VAISHALI KESHAV KULKARNI,PUNE V. ITO WARD 13(2), PUNE

ITA 540/PUN/2025

AI Insights

The case involves Vaishali Keshav Kulkarni, the appellant, who contested the reassessment order for the Assessment Year 2015-16 concerning a property sale. The Income Tax Officer (ITO) had issued a notice under section 148 based on information that the appellant had sold an immovable property for Rs. 3.60 crores, which was allegedly not reported in her income tax returns. The reassessment was challenged on grounds of procedural lapses and incorrect application of facts, as the actual sale transaction was conducted by her father, Dilipkumar Agarwal, for Rs. 1.20 crores, and not by the appellant. The Tribunal's decision highlighted the failure to adhere to the faceless assessment procedures and the incorrect interpretation of the sale transaction's value, leading to the quashing of the reassessment order.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 397060 (ITAT-PUNE)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-05-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2015-2016
• Other Referred Cases: Rajeev Bansal vs. Hon'ble Supreme Court, Sanath Kumar Murali vs. ITO, Nitin Nema vs. PCIT, Smt. Sunita Purushottam Virgincar vs. ITO, Chandni J. Ahuja vs. UOI
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: HARISH BIST
• Assessee Lawyers: KARTIK NATRAJAN
• Keywords: Set aside; Business income; Additional evidence; Reasonable cause; Reassessment proceedings; Cost of acquisition; Gift; Period of limitation; Reopening of assessment; Capital Gains; TDS; Source of fund; Competent authority; Time period of passing order; Procedural lapse
• Section: 147; 148; 144; 234B

Judgement Text

" आयकर अपीलीय अिधकरण ”एस एम सी” Ɋायपीठ पुणेमŐ। IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCHES “SMC” :: PUNE BEFORE DR.DIPAK P. RIPOTE, ACCOUNTANT MEMBER AND SHRI VINAY BHAMORE, JUDICIAL MEMBER आयकर अपील सं. / ITA No.540/PUN/2025 िनधाᭅरण वषᭅ / Assessment Year: 2015-16 Vaishali Keshav Kulkarni, Flat No.3, Hermes Grandstand society, Kavade Maal Sopan Baug, Pune Cantt East SO., Pune – 411001. V s The Income Tax Officer, Ward-13(2), Pune. PAN: ATJPK4884A Appellant/ Assessee Respondent / Revenue Assessee by Shri Kartik Natrajan – CA/AR Revenue by Shri Harish Bist – Addl.CIT(DR) Date of hearing 03/04/2025 Date of pronouncement 28/05/2025 आदेश/ ORDER PER DR. DIPAK P. RIPOTE, AM: This appeal filed by the assessee is against the order of ld.Commissioner of Income Tax(Appeals)[NFAC], passed under section 250 of the Income Tax Act, 1961; dated 13.12.2024 for Assessment Year 2015-16 emanating from Assessment Order u/s.147 r.w.s 144 dated 05/03/2024. The assessee has raised the following grounds of appeal : ITA No.540/PUN/2025 [A] 2 “Being aggrieved by the order passed u/s 250 of the Income-tax Act, 1961 ('the Act') dated December 13, 2024 for the AY 2015-16 ('the order') by the Hon'ble Commissioner of Income-tax (Appeal) National Faceless Appeal Centre (NFAC) Delhi ('Ld. CIT(A)'), your appellant presents the following grounds of appeal, which are without prejudice to each other 1. In the facts of the case and under the circumstances and in law, the Ld. CIT (A) has erred in upholding the conduct of proceeding under section 148A of the Act and issuance of notice under section 148 of the Act by the Jurisdictional Assessing Officer (JAO) as against the Ld. AO in faceless manner as required by e- Assessment of Income Escaping Assessment Scheme, 2022 and Faceless Jurisdiction of Income-tax Authorities Scheme, 2022. The notices issued and the consequent order is tainted with procedural lapses, hence void and therefore, deserves to be quashed. 2. In the facts of the case and under the circumstances and in law, the Ld. CIT(A) has erred upholding the conduct of the proceedings under section 148A of the Act, issuing notice under section 148 of the Act by the JAO and passing order by the Ld. AO under section 147 of the Act. The information obtained and relied upon is misleading and incorrect and therefore, the very initiation of the proceeding stands vitiated and the reassessment order passed in case of the appellant is bad in law. 3. In the facts of the case and under the circumstances and in law, the Ld. CIT(A) has erred in upholding the Ld. AO's action in relying upon the information obtained by the JAO and the Ld. CIT has failed to appreciate the fact that information on the basis of which the entire reassessment