Income Tax Appellate Tribunal - Raipur
Ghanashyam Sunder Patel,(Legal Heir Of ... vs Ito, Ward-4(1), Raipur, Raipur on 28 April, 2026
आयकर अपील य अ धकरण यायपीठ "एक-सद य" मामला रायपरु म
IN THE INCOME TAX APPELLATE TRIBUNAL
RAIPUR BENCH "SMC", RAIPUR
ी पाथ सारथी चौधर , या यक सद य के सम
BEFORE SHRI PARTHA SARATHI CHAUDHURY, JUDICIAL MEMBER
Sl. ITA No. Name of Appellant Name of Respondent Asst. Year
No.
Ghanshyam Sunder
Patel
Legal heir of Kesar
Patel (Deceased) The Income Tax Officer
House No.865, Sector- Ward-4(1), Raipur (C.G.)
1. 2013-14
194/RPR/2026 3, Road No.4,
Professor Colony,
Raipur-492 001 (C.G.)
PAN : AVUPP7231K
Ghanshyam Sunder
Patel
House No.865, Sector-
2. 195/RPR/2026 3, Road No.4, The Income Tax Officer
Professor Colony, Ward-4(1), Raipur (C.G.) 2013-14
Raipur-492 001 (C.G.)
PAN : AVUPP7231K
Assessee by : Shri Ravi Agrawal, CA
Revenue by : Dr. Priyanka Patel, Sr. DR
सुनवाई क तार ख / Date of Hearing : 28.04.2026
घोषणा क तार ख / Date of Pronouncement : 28.04.2026
2
ITA Nos.194 & 195/RPR/2026
आदे श / ORDER
PER PARTHA SARATHI CHAUDHURY, JM
The captioned appeals preferred by the assessee emanates from the respective orders of the Ld.CIT(Appeals)/NFAC, Delhi dated 06.02.2026 & 10.02.2026 for the assessment year 2013-14 as per the grounds of appeal on record.
I shall first take up the appeal filed by the assessee in ITA No.194/RPR/2026 for A.Y.2013-14 for adjudication.
2. The contention in law assailed by the Ld. Counsel for the assessee emanating in Ground of appeal No.1 is that though the order of reassessment has been passed u/s. 147 r.w.s 144 of the Income Tax Act, 1961 (for short 'the Act'), dated 27.09.2021, however, no notice u/s. 148 of the Act has been ever served to the assessee and therefore, in absence of valid notice u/s. 148 of the Act, the entire proceedings and consequential order is illegal and liable to be quashed.
3. That demonstrating the same, the Ld. Counsel for the assessee has brought to the notice of the Bench a letter dated 08.04.2026 by the jurisdictional A.O i.e. ITO-4(1), Raipur and the same is extracted as follows:
3
ITA Nos.194 & 195/RPR/2026 4 ITA Nos.194 & 195/RPR/2026 5 ITA Nos.194 & 195/RPR/2026 6 ITA Nos.194 & 195/RPR/2026 7 ITA Nos.194 & 195/RPR/2026
4. That as discernable from the aforesaid, the A.O himself admits at Para 3 of the said letter that the notice u/s. 148 of the Act was not served and the same has been returned back by the postal department on 12.03.2020 marked as 'Not known'. That even the copy of undelivered notice u/s.148 of the Act and acknowledgement and envelope had been enclosed a/w. the said letter. It is crystal clear therefore that no notice u/s.148 of the Act has been ever served upon the assessee before completion of assessment u/s.147 r.w.s. 144 of the Act. It was further brought to the notice of the Bench as submitted by the Ld. Counsel referring to Section 282 of the Act which speaks about service of notice generally and therein, there are options provided to the Department for service of notice and apart from sending notice by post, there is also provision as per Clause (b) in such manner as provided under the Code of Civil Procedure, 1908 (5 of 1908) for the purposes of service of summons............. The relevant Section 282 of the Act is extracted for the sake of completeness:
"[282. Service of notice generally.-
(1) The service of a notice or summon or requisition or order or any other communication under this Act (hereafter in this section referred to as "communication") may be made by delivering or transmitting a copy thereof, to the person therein named,-
(a) by post or by such courier services as may be approved by the Board; or 8 ITA Nos.194 & 195/RPR/2026
(b) in such manner as provided under the Code of Civil Procedure, 1908 (5 of 1908) for the purposes of service of summons; or
(c) in the form of any electronic record as provided in Chapter IV of the Information Technology Act, 2000 (21 of 2000); or
(d) by any other means of transmission of documents as provided by rules made by the Board in this behalf.
(2) The Board may make rules providing for the addresses (including the address for electronic mail or electronic mail message) to which the communication referred to in sub-
section (1) may be delivered or transmitted to the person therein named.
Explanation.-For the purposes of this section, the expressions "electronic mail" and "electronic mail message"
shall have the meanings as assigned to them in Explanation to section 66A of the Information Technology Act, 2000 (21 of 2000).]"
5. It was therefore, submitted by the Ld. Counsel for the assessee that the Department could have affixed the said notice on the door or on an open area at conspicuous place from where it can be visible to the assessee. But no such action of serving of notice has been done by the Department and resultantly, notice u/s.148 of the Act, therefore, remained unserved upon the assessee.
6. The Hon'ble High Court of Delhi in the case of Commissioner of Income Tax Vs, Chetan Gupta (2016) 382 ITR 613 (Delhi) has held that on account of the absence of a valid service of notice u/s. 148 of the Act on the assessee, reassessment proceedings were bad in law. The issuance of notice to the assessee and service of such notice upon the assessee u/s. 9
ITA Nos.194 & 195/RPR/2026 148 of the Act are jurisdictional requirements that must be mandatorily complied with and they are not mere procedural requirements. That for the A.O to exercise jurisdiction to reopen an assessment, notice u/s.148(1) of the Act has to be mandatorily issued to the assessee. Further, the A.O cannot complete the reassessment without service of the notice so issued upon the assessee in accordance with Section 282(1) r.w. Order V Rule 12 CPC and Order III Rule 6 CPC. The onus was on the Revenue to show that proper service of notice has been effected u/s.148 of the Act on the assessee.
7. Reverting to the facts of the present case, as evident from letter of the A.O dated, 08.04.2026, he himself admits that notice u/s.148 of the Act was not served upon the assessee.
8. Further, the Hon'ble High Court of Delhi in the case of Commissioner of Income Tax Vs. Hotline International (P). Ltd. