stand to benefit by lodging an appeal late (2) Refusing to condone delay can result in a meritorious matter being thrown at the very threshold and cause of justice being defeated. As against this, when delay is condoned, the highest that can happen is that a cause would be decided on merits after hearing the parties. (3) 'Every day's delay must be explained' does not mean that a pedantic approach should be made. Why not every hour's delay, every second's delay? The doctrine must be applied in a rational, commonsense and pragmatic manner. (4) When substantial justice and technical consideration are pitted against each other, the cause of substantial justice deserves to be preferred, for the other side cannot claim to have vested right in injustice being done because of a non deliberate delay. (5) There is no presumption that delay is occasioned deliberately, or on account of culpable negligence, or on account of mala fides. A litigant does not stand to benefit by resorting to delay. In fact, he runs a serious risk. (6) It must be grasped that the judiciary is respected not on account of its power to legalise injustice on technical grounds but because it is capable of removing injustice and is expected to do so. 11 Page | 11 ITA No.858/MUM/2024 Smt. Laxmiben Bhavanji Shah; A. Y.2011-12 6.2 When substantial justice and technical consideration are pitted against each other, the cause of substantial justice deserves to be preferred, for the other side cannot claim to have vested right for injustice being done because of non deliberate delay. In the case on our hand, the issue on merit regarding allowability of deduction u/s. 80IB of the Act was covered in favour of the assessee by the binding Judgment of the jurisdictional High Court. Moreover, no counter-affidavit was filed by the Revenue denying the allegation made by the assessee. It is not the case of the Revenue that the appeal was not filed deliberately. Therefore, we have to prefer substantial justice rather than technicality in deciding the issue. As observed by Apex Court, if the application of the assessee for condoning the delay is rejected, it would amount to legalise injustice on technical ground when the Tribunal is capable of removing injustice and to do justice. Therefore, this Tribunal is bound to remove the injustice by condoning the delay on technicalities. If the delay is not condoned, it would amount to legalising an illegal order which would result in unjust enrichment on the part of the State by retaining the tax relatable thereto. Under the scheme of Constitution, the Government cannot retain even a single pie of the individual citizen as tax, when it is not authorised by an authority of law. Therefore, if we refuse to condone the delay, that would amount to legalise an illegal and unconstitutional order passed by the lower authority. Therefore, in our opinion, by preferring the substantial justice, the delay of 2819 days has to be condoned.” 2.2.10.We refer to a third member decision of Hon’ble Chennai Tribunal in case of People Education & Economic Development Society Vs. ITO reported in 100 ITD 87 (TM) (Chen), wherein it was held that; “when substantial justice and technical consultation are pitted against each other, the cause of substantial justice deserves to be preferred for the other side cannot claim to have vested right in injustice being done because of non-deliberate delay”. 2.2.11.The next question that arises is whether delay was excessive or inordinate. In our opinion there is no question of 12 Page | 12 ITA No.858/MUM/2024 Smt. Laxmiben Bhavanji Shah; A. Y.2011-12 any excessive or inordinate, delay, when the reason stated by the assessee is reasonable cause, for not able to file appeal within the period of limitation. The reason for the delay given by the assessee therefore deserves to be considered, when there exist a reasonable cause, and therefore the period of delay may not be a relevant factor. In support, we rely on the decision of Hon’ble Madras High Court in the case of CIT vs. K.S.P. Shanmugavel Nadai and Ors. Reported in 153 ITR 596 considered condonation of delay and held that, there was sufficient and reasonable cause on the part of the assessee for not filing the appeal within the period of limitation. Hon’ble Madras High Court thus condoned nearly 21 years of delay in filing the appeal. As compared to 21 years, delay of about 1000 to 2000 days cannot be considered to be inordinate or excessive. 2.2.12. At this juncture, we refer to the decision of Hon’ble Madras High Court in the case of Sreenivas Charitable Trust, reported in 280 ITR 357 held that, no hard and fast rule can be laid down in the matter of condonation of delay and the Court should adopt a pragmatic approach and the Court should exercise their discretion on the facts of each case keeping in mind that in construing the expression \"sufficient cause\" the principle of advancing substantial justice is of prime importance and the expression \"sufficient cause\" should receive a liberal construction. The decision of Hon’ble Madras High Court (supra) stipulates that, in order to advance substantial justice which is of prime importance, the expression \"sufficient 13 Page | 13 ITA No.858/MUM/2024 Smt. Laxmiben Bhavanji Shah; A. Y.2011-12 cause\" should receive a liberal construction. For purpose of advancing substantial justice, which is of prime importance in the administration of justice, expression \"sufficient cause\" should receive a liberal construction. Similar view was taken by Hon’ble Madras High Court in the case of Venkatadri Traders Ltd. v. CIT (2001) 168 CTR (Mad) 81 : (2001) 118 Taxman 622 (Mad). 2.2.13. We also refer to the decision of Hon’ble Mumbai Bench of this Tribunal in the case of Bajaj Hindusthan Ltd. v. Jt. CIT (AT) reported in 277 ITR 1 condoned the delay of 180 days when, the appeal was filed after the pronouncement of the Judgment of the Hon’ble Supreme Court. It is also to be noted that the Revenue has not filed any counter-affidavit, opposing the application of the assessee for condonation of delay. Hon’ble Supreme Court in the case of Mrs. Sandhya Rani Sarkar vs. Smt. Sudha Rani Debi reported in AIR 1978 SC 537 held that, non-filing of affidavit in opposition to an application for condonation of delay may be a sufficient cause for condonation of delay. In this case, the Revenue has not filed any counter- affidavit opposing the application of the assessee, therefore, as held by Hon’ble Supreme Court, there is sufficient cause for condonation of delay. Hon’ble Supreme Court also observed that; “It does not mean that when the delay was for longer period, the delay should not be condoned even though there was sufficient cause. Condonation of delay is the discretion of the Court/Tribunal. Therefore, it would depend upon the facts of 14 Page | 14 ITA No.858/MUM/2024 Smt. Laxmiben Bhavanji Shah; A. Y.2011-12 each case. In our opinion, when there is sufficient cause for not filing the appeal within the period of limitation, the delay deserves to be condoned, irrespective of the duration/period.” 2.2.14. The observations of Justice Krishna Iyer as he has quoted at various occasion while dealing with technicalities is that “any interpretation that alludes substantive justice is not to be followed and that substantive justice must always prevail over procedural technicalities”. Even Hon’ble Supreme Court in case of Collector Land Acquisition vs. Mst. Katiji & Ors., reported in (1987) 167 ITR 471 has laid down a ratio of similar principles. Following are observations by Hon’ble Supreme Court in case of Collector Land Acquisition Vs. Mst. Katiji & Ors., reported in (supra):- “The Legislature has conferred the power to condone delay by enacting section 51 of the Limitation Act of 1963 in order to enable the courts to do substantial justice to parties by disposing of matters on de merits\". The expression “sufficient cause” employed by the Legislature is adequately elastic to enable the courts to apply the law in a meaningful manner which subserves the ends of justice that being the life-purpose of the existence of the institution of courts. It is common knowledge that this court has been making a justifiably liberal approach in matters instituted in this court. But the message does not appear to have percolated down to all the other courts in the hierarchy. And such a liberal approach is adopted on principle as it is realized that : 1. Ordinarily, a litigant does not stand to benefit by lodging an appeal late. 2. Refusing to condone delay can result in a meritorious matter being thrown out at the very threshold and cause of justice being defeated. As against this, when delay is condoned, the highest that can happen is that a cause would be decided on merits after hearing the parties. ......................................................1.Any appeal or any application, other than an application under any of the provisions of Order XXI of the Code of Civil Procedure, 15 Page | 15 ITA No.858/MUM/2024 Smt. Laxmiben Bhavanji Shah; A. Y.2011-12 1908, may be admitted after the prescribed period if the appellant or the applicant satisfies the court that he had sufficient cause for not preferring the appeal or making the application within such period.” 2.2.15. Be that as it may, we note that, the notice of hearing issued by the Ld.CIT(A) was at the peak of COVID and therefore it can also be presumed that one must not have verified the portal properly and would have picked up some email ID from some records of the assessee in order to issue notice of hearing. The Impugned order of Ld.CIT(A) dated 30/10/2021 was also passed during the COVID period. And as per the mandate of Hon’ble Supreme Court, period up to 30/06/2022 deserves to be excluded. 2.2.16. We therefore are of the opinion in respect of balance period that the reasons assigned by the assessee and the inability to present appeal before this Tribunal within time deserves consideration. We accordingly condone the delay in filing the present appeal before this Tribunal and the appeal is taken up for hearing on merits. 3. The Ld.AR submitted that the assessee filed an application for admission of additional ground that reads as under: 1. “Shri Bhavanji K Shah, the husband of Smt. Laxmiben Bhavanji Shah died on 22nd January, 2018. Smt. Laxmiben Bhavanji Shah was registered as a Legal Representative Assessee with the Income-tax Department w.e.f. 22nd December, 2018. 2. Shri Bhavanji K Shah was a partner of M/s. New Steel Centre and in A.Y. 2011-12 he had earned commission income in his individual capacity which he had offered for taxation in his ITR filed for A.Y. 2011-12. In the earlier three years (i.e., A. Ys. 2008- 16 Page | 16 ITA No.858/MUM/2024 Smt. Laxmiben Bhavanji Shah; A. Y.2011-12 09 to 2010-11) the assessee had no business income except share of profit, remuneration and interest on capital from the partnership firm of M/s. New Steel Centre. 3. For A.Y. 2011-12 Shri Bhavanji K Shah filed his return of income on 27th July, 2011 declaring total income of Rs.4,47,360 along with his Profit & Loss a/c and Balance Sheet as on 31 March 2011. The said ITR was accepted u/s.143(1) of the I. T. Act, 1961. 4. The assessee, Shri Bhavanji K Shah, received a notice u/s. 148 of the Act dated 31 July, 2014 reopening his assessment for A.Y. 2011-12 from the ITO, Ward-22(2)(1), Mumbai. In response thereto the assessee had filed a letter dated 27th August, 2014 with the ITO asking her to treat his return filed on 27th July, 2011 as in due compliance of the notice u/s. 148 of the Act. Secondly, the assessee asked for the reasons recorded and a copy of the approval granted by the CIT for issuing the notice u/s. 148 of the Act. The ITO did not furnish a copy of the reasons recorded. 5. The ITO Ward 22(2)(1), Navi Mumbai, issued SECOND notice u/s.148 of the Act on 7th November, 2014 reopening the assessment of the assessee for A.Y. 2011-12. With the said notice the ITO gave a copy of the reasons recorded by her on 7th November, 2014 for reopening the assessment of the assessee. 6. The ITO-27(1)(2), Navi Mumbai issued a notice u/s. 142 (1) of the Act dated 6th May, 2015 seeking various details. 7. The assessee filed his reply dated 1st June, 2015 enclosing a copy of return of income, computation of income, Balance Sheet and Profit and Loss Account for A.Y. 2011-12. The assessee explained that he had made no purchase of goods for trading or otherwise during the previous year relevant to A.Y. 2011-12 and therefore, there was no question of any alleged hawala purchase. The assessee sought information from the ITO regarding the alleged hawala purchases recorded in the reasons by the ITO. 8. The assessee filed another letter dated 27th July 2015 and stated that he had not purchased or sold any goods during the previous year relevant to A.Y. 2011-12 and hence he was not in a position to provide any information asked for by the ITO. The assessee further stated that the alleged information gathered in the course of the search at the premises of one Mr. Bhanwarlal Jain on 3rd October, 2013 are not provided to the assessee. The assessee, therefore, requested that he should be provided with all the information on the basis of which the reasons were recorded, and his assessment is reopened. 9. The ITO 27(1)(2), Navi Mumbai issued a THIRD notice u/s. 148 of the Act dated 30th July, 2015 to the assessee reopening his 17 Page | 17 ITA No.858/MUM/2024 Smt. Laxmiben Bhavanji Shah; A. Y.2011-12 assessment for A.Y. 2011-12 without furnishing a copy of the reasons recorded by him. Along with the aforesaid notice u/s. 148 of the Act dated 30th July, 2015, the ITO-27(1)(2), Navi Mumbai also issued a notice u/s. 142(1) of the Act dated 30th July, 2015, wherein he asked the same details which he had called for vide his notice u/s. 142(1) of the Act dated 6th May, 2015. 10. The assessee vide his letter dated 5th October, 2015 informed the ITO-27(1)(2), Navi Mumbai that for A.Y. 2011-12 he had filed his Return of Income on 27th July 2011. The assessee asked for a copy of the reasons recoded for reopening his assessment for AY 2011- 12 vide notice u/s. 148 of the Act dated 30th July, 2015. It may be noted that the ITO has not furnished till date a copy of the reasons recorded by him for issuing the notice u/s. 148 of the Act dated 30th July, 2015. 11. The ITO-27(1)(2), Navi Mumbai passed the assessment order u/s. 143(3) r.w.s. 147 of the Act on 19th October, 2015 and made the addition of Rs.51,43,014/- as unexplained cash credit. 12. The assessee filed an appeal before the Commissioner (Appeals) on 23rd November 2015, wherein the assessee had challenged reopening of his assessment. Pending the hearing of the appeal, the assessee expired on 27th January 2018. 13. The Commissioner (Appeals) after lapse of five years took up the appeal for hearing for the first time on 15th January 2021. As stated in the order of the CIT(A) dated 31-10-2021, he had issued four notices on 15-1- 2021,07-07-2021, 24-09-2021 and 27-10- 2021 but the assessee could not respond as the said Notices were not sent on the registered email of the assessee. The assessee came to know that the CIT(A) dismissed the appeal on 28th December 2023 as explained in the affidavit. The CIT(A) dismissed the appeal on the ground that the appellant has not controverted the order against which the appeal has been filed and hence the order is confirmed. 