proceedings are initiated was an incorrect information. There was no such sale transaction of Rs. 3.60 Crs took place in the name of the assessee during AY 2015-16. The information received from the Verification Unit that the sale document was of Rs. 1.20 Crs, was during the course of assessment. It therefore, appears that there was no Evidence or Relied Upon Document available with the JA O at the time of issuing notice u/s 148. Hence the Notice u/s 148 and the consequent assessment u/s 147 is bad in law. 4. In the facts of the case and under the circumstances and in law, the Ld. CIT(A) has erred in upholding the Id. Assessing Officer's action of making addition of Rs.24.00 Lakhs to the total Income of the assessee beyond the limitation period of 3 years from the end of the relevant A Y 2015-16, as it is below Rs.50.00 Lakhs as per section 149 of the Income Tax Act, 1961. Hence, the Notice issued by the JAO and the assessment ITA No.540/PUN/2025 [A] 3 done thereafter are without jurisdiction, bad in law and therefore needs to be set aside. 5. In the facts of the case and under the circumstances and in law, the Ld. CIT(A) has erred in upholding the Id. Assessing Officer's action of denying the fact that the alleged sale transaction of the property was done by Mr. Dilipkumar Agarwal during AY 2015-16. The assessee was merely a consenting party as a family member along with her mother, brother & sister. The property belonged to the assessee's father Mr. Dilipkumar Agarwal. He has already disclosed the said transaction of sale of property of Rs.1.20 Crs in his Return of Income for A Y 2015-16 filed by him. Further entire consideration of Rs.1.20 Crs was received by Mr. Dilipkumar Agarwal in his bank account (Axis Bank A/c No.913010039357849). Therefore, the addition of Rs.24.00 Lakhs in the total income of the assessee, as 1/5thshare in the sale value of the property, is not justified and the order passed need to be quashed. 6. In the facts of the case and under the circumstances and in law, the Ld. CIT(A) has erred in upholding the Id. Assessing Officer's action of charging interest under Sections 234A, 234B and 234C of the Act. 7. Your appellant craves leave to add, amend, modify alter and / or delete any of the above grounds of appeal on or before the date of hearing.” Delay condonation : 1.1 There is a delay of 16 days in filing appeal before this Tribunal. We have perused the submission and found that there is sufficient and reasonable cause for the delay. Accordingly, the delay is condoned. Submission of ld.AR : 2. Ld.AR for the assessee submitted that CIT(A) has failed to appreciate the submission of the assessee. Ld.AR submitted Affidavit of the assessee. ITA No.540/PUN/2025 [A] 4 2.1 Ld.AR pleaded that the Notice u/s.148 dated 13/04/2022 and the order is bad in Law.Ld.AR relied on the order of Hon’ble Supreme Court in the case of Rajeev Bansal and Hon’ble High Court. 2.2 Ld.AR’s written submission on merits of the addition is as under : “Even as per the income-tax Department's information, I did not have any taxable income besides the alleged sale of impugned immovable property-only Rs. 11k interest income [Page 11 of Paperbook, Para 1, Page 1 of Reassessment Order] In fact, the impugned immovable property is sold by my father Mr. Dilipkumar Hiralal Agarwal Saraf [PAN: AELPA1854K], who has offered the same to taxation fully and paid the relevant capital gains tax as Your Honors can clearly see from the ITR return filed by Mr. Dilipkumar for AY 2015-16 (Pages 54 onwards of the Paperbook). This fact was clearly brought to the notice of the Hon'ble NFAC [Page 9 of the CIT(A) Order) This property was gifted by Mr. Hiralal Bhagwandas Saraf (Agarwal) (my grandfather) by execution of a Gift deed dated April 17, 1964, to his sons Mr. Dilipkumar Hiralal Saraf (Agarwal)(my father) and Mr. Nandkumar Hiralal Saraf (Page 22 of the Paperbook). From the gift deed, it is very clear that I am not the owner of the property, Even in the 7/12 Extract, it is my Father who is clearly shown as the Owner of the Impugned immovable property. (Page 34 of the Paperbook). I have formed part of the impugned Sale Deed only as a consenting witness, but inadvertently placed as vendor ITA No.540/PUN/2025 [A] 5 It is very well evident from the impugned Sale Deed itself that, the total sale consideration was received through cheque payments in the name of my father Mr. Dilip Kumar alone (Page 38 & 39 of the Paperbook). Ld.AR also filed a paper book which contains additional evidence. Ld.AR requested for admission of additional evidence. Ld.AR submitted that in this case, the property was belonging to the assessee’s father. The written submission of ld.AR is reproduced as under : Cheque Numbers/Bank Amount in Rs. 000093/Bank of India 30,00,000 000092/Bank of India 30,00,000 000105/Bank of India 30,00,000 328054/Axis Bank 10,00,000 328055/Axis Bank 10,00,000 000106/Bank of India 30,00,000 Thus, it becomes evident that my Father was the Seller and that I was not the intended beneficiary of the sale proceeds and as a corollary, I was not the owner of the said impugned immovable property. My Father had already offered the capital gains to tax as the rightful owner and hence, there will be wrongful double taxation if taxed in my hands.” 2.3 Ld.AR also submitted that the Assessing Officer has not provided copy of the reasons recorded for reopening. Ld.AR submitted that Assessee had asked for the same. Ld.AR also submitted that though assessee had asked for copy of the approvals issued u/s.151 of the Act, the AO did not provide the copies. Ld.AR relied on the decision of Hon’ble Bombay High Court. Submission of ld.DR : 3. Ld.DR for the Revenue relied on the order of Assessing Officer and ld.CIT(A). Ld.DR submitted that assessee’s name ITA No.540/PUN/2025 [A] 6 appears in the registered sale deed, therefore, Assessing Officer has rightly taxed assessee. Findings & Analysis : 4. We have heard both the parties and perused the records.Assessee is an individual and has not filed Return of Income for A.Y.2015-16 u/s.139(1) of the Act. Brief Facts of the case are as under : 4.1 It is a fact that Assessing Officer issued notice u/s 148 based on the information regarding sale of immovable property. It is noted from the Assessment Order that the Assessing Officer was having copy of the impugned ‘Deed of Sale’ dated 25 July 2014, which the Assessing Officer obtained after the Order u/s 148A(d) was passed and Notice u/s.148 dated 13/04/2022 was issued. The sale consideration mentioned in the said ‘Deed of Sale’ is Rs.1,20,00,000/- only. Following persons are referred as vendors in the impugned Deed of Sale :  Dilipkumar Saraf  Mrs. Chitra Dilipkumar Saraf-wife of Dilipkumar Saraf ITA No.540/PUN/2025 [A] 7  Mrs. Vaishali Keshav Kulkarni- daughter of Dilipkumar Saraf.  Ms.DeepaliDilipkumar Saraf- daughter of Dilipkumar  Mr.RahulDilipkumar Saraf- son of Dilipkumar Saraf. PAN numbers are mentioned and copies of PAN cards are enclosed with impugned Deed of Sale. 4.2 We have studied the impugned Sale deed and noted that the copies of Demand Drafts issued by Purchasers to the seller are part of the Registered Deed of Sale duly numbered as page number 21 and 22. On perusal of these Demand Drafts it is noted that all the drafts are in the name of Mr. Dilipkumar Hiralal Saraf. Thus, it is clear from the registered deed of sale that the entire sale consideration was received by Dilipkumar Saraf. These facts were on the record of the Assessing Officer. 4.3 The impugned immovable property was Gifted by Hiralal Saraf (Grandfather of the Assessee) vide a Gift Deed dated 17/04/1964. The Assessee is Born much after the Gift Deed. This explains that the impugned immovable property was received as Gift by Dilip Kumar Saraf and not assessee as Assessee was not born when gift was executed. ITA No.540/PUN/2025 [A] 8 4.4 The Assessing Officer has passed an Assessment Order u/s.147 r.w.s. 144 of the Act on 05/03/2024. The Assessing Officer taxed 1/5th share as Short Term Capital Gain at Rs.24,00,000/-. The relevant paragraph of the Assessment Order is reproduced here as under : “Taking into consideration the relevant material available on records and facts and circumstances of the case, Rs.24,00,000/- is added to the total income on account of on account of short-term Capital Gain.” 4.5 Thus, though the Assessing Officer was having copy of the impugned Deed of Sale, which gives entire narration and history of the impugned immovable property, inspite of that AO held it as Short term Capital Gain. We have already mentioned that the Vendor received property vide Gift Deed dated 17/04/1964 much before the Birth of the assessee. Assessee as per PAN Card is born in 1974. The Assessing Officer has not considered this fact. The Assessing Officer has not bothered to reduce Cost of Acquisition. Assessing officer could have referred the impugned property to DVO to determine cost of acquisition. 4.5.1 Be it as it may be, the Assessing Officer has applied incorrect section by taxing it as Short term capital Gain, when the impugned property is a Long Term Asset. ITA No.540/PUN/2025 [A] 9 5. The Assessee filed appeal before the Commissioner of Income Tax(Appeal). The ld.CIT(A) has reproduced the submission of the assessee which we are reproducing here as under : “1 On March 31, 2022, the Income-tax Officer, Ward 13(2), Pune (Jurisdictional Assessing Officer or JAO) issued a notice under section 148A(b) of the Income-tax Act, 1961 (the Act) for the AY 2015-16 (Notice No-ITBA/AST/F/148A(SCN)/2021-22/104220928 4(1)), requesting for certain details from the appellant, in connection to the information obtained by the JAO from the Insight Portal. The information mentioned that the appellant has sold an immovable property during the financial year (FY) 2015-16 amounting to Rs.3,60,00,000/- No details of such transaction such as date of document, document number etc, were provided to the assessee. 2. The fact was that, during the FY 2014-15, the assessees father Mr. Dilipkumar Agarwal having PAN. AELPA1854K has sold immovable property for Rs. 1,20,00,000/- vide document no. 4859/2014 registered at the Sub Registrar, Haveli 17 on 25/07/2014. The assessees name was appearing in the document along with her mother, brother and sister as only family members for the purpose of giving consent for the said sale of the property. The said Mr. Dilipkumar Agarwal received the entire consideration of Rs. 1,20,00,000/- against the sale transaction in his bank account. Mr. Dilipkumar Agarwal had filed his income tax return disclosing the Capital Gain arising from the said sale transaction. Thus, the transaction of the sale of immovable property pertains to Mr. Dilipkumar Agarwal and not to the assessee, which has been misrepresented in the information obtained and relied upon by the JAO while conducting proceedings under section 148A of the Act and issuing notice under section 148 of the Act, and also by the National Faceless Assessment Centre (Ld. AO) while passing order under section 147 of the Act. 3. Further, the conduct of proceeding under section 148A of the Act and issuance of notice under section 148 of the Act by the JAO is tainted by procedural lapses and not in compliance with the e-Assessment of Income Escaping Assessment Scheme, 2022 and Faceless Jurisdiction ITA No.540/PUN/2025 [A] 10 of Income-tax Authorities Scheme, 2022, wherein it is mentioned that the conduct/initiation of the reassessment proceedings under section 147, 148 and 148A of the Act, should be done in a faceless manner. 4. During the course of assessment, the Ld. A. O. accepted the fact that the sale transaction was not of Rs. 3,60,00,000/- as reported by the Insight Portal, but of Rs. 1,20,00,000/- as per the document provided by the assessee in which 5 names were appearing. Instead of dropping the assessment proceedings, as being founded on the incorrect information and without any evidence in place, the Ld. A O further went on to complete the assessment by making addition as 1/5th share of the sale consideration i.e. Rs. 24,00,000/- as short term capital gain. 5. The Ld. AO has passed an order under section 147 of the Act on 05.03.2024 (Order No: ITBA/AST/S/147/2023-24/1062005275(1)), by making the following additions to the total income. 1. Short Term Capital Gain Rs. 24,00,000/- 5. Aggrieved by the order passed by the Ld. AO under section 147 read with section 144B of the Act, the appellant presents this appeal before Your Honor.” 5.1 Inspite of providing documentary evidence that assessee is not the owner of the impugned property, her father is owner and her father has paid entire tax, copy of the return of income filed by her father u/s.139(1), theld.CIT(A) has confirmed the addition. 