VIJIT SINGH,JAIPUR V. ITO WARD 3(2) JAIPUR, JAIPUR

ITA 1246/JPR/2025

AI Insights

The case involves Vijit Singh, the appellant, who appealed against the order of the CIT(A), National Faceless Appeal Centre, Delhi, which was passed under section 250 of the I.T. Act, 1961 for the assessment year 2009-10. The primary contention was regarding the legality of the reassessment proceedings under sections 147 and 148, and the subsequent additions made to the assessee's income. The Tribunal examined the procedural lapses in the approval for reassessment and the substantive issues regarding the additions made to the assessee's income from investments in mutual funds. The Tribunal found that the procedural requirements for reassessment were not met, leading to the quashing of the notice and the assessment order.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 787530 (ITAT-JAIPUR)
• Duration Of Justice: 2 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-11-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 08-09-2025
• Other Referred Cases: Collector, Land Acquisition vs. Mst. Katiji, Pr. CIT vs. N. C. Cables Ltd., Maruti Clean Coal And Power Ltd. vs. ACIT, CIT vs. S. Goyanka Lime & Chemicals Ltd., PAC AIR SYSTEMS P. LTD. vs. ITO, Gorika Investment And Export (P) LTD. vs. ITO, TARA ALLOYS LTD. vs. ITO, Arvind Kumar Nehra vs. ITO Ward 7(1), Jaipur, Rajendra Kumar Meena vs. ITO Swaimodhopur, M/S. Pasari Casting And Rolling Mills vs Income-Tax Department, CIT vs. Bhawani Oil Mills (P) Ltd, CIT vs. Jai Kumar Bakliwal, CIT vs. H.S. Builders (P) Ltd, CIT vs. Real Time Marketing (P) Ltd, CIT vs. P. Mohan Kala, CIT vs. Kulwant Rai, CIT vs. Shalimar Buildwell Pvt Ltd, CIT vs. Fair Finvest Pvt. Ltd
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: GAURAV AWASTHI
• Assessee Lawyers: SHRAWAN KUMAR GUPTA; AO UNDER SECTION WERE NOT SATISFYING
• Keywords: Condonation of delay; Set aside; Difference of opinion; Change of opinion; Additional evidence; Retrospective amendment; Reasonable cause; Reassessment proceedings; Question of law; Unexplained cash credit; Unexplained investment; Income from undisclosed sources; Onus to prove; Reopening of assessment; Principle of natural justice; Search and seizure; Assessment record; Competent authority; Reason to believe; Bogus
• Section: 147; 148; 144; 143(3); 142(1); 56; 68; 131; 69; 69C

Judgement Text

"vk;dj vihyh; vf/kdj.k] t;iqj U;k;ihB] t;iqj IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES,”B” JAIPUR Mk0 ,l- lhrky{eh] U;kf;d lnL; ,oa Jh jkBkSM+ deys'k t;UrHkkbZ] ys[kk lnL; ds le{k BEFORE: DR. S. SEETHALAKSHMI, JM & SHRI RATHOD KAMLESH JAYANTBHAI, AM vk;dj vihy la-@ITA. No.1246 /JPR/2025 fu/kZkj.k o\"kZ@Assessment Years : 2009-10 Vijit Singh 3, Tulsi Marg, Bani Park Jaipur, Jaipur. cuke Vs. The ITO, Ward-3(2), Jaipur. LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: AGWPS9272L vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksj ls@ Assessee by : Shri Shrawan Kumar Gupta, Adv. jktLo dh vksj ls@ Revenue by : Shri Gaurav Awasthi, JCIT lquokbZ dh rkjh[k@ Date of Hearing : 27/10/2025 mn?kks\"k.kk dh rkjh[k@Date of Pronouncement : 17/11/2025 vkns'k@ ORDER PER DR. S. SEETHALAKSHMI, J.M. This is an appeal filed by the assessee against the order of ld. CIT(A), National Faceless Appeal Centre (NFAC) Delhi dated 21.03.2025 passed under section 250 of the I.T. Act, 1961, for the assessment year 2009-10. 2. The assessee has raised the following grounds of appeal :- “1. The impugned order u/s 147 rws 144 of the I.T. Act, 1961 dated 26.10.2016 as well as the notice u/s 147 rws 144 and action or proceedings u/s 147/144 are illegal, bad in law, barred by limitation, without jurisdiction, without approval/satisfaction from the proper or competent authority, invalid exparty order in gross breach of the law and against the principle of natural Printed from counselvise.com ITA No. 1246/JPR/2025 Vijit Singh, Jaipur. 2 justice and various other reasons or and further contrary to the real facts of the case hence the same may kindly be quashed. 2. The ld. CIT (A) has grossly erred in law as well as on the facts of the case in set-aside the assessment to AO for making as fresh assessment without deciding our legal grounds and other grounds of appeal when all the details were available before him and also covered matter by the Hon’ble ITAT orders, Hon’ble High Court Orders and nothing new facts and material were/are to be filed by the assessee. Hence the order of the ld. CIT (A) are bad in law, invalid, illegal and on facts of the case, for and various other reasons and hence the same may kindly be quashed. 3. Rs. 60,00,000/-: The ld. AO has grossly erred in law as well as on the facts of the case in making the addition of Rs. 60,00,000/- on account of investment in Mutual Funds and the ld. CIT (A) has also grossly erred in set aside the same to the ld. AO without considering the details, submissions and various judgements/orders, material available, evidences and documents, remand report before him, the ld. AO also erred in making the addition without invoking any provisions of the Act. Hence the addition so made by the ld. AO and set aside by the ld. CIT (A) AO is being totally contrary to the provisions of law and facts on the record and hence same may kindly be deleted in full. 4. The ld. AO has grossly erred in law as well as on the facts of the case in charging the interest u/s 234A, B, C. The interest so charged is being totally contrary to the provision of law and on facts of the case and hence same may kindly be deleted in full. 5. That the appellant prays your honour indulgences to add, amend or alter of or any of the grounds of the appeal on or before the date of hearing.” 3. We find that the appeal filed by the assessee is delayed by 100 days. The assessee has filed an application dated 30.08.2025 along with an Affidavit for condonation of delay. The affidavit filed by the assessee is being reproduced hereunder :- “AFFIDAVIT Reg: Sh. Vijit Singh V/s ITO Ward 3(1), Jaipur, PAN:AGWPS9272L U/s 147 RWS 144 FOR A.Y. 2009-10. I, Vijit Singh S/o Shri Jagjeet Singh Aged 57 years, R/o 3, Tulsi Marg, Bani Park, Jaipur, Raj. Do hereby solemnly affirm on oath as under : Printed from counselvise.com ITA No. 1246/JPR/2025 Vijit Singh, Jaipur. 3 1. That I am now regular IT assesse having PAN : AGWPS9272L. 2. That an appeal is being filed by us before your honor for against the order of CIT(A) by the delay about 3 months 1 days late. Although there actually there is no delay if following facts are being considered. 3. That the reason of late filing was that the order was sent on my email id and after 4-5 days I informed to his local counsel. As being March closing and due to busy in Bank Audit in the April the local counsel asked to me to meet in the last week of April. As on seeing the order I come to know that the matter has restored to the O for fresh assessment. However recently when my local counsel has discussed with the counsel who was looking and arguing this appeal matter and told about the order passed by the ld. CIT (A). Then after seeing the CIT (A) he has stated that why you have not stated earlier about the order passed by the CIT (A), then we told that we forgot to discuss and could not sent the order due to communication gapes. After seeing the order of CIT(A) it has come to know that ld.CIT(A) has not decided the matter on legal and also he has not stated any things on the merit despite all the evidences and material has already been examined by the ld. AO during the course of remand proceedings and sent his remand report and there was no need to send the matter back to the ld.AO rather matter should be decided by him. Hence on the lack of bonafide advise of the local counsel and communication gap in understanding the order, we could not file the appeal before your honor. However the appeal arguing counsel after seeing all the above facts has advised that you should have also filed appeal before the honble ITAT against the CIT(A) order which you have not filed, now with the condonation application you should filed appeal as you had proceeded on lack of bonafide advice of the local counsel and communication gape and there is sufficient or reasonable cause and there is prima faci a strong case in our favour. 4. That thereafter our counsel has started to prepare the appeal and the appeal has been prepared and sent to us for singe now. 5. That due to lack of a bonafide advice of the local counsel and communication gap in understanding the matter the appeal could not be filed within time. 6. That there was no negligence of either us nor the counsels. Thus due to this reason the appeal could not be filed within time. 7. That the contents or averment of application for condonation of delay are true and correct and may be treated as part of this affidavit. Place : Jaipur Sd/- Date : 04.09.2025 Deponent VERIFICATION I, Vijit Singh S/o Shri Jagjeet Singh Aged 57 years R/o 3, Tulsi Marg, Bani Park, Jaipur, Raj. Do hereby verified that the contentions of above para 1 to 7 are true and correct to the best of my knowledge, nothing has been concealed. God may help me. Place : Jaipur Sd/- Printed from counselvise.com ITA No. 1246/JPR/2025 Vijit Singh, Jaipur. 4 Date : 04.09.2025 Deponent 4. Considering the reasons mentioned in the said application accompanied by an Affidavit of the assessee, we feel that the reasons mentioned in the Affidavit constitute sufficient cause for not filing the appeal within the time before us. Therefore, taking a lenient view and considering the principles laid down in the case of Collector, Land Acquisition vs. Mst. Katiji, 1987 AIR 1353 (SC), we condone the delay of 100 days in filing the appeal before us. 5. The brief facts of the case are that the assessee is an Individual and derives income from interest. The assessee has not filed his return of income for the year under consideration because the income stated to be below the taxable limit. Subsequently, as per the ITS detail available with the department, it came to the knowledge of the Assessing Officer that the appellant had invested an amount of Rs. 60,00,000/- in two mutual funds during the year but did not file his return of income. Based on the above information, the case of the assessee was reopened by issuance of a notice under section 148 of the Income Tax Act, 1961 on 25.03.2016, after recording reasons and obtaining approval from the competent authority. The notice under section 148 was duly served on 29.03.2016 through postal authorities. No compliance was made by the assessee. Thereafter, Printed from counselvise.com ITA No. 1246/JPR/2025 Vijit Singh, Jaipur. 