14. I say that I have filed the present appeal before the Honourable Tribunal on 26th February 2024 wherein Grounds of Appeal was filed. However, due to oversight, grounds challenging the reopening of assessment remained to be taken. 15. It is only when the present appeal was listed for hearing, my advocate pointed out and therefore, he asked me to immediately file the present application for admission of additional grounds of appeal. 16. The additional grounds are legal grounds and all the facts relating to the adjudication of the said additional ground are already on record and that no new facts are required to be investigated or to be brought on record. A copy of the additional grounds is enclosed herewith. 18 Page | 18 ITA No.858/MUM/2024 Smt. Laxmiben Bhavanji Shah; A. Y.2011-12 17. The assessee mostly humbly requests your honours to take into consideration the additional grounds of appeal while disposing of the appeal of the assessee as the same shall not cause any prejudice to the Revenue, but it is in the interest of justice and fair play and thus the balance of convenience is in favour of the assessee. In this regard, we rely upon the following decisions rendered by various Courts: (i) National Thermal Power Corporation v. CIT [229 ITR 383 (SC) ]; (ii) Jute Corporation of Indian Ltd. v. CIT [187 ITR 688 ( SC) ]; (iii) Ahmedabad Electricity Co. Ltd. v. CIT [199 ITR 351 (Bom) (FB)] (iv) CIT vs. Pruthvi Brokers and Shareholders Pvt. Ltd. (349 ITR 336) 18. We hope and do trust that your honours will find the aforesaid in order and accede to the request of the assessee and oblige.” 3.1. The Ld.AR submitted that above grounds are raised purely that goes to the root cause of the case. It was submitted that no new facts needs to be considered in order to dispose of the additional grounds raised by the assessee. It is submitted that, the additional grounds raised do not require verification of any new facts. The Ld.AR submitted that these issues have been raised before the Ld. CIT(A), however was not adjudicated. The Ld.AR, thus prayed for the admission of additional grounds so raised by assessee. 3.2. On the contrary, the Ld.DR though opposed admission of the additional grounds, could not bring anything on record which would challenge such a right available to assessee under the Act. We have perused the submissions advanced by both sides in the light of records placed before us. 3.3. We note that, the issue raised by assessee in the additional grounds is challenging validity of notice u/s.148 of the act, 19 Page | 19 ITA No.858/MUM/2024 Smt. Laxmiben Bhavanji Shah; A. Y.2011-12 without recording proper reasons for re-opening and the reassessment being completed without issuance of notice under section 143(2) of the Act. We note that these are directly connected with the validity of reassessment proceedings and has been raised before the Ld. CIT(A) and inadvertently the assessee failed to raise these ground while filing the original grounds of appeal. Issues alleged by the assessee are legal that do not require investigation of any facts. Considering the submissions and respectfully following the decisions of Hon’ble Supreme Court in case of National Thermal Power Co. Ltd. Vs. CIT reported in (1998) 229 ITR 383 and Jute Corporation of India Ltd. Vs. CIT reported in 187 ITR 688, we are admitting the additional grounds raised by the assessee. Respectfully following the above, we admit the additional grounds raised by assessee in both the years under consideration. Accordingly, the additional grounds filed by assessee stand admitted. 4. As noted herein above the additional grounds raised by the assessee goes to the root cause of reassessment proceedings. Accordingly, before considering the merits of the case, it is appropriate to adjudicate the legal issue raised by the assessee in additional grounds. The brief facts hearing to the legal issue raised by assessee are as under: 4.1. Late Bhavanji K. Shah, husband of Smt. Laxmiben B. Shah died on 27/01/2018. Smt. Laxmiben B Shah was then register as 20 Page | 20 ITA No.858/MUM/2024 Smt. Laxmiben Bhavanji Shah; A. Y.2011-12 the legal representatives of her husband, with the income tax department with effect from 22/12/2018. Late Bhavanji K Shah was a partner of M/s. New Steel Centre and during the year consideration, and earned commission income in its individual capacity which was offered to tax in the return filed for assessment year 2011-12. It is submitted by the legal representative that, even in any of the 3 preceding assessment years, her deceased husband had no other income except the share of profit, remuneration and interest on capital from the partnership firm M/s. New steel centre. 4.2. It is submitted that upon filing the return of income by her husband, the same was accepted under section 143 (1) of the act. It is submitted that her husband received a first notice under section 148 of the act on 31/07/2014 for the year under consideration from ITO for 22 (2) (1) Mumbai. In response to the notice assessee on 27/08/2014 filed return his reply. The assessee also asked for the reason recorded for issuing such notice. The Ld.AR submitted that Ld. AO did not furnish any of the details sought for by her deceased husband. 4.3. Subsequently ITO ward (22) (1) issued 2nd notice under section 148 of the act on 7/11/2014. It is submitted that, along with the said the notice ITO ward 27(1)(2) copy of the reasons recorded on the even date was also issued. 4.4. It is submitted that thereafter, ITO 22 (2) (1), Navi Mumbai issued notice under section 142(1) of the act on 06/05/2015, calling upon assessee to furnish various details. The assessee in 21 Page | 21 ITA No.858/MUM/2024 Smt. Laxmiben Bhavanji Shah; A. Y.2011-12 reply filed response dated 01/06/2015 enclosing copy of the return of income, balance sheet and profit and loss account for the year under consideration. It was submitted by the assessee that, he made no purchase of goods for trading or otherwise during the previous irrelevant to the year under consideration and therefore there was no question of any alleged hawala purchases. The assessee had also sought information from the ITO regarding the alleged hawala purchase recorded in the reasons which was not provided. Subsequently the assessee filed one more letter day on 27/07/2015 seeking the alleged information gathered against assessee from the search at the premises of one Mr. Bhanwarlal Jain on 03/10/2013 which was never provided to the assessee. 4.5. The Ld.AR submitted that, the assessee was again issued 2nd notice under section 148 of the act on 30/07/2015 in response to which assessee once again filed a letter dated 05/10/2015 informing the Ld. AO regarding the 2 previous notices issued, reopening the assessment for the year under consideration. The assessee also sought the reasons recorded for reopening the assessment by the 3rd notice under section 148 of the act. The Ld.AR submitted that to the 3rd notice the assessing officer never provided the reasons recorded till date. 4.6. The Ld.AR submitted that ITO 27 (1) (2), Navi Mumbai then passed the assessment order under section 143 (3) read with section 147 of the act on 19/10/2015 making addition of ₹ 51, 43, 014 as unexplained cash credits. 22 Page | 22 ITA No.858/MUM/2024 Smt. Laxmiben Bhavanji Shah; A. Y.2011-12 Aggrieved by the order of the Ld. AO, assessee preferred appeal before the Ld. CIT(A). 4.7. Before the Ld. CIT(A) the assessee challenge reopening of the assessment for year under consideration. It is submitted that pending the appeal before the Ld. CIT(A) the assessee expired on 27/01/2018. It is submitted by the Ld.AR that the Ld. CIT(A) (A) after lakhs of 5 years to cover the appeal for hearing for the 1st time on 15/01/2021. The Ld. CIT(A) in the impugned order dated 31/10/2021 mentioned that he had issued notices on 15/01/2021, 07/06/2021 and 24/09/2021 and 27/10/2021 but the assessee could not respond to the said notices that was sent to the registered email ID of the assessee. The Ld.AR submitted that the manner in which the Ld. CIT(A) disposed off the appeal filed by the assessee, reveals that elation of principles of natural justice as the email to which the notices were issued were not the registered email ID as per pages 17,18 19 of the paper book. 4.8. The Ld.AR submitted, that 1st notice dated 31/07/2014 was issued without recording reasons. He submitted that the 2nd notice under section 148 issued on 07/11/2014 was furnish to the assessee along with the reasons recorded for reopening. However issuance of 2nd notice issued under section 148 of the act, and the officer who recorded reasons are of different jurisdictions. The Ld.AR surprisingly submitted that, the 3rd notice was received by the assessee, reopening the assessment vide notice dated 13/07/2015, without issuing any reasons 23 Page | 23 ITA No.858/MUM/2024 Smt. Laxmiben Bhavanji Shah; A. Y.2011-12 recorded. The assessee again sought reasons recorded vide letter filed with the Ld.AO as mentioned hereinabove. The Ld.AR submitted that, it is on the basis of the 3rd notice issued that the assessment was completed on 19/10/2015. 4.9. The Ld.AR submitted that as regards the earlier to notice having not withdrawn assessment being completed based on the 3rd notice is bad in law and without jurisdiction. He placed reliance on following decisions in support of his claim.: “-Marwadi Shares & Finance Ltd. v. DCIT (407 ITR 49, Guj.). -Elite Pharmaceuticals v. ITO (147 taxmann.com 378, Calcutta). -PCIT v. Coal India Ltd. (146 taxmann.com 546, Calcutta). -PCIT v. Archdiocesan Board of Education (456 ITR 453, Kar.)” The Ld.AR vehemently submitted that the Ld.AO though proceeded to complete assessment based on 3rd notice of reopening, he did not furnish reasons recorded for issuance of such notice. It is submitted that the assessee asked for copy of the reasons recorded in writing during the assessment proceedings, but the same are not provided to the assessee till date. He the submitted that the presumption that, the reasons for reopening were never recorded for issuance of notice u/s. 148 dated 13/07/2015 assessment issuance of notice u/s. 148 dated 3/07/2015 has to be accepted. He placed reliance on the decision of Hon’ble Bombay High Court in case of CIT vs Tata Sons Ltd reported in 110 taxman.com 115 in support of this contention. 4.10. The Ld.AR submitted that, the Ld.AO thus completed the reassessment on issuance of notice under section 148 without 24 Page | 24 ITA No.858/MUM/2024 Smt. Laxmiben Bhavanji Shah; A. Y.2011-12 recording any reason, vitiates the entire proceeding. It is thus submitted that the order dated 19/10/2015 is bad in law and without jurisdiction. He placed reliance on the decision of Hon’ble Bombay High Court in case of Rajesh Poddarvs. ITO, reported in 152 taxman.com 98 and decision of Hon’ble Madras High Court in case of CIT vs Janak Shantilal Mehta reported in 124 taxman.com 516. Condition raised by the Ld.AR is that notice under section 143 (2) of the act was never issued before even before completing the assessment proceedings and passing of the order under section 143 (3) read with section 147 of the act and therefore the entire reassessment proceeding is bad in law and without jurisdiction. 4.11. The Ld.DR on the contrary relied on the order passed by authorities below. We have perused the submissions advanced for both sides in light of records placed before us. 5. The moot question involved in the present appeal is, whether the 2nd and 3rd notice issued under section 148 of the act to the for the same assessment year by the assessing officer, without disposing the return of income in response to the 1st notice under section 148 of the act is bad in law. It is noted that, when the 1st notice under section 148 of the act was issued to the assessee entirely and assessment opened up. Thus without disposing of the return of income filed by the assessee in response to the 1st notice, the assessing officer could not have issued the 2nd and the 3rd notice in respect of same 25 Page | 25 ITA No.858/MUM/2024 Smt. Laxmiben Bhavanji Shah; A. Y.2011-12 assessment year. Hon’ble Calcutta High Court in case of PCIT vs Coal India Ltd(supra) on similar issue observed that, 2nd notice reopening the same assessment could not have been done by the assessing officer as the assessment is already stands reopened by way of the 1st notice issued. 5.1. Now, assuming that the 1st notice could not have been acted upon since admittedly the reasons were not recorded prior to the issuance of notice. Then,the Ld. AO should have intimated the dropping of/withdrawal of such 1st notice, which is also not complied with. 5.3. We note that Hon’ble Calcutta High Court in case of Elite Pharmaceuticals vs ITO(supra) held that, the assessing officer was not justified in issuing the 2nd notice under section 148 of the act, relating to the same assessment year, when the assessee filed his return of income in response to the 1st notice under section 148 of the act. In the case of PCIT vs Coal India Ltd(supra) Hon’able High Court further emphasised the principle on identical issue by observing as under: “6. The short issue which arises for consideration in the instant appeal is whether the Assessing Officer could have issued a second notice under section 148 of the Act when the assessee had filed his return of income in response to the first notice issued under section 148A and such return was not disposed of. This question of law has been answered in several decisions and one of the earliest decisions is in the case of S. Raman Chettiar v. CIT [1961] 42 ITR 700 (Mad.), wherein the Court held that when a return is furnished by the assessee in consequence of a notice issued under section 34 of the Income-tax Act, 1922, it was not open to the Income-tax Officer to ignore that return and issue a further notice under section 34(1)(a) on the assumption that there had been an omission or failure on the part of the assessee to 26 Page | 26 ITA No.858/MUM/2024 Smt. Laxmiben Bhavanji Shah; A. Y.2011-12 make return of his income. This decision was affirmed by the Hon'ble Supreme Court in the CIT v. S. Raman Chettiar [1965] 55 ITR 630. There is also a decision of the High Court of Allahabad to the same effect in the case of Commercial Art Press v. CIT [1979] 1 Taxman 38/[1978] 115 ITR 876. The aforementioned decisions were followed in the case of A.S.S.P. & Co. v. CIT [1986] 27 Taxman 623/[1988] 172 ITR 274 (Mad.). Further, a leaned Single Bench of this Court has decided an identical issue in the case of Indian legal principle is when a notice under section 148 of the Act is issued, the original assessment proceedings are entirely opened up or left open and the finality which had occurred in the first assessment order does not exist any longer. Therefore, without disposing of the return of income filed by the assessee in response to the first notice, the assessing officer could not have issued a second notice for reopening of the assessment which, at the relevant point of time, did not exist in the eye of law.” 5.4. Hon’ble Karnataka High Court also had occasion to consider identical issue in case of CIT vs Archdioceasan Board of Education reported in (2023) 155 taxman.com 82 wherein, following observations were made: “8. Sub-section (2) of section 153 of the Act as it stood prior to amendment, relevant to A.Y. 2008-09 reads as under: \"(2) No order of assessment, reassessment or recomputation shall be made under section 147 after the expiry of one year from the end of the financial year in which the notice under section 148 was served:\" 9. Thus, no assessment order could be passed after expiry of one year from the end of Financial Year. In the case on hand, the notice has been issued on 18-4-2013. The end of F.Y. shall be 31-3-2014 and one year there-from would expire on 31-3-2015. Thus, the AO had time till 31-3- 2015 to complete the proceedings. 