5.2 Assessing Officer (AO) received information regarding Sale of Immovable Property, AO passed an order u/s.148A(d) on 13.04.2022. The Assessing Officer issued notice u/s.148 of the Act on 13.04.2022. ITA No.540/PUN/2025 [A] 11 5.3 Thus, admittedly the Notice u/s.148 was issued on 13/04/2022 for AY 2015-16. Discussion : 6. We have perused order u/s.148A(d) of the Act, dated 13.04.2022. The relevant paragraphs of the said order are reproduced here as under : Quote “01. Brief details of the Assessee. The assessee VAISHALI KESHAV KULKARNI ATJPK4584A) is an Individual. No return of income was filled by the assessee for AY 2015-16 The case of the assesses was picked up in Non-Filing of Return (NMS) under priority Pt from Insight portal in accordance with the risk management strategy formulated by the CBDT (Board due to the large transactions done by the assessee during A.Y 2015-16 02. Brief details of the information collected/received by the AO: In this case, the information is received through INSIGHT Portal under Non-Filing of Return(NMS) under priority P1 in accordance with the risk management strategy formulated by The CBDT (Board). The information is as per table given below : Code Info Amount(Rs.) AIR-007 TDS-194A Sold immovable property valued at Rs.30,00,000 or more TDS Statement – Interest other than interest on securities (Section 194A) 36000000 11125 Total Rs.36011125/- 03. Inquiry by the AO: On verification with the departmental websites of e-filing portal, ITBA and Insight, it is noted that the assessee has not filed any return of ITA No.540/PUN/2025 [A] 12 income for AY 2015-16 but has sold immovable property of Rs.36000000/- and has received Interest other than interest on securities in AXIS BANK LTD of Rs. 11125/-. 3.1 In view of the above, it is evident that the assessee has entered to huge transactions but has not fled return of income. Therefore initially show cause notice was issued on 26-03-2022 but time was given less than 7 days hence fresh show cause notice was sound to the assessee u/s 148A(b) on 31/03/2022, after obtaining the prior approval of the competent authority through ITBA and the show cause notice was served on the assessee through ITBA on registered email address. Time of 14 days was provided to the assessee till 09-04-2022 per the provisions of section 148A(b) of the Act. 04. Response of the assessee:- The assessee has not filed any response to the show cause notice issued u/s 148A(b) within the time limit allowed. Therefore the information in my possession mentioned in para 02 & 03 above reveal that the income chargeable to tax of Rs. 36011125/-which is more than Rs. 50 lakhs which represented in the form of asset has escaped the assessment. Therefore this is fit case for issue of notice u/s 148 hence it is necessary to issue of notice u/s 148 of the Act for AY 2015-16 with prior approval of the competent authority Therefore this case is fit case for issue of notice u/s 148.” Unquote. 7. Thus, it can be observed that the so-called information with the ITO was sale of immoveable property and amount mentioned is Rs.3,60,00,000/-. 7.1 The information on the basis of which Notice u/s 148A was issued is wrong as there is no such Sale of Rs.3.60 crores during the year. ITA No.540/PUN/2025 [A] 13 7.1.1 Same amount of Rs.1,20,00,000/- is added thrice, the transaction date is same i.e.25.07.2014 and information is provided by Joint Sub Registrar, Haveli, Pune. However, the ITO has not bothered to verify or rather understand the exact Nature of the Transaction. Without application of mind, the ITO treated the value of transaction as Rs.3.60 crores. It is also noted that the approving authority has also not bothered to understand the transaction and approved it mechanically. This shows that there is no application of mind by the Approving Authority also. Had the Assessing Officer obtained the copy of the deed of the sale dated 25.07.2014 from the office of the Joint Sub Registrar, Haveli, Pune – the ITO would have understood the entire nature of transaction. However, the ITO failed to obtain the same during the proceedings u/s.148A of the Act. The Competent Authority who approved it had also not bothered to verify the same. 7.2 This also demonstrates that the ‘so called Insight Information’ relied by the ITO is not reliable, it is factually incorrect. That may be the reason that Parliament in its wisdom has kept a safe guard in the form of Section 148(a) where in the ITO is required to conduct inquiry. ITA No.540/PUN/2025 [A] 14 7.3 Under Section 148A(a) of the Act, the Assessing Officer is required to conduct an enquiry to arrive at the decision that there is income chargeable to tax which has escaped assessment, but in this case, Assessing Officer has not conducted an enquiry. 7.4 The Words used in the Section is “Income chargeable to Tax which has escaped the assessment”, however, the Entire Sale Consideration received on account of Sale of immoveable property can never be Income Chargeable to Tax, because as per Section 48 of the Income Tax Act, cost of acquisition or Index Cost of Acquisition needs to be reduced from Sale Consideration. However, the ITO has not bothered to understand this basic concept. 7.5 In this case, there were five names mentioned under the Head “Vendors”, therefore, assessee’s sale would have been 1/5th. However, Assessee has denied it as assessee has not received any amount and Assessee claimed that the property belongs to her Father. Assessee claimed that the Assessee is not the owner of the impugned property but her father is the owner of the property. ITA No.540/PUN/2025 [A] 15 8. Be it as it may be, even for argument’s sake, the 1/5th of Rs.1.20 crores are Rs.24,00,000/- only. This amount has been considered by the Assessing Officer in the assessment order u/s.147 of the Act. Therefore, even for argument’s sake, if the entire sale consideration is considered as Income Escaping Assessment, the Assessee’s Share would have been only Rs.24,00,000/- which is less than Rs.50 lakhs. 8.1 As per Section 149(1)(b) of the Act, if more than three years have been lapsed, then Notice u/s.148 can be issued only if Value of Income Escaping Assessment is more than Rs.50 lakhs. In this case, the value is less than Rs.50 lakhs, therefore, ITO had no jurisdiction to issue the notice u/s.148 of the Act. 9. We find support from the Order of Hon’ble High Courts. 9.1 The Hon’ble Karnataka High Court in the case of ITO vs Sanath Kumar Murali [2025]304 Taxman 55(Karnataka) dated 10/02/2025 has held as under : Quote, “ 2. Learned Senior Panel Counsel appearing for the revenue vehemently argues that the impugned order beingcontrary to the scheme of Section 149 of the Income Tax Act, 1961, once an amount of Rs.50.00 lakh isascertained as escaped income for assessment, the interference of the Writ Court was uncalled for. ITA No.540/PUN/2025 [A] 16 3. Learned Counsel for the assessee, per contra, submits that merely because the concerned conveyancementions Rs.55.00 lakh, that itself cannot be taken as the income escaping assessment inasmuch as the cost ofacquisition to be deducted from it and if that is done, it would fall below the ceiling limit of Rs.50.00 lakh.This aspect of the matter, learned Counsel for the assessee submits, was considered by a Division Bench of Madhya Pradesh High Court sitting at Jabalpur in Nitin Nema v. Office of Principal Chief CIT [2023] 155taxmann.com 276/458 ITR 690 (Madhya Pradesh) and relief has been accorded to the Assessee of the kindafter referring to the order impugned in this appeal. He also tells us that challenge to the Jabalpur Bench'sorder has attained finality at the hands of the Apex Court in SLP No(C). 38708 of 2024 on 17.09.2024 andtherefore, the order of the learned Single Judge has secured imprimatur of the Apex Court. So contending, heseeks dismissal of the appeal. 4. Having heard the learned counsel for the parties and having perused the appeal papers, we are broadly inagreement with the views of the learned Single Judge, inter alia, to the effect that while assessing the quantumof escaped income in matters like this, the amount mentioned in the registered conveyance cannot be straightaway taken without deducting the cost of acquisition therefrom. This apart, as rightly submitted by the learnedcounsel for the assessee, the Jabalpur Bench of Madhya Pradesh High Court, in the case supra, followed theimpugned order of the learned Single Judge of this Court and later the challenge by the Revenue before theApex Court of the Country has been repelled. In the above circumstances, there is no merit in the appeal and accordingly it is dismissed, costs having beenmade easy.” Unquote. ITA No.540/PUN/2025 [A] 17 9.2 The Hon’ble High Court of Madhya Pradesh in the case of Nitin Nema Vs. PCIT [2023] 458 ITR 690 (Madhya Pradesh)[16- 08-2023] has observed as under : Quote, “ 6. After hearing learned counsel for rival parties, short question which falls for consideration is as to whetherincome of Rs. 7205084/- shown in the impugned order and notice to have escaped assessment, is incomechargeable to tax or not? 6.1 Admittedly, the expression 'income chargeable to tax' is not defined in the IT Act. However, the scheme ofthe IT Act specially the provisions which deal with computation of business income make it abundantly clearthat definition of expression 'income' and 'income chargeable to tax' are at variance to each other. The expression 'income' is