5 the AO issued notice dated 01.07.2016 under section 142(1) along with questionnaire which was served through Postal authorities. No compliance was made by the assessee. Again notice under section 142(1) along with questionnaire was issued vide notice dated 19.08.2016 which was served through Notice Server on 24.08.2016. The assessee has not responded to this notice also. Thereafter, final show cause notices dated 04.10.2016 and 18.10.2016 were issued to the assessee and duly served through Postal authorities on 08.10.2016 and 20.10.2016 respectively asking the assessee to show cause as to why investment of Rs. 30,00,000/- made in Birla Sun Life mutual funds and investment of Rs. 30,00,000/- made in HDFC mutual funds in FY 2008-09 relevant to AY 2009-10 may not be treated as undisclosed investment and taxed accordingly. But no compliance was made by the assessee. Consequently, the AO observing that despite giving ample opportunities, the assessee has not responded to any of the statutory notices issued by the department, assessed the total income of the assessee at Rs. 60,00,000/- treating the investment in mutual funds as his undisclosed income for the year under consideration, vide his order dated 26.10.2016. The assessee being aggrieved with the assessment order, filed appeal before the ld. CIT (A), who after considering the submissions of the assessee, remanded the matter back to the AO for fresh assessment. Printed from counselvise.com ITA No. 1246/JPR/2025 Vijit Singh, Jaipur. 6 Now, being aggrieved with the ld. CIT (A)’s order, the assessee has preferred this appeal before the Tribunal on the grounds reproduced herein above. 6. Before us, ground nos. 1 & 2 relate to challenging the invalid action and proceedings initiated under section 148 of the IT Act, 1961 and thereby passing ex-party order u/s 147/144 dated 26.10.2016 as well as action taken u/s 147/148 of the IT Act are illegal, bad in law, invalid and barred by limitation on facts of the case for want of jurisdiction, without approval/satisfaction from the proper or competent authority u/s 151 and invalid set aside by the ld. CIT (A). Ground No. 3 relates to addition of Rs. 60,00,000/- on account of investment in mutual funds. The ld AR appearing on behalf of the assessee has filed the written submissions before the Bench and the submissions qua the issue under consideration are as under: “GOA:1-2 :Invalid Action and proceedings initiated u/s 148 and invalid set aside by the ld. CIT(A): GOA-3: Addition of Rs.60,00,000/- on account of investment in shares. FACTS: Brief facts of the case are that the assesseehaving income from interest and was not a regular IT assessee in that year and not filled his return of income in that year being the below taxable. The ld. AO has issued the notice u/s 148 on dt. 25.03.2016 on the reason that “ As per ITS details the assessee has purchased units of Mutual funds of Rs.60,00,000/- and it is found that the assessee has not filed return of income for A.Y. 2009-10, hence I have reason to believe that the income to the extent of Rs.60,00,000/- has escaped assessment(PB1). The ld. AO has issued notice u/s 148 on dt. 25.03.2008 and stated to be served through postal authority on 29.03.2016. The ld. AO stated that he has issued various notices and alleged that the assessee has not filled Printed from counselvise.com ITA No. 1246/JPR/2025 Vijit Singh, Jaipur. 7 details. In absence of non-compliance the AO proceeded ex-party assessment u/s 144. While passing the assessment the ld.AO noted that the assessee has made investment of Rs.30,00,000/- in Birla Sun Life Mutual Fund and investment of Rs.30,00,000/- in HDFC Mutual Funds and in absence of reply he completed the assessment by making the addition of at Rs. 60,00,000/- as his undisclosed income. 2.In first appeal assessee challenged the legality, validity and proceeding u/s 147/148 and also challenged the assessment order as invalid illegal and additions. Vide GOA before CIT(A) attached with form 35. During the course of hearing before the CIT(A) we have filed detailed WS(PB ), paper additional evidence etc.(PB ) on 15.03.2021. The ld. CIT(A) has send the additional evidence to the ld. AO for his comments. And the ld. AO has issued the remand proceedings letter to assesseedt. 18.12.2023 and in response there to the undersigned counsel(.i.e. Shrawan Kr. Gupta, Advocate) appeared before the AO i.e ITO Ward 1(2) Jaipur and filed the details again as filed before the ld. CIT(A) and explained the matter. And the ld. AO sent his remand report to the ld. CIT(A), which is reproduced at 3 to 5 of CIT(A) order. 3. The ld. CIT(A) has not considered the same despite all the details, facts, submission, documents and legal position were very well available before the lower authorities and also not provide the copy of remand report to the assessee but reproduced in his order at page 3 to 5. However despite all these the ld. CIT(A) has neither given any finding or decision on the legal issues as well as on the merit of the case rather he setaside the case to the ld. AO for fresh assessment only by stating as under:- vide page 5-6 of the CIT(A) order “From the perusal of records and submission of the appellant, it is noticed that the appellant has mentioned that he had not received the notices issued during assessment proceedings. The appellant has furnished his explanation along with supporting documents in respect of each issue of additions. Similarly, during appellant proceedings, the appellant has submitted certain documents in support of his claim in respect of each issue of additions made. However, these claims of the appellant are required to be examined in details and after proper examination of records. In the remand proceedings also, the appellant did not furnish the details to the satisfaction of the Assessing Officer. 6. Therefore, on the basis of response of the appellant, and considering the facts mentioned in the assessment order, it is clear that proper enquiry is needed in this case in order to ascertain the correctness of claim of the appellant. In order to meet the ends of natural justice and to verify the submissions and supporting documents filed by the appellant, it is felt pertinent to remand back the case to the file of the Assessing Officer, in order to make a fresh enquiry and a de novo Printed from counselvise.com ITA No. 1246/JPR/2025 Vijit Singh, Jaipur. 8 assessment in this case. Assessing Officer is directed to accord proper opportunity to the appellant and pass a suitable order after examination of facts and response of the appellant. 6.1 Based on the above discussion, as per the provisions contained in proviso to sec. 251(1)(a) of the Act, the case is hereby set aside to the file of the Assessing Officer” Hence this appeal before your honor. SUBMISSIONS: 1.1 At the very outset it is submitted that the ld. CIT(A) has wrongly setaside the assessment order without deciding the legal grounds of appeal when there was no further verification and examination is required on the legal issue’s. And it is the settled position that firstly legal issue is to be decided and if on the legal issue the assessee succeed or having good case then there was no need to setaside or to restore the matter to the AO. The matter is to be restored to the AO by the ld. CIT(A) on merit only after deciding the case against the assessee on legal issues. As per new amended act w.e.f. 01.10.2024. In our view the matter to be restored to the AO by the ld. CIT(A) those appeals which have been filed after the 01.10.2024 not before it because it is not retrospective amendment. 1.2. Further on the merit of the case when it is the admitted facts that all the details were available before the ld. AO and have been considered by the ld. AO in the remand proceedings itself admittedly and now the assessee is not required to file other details/evidences. Then the matter was to be decided by the ld. CIT(A) itself, for which he has failed to do so. Hence it is prayed that the matter on legal issue and on merit may kindly be consider and decided by your honor. As recently this Hon`ble ITAT in the case of Suresh Kumar Saini v/s ITO Ward 7(4), Jaipur in ITA No. 1256/Jp/2024 dt.29.01.2025has decided the legal grounds of appeal even not decided by the ld. CIT(A). Copy is enclosed. 2. Now on the legal issue and merit we rely upon on our WS, paper book, which may kindly consider. 3. No Satisfaction or application of mind by the Add. CIT and Pr. CIT: At the very outset it is submitted that on perusal of the reason recorded and approval u/s 151 by the competent authority it is clearly proved that they in the satisfaction the ld. Pr.CIT has mentioned only that “Yes”. (PB1). The ld. Pr. CIT has given the approval and satisfaction in the mechanical manner, he has not recorded his own satisfaction. As on perusal of the reason recorded and approval u/s 151 by the without competent authority it is clearly proved that Printed from counselvise.com ITA No. 1246/JPR/2025 Vijit Singh, Jaipur. 9 they have not applied the mind on the reasons recorded they have only expressed or mentioned yes I am satisfied by the Add. CIT not by Pr. CIT on the reason forwarded. While as per decision of Pr. CIT vs. N. C. Cables Ltd.(2017) 98 CCH 0010 DelHC it has been held that Section 151 of the Act clearly stipulates that the CIT, who is the competent authority to authorize the reassessment notice, has to apply his mind and form an opinion. The mere appending of the expression ‘approved’ says nothing. It is not as if the CIT has to record elaborate reasons for agreeing with the noting put up. At the same time, satisfaction has to be recorded of the given case which can be reflected in the briefest possible manner. In the present case, the exercise appears to have been ritualistic and formal rather than meaningful, which is the rationale for the safeguard of an approval by a higher ranking officer. For these reasons, the Court is satisfied that the findings by the ITAT cannot be disturbed. Here is also the same position copy of reason recorded is enclosed(PB1-3) because no satisfaction by the ld. Pr. CIT, the satisfaction if any was of the ld. Add. CIT, who is not competent in the present case. On this preposition kindly also refer Also refer Maruti Clean Coal And Power Ltd. vs. ACIT (2018) 400 ITR 0397 (Chhattisgarh) In the case of CIT vs. S. Goyanka Lime & Chemicals Ltd. (2015) 231 TAXMAN 0073 (MP) it has been held that While according sanction, the Joint Commissioner, Income Tax has only recorded so “Yes, I am satisfied” If the case in hand is analysed on the basis of the aforesaid principle, the mechanical way of recording satisfaction by the Joint Commissioner, which accords sanction for issuing notice under section 147, is clearly unsustainable and we find that on such consideration both the appellate authorities have interfered into the matter. In doing so, no error has been committed warranting reconsideration. (para 7) As far as explanation to Section 151, brought into force by Finance Act, 2008 is concerned, the same only pertains to issuance of notice and not with regard to the manner of recording satisfaction. That being so, the said amended provision does not help the revenue. No question of law involved in the matter, warranting reconsideration appeals are, therefore, dismissed. Also refer PAC AIR SYSTEMS P. LTD. vs. ITO (2020) 58 CCH 0001 DelTrib it has been held that Reassessment—Income escaping assessment— Assessee filed present appeal challenging order of CIT(A) wherein, AO’s action was accepted—Assessee contended that AO had erred in assumption of jurisdiction u/s 147/148 based on invalid and mechanical approval granted by Addl. CIT—Held, approval granted by Addl. CIT was a mechanical and without application of mind, which was not valid for initiating re-assessment Printed from counselvise.com ITA No. 1246/JPR/2025 Vijit Singh, Jaipur. 10 proceedings, because from said remarks, it was not coming out as to which material; information; documents and which other aspects went gone through and examined by Addl. CIT for reaching to satisfaction for granting approval—Thereafter, AO had mechanically issued notice u/s 148— Reopening in assessee’s case for AY in dispute was bad in law and deserved to be quashed—Approval granted by Addl. CIT was a mechanical and without application of mind, which was not valid for initiating reassessment proceedings issue of notice u/s 148 and was not in accordance with s. 151 thus, notice issued u/s 148 was invalid and accordingly, reopening in this was bad in law and therefore, same was hereby quashed—Assessee’s appeal partly allowed. In the case of Gorika Investment And Export (P) LTD. vs. ITO (2018) 53 CCH 0168 DelTribReopening—Income escaping assessment—Validity thereof—Assessee filed return of income declaring income which was processed u/s. 143(1)—AO issued notice u/s. 148 after recording reasons that income of assessee had escaped assessment—AO framed assessment u/s. 143(3) r.w.s. 147 by making addition—CIT(A) upheld order of AO—Held, in CIT Vs N.C. Cables Ltd., it was held that CIT(A) who was competent authority to authorize reassessment notice had to apply his mind and form opinion— Mere appending of expression ‘approved’ says nothing—Satisfaction had to be recorded of given case which could be reflected in briefest possible manner—Exercise appears to had been ritualistic and formal rather than meaningful, which was rationale for safeguard of approval by higher ranking officer—AO initiated proceedings u/s. 147 r.w.s. 148 on basis of information furnished by Directorate of Investigation Unit and CIT gave approval without applying his mind in slip-shod manner—As approval/sanction given by CIT was without recording satisfaction, reopening was not sustainable— Assessee’s appeal allowed. TARA ALLOYS LTD. vs. ITO (2018) 63 ITR (Trib) 0484 (Delhi)Reassessment—Income escaping assessment—Validity thereof—Case of assessee was selected for scrutiny as per provisions of section 147 and 151 and accordingly notice u/s 148 was issued to assessee—Proceedings u/s 147/148 were initiated after recording reasons on basis of information received from Investigation Wing of Department on basis of search and seizure operation—During course of assessment proceedings, assessee was specifically asked to explain and justify transaction with G received as share application money/share capital and why same should not be disallowed or added in income of assessee—AO held that it was camouflage just to introduce its own fund through entry operator therefore amount was added in income of assessee company as unexplained u/s 68—CIT(A) confirmed reassessment and addition made by AO of share capital and unexplained cash credit—Held, notice u/s 148 could be quashed if ‘belief’ was not bona fide or one based on vague, irrelevant and non-specific information—Basis of belief should be discernible from material on record which was available with AO when he recorded reasons—There should be link between reasons and evidence/material available with AO—Commissioner had simply affixed Printed from counselvise.com ITA No. 1246/JPR/2025 Vijit Singh, Jaipur. 11 “approved” at bottom of note sheet prepared by ITO technical—ITO could not have had reason to believe that income had escaped assessment by reasons of assessee ’s failure to disclose material facts and if Commissioner had read report carefully he could not have come to conclusion that this was fit case for issuing notice u/s 148—Commissioner had simply put “approved” and signed report thereby giving sanction to AO—Nowhere Commissioner had recorded satisfaction note, not even in brief after applying his mind—After expiry of four years from end of relevant assessment year, notice u/s 148 should not be issued unless Commissioner was satisfied that it was fit case for issue of such notice—Reassessment proceedings and notice being bad in law were quashed—Assessee’s appeal allowed. Also refer a recent judgment of this Honble ITAT in the case of Sh. Anshuman Singh v/s ACIT Circle-1 Jaipur in ITA No.733 & 739/JP/2023 dt.10.04.2024. Therefore the notice, reasons recorded, assessment all are the illegal bad void ab-initio and barred by limitation and liable to be quashed. 4. No income escaped: It is submitted that the notice u/s 148 can be issued only when there is any escape of income because S. 147 provides that If the Assessing Officer has reason to believe that an income chargeable to tax has escaped assessment for any assessment year, here the assessee has not escaped any income because the assessee has purchased the Mutual from disclosed or valid sources. Which shows that there was no escapement of income by the assessee. Hence if there is neither the escapement of income by the assessee nor proved then the notice issued u/s 148 is invalid. 5. Reason to believe and not reason to suspect: 5.1It is further submitted that even under the amended law by the finance act 1989 the condition precedent or words, which continues right since inception till date, are “reason to believe\" and not \"reason to suspect\". The word “believe” has to be understood in contradistinction of suspicion or opinion. Belief indicates something concrete or reliable. Kindly refer Gangasharan& Sons Pvt. Ltd. 130 ITR 1 (SC), and ITO v. LakhmaniMewal Das, (1976) 103 ITR 437 (SC). 5.2The belief of the Officer should be as to escapement of income and the belief should not be a product of imagination or speculation. There must be reason to induce the belief. The Court can always examine this aspect though the declaration or sufficiency of the reasons for the belief cannot be investigated by the Court (SheoNath Singh v. AAC, (1971) 82 ITR 147 (SC). In the case of MukeshModi&Ors.vs. DCIT 366 ITR 418 (Raj) held that Evasion of tax was menace to society but Assessee contributing to the exchequer in form of tax could not be allowed to suffer on mere pretence that it had evaded payment of tax. Rowing and fishing enquiry in hands of AO on mere suspicion or change of opinion could not satisfy expression \"reason to believe\" exposing Assessee for reopening of assessment. Notice for reopening Printed from counselvise.com ITA No. 1246/JPR/2025 Vijit Singh, Jaipur. 12 of assessment was not in consonance and in conformity with under Section 147 and made specified notice vulnerable. High Court pointed that, reasons given by AO for issuance of notice for Re-assessment were not plausible and convincing. In fact order, where objections were rejected by AO, was not self- contained speaking order. Upon perusal of the order, it was amply clear that the same contains conclusions and is bereft of reasons.(para 12) Notices issued to Assessee by AO under Section 147/148 were not satisfying the pre-requisites for same. There was no whisper in the notice, or iota of proof that while issuing same. AO had reason to believe that any income chargeable to tax had escaped assessment for the assessment year. Notice issued by AO simply for his own verification and to clear his doubts and suspicions to re-examine the material which were already available on record at time of passing of t earlier assessment orders. The legislature under Section 147 has not clothed AO with such jurisdiction therefore the action could not be upheld in the background of facts of instant case. One more redeeming fact which had direct nexus with the subsequent re-assessment proceedings and ramification of the same had culminated into re-assessment orders was the impugned order where AO rejected the objections submitted by Assessees pursuant to notice under Section 147/148. Order passed by AO in this behalf was not a speaking order which could not be sustained. In view of legal infirmity in the notice under Section 147/148 and laconic order of AO while rejecting objections Assessee the consequential assessment Orders were liable to be annulled.(para16). The ld. CIT(A) has not given any finding and observation on the legal issue Therefore all the proceedings are illegal invalid void ab initio and liable to be quashed. 6. Hence in view of the above submissions the action taken u/s 148 and consequent proceedings may kindly be quashed. GOA-3: Addition of Rs.60,00,000/- on account of investment in Mutual Funds/shares. FACTS:Kindly refer facts mentioned in GOA1-2. SUBMISSIONS: 1.No provisions has been applied by the ld. AO: 1.1 At the very outset it is submitted that the ld. AO made the additions on account of Investment of Rs.Rs.60,00,000/- in Mutual Funds from alleged undisclosed income. However while making the additionshe has not invoked or applied any provisions of law while making the addition. The ld. AO has not stated under what provision of law he has made the addition and under what head whether, Printed from counselvise.com ITA No. 1246/JPR/2025 Vijit Singh, Jaipur. 13 under business or trading income, agriculture income, capital gain or u/s 48, 56 or u/s 68 or 69. Thus the addition so made without any provision of act is also against the law and liable to be deleted on this ground alone. When the ld. AO has not invoked any provision of Act/law then also how the ld.AO can make the addition. When in the law and in the Act for each and every offence specific provisions are given to held any person as victim defaulter, then without applying any provision for that a person cannot be taxed and penalized. When the ld. AO himself has not stated that under what provision the assessee liable to be taxed or penalized or under what provision his offence falls then how the addition can be made. 1.2 On this preposition we also would like to draw your kind attention toward the recent decision of this Honble ITAT in the case of Arvind Kumar NehraV/s ITO Ward 7(1), Jaipur 32/Jp/2024dt10.04.2024 where it has been held “It is also noteworthy to mention from the entire conspectus of the case that the AO has also not invoked any provisions of IT Act while making the lump Sum addition of Rs.50,00,000/- for cash deposits in the bank account during the Demonetization Period, Unsecured Loan & capital introduced. Hence, in our view lump-sum addition cannot be made under these accounts. The AO must have referred the specific amount with specific details and documents which he has not provided and as to what basis lump sum addition has been made and also failed to mention that on which account and as to what amount of addition consists of. It is also noted that the AO has not stated under which provisions or section he has made the lump-sum addition either u/s 68 or 69 or 69A or trading or u/s 56 i.e. other sources. It may be worthwhile to mention that when in the Act for every additions, the provisions or section has been provided by the legislature, otherwise there shall be no meaning of the Act. Hence the addition is wrongly made against the Act . (vide page 21-22 of the order).” 1.3 The same has also been held recently in the case of Rajendra Kumar Meena v/s ITO Swaimodhopur in ITA No.516/Jp/2024 dt. 2507.2024. 6.4 In the case of M/S. Pasari Casting And Rolling Mills ... vs Income-Tax Department Through Its ... on 25 January, 2024 in W.P. (T) No. 1850/2022 dt. 25.01.2024 where it has been held that “ Furthermore, the recorded reason is also silent under which provision of the Act the additions are sought to be made i.e. whether Section 68, Section 69A, Section 69B, Section 69C or any other provisions of the Act. It is not the case of the Revenue that the Petitioner has paid any cash to the so-called accommodation entry provider to obtain the accommodation entry to plough back own funds, hence, there is no ground/material to form reasonable belief of any accommodation entry. (Refer PCIT Vs. Meenakshi Overseas P. Ltd. reported in [2017] 395 ITR 677 (Del). Printed from counselvise.com ITA No. 1246/JPR/2025 Vijit Singh, Jaipur. 14 1.5In the case of Oryx Fisheries Pvt. Ltd. Vs. UOI reported in (2010) 13 SCC 427, it is held by the Hon'ble Supreme Court that the show cause notice should give the noticee a reasonable opportunity of making objections against proposed charges indicated in the notice and the person proceeded against must be told the charges against him so that he can make his defense and prove his innocence. In the entire course of the proceeding, at no stage the Petitioner is made aware of the provisions of law which have been contravened and/or under which the additions are sought to be made which is in gross violation of the principles of natural justice and the procedure adopted by the Department is not fair or proper. In the case of New Delhi Television Ltd. Vs. DCIT reported in [2020] 424 ITR 607 (SC), it is held by the Hon'ble Apex Court that the Assessee must be put to notice of all the provisions on which the Department relies. 1.6 Recently the same has also been laid down by this honble ITAT in the case of M/s Kajari Mineral Pvt. Ltd v/s DCIT Central Circle-1 Udaipur in ITA No. 217 and 218/Jodh/2024 dt.21.11.2024 and also in Smt. Prabhati Devi v/s ITO Ward Dausa in ITA No. 1031/Jp/2024 dt. 01.10.2024. Copy is enclosed. 1.7 Recently the Honble ITAT in the case of AshianaBuildpropPvt. Ltd., , Udaipur. Vs. The DCIT, Central Circle-1, Udaipur in ITA No. 706 to 709/Jodh/2024 dt. 26.05.2025 it has been held . “8. We have heard the rival submissions, perused the material on record and gone through the orders of the lower authorities. Upon consideration of the facts and material available on record, we are in agreement with the contentions of the ld. AR that while making the additions, the Assessing Officer has not invoked any provisions of the Act, which is clearly apparent from the assessment order itself, as also from the Show Cause Notice dated 24.11.2017 available at PB 59-70 and the ld. D/R has also admitted the same that is why he has filed the Written submission on this. In support of his case, the ld. A/R has drawn our attention to the various judgments of Honble Supreme Court, High Courts and the coordinate benches of the Tribunal, Jodhpur and Jaipur as under :- i) ii) iii) iv) Arvind Kumar Nehra V/s ITO Ward 7(1), Jaipur 32/Jp/2024 dt 10.04.2024 Rajendra Kumar Meena v/s ITO Swaimodhopur in ITA No.516/Jp/2024 dt. 2507.2024. M/S. Pasari Casting And Rolling Mills ... vs Income-Tax Department Through Its ... on 25 January, 2024 in W.P. (T) No. 1850/2022 dt. 25.01.2024 Oryx Fisheries Pvt. Ltd. Vs. UOI reported in (2010) 13 SCC 427, it is held by the Hon'ble Supreme Court. 85 ITA Nos. 706 to 709/Jodh/2024 AshianaBuildpropPvt. Ltd., Udaipur. v) vi) New Delhi Television Ltd. Vs. DCIT (SC) reported in [2020] 424 ITR 607 M/s Kajari Mineral Pvt. Ltd v/s DCIT Central Circle-1 Udaipur in ITA No. 217 and 218/Jodh/2024 dt.21.11.2024 and also in Smt. Prabhati Devi v/s ITO Ward Dausa in ITA No. 1031/Jp/2024 dt. 01.10.2024. Further, the case laws referred by the ld. D/R is not applicable in the present case and are fully distinguishable, the mater cannot be sent back to the AO for fresh assessment Printed from counselvise.com ITA No. 1246/JPR/2025 Vijit Singh, Jaipur. 15 where there is legal issue involved, the same may be sent if the assessment has been made ex-party and if any additional evidence is filed on the merit and facts were not before the AO, as on the legality, there is no requirement to examine the facts when no new material and evidence filed and how for invoking the provisions an assessment can be sent for fresh assessment, the Tribunal cannot rectify the legal mistake committed by the AO and cannot give fresh innings only to invoke the provision for making the addition and rectify the legally which is committed by him. 9. Taking into consideration the judicial pronouncements mentioned herein above, we are of the view that additions cannot be made without invoking any provisions of the Act. The AO should have referred or stated under which provisions or section he has made the addition either u/s 68 or 69 or 69A or trading or u/s 56 i.e. other sources. It may be worthwhile to mention that when in the Act for every addition, the provisions or section has been provided by the legislature, otherwise there shall be no meaning of the Act. Hence the addition is wrongly made against the Act. Thus the additions made are deleted.” Here also the same position hence looking to the above facts and legal position the additions may kindly be deleted in full and oblige. 2. Correct facts and sources fully explained: At the very outset it is submitted that the assessee is having income from interest below taxable limit. He was having ancestral land at Jodhpur. The assessee wanted to make commercial construction on that land, for that he was required funds. Hence he has received Rs.47,69,000/- through Cheque on 24.04.2008 from Sh. Sanjay Singh who is an NRI and the cousin brother of the assesseei.e son of his Bhua and has also received Rs.12,00,000/- from Sh. Anil Agrawal on 26.04.2008 through cheque and rest of Rs.31,000/- from his own. To start the construction activity there was some time taking, hence the assessee has made investment of that loan amount in the Mutual funds for time being on 30.04.2008. Thereafter the assessee has also Received Rs. 15,00,000/- from her mother PratapKumari on 05.05.2008 and thereafter he made repayment of Rs.4,00,000/- to Smt. PratapKumari on 29.08.2008 and also made repayment of Rs. 4,00,000/- on 30.08.2008, Rs. 4,00,000/- on 02.09.2008 and Rs. 2,50,000/- on 23.09.2008 totaling to Rs.10,50,000/- to Sh. Anil Agrawal. Thereafter when he started the construction he enchased those mutual funds and received Rs.7,00,000/- on dt.14.10.2008, Rs.14,00,000/- on dt. 29.05.2009 and Rs.10,82,396/- totaling to Rs.31,82,396/- by earning the profit of Rs.1,82,396/- from HDFC Mutual funds and also received Rs.7,00,000/- on dt.17.09.2009, Rs.5,00,000/- on dt.01.10.2009, Rs.6,00,000/- 24.12.2009, Rs.10,00,000/- on dt. 01.02.2010 and Rs. 4,57,128/- on dt. 25.02.2010 totaling Printed from counselvise.com ITA No. 1246/JPR/2025 Vijit Singh, Jaipur. 16 to Rs.32,57,128/- by earning the profit of Rs.2,57,128/- from Birla Mutual funds. Thus the source of investment of Rs. 60,00,000/- in the mutual funds is clearly proved from the above. In support of our above contention we filed the Copy of confirmation (PB5), bank statement(PB6-13) and affidavit(PB51-52) of Sh. Sanjay Singh. Copy of confirmation (PB14), bank statement(PB15-28), ITR with computation of total income(PB29-37) and affidavit(PB53-54) of Sh. Anil Agrawal. Sh. Anil Kumar is a regular IT assessee. Copy of Bank statement and ledger account of Mutual funds of the assesseewasalsofilled (PB2-4).Wherein they have confirmed all the facts and amount given by them and investment in Mutual Funds. Copy of affidavit of the assesseewas also filled (PB5556). As the above evidence were not filed before the ld. AO due to the Exparty assessment and are the additional evidence for that assessee filed application u/r 46A in the interest of natural justice. And the ld. CIT(A) has admitted the same and sent the same to the ld. AO for his comments and the ld. AO has seen all these and sent his remand report vide page 3 to 5 of CIT(A) order. Further the assessee has also made repayment to those persons in the year and later years which is also clear from the bank statements of the assesseeand confirmations of the person. Because in later years he was having hand sum rental income from the property constructed from the loans taken from parties and the rental income is increasing year to year and both the lower authorities has not denied these vital facts. In ITO v/s Computer Force 49 DTR 298(Ahd-B)- held Payment made to the creditors in subsequent year no addition can be made. However the ld. AO has not rebutted all these vital facts and evidences rather he ignored these vital facts and evidences. And proceeded on own his assumption, presumptions and suspicion. And it is well settled law that no addition can be made on assumption presumptions and suspicion as held above. Hence from the above the sources of the investment in Mutual Funds are very clerically proving and such evidence are beyond any doubt. 3. Affidavit not controverted :Further in support of above contentions the assessee had also filed the affidavits of the persons from i.e Sanjay Singh(PB ) and Anil Kumar Agrawal (PB )from whom assesseee has taken the amount and affidavit of assessee was also filled (PB ). Further if there is no any contrary thing and material on the documents and details submitted the same should be accepted and the additions so made liable to be deleted. Printed from counselvise.com ITA No. 1246/JPR/2025 Vijit Singh, Jaipur. 17 3.2 The ld. AO and ld. CIT(A) both have not rebutted the affidavits filed by the assesseeand the contention made in the letter of affidavit should be accepted as truth unless rebutted. Because these affidavits have not been rebutted by lower authority by bring any contrary evidence or without examining. It is very settled legal position that in the cases where affidavit has been filed yet the contents thereof have not been rebutted by the AO/authority, the facts mentioned therein have to be read as the facts binding upon the Income Tax authorities. Kindly refer Mehta Pareek& Co. 30 ITR 181 (SC), ITO v. Dr.TejgopalBhatnagar 20 TW 368 (Jp)Paras Cotton Company vs. CIT (2003) 30 TW 168 (JD)., CIT v/s LunardDimond Ltd. 281 ITR 1 (Del). Recently in CIT v/s Bhawani Oil Mills (P) Ltd 239 CTR 445/49 DTR 212(Raj.)- It has been held that contents of affidavit could not be treated as of a lesser importance than the statement given by the creditor before the AO. Recently this Honble ITAT in the case of NarayaniBaiDangi v/s ITO Ward 2(1), Udaipur in ITA No.22/Jodh/2022 dt.13.10.2023 it has been held that we respectfully relied on the order Mehta Parikh & Co, (supra). The revenue has not acted in proper manner to verify the nature of land and had not confronted the affidavit filed by assessee. The ld. DR was unable to submit any contrary judgment against the submission of the assessee. In our considered view, the revenue has not taken any pain to complete the verification or has not confronted the affidavit of the assessee during the appeal stages. So, the ground of the assessee is accepted by the bench. We set aside the appeal order and the addition amount to Rs. 15,53,112/- is quashed. Also refer the decision of VimalChatur v/s ITO Ward 2(2), Udaipur 351/Jodh/2023 dt. 26.04.2024 where the it has been held that We have heard the rival contention and perused the material placed on record. We observed that the assessee and his wife namely Smt. KanakLatChajed both are Senior Citizen, Retired Govt. Employee and pensioner. The assessee has filed the cash flow statements of last five years available at page 16 of the CIT(A) order and at page 18 of the paper book alongwith cash flow statements. The assessee has also filed the day wise cash withdrawals and deposit which are available at Page 19 to 30 of paper book. The lower authorities have only doubted the cash flow statements but could not disproved with any contrary evidences about the withdrawal of cash and its source. The assessee has also filed a family settlement of her wife family vide PB31-32, where she got Rs.3,61,000/- which is also available with the assessee and the lower authorities has discarded or disbelieved without examining and without bringing any adverse evidence. The assessee has also filed the affidavit of his wife namely Smt. KanakLataChhajed before CIT(A), which is produced before us at page 16-17of paper book. We note in the affidavit she clearly stated that the bank accounts were jointly owned and she had deposited the cash of Rs.15,59,000/- in these bank accounts, this affidavit has also been Printed from counselvise.com ITA No. 1246/JPR/2025 Vijit Singh, Jaipur. 18 remained uncontroverted. It is settled law that the contents of an affidavit should be read correct and full unless not controverted. 8.1 To support his arguments the Ld. AR for the assessee has also drawn our attention to the judgments of Hon'ble Supreme Court in the case of Mehta Parikh & Co. v. Commissioner of Income-tax, [1956] 30 ITR 181 (SC) wherein Court has held as that:- \" It has to be noted, however, that beyond these calculations of figures, no further scrutiny was made by the Income-tax Officer or the Appellate Assistant Commissioner of the entries in the cash book of the appellants. The cash book of the appellants was accepted and the entries therein were not challenged. No further documents or vouchers in relation to those entries were called for, nor was the presence of the deponents of the three affidavits considered necessary by either party. The appellants took it that the affidavits of these parties were enough and neither the Appellate Assistant Commissioner, nor the Income-tax Officer, who was present at the hearing of the appeal before the Appellate Assistant Commissioner, considered it necessary to call for them in order to cross-examine them with reference to the statements made by them in their affidavits. Under these circumstances it was not open to the Revenue to challenge the correctness of the cash book entries or the statements made by those deponents in their affidavits. This being the position, the state of affairs, as it obtained on 12th January, 1946, had got to be appreciated, having regard to those entries in the cash books and the affidavits filed before the Appellate Assistant Commissioner, taking them at their face value. The entries in the cash books disclosed that, taking the number of high denomination notes at 18 on 2nd January, 1946, there came in the custody or possession of the appellants after 2nd January, 1946, and up to 12th January, 1946, 49 further notes of that high denomination, making 67 such notes in the aggregate, out ofwhich 61 such notes could be encashed by the appellants on 18th January, 1946, through the Eastern Bank. A mere calculation of the nature indulged in by the Income-tax Officer or the Appellate Assistant Commissioner was not enough, without any further scrutiny, to dislodge the position taken up by the appellants, supported as it was, by the entries in the cash book and the affidavits put in by the appellants before the Appellate Assistant Commissioner.” Considering the reconciliation and cash flow statement filed by the assessee along with family settlement deed and affidavit of assessee’s wife, wherein she owned responded of having deposited of cash out of her owned source and saving., Therefore, without controverting the fact stated of affidavit by the wife of the assessee, the addition made by the lower authorities even for an amount of Rs. 12,87,100/-is also not sustainable in the hands of the assessee and therefore, the same is directed to be deleted.” The above has also been followed recently by this Honble Bench in the case ofKailash Chand Meena v/s ITO Daus in ITA No. 101/Jpr/2025 dt.30.09.2025. Here also the same position Printed from counselvise.com ITA No. 1246/JPR/2025 Vijit Singh, Jaipur. 