10. The ITAT relying upon the decision of Hon'ble Gujarat High Court rendered in Marwadi Shares & Finance Ltd. v. Dy CIT [2018] 94 rendered com 398/407 ITR 49 (Guj.) [paras 17 and 18] has allowed the appeal. The Hon'ble Gujarat High Court has held in the said case that when appeint notice of reopening of the assessment is not withdrawn, there is no scope in law to issue a fresh notice to reopen. 11. It is not in dispute that no action has been taken pursuant to notice under section 148 of the Act dated 18-4-2013. According to the 27 Page | 27 ITA No.858/MUM/2024 Smt. Laxmiben Bhavanji Shah; A. Y.2011-12 Revenue, time would expire to complete the assessment proceedings pursuant to notice on 31-12-2014, which, in our view is incorrect in view of section 153(2) of the Act as it stood prior to amendment. 12. To a pointed question by the Court as to whether the Revenue has challenged the judgment in Marwadi Shares & Finance Ltd. (supra) rendered by the Gujarat High Court, learned standing counsel pointed out that as per his research in the data base of the Supreme Court, he could not find any information. Thus, Revenue has accepted the view taken by the Gujarat High Court and we are in respectful agreement with the same. Hence, second notice dated 31-3-2015 is unsustainable in law.” 5.5. Assuming the fact, without approving such action by the Ld.AO, even if it is considered that, the reasons recorded in the 2nd notice issued under section 148, is to be considered to reopening assessment again vide the 3rd notice, we refer to the decision of Hon’ble Jurisdictional Bombay High Court in case of PCIT vs Tata Sons Ltd (supra) wherein Hon’ble Court held that, the reassessment order passed by the Ld.AO based a notice issued without recording reasons are bad in law. The observations of the Hon’ble High Court are as under: 2. Mr.Suresh Kumar, learned counsel for the Revenue urges the following two questions of law for our consideration: \"(i) Whether the Tribunal was correct in holding that due process of law has been not been followed in reopening of the case by the AO when the reasons were recorded before issue of notice u/s. 148 of the IT Act 1961? (ii) Whether the Tribunal was justified in law in holding that the error in dales mentioned while furnishing reasons for reopening and quashing the reopening proceedings while failing to appreciate that such mistake is covered under u/s. 292B of the IT Act?\" 3. Regarding Question no.(i). (a) On 5 March 2009, the Assessing Officer issued a notice under section 148% of the Act seeking to re-open the assessment for Assessment Year 2004-05. The Respondent contended that the reopening notice was issued much before the reasons were recorded for reopening the assessment, thus the reopening notice was without jurisdiction. However the Assessing Officer did not 28 Page | 28 ITA No.858/MUM/2024 Smt. Laxmiben Bhavanji Shah; A. Y.2011-12 accept the Respondent's contention and passed an order of assessment under section 143(3) r.w section 148 of the Act. (b) In appeal, the Commissioner of Income Tax (Appeals) held that the reopening notice had been issued without having recorded the reasons which led the Assessing Officer to form a reasonable belief that income chargeable to tax escaped assessment. It records that reasons were recorded on 19 March 2009 while the impugned notice issued is dated 6 March 2009. In the above facts, the Commissioner of Income Tax (Appeals) held the entire proceeding of reopening to assessment is vitiated as notice under section 148 of the Act is bad in law. (c) Being aggrieved the Revenue filed Appeal to the Tribunal. The Tribunal specifically asked the Revenue to produce the assessment record so as to substantiate its case that impugned notice under 67 section 148 of the Act was issued only after recording the reasons for reopening the assessment. The Revenue produced the record of assessment for Assessment Year 2004-05 before the Tribunal. However the Tribunal on facts found from the entries made in the Assessment record produced, found an entry as regards issue of notice under section 148 dated 6 March 2009. However no entries prior thereto i.e. 6 March 2009 were produced before the Tribunal, so as to establish that the reasons were recorded prior to the issue of notice dated 6 March 2009 u/s.148 of the Act. Thus the Tribunal concluded that prior to 6 March 2009 there is nothing in the record which would indicate that any reasons were recorded prior to the issue of notice. Therefore in the absence of the Revenue being able to show that the reasons were recorded prior to 6 March 2009, the impugned order held that reopening notice is without jurisdiction. (d) We note that both the CIT(A) and the Tribunal have concurrently come to a finding of fact that no reasons were recorded by the Assessing Officer prior to issuing the reopening notice dated 6 March 2009. Nothing has been shown to us to suggest that the above finding of fact is perverse. Thus we see no reason to entertain this question as it does not give rise to any substantial question of law.” 5.6. On similar proposition, recent decision of Hon’ble Bombay High Court in case of Rajesh Poddar vs. ITO(supra) favours assessee’s contention that, once for the reasons recorded in respect of the notice of reopening, based on which the 29 Page | 29 ITA No.858/MUM/2024 Smt. Laxmiben Bhavanji Shah; A. Y.2011-12 assessment proceedings are completed or the assessment order is passed is to be treated bad in law. 5.7. Further, we also note contradictions in the assessment order in Para 3 wherein it is recorded by the Ld. AO that, the case was reopened on the basis of information received from the DGIT Invistigation, Mumbai stating that assessee took accommodation entries amounting to Rs.51,43,014/- from M/s.Look at Me Pvt. Ltd. The company was floated by one Mr.Bhanwarlal Jain group along with his sons for giving accommodation bills for bogus purchases was admitted by Mr.Bhanwarlal Jain and his associates in the statement’s own under oath. We note that Ld. AO never provided any materials based on which such conclusion was arrived at assessee that the before us was a beneficially of such activity. Further in 3.5 of the assessment order Ld.AO observed that assessee has not provided any evidence in respect of purchase of various shares through M/s.Look at me Pvt.Ltd., to support the version of Mr.Bhanwarlal Jain that the assessee has indeed availed services of the said group in obtaining entries through Mr.Bhanwarlal Jain. 5.8. This is a classic case where the Ld.AO himself has acted quite recklessly and/or in an irresponsible manner, inasmuch as that that, 3 consecutive notices were issued under section 148 of the act. Such procedure adopted by the Ld.AO is quite astonishing to us. As the facts stand, that led to the passing of the assessment order dated 19/10/2015, the procedure adopted in this case has defied set principles by laid down various Hon’ble 30 Page | 30 ITA No.858/MUM/2024 Smt. Laxmiben Bhavanji Shah; A. Y.2011-12 High Court’s and Hon’ble Supreme Court, and the law laid down under the act. 5.9. The next contention of the Ld.AR regarding non issuance of notice under section 143(2) of the act also favours assessee in the present facts of the case. The Ld. AO had issued notice under section 143(2) the 2nd notice issued under section 148 of the act for the year under consideration. However he proceeded to complete the reassessment by passing assessment order based on the 3rd notice issued under section 148 of the act to which neither any reasons were recorded nor the notice under section 143(2) was issued to the assessee. 5.10. Hon’ble Courts have time and again held that receiving a notice from the department, under Section 143(2) of the Act signifies that the department has identified certain issues in Income tax return filed by the assessee on which further clarification is required and intend to conduct a scrutiny assessment u/s.143(3). However in the present facts of the case upon issuance of 3rd notice of reopening the assessment till passing of the reassessment order, no notice u/s. 143(2) issued and the primary contentions urged by the Ld.AR that the procedure adopted by the Ld. AO in passing the reassessment order appears to flawed. The Ld.DR however tried to justify the reassessment order so passed, on the ground that the reasons were recorded at the time of issuance of the 2nd notice under section 148 of the act and a notice under section 143 (2) was also issued. 31 Page | 31 ITA No.858/MUM/2024 Smt. Laxmiben Bhavanji Shah; A. Y.2011-12 5.11. We note that even the 2nd notice of reopening issued is not in accordance with law as a notice has been issued by one officer and reasons have been recorded by another officer on the same d which is not the procedure to be followed the reasons has to be mandatorily to be recorded 1st, as per section 151 of the act and thereafter the notice has to be issued under section 148 of the act . 5.12. We therefore cannot countenance to such argument urged on behalf of the department that sanctity should be attributed to such procedure. Reassessment order so passed based on a notice issued under section 148 of the act, that ex-facie bad in law in the eyes of law, deserve to be quashed and set aside. As we have quashed the reassessment order dated 19/10/2015 the issue arising therefrom on merits not be considered at this stage. Accordingly the additional ground raised by the assessee stands allowed. In the result the appeal filed by the assessee stands allowed. Order pronounced in the open court on 30 -10-2024. Sd/- Sd/- (OMKARESHWAR CHIDARA) (BEENA PILLAI) Accountant Member Judicial Member 30.10.2024 *SK, Sr. PS Copy of the Order forwarded to : 1. The Appellant 2. The Respondent 32 Page | 32 ITA No.858/MUM/2024 Smt. Laxmiben Bhavanji Shah; A. Y.2011-12 3. DR, ITAT, Mumbai 4. 5. Guard File CIT BY ORDER, (Dy./Asstt. Registrar) ITAT, Mumbai "