SUNIL UTTAM KAKADE,PUNE V. ITO WARD 4(3) PUNE, PUNE

ITA 2251/PUN/2024

AI Insights

The case involves Sunil Uttam Kakade, the appellant, who contested the additions made to his income by the Income Tax Officer, Ward-8(3), Pune, for the assessment year 2017-18. The additions were based on alleged unexplained cash deposits during the demonetization period and other credit entries in his bank account. The appellant argued that the reassessment was unjust as the issues had been previously addressed in earlier assessments where no additions were made. The Tribunal examined the validity of the notice under section 148 and the subsequent assessment order, ultimately finding them to be based on a change of opinion rather than new facts, leading to the allowance of the appellant's appeal on this ground.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 712743 (ITAT-PUNE)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-07-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Assessment Year: 2017-2018
• Other Referred Cases: Berger Paints India Ltd. V. ACIT, Commissioner of Income-tax, Delhi V. Kelvinator of India Ltd., CEAT Ltd. V. Assistant Commissioner of Income-tax, Deputy/Assistant Commissioner of Income-tax V. Financial Software and Systems (P.) Ltd., Merrygold Gems (P.) Ltd V. Assistant Commissioner of Income-tax, Shri Dilip Laximan Powar Vs. ITO
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: AKHILESH SRIVASTVA
• Assessee Lawyers: KISHOR B PHADKE
• Keywords: Difference of opinion; Change of opinion; Opportunity of being heard; Reason to believe
• Section: 147; 148; 144

Judgement Text

" आयकर अपीलीय अिधकरण ”बी” Ɋायपीठ पुणेमŐ। IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCHES “B” :: PUNE BEFORE MS.ASTHA CHANDRA, JUDICIAL MEMBER AND DR.DIPAK P. RIPOTE, ACCOUNTANT MEMBER आयकर अपील सं./ITA No.2251/PUN/2024 िनधाᭅरण वषᭅ / Assessment Year: 2017-18 Sunil Uttam Kakade, Roopm No.7, Bldg. No.4, Ashok Nagar Pimpri, Kalewadi B.O, Pune – 411017. Maharashtra. V s. The Income Tax Officer, Ward-8(3), Pune. PAN: AOSPK4472L Appellant/ Assessee Respondent / Revenue Assessee by Shri Kishor B Phadke – AR Revenue by Shri Akhilesh Srivastva –Addl.CIT(DR) Date of hearing 09/07/2025 Date of pronouncement 30/07/2025 आदेश/ ORDER PER DR. DIPAK P. RIPOTE, AM: The Assessee has filed an appeal against the order of ld.Commissioner of Income Tax (Appeal)[NFAC], passed under section 250 of the Income Tax Act, 1961 dated 31.10.2023 for A.Y.2017-18, emanating from the order u/s.147 r.w.s 144 read with section 144B of the Act, dated 29.03.2022. The Assessee has raised the following grounds of appeal : Printed from counselvise.com ITA No.2251/PUN/2025 for A.Y.2017-18 [A] 2 “1. The learned CIT(A), NFAC erred in law and on facts in upholding the addition made by learned AO only on the basis of material available on record without granting the opportunity of being heard to the appellant. The learned CIT(A) failed to appreciate that, none of the hearing notices had been served to the appellant 2. Learned CIT(A), NFAC confirming and learned AO erred in law and on facts in assuming Jurisdiction u/s 147 of the ITA, 1961, despite there was no reason to believe that appellant has escaped income. The learned AO ought to appreciate that appellant was assessed u/s 144(1)(b) on identical issues. 3. The learned IT authorities erred in law and on facts in assessing total income of the appellant at Rs. 1,41,55,000/- instead of returned income of Rs. 30,200/- (filed in response to notice u/s 148 of the ITA, 1961), by making addition of Rs. 10,00,000/- on account of cash deposits during the demonetization period and Rs. 1,31,50,000/- on account of other credit entries (including cash deposits other than demonetization period) in Bank of Maharashtra. 4. The learned IT authorities erred in law and on facts in passing order u/s 147 r.w.s. 1448 of the ITA, 1961 without issuing notice u/s 143(2) of the ITA, 1961, which is mandatory requirement of the ITA, 1961 (despite return of income of filed on 26/03/2022) and thereby, proceedings u/s 147 of the ITA, 1961 are bad in law and void-ab-initio. 5. The learned IT authorities erred in law and on facts in making addition of Rs. 10,00,000/- u/s 69A of the ITA, 1961 w.r.t. cash deposited during the demonetization period. The learned AO ought to have appreciated that appellant was having sufficient cash sources and the cash deposits is out of previous withdrawals, which was also Printed from counselvise.com ITA No.2251/PUN/2025 for A.Y.2017-18 [A] 3 submitted during the earlier 144 proceeding and duly accepted by the erstwhile learned AO. 6. The learned IT authorities erred in law and in facts in making the addition of Rs. 1,31,55,000/- u/s 69A of the ITA, 1961 for credit entries in the bank account. The learned AO ought to have appreciated that source of such credit entries is advance received against the land deal, recovery of unsecured loans and some are the sale proceedings etc., which was also submitted during the earlier 144 proceeding duly accepted by the erstwhile learned AO. 7 Appellant craves leave to add/amend/modify/delete all / any of the grounds of appeal.” Submission of ld.AR : 2. Ld.AR for the Assessee filed a paper book containing 156 pages. Ld.AR submitted that the notice u/s.148 of the Income Tax Act, 1961 dated 30.03.2021 is bad in law. Ld.AR submitted that the notice u/s.148 has been issued on the ground that Assessee has deposited cash of Rs.10 lakhs in the Bank Account during the Demonetization Period. Ld.AR submitted that on the same reason, the ITO, Ward-8, Pune had carried out the assessment proceedings by issuing notices and in response to which Assessee filed elaborate reply to those notices. Accordingly, after verifying all the details, Assessing Officer passed an order for A.Y.2017-18 dropping the Printed from counselvise.com ITA No.2251/PUN/2025 for A.Y.2017-18 [A] 4 proceedings. Copy of the said order is at page 80a of the paper book. Ld.AR invited our attention to the show cause notice dated 09.09.2019 for A.Y.2017-18 vide which the Assessing Officer has asked elaborate questions with reference to cash deposits. The ld.AR invited our attention to page no.9 of the paper book which is e-proceeding Acknowledgment to demonstrate that Assessee had submitted all the details on 16.09.2019 in response to notice dated 09.09.2019. 