inclusively defined under section 2(24) of IT Act whereas 'income chargeable to tax'obviously denotes an amount which is less than 'income'. The 'income chargeable to tax' is arrived at after deducting the permissible deductions under IT Act from 'income'. As such quantum of 'income' is invariably more than the income chargeable to tax. 6.2 Moreso, all penal provisions under the scheme of income tax, emanate from the factum of evasion of tax calculated based on income chargeable to tax. 6.3 Several High Courts have held that income chargeable to tax cannot be the gross receipts/consideration in any business transaction. One such decision which appears to be closest to the facts of present case is the Single Bench decision of Karnataka High Court rendered on Sanath Kumar Murali (supra),………………. ……………. 6.4 The objection of learned counsel for Revenue that the petitioner having failed to file return for the relevant assessment year cannot ITA No.540/PUN/2025 [A] 18 seek to challenge the impugned order, is heard to be dismissed. The provisions from section 147 to section 151 pertaining to subject of income escaping assessment in the IT Act do not support the contention of the Revenue. There is nothing in sections 148, 148A or section 149 which may prevent assessee from taking advantage of said provisions merely because of his failure to file return……… ………………… 9. From the aforesaid discussion what comes out loud and clear is that the Revenue has failed to understandthe fundamental difference between sale consideration on one hand and income chargeable to tax on the other. The Revenue despite being assisted by thousands of experts in the field of finance and taxation, hascommitted such elementary mistake leading to harassment to the assessee who has been compelled to file thepresent avoidable piece of litigation. Moreso, this Court has been compelled to decide this frivolous matter wasting its precious time and energy which could have been utilized in more pressing matters.” Unquote. 9.3 The Hon’ble Bombay High Court has observed in the case of Smt. Sunita Purushottam Virgincar Vs. ITO 466 ITR 238 (Bom) vide order dated JULY 4, 2024 as under : Quote, “ 9. The next reason cited by the Revenue for rejecting the explanation is, \"Copy of the Sale Deed was not available at the time of recording of reasons\". We find that even such reasoning is fallacious and not tenable in law. The information from the office of the Sub Registrar's for any registration is duly transmitted to the respondents. The execution of such Sale Deed was already on record. In such a case if the respondents fail to take note of the document which was available for transmission to the respondents from the Sub-Registrar's office, in our view, the assumption of jurisdiction will have to be regarded as erroneous. In any case, we find that at the time of passing of the order dated 16.07.2021, the ITA No.540/PUN/2025 [A] 19 Sale Deeds (which were available) ought to have been taken into consideration.” Unquote. 9.4 In these facts and circumstances of the case, since the value of “Income Chargeable to tax” is less than Rs.50 Lacs, respectfully following Hon’ble High Courts (supra) we are of the opinion that the order u/s 148A(d) is without any jurisdiction hence not sustainable in law. Therefore, the Order u/s 148A(d) of the Act and the consequential Assessment Order is quashed. 10. Even otherwise, the order u/s.148A(d) is based on wrong facts of “sale consideration” Rs.3,60,00,000/-, hence it is bad in law. 11. The relevant paragraph of the Assessment Order is reproduced here as under : “4.4 Variations proposed on the basis of inference drawn (specify the basis of inference and quantify the variation proposed, if possible). The assessee an Individual and has not filed return of income for A.Y. 2015-16. As the assessee has not filed any return of income, the business activities/sources of income of the assessee cannot be ascertained. In this case, as per specific information with the department, the assessee has Sold Immovable Property of Rs.3,60,00,000/- received Rs. 11,125/- as interest other than interest on securities. After due analysis of the relevant information and verification from the different portals, it was observed that the income corresponding to the above tabulated financial transaction has escaped assessment as the assessee has not filed return of income for the year under consideration, and neither has any assessment been done earlier for the financial transaction. On perusal of the order issued under ITA No.540/PUN/2025 [A] 20 section 148A(d) of the Income-tax Act, 1961, it is observed that Jurisdictional Assessing Officer, based on the information, after obtaining approval from the competentauthority and following the due procedure prescribed in Section 148A of the Income Tax, 1961 order under clause (d) of section 148A of the Income-tax Act, 1961 passed on 13.04.2022 and the case has been selected for scrutiny u/s. 147 of the Income Tax Act, 1961 to verify the capital gain on account of the sale of immovable property. Accordingly, notice u/s. 148 was issued on 13.04.2022. The assessee has not filed Return of Income in response to the notice u/s. 148 of the I. T Act, 1961.”(Emphasis Supplied) 11.1 Thus, as per the Assessing Officer the case has been selected for Scrutiny u/s 147 of the Income tax Act to verify the Capital gain on account of sale of immovable property. It means the Notice u/s 148 was issued just for verification. There have been changes in the ‘reopening ’ procedure in 2021. After the amendment Section 148A was introduced w.e.f01/04/2021. The section 148A is as under : “148A. The Assessing Officer shall, before issuing any notice under section 148,— (a) conduct any enquiry, if required, with the prior approval of specified authority, with respect to the information which suggests that the income chargeable to tax has escaped assessment;” 11.2 Thus, as per Section 148A(a) the Assessing Officer has to conduct inquiry with respect of information . In this case the AO has not conducted any inquiry before issuing the Notice u/s 148 dated 13/04/2022 as is evident from the above paragraph of the Assessment Order. ITA No.540/PUN/2025 [A] 21 11.3 The Hon’ble Bombay high Court in the case of Chandni J. AhujaVs. UOI [2024] 160 taxmann.com 404(Bombay) vide order dated 01/03/2024 has held as under : Quote, “ 9 In the case at hand, the Assessing Officer does not say that any income has escaped assessment. All that the Assessing Officer desires is examination of certain details pertaining to the actual extent of escapement of income which can be established only after detailed investigation. Even in the reasons recorded, it says \" In this case as per the CIB information you have entered into huge share transaction . . . . . . . . . the value of the share transaction is . . . . . . it is necessary to verify the above aspect, it is necessary to reopen the case. . . . . . . . \". That cannot be stated to be founded on the belief that any income which is chargeable to tax has escaped assessment and hence, such verification is necessary. Just because some information has been received from CIB does not entitle the Assessing Officer to reopen assessment. The reasons must be founded on the satisfaction of the Assessing Officer that income chargeable to tax has escaped assessment. Once that is not to be found, then, the impugned notice cannot be sustained. As noted earlier, what we find is that there are no reasons to believe but only reasons to suspect. Hence, reopening of assessment is not satisfactory. 10 In the circumstances, the rule issued on 13th April 2016 is made absolute. The impugned notice dated 20th March 2015 and the order on objections dated 6th November 2015 are hereby quashed and set aside.” Unquote. 11.4 In the case under consideration the AO has also issued Notice u/s.148 only to verify the Capital gain, hence the facts are identical ITA No.540/PUN/2025 [A] 22 to the case of Chandani Ahuja(supra), therefore, respectfully following Hon’ble Bombay High Court, we hold that Notice u/s.148 is bad in law. Accordingly, the order u/s 147 is quashed. 12. In the result the Grounds Numbers 2, 3 and 4 raised by the assessee are allowed. 13. Since we have decided the Legal grounds raised by the assessee in favour of the assessee, we do not intend to adjudicate the merits of the additions. 14. In the result, appeal of the Assessee is Partly Allowed. Order pronounced in the open Court on 28 May, 2025. Sd/- Sd/- (VINAY BHAMORE) (DIPAK P.RIPOTE) JUDICIAL MEMBER ACCOUNTANT MEMBER पुणे / Pune; ᳰदनांक / Dated : 28 May, 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, “एस एम सी” बᱶच, पुणे / DR, ITAT, “SMC” Bench, Pune. 6. गाडᭅफ़ाइल / Guard File. ITA No.540/PUN/2025 [A] 23 आदेशानुसार / BY ORDER, // TRUE COPY // Senior Private Secretary आयकर अपीलीय अिधकरण, पुणे/ITAT, Pune. "