19 4. Sources Explained with Evidence and not rebutted by the AO: Theld. AO alleged that the appellant could not explain the source of investment made in the Mutual Funds. However the appellant has fully explained the sources of such investment as we have already explain the same in above para-1 before the ld. AO and as well as before the ld. CIT(A).In support assessee had filed confirmation, affidavits and bank statements and ITR wherein they clearly confirmed the same. Thus he duly accepted of giving money to the appellant as appearing from the above documents and evidences. The ld. AO nowhere rebutted these documents with the help of documentary evidences . The AO merely proceeded on his own suspicion despite these materials. 4.2 The observation of the lower authorities are wrong, when the lower authorities have not rebutted the contentions and details by brining any contrary evidence except the suspicion and presumption. Thus the observation based on assumption, presumption and suspicion and his own guess workand it is the settled legal position of law that suspicion may be strong however cannot take the place of reality, are the settled principleskindly refer Dhakeshwari Cotton Mills 26 ITR 775 (SC) also refer R.B.N.J. Naidu v/s CIT 29 ITR 194 (Nag), Kanpur Steel Co. Ltd. v/s CIT 32 ITR 56 (All).Also refer CIT v/s KulwantRai 291 ITR 36( Del). In CIT v/s Shalimar BuildwellPvt Ltd 86 CCH 250(All) it has been held that the AO made the addition merely on suspicion which was not desirable in the eye of law. 4.3In CIT v/s H.S. Builders (P) Ltd 78 DTR 169(Raj.): Tribunal was justified in deleting the addition after finding that the assessee had submitted the accounts of return, the computation of income and the balance sheets of creditors and also supplied all their particulars, that the money given to the assessee had been shown in the respective balance sheet of the creditors and that the creditors who were called by the AO did affirm the fact of giving money and explained the sources. 4.4In the case of CIT vs. Jai Kumar Bakliwal366 ITR 217 (Raj)it has been held that Income from undisclosed sources Cash credit Genuineness and creditworthiness of transaction Addition Validity Assessee was carrying on business of finance and earning income by way of interest During course of work of financing and money lending, had raised loans from certain parties As per AO most of parties were relatives of assessee and they were said to be unsecured loans It had been claimed by AO that in most of cases, though amount was received by account payee cheque and most of creditors were assessed to Income Tax Act and had even provided their permanent account number but on desire of AO of producing said parties, none of parties were able to prove source of amount advanced to assessee Thus, AO made addition u/s 68 as income from undisclosed sources CIT(A) deleted addition Printed from counselvise.com ITA No. 1246/JPR/2025 Vijit Singh, Jaipur. 20 holding that source of cash creditors was not required to be proved by assessee once identity, capacity and genuineness stands proved ITAT dismissed revenue’s appeal Held, all cash creditors had affirmed in their examination that they had advanced money to assessee from their own respective bank accounts Therefore, when there was categorical finding even by AO that money came from respective bank accounts of creditors, which did not flow in shape of money, then, such addition could not be sustained and had been rightly deleted by both two appellate authorities There was no clinching evidence in present case nor AO had been able to prove that money actually belonged to none but assessee himself Action of AO was based on mere suspicion Accordingly, ITAT, after appreciation of evidence had rightly dismissed revenue’s appeal It was pure finding of fact Revenue’s appeal dismissed. 4.5In CIT v/s vs. Bhawani Oil Mills (P) Ltd.(2011) 239 CTR 0445 (Raj.) it has been held Income—Cash credit—Genuineness—Though only one of the eight creditors appeared in response to the notice given by the AO and confirmed the loan, non-appearance of others by itself cannot be a reason to discard their version—These persons have subsequently filed their confirmations supported by their affidavits—Contents of the affidavits could not be treated as of a lesser importance than the statement given by the creditor before the AO—Tribunal has dealt with the confirmations given by the creditors in detail and found no reason to doubt the correctness of the impugned cash credits taken from the said creditors—Therefore, the matter deals with appreciation and evaluation of evidence and does not raise any substantial question of law, so as to justify interference. 5.1. Assessing Officer must form opinion by applying his mind - A bare reading of section 68 suggests that there has to be credit of amounts in the books maintained by the assessee, that such credit has to be of a sum during the previous year, and that the assessee offers no explanation about the nature and source of such credit found in the books or the explanation offered by the assessee, in the opinion of the Assessing Officer, is not satisfactory. It is only then the sum so credited may be charged to income-tax as the income of the assessee of that previous year. The expression ‘the assessee offers no explanation’ means where the assessee offers no proper, reasonable and acceptable explanation as regards the sums found credited in the books maintained by the assessee. It is true that the opinion of the Assessing Officer for not accepting the explanation offered by the assessee as not satisfactory is required to be based on proper appreciation of material and other attending circumstances available on record. The opinion of the Assessing Officer is required to be formed objectively with reference to the material available on record. Application of mind is the sine qua non for forming the opinion - CIT v. P. Mohanakala[2007] 161 Taxman 169 / 291 ITR 278 (SC). Printed from counselvise.com ITA No. 1246/JPR/2025 Vijit Singh, Jaipur. 21 On perusal of assessment order it is clear that the AO did not consider the material available on record. 5.2 In the Case of CIT v/s Real Time Marketing (P) Ltd 306 ITR 35 (Del) it has been held that “AO made the addition towards unexplained cash credit on the basis that it was the assessee’s money(Rs. 22,97,000/-) which was deposited in cash in the account of FBSL and routed through different accounts and was received as unsecured loan by the assessee- on appeal, concurrent findings of facts recorded by the CIT(A) and Tribunal that there is no material to link the assessee with the amount deposited in cash in the bank account of FBSL and thus no case is made out for making addition” Here is the same facts and position. 5.3 In the case of CIT v/s S.D. Investment & Trading Co. 306 ITR 31(Bom) It has been held that “ the explanation of the assessee that cash deposit in bank account represented advance against sale of air-conditioner was satisfactory asthe parties confirmed ledger entries hence no addition is called for”. Here is also same position, as the assessee received amount from the 3-4 persons, which were deposited in bank through account payee cheque. 6.1 The above matter iscovered by the decision of Honble Supreme Court in the case of CIT v/s Lovely Exports (P) Ltd 216 CTR 195(SC), wherein it has been held that “If the share application money is received by the assessee company from alleged bogus share holders, whose names are given to the AO, then the department is free to proceed to reopen their individual assessment in accordance with law, but it cannot be regarded as undisclosed income of assessee company” Further we may submit that thepresent case is also directly covered by the decision of CIT vs. First Point Finance Ltd 286 ITR 477 (Raj.) by holding that It is not denied that all the share holders/share applicants are genuinely existing persons. It is also not denied that each of them is an income tax assessee and the copies of the return of their income were also placed before the AO by the assessee which facts is also not denied . In these circumstances, no material has been brought on record except inferring that the investor in the opinion of the AO was not creditworthy to link the assessee with such investment of money made by those persons. There is no presumption that the assessee is the benami owner of the investment made by the existing persons. The share holder filed their confirmation from such investors has been obtained and their statement were also recorded.Theassessee did discharge the initial onus cast upon in this case. Further in the case of CIT vs. First Point Finance Ltd (Supra) the Honble High Court followed the following observation of the Hon'ble Delhi High Court inthe case of Steller Printed from counselvise.com ITA No. 1246/JPR/2025 Vijit Singh, Jaipur. 22 Investment Ltd. 192 ITR 287 which has now been affirmed by the Hon'ble Supreme Court also in the case of Steller Investment 251 ITR 263. The ratio laid down in this case was that Sec.68 shall not apply on share application money. \"13 We have considered the rivalcontentions, relevant material on record, as also the cited decisions. In 192 ITR 287 Steller Investment Ltd., Honble Delhi High Court has laid down as under: \"It isevident that even if it be assumedthat the subscribers to (the subscribers to) the increased share capital were notgenuine, nevertheless, under no circumstances, canthe amountof sharecapital beregarded as undisclosed income of the assessee. It may be that there are some bogus shareholders in whose namesshares hadbeen issued and the money mayhave been provided by some other persons. If the assessment of the persons who are alleged to have reallyadvanced themoney is sought to be reopened, that would have made some sense but we fail to understand as tohow this amount of increased share capital can be assessed in the hands of the company itself.\" 7. Initial Onus Discharged: Further it is submitted that even assuming, S. 68 applies, it is only initial onus, which lay upon the assessee to prove the identity and the capacity of the creditor and the genuineness of the transaction and once this initial onus is discharged, it shifts to the AO to rebut/ disprove the same for making a valid addition u/s 68. kindly referCITvs Shree Barkha Synthetics 182 CTR 175 (Raj). The Hon’ble RHC again reiterated the same view in CIT vs. First Point Finance Ltd 286 ITR 477 (Raj.) holding that this court held after referring to the aforesaid decisions, that once the initial burden has been discharged in respect of the identity of investors, about their existence, and the confirmation from such investors has been obtained, the burden shifts to the Revenue to prove otherwise not only that the invested amount did not belong to the creditors but further it has to prove the said amount belonging to the assessee.Theassessee did discharge the initial onus cast upon in this case. i. Identity Established: The identity of the person stood proved and neither doubted nor alleged by the ld. AO. Thus, the identity of the person stood establishedadmittedly . ii. Genuine Transaction: Genuineness of transaction is also duly and fully established under the peculiar facts and circumstances of the case in as much as the receipt of the subjected amounts were admittedly duly have been received by Account Payee cheqes from them as appearing from their Printed from counselvise.com ITA No. 1246/JPR/2025 Vijit Singh, Jaipur. 23 documents. Admittedly there are no cash transactions from whom amount received or paid. iii. Capacity Proved: The persons is IT assessee and fully explained the sources of loan given, thus having sufficient earning and funds and the ld. AO madewrong allegation on their creditworthiness in the remand report. The ld. AO has only stated that the assessee could not explain the source of Rs.60,00,000/-. However when the assessee has explained the same with all the evidences and the ld. AO has not stated that in the IT act what is the criteria to explain. As per settled legal position there three ingredients as above which has duly explained by the assessee and the ld. AO in the assessment nowhere denied from these. The assessee thus, duly discharged the initial burden lay upon it, to which extent only it was responsible, as held earlier in CIT vs. Orissa Credit Corp. Ltd. 159 ITR 78 (SC) and recently referred inCIT vs P. Mohan Kala 291 ITR 279 (SC). Identity Established: It is further submitted that even assuming the ratio so laid down in the case of Sophia Finance Ltd. 205 ITR 98 (Del.) is heldapplicable, i.e . what is required is only to establish that there existed a shareholder and the payment was really madeby it, which stands established in the present case, as would appear from the above documents enclosed. Thus identity of all these persons stood established beyond doubt. Kindly refer a decision in Labhchand Bohra V/s ITO (2008) 8 DTR 44 (Raj.)-Held: cash credit- burden of proof- identity of the creditors established and they confirmed the credit. This discharged the burden of assessee to prove genuineness. However capacity of the lender to advancement money to assessee was not a matter which the assessee could be required to establish and that would amount to calling upon him to establish the source of source. Hence addition cannot be sustained. Also refer Kanhaialal Jangid vs. ACIT (2008) 8 DTR 38 (RAJ.), ( 217 CTR 354) held Income –cash credit –Burden of proof – Assessee having filed confirmation from the creditor and having produced the creditor before AO where the creditor affirmed advancement of loan to assessee, no addition under s. 68 could be made in the hands of assessee on the ground that the creditor could not satisfactorily explain the source of loan- Burden on the asssessee in such cases does not extend to prove the source of the creditor from where he made the advance to the assessee. Also refer Aravali Trading Co. v/s ITO 8 DTR 199 held that once the existence of the creditors is proved and such persons own the credits which are found in the books of the assessee, the assessee's onus stand discharged and the latter is not further required to prove the sources from which the creditors could have acquired the money deposited with him and, therefore Printed from counselvise.com ITA No. 1246/JPR/2025 Vijit Singh, Jaipur. 24 the addition u/s 68 cannot be sustained in the absence of anything to establish that the sources of the creditors deposits flew from the assessee itself. In the case of CIT vs. Varinder Rawlley(2014) 366 ITR 232 (P&H) held that It has come on record that the assessee-respondent received the amount by way of an account payee cheque. The amount was returned by way of an account payee cheque. The transactions were reflected in the bank accounts of the assessee as well as the creditor. The firm M/s Vishnu Jewellers was an income tax assessee. Its PAN card was placed on record. The assessee had filed the copy of the account of M/s Vishnu Jewellers in his books of account. The assessee had on three occasions informed that the firm was not under his control and he is unable to produce it before the Assessing Officer. He had requested the Assessing Officer to directly make enquiries. It appears that no enquiry was made by the Assessing Authority. If the Assessing Officer had any doubts about the entry, instead of drawing any inference, the Assessing Officer could have summoned the proprietor of the firm. No attempt was made by the Assessing Officer to ascertain the factum of clearance of cheque from the bank and subsequent refund of the amount. Once it is so, in our view the assessee had sufficiently discharged the burden which lay upon it to explain the nature and source of the credit entry appearing in its accounts and the burden clearly shifted in the present case on to the department to prove to the contrary and hold that in spite of the assessee’s explanation, the entries could still be held to represent the assessee’s income. The Assessing Officer failed to invoke the provisions under Section 131 of the Act, the Tribunal has rightly concluded that it was sufficient to delete the addition. Also refer CIT v/s Fair FinvestPvt. Ltd 357 ITR 146(Del) 8.Hence in view of the above facts, circumstances and legal position entire addition may kindly be deleted in full. 6.1 The ld. AR further submitted Paper Book Index in support of his case as under : PAPER BOOK INDEX Sr. No. Particulars Page No. 1 Copy of Reasons Recorded u/s 148 1 2. Copy of confirmation Ledger account of Mutual Funds and Bank (PB2-4), 2-4 3. Copy of Confirmation, bank statement and affidavit of Sh. Sanjay Singh. 5-13 4. Copy of confirmation, bank statement, ITR with computation of total income and affidavit of Sh. Anil Agrawal. 14-37 5. Copy of Bank Statement of assessee 39-50 6. Copy of affidavit of Sh. Sanjay Singh, Anil Kumar Agrwal 51-56 Printed from counselvise.com ITA No. 1246/JPR/2025 Vijit Singh, Jaipur. 25 and assessee 7. Copy of full Bank statement of the assessee 57-72 8. Copy of Written Submissions to CIT(A) 73-84 9. Copy of Remand Proceedings letter of AO. 85 7. On the other hand, the ld. DR supported the orders of the Revenue Authorities. 8. We have heard the rival submissions, perused the material on record and duly considered facts of the case in the light of the applicable legal position. We have noted that the AO passed the assessment order ex parte after giving 5 (five) opportunities by way of issuing notices/show cause notices on25.03.2016, 01.07.2016, 19.08.2016, 04.10.2016 and 18.10.2016, but the assessee did neither bother to attend the assessment proceedings nor submitted any written submission in support of his case. During the appellate proceedings, the assessee made detailed submission along with evidences on each of grounds raised. The ld. CIT (A) considering the submissions of the assessee, a remand report was called for from the Assessing Officer. In the remand report, the AO mentioned that the additional evidences furnished by the assessee should not be accepted under the provisions of Rule 46A of I.T. Rules, 1962. The AO, however, verified the issues on merit based on materials available on record. The remand report submitted by the AO has been reproduced at pages 3 to 5 of the ld. CIT (A)’s order. The ld. CIT (A) after considering Printed from counselvise.com ITA No. 1246/JPR/2025 Vijit Singh, Jaipur. 26 the assessment order, documents submitted by the assessee before him, and the remand report furnished by the AO, was of the view that the claims of the assessee are required to be examined in details and, accordingly, he set aside the assessment order and remanded the matter back to the AO for fresh assessment. 8.1 At the time of hearing before us, the ld. AR of the assessee submitted that the ld.CIT (A) has wrongly set aside the assessment order when all the materials were before him and no further verification and examination is required on the legal issue. The ld. AR submitted that the mater on legal issue and on merit may kindly be decided first. The ld. AR placed reliance on the decision of the Coordinate Bench of the Tribunal, Jaipur in the case of Suresh Kumar Saini vs. ITO in ITA No. 1256/JPR/2024 dated 29.01.2025wherein the Coordinate Bench decided the legal ground which was even not decided by the ld. CIT (A). The ld. AR further argued on the legal issue that the impugned order under section 147/144 dated 26.10.2016 as well as the action taken under section 147 read with section 148 of the IT Act, 1961 are bad in law, illegal, invalid on facts of the case for want of jurisdiction, without proper approval and satisfaction of higher authorities under section 151 of the IT Act and also barred by limitation and hence the same may kindly be quashed. Printed from counselvise.com ITA No. 1246/JPR/2025 Vijit Singh, Jaipur. 27 8.2 On perusal of the assessment order, it is noted that the AO on the basis of information available in ITS Data of the assessee made the addition of Rs. 60,00,000/- on account of unexplained investments in Birla Sun Life Mutual Funds of Rs. 30,00,000/- and HDFC Mutual Funds of Rs. 30,00,000/- treating the same as undisclosed income for the AY 2009-10, vide his order dated 26.10.2016 passed under section 147 read with section 144 of the IT Act. However, in first appeal, the ld. CIT (A) without deciding the legal issue, set aside the ex-party assessment order for making fresh assessment, on the basis of documents submitted by the assessee at the appellate proceedings. The moot question raised by the ld. A/R of the assessee is that order passed by the AO is illegal and bad in law and it lacks jurisdictional error on the point of no proper satisfaction of competent authority. The Bench has meticulously gone through the orders of the lower authorities and taken into consideration the oral arguments advanced by the ld.AR of the assessee encountering the ex- party assessment order as invalid and beyond jurisdiction. It is noted on perusal of the reasons recorded and approval under section 151 by the competent authority, it indicates that Pr. CIT has not applied his mind on the reasons recorded by lower authorities and he has only expressed or mentioned “Yes” on the reason forwarded (PB page-1). It is worthwhile to mention that as per decision of Hon’ble Delhi High Court in the case of Printed from counselvise.com ITA No. 1246/JPR/2025 Vijit Singh, Jaipur. 28 Pr. CIT vs. N. C. Cables Ltd.(2017) 98 CCH 0010 wherein it has been held that Section 151 of the Act clearly stipulates that the CIT, who is the competent authority to authorize the reassessment notice, has to apply his mind and form an opinion. The mere appending of the expression ‘approved’ or ‘Yes’ says nothing. It is not as if the CIT has to record elaborate reasons for agreeing with the noting put up before him. At the same time, satisfaction has to be recorded of the given case which can be reflected in the briefest possible manner. In the present case, the exercise appears to have been ritualistic and formal rather than meaningful, which is the rationale for the safeguard of an approval by a higher ranking officer. For these reasons, the Court is satisfied that the findings by the ITAT cannot be disturbed. In the present case also, it is noted that the ld. A/R of the assessee has advanced his paper book at Page 1 as to reasons recorded for no satisfaction by the ld. Pr. CIT, the satisfaction if any was of the AO, who is not competent in the present case. On perusal of the assessment record, it has also been noticed that there was no approval in original letter or documents. The ld. A/R further placed reliance on the following case laws :- i. Maruti Clean Coal And Power Ltd. vs. ACIT (2018) 400 ITR 0397 (Chhattisgarh) ii. CIT vs. S. Goyanka Lime & Chemicals Ltd. (2015) 231 TAXMAN 0073 (MP) Printed from counselvise.com ITA No. 1246/JPR/2025 Vijit Singh, Jaipur. 29 iii. PAC AIR SYSTEMS P. LTD. vs. ITO (2020) 58 CCH 0001 Del Trib iv. GORIKA INVESTMENT AND EXPORT (P) LTD. vs. ITO (2018) 53 CCH 0168 Del Trib. v. TARA ALLOYS LTD. vs. ITO (2018) 63 ITR (Trib) 0484 (Delhi) In view of the above facts and circumstances of the case, the action taken under section 148 of the IT Act, 1961 and consequent proceedings needs to be quashed for which we rely on the decision of the Coordinate Bench of the Tribunal, Jaipur in the case of Shri Satyanarayan Bairwa vs. ITO in ITA No. 867 & 869/JP/2018 dated 15.09.2021 wherein at para 19 to 20 it has been held as under :- “19. We have considered the rival contentions of both the parties and perused the material available on record. From perusal of the record, we observed that the A.O. has reopened the case of the assessee for escaping the income of Rs.1,15,00,500/- on account of cash deposit in his bank account and assessee has not filed his return of income and issued notice u/s. 148 of the Act on 29.03.2016 after recording reasons that income of assessee had escaped assessment in the meaning u/s 147 of the Act. Thereafter the AO framed assessment u/s. 144 r.w.s. 147 of the Act by making addition of Rs.1,15,00,000/- and the ld. CIT(A) upheld the order of AO. Before us the ld. A/R has drawn our attention to the reasons recorded and satisfaction of the Pr. CIT and Addl. CIT placed at page No. 10-11 of the assessee’s paper book where the Addl. CIT has mentioned only “Recommended” and Pr. CIT has mentioned only “Yes”, which shows no application of mind and proper satisfaction by them on the reasons recorded by the AO. In this regard, we draw strength from the decision in the case of Pr. CIT vs. N. C. Cables Ltd.(2017) 98 CCH 0010 Del HC wherein it has been held that Section 151 of the Act clearly stipulates that the CIT, who is the competent authority to authorize the reassessment notice, has to apply his mind and form an opinion. The mere appending of the expression ‘approved’ says nothing. It is not as if the CIT has to record elaborate reasons for agreeing with the noting put up. At the same time, satisfaction has to be recorded of the given case which can be reflected in the briefest possible manner. In the present case, the exercise appears to have been Printed from counselvise.com ITA No. 1246/JPR/2025 Vijit Singh, Jaipur. 30 ritualistic and formal rather than meaningful, which is the rationale for the safeguard of an approval by a higher ranking officer. For these reasons, the Court is satisfied that the findings by the ITAT cannot be disturbed.” We also draw strength from the decision in the case of CIT vs. S. Goyanka Lime & Chemicals Ltd. (2015) 231 TAXMAN 0073 (MP) wherein it has been held that While according sanction, the Joint Commissioner, Income Tax has only recorded so “Yes, I am satisfied” If the case in hand is analysed on the basis of the aforesaid principle, the mechanical way of recording satisfaction by the Joint Commissioner, which accords sanction for issuing notice under section 147, is clearly unsustainable and we find that on such consideration both the appellate authorities have interfered into the matter. In doing so, no error has been committed warranting reconsideration. 20. The ld. A/R has also drawn our attention on the approval of the Pr. CIT placed at page Nos. 7-8 of the paper book and also from the assessment record placed before us, we found that he has given one consolidated approval of 56 different assessee’s in one shot through one letter dated 29.03.2016 which is even not signed by him but signed by ITO (T&J), who is not a competent authority to give and signed the approval letter, which shows how the PR. CIT has acted in very formal way. When we examined of the assessment record, it is gathered that the approval was in photocopy and not in original or there was no original letter or documents of approval. Further the name of the assessee was at Sr. 46 out of 56 assessee's and even there was no tick on the name of the assessee in the approval list, which creates a doubt that the approval has been received before the issue of notice u/s 148 of the Act as the approval letter lying on the file after issuance of the notice u/s 148 or not before or attached with the notice u/s 148 and may reach in the office of the AO after 31.03.2016. Thus, in our view, approval u/s 151 cannot be given of all the 56 assessee's in a single documents, as all assessee's are the independent and separate also the reason recorded are different in each case and it is not possible that there shall be same reasons. Looking to these facts and record it is also held that the procedures and way of approval and satisfaction is not proper. Here AO initiated proceedings u/s. 147 r.w.s. 148 on basis of information furnished and CIT gave approval without applying his mind in slipshod manner. As approval/sanction given by CIT was without recording his own independent satisfaction as noted above, therefore the reopening was not sustainable as per above judicial pronouncements and irregularities noted. There were clear irregularities and violation of the provision of Sec. 151 of the Act and very foundation of the issuance of the notice u/s 148 was not as per law. Then in that eventuality, we are of the view that the issuance notice 148 of the Act and all the consequent proceedings and assessment order passed was not in accordance with law. The Printed from counselvise.com ITA No. 1246/JPR/2025 Vijit Singh, Jaipur. 31 case laws relied upon by the ld. DR are not tenable in the facts and circumstances of present case, therefore, considering the totality of facts and circumstances of the case as well as the judicial pronouncements qua the issue under consideration, we find merit in the contention of the ld AR, therefore, we quash the proceedings U/s 147 of the Act.” Thus, taking into consideration the above facts and circumstances of the case and the case laws cited hereinabove, and taking a consistent view of the matter, we feel that there is jurisdictional error and hence we hold the proceedings initiated u/s 147/148 as null and void and hence we quash the notice issued u/s 148 and the assessment order passed in consequence thereto. The order passed by the AO does not survive and we quash the order of the ld. CIT (A). The appeal of the assessee is allowed. 9. Since, we quashed the proceeding U/s 147 of the Act, therefore, there is no need to adjudicate the other grounds raised in this appeal. In the result, the appeal of the assessee is allowed. Order pronounced in the open Court on 17/11/2025. Sd/- Sd/- ¼ jkBkSM+ deys'k t;UrHkkbZ ½ ¼MkWa-,l-lhrky{eh½ (RATHOD KAMLESH JAYANTBHAI) (Dr. S. Seethalakshmi) ys[kk lnL; @Accountant Member U;kf;d lnL;@Judicial Member Tk;iqj@Jaipur fnukad@Dated:- 17/11/2025 *Santosh vkns'k dh izfrfyfi vxzsf’kr@Copy of the order forwarded to: Printed from counselvise.com ITA No. 1246/JPR/2025 Vijit Singh, Jaipur. 32 1. vihykFkhZ@The Appellant- Vijit Singh, Jaipur. 2. izR;FkhZ@ The Respondent- ITO, Ward-3(2), Jaipur. 2. vk;dj vk;qDr@ CIT 4. vk;dj vk;qDr@ CIT(A) 5. foHkkxh; izfrfuf/k] vk;dj vihyh; vf/kdj.k] t;iqj@DR, ITAT, Jaipur. 6. xkMZ QkbZy@ Guard File { ITA No. 1246/JPR/2025 } vkns'kkuqlkj@ By order lgk;d iathdkj@Asst. Registrar Printed from counselvise.com "