2.1 Therefore, ld.AR for the Assessee pleaded that the notice u/s.148 dated 30.03.2021 is based on change of opinion and hence, not sustainable. The ld.AR relied on the following case laws : “a. Berger Paints India Ltd. V. ACIT ([2010] 322 ITR 369 (Calcutta)) b. Commissioner of Income-tax, Delhi V. Kelvinator of India Ltd. ([2010] 187 Taxman 312 (SC)/[2010] 320 ITR 561 (SC)/[2010] 228 CTR 488 (SC)) c. CEAT Ltd. V.Assistant Commissioner of Income-tax ([2023] 146 taxmann.com 107 (Bombay)/ [2023] 291 Taxman 366 (Bombay)) d. Deputy/Assistant Commissioner of Income-tax V.Financial Software and Systems (P.) Ltd. ([2022] 145 taxmann.com 37 (SC)/ [2022] 447 ITR 370 (SC)) Printed from counselvise.com ITA No.2251/PUN/2025 for A.Y.2017-18 [A] 5 e. Merrygold Gems (P.) Ltd V. Assistant Commissioner of Income-tax ([2024] 167 taxmann.com 84 (Gujarat)” Submission of ld.DR : 3. The ld.DR for the Revenue relied on the order of Assessing Officer and ld.CIT(A). Findings & Analysis : 4. We have heard both the parties and perused the records. In this case, Assessment Order was passed u/s.147 r.w.s. 144 r.w.s 144B of the Income Tax Act, 1961 for A.Y.2017-18 on 29.03.2022. As per the said assessment order, notice u/s.148 dated 30.03.2021 was issued to the Assessee on the ground that Assessee had deposited cash of Rs.10 lakhs in his Bank Account in the Demonetization Period. 4.1 The Assessing Officer (AO) has passed assessment order u/s.144 stating that no details were filed by the Assessee. 5. We have perused the paper book filed by the Assessee. It is observed that Assessee had made an elaborate submission in response to notice dated 09.09.2019. Copy of the E-Proceedings Acknowledgment is at page no.9 of the paper book. As per the said Printed from counselvise.com ITA No.2251/PUN/2025 for A.Y.2017-18 [A] 6 submission, Assessee had filed copy of cash books for F.Y.2014-15, F.Y.2015-16 and F.Y.2016-17. Similarly, Assessee had filed copy of Balance Sheets for F.Y.2014-15, F.Y.2015-16 and F.Y.2016-17. Copy of Bank Statements, Copy of Profit and Loss Accounts, Copy of Sales Registers. Assessee had also filed an elaborate letter explaining the entire transactions. Then again, Assessee filed a letter dated 11.12.2019 electronically along with its Annexures explaining the transactions. 6. Assessee has filed copy of Assessment Order at page no.80a of the paper book for A.Y.2017-18 passed by ITO, Ward-8(5), Pune, having DCR No.176/135/2019-20. Vide the said assessment order, the proceedings have been dropped. 6.1 Thus, it is observed that during the initial assessment proceedings, assessee had filed all the details with reference to the cash deposits and other credits before the Assessing Officer. Assessing Officer had verified all these details. 7. It is observed that the notice u/s.148 dated 30.03.2021 was issued again on the basis of cash deposits of Rs.10 lakhs during the Demonetization Period. Ironically, in the said assessment order Printed from counselvise.com ITA No.2251/PUN/2025 for A.Y.2017-18 [A] 7 dated 29.03.2022, the Assessing Officer[NFAC] has blatantly ignored the submissions filed by the Assessee for which Electronic Acknowledgment is on record. 8. On careful studying the documents which are at Page No.1 to 80 of the paper book which were filed before the Assessing Officer- ITO, Ward-8(5), Pune, it is noted that Assessee had duly explained the credits appearing in the bank accounts. ITO, Ward-8(5), Pune after considering the submission dropped the proceedings. Therefore, the subsequent notice u/s.148 dated 30.03.2021 is based on mere change of opinion, rather the Assessing Officer has not applied his mind while issuing the said notice dated 30.03.2021, as nowhere the Assessing Officer has referred to the submissions filed earlier. 8.1 The Hon’ble Bombay High Court in the case of Shri Dilip Laximan Powar Vs. ITO 474 ITR 72 vide order dated 30.07.2024 has held as under : “18. The record thus shows that in the scrutiny assessment under section 143(3), the issue of deposit of SBNs by the assessee during the demonetization period has been examined in detail by the Assessment Officer and the same objection is now raised by the audit party which, in our considered view, would amount to an attempt to review the same issue and consequently come within the fold of change of opinion which Printed from counselvise.com ITA No.2251/PUN/2025 for A.Y.2017-18 [A] 8 is not permissible in accordance with the settled position of law. As indicated earlier, we have relied upon Mangalam Publications (supra) in support of the view that we take.” 8.2 In these facts and circumstances of the case, the Notice u/s 148 is bad in law and the consequential assessment order is void ab initio. Accordingly, the Ground Number 2 raised by the assessee is allowed. 8.3 Since we have allowed Ground Number 2 raised by the assessee, other grounds become academic in nature, accordingly dismissed as unadjudicated. 9. In the result appeal of the assessee is partly allowed. Order pronounced in the open Court on 30 July, 2025. Sd/- Sd/- MS.ASTHA CHANDRA Dr.DIPAK P. RIPOTE JUDICIAL MEMBER ACCOUNTANT MEMBER पुणे / Pune; ᳰदनांक / Dated : 30 July, 2025/ SGR आदेशकᳱᮧितिलिपअᮕेिषत / Copy of the Order forwarded to : 1. अपीलाथᱮ / The Appellant. 2. ᮧ᭜यथᱮ / The Respondent. 3. The CIT(A), concerned. 4. The Pr. CIT, concerned. 5. िवभागीयᮧितिनिध, आयकर अपीलीय अिधकरण, “बी” बᱶच, पुणे / DR, ITAT, “B” Bench, Pune. 6. गाडᭅफ़ाइल / Guard File. Printed from counselvise.com ITA No.2251/PUN/2025 for A.Y.2017-18 [A] 9 आदेशानुसार / BY ORDER, // TRUE COPY // Senior Private Secretary आयकर अपीलीय अिधकरण, पुणे/ITAT, Pune. Printed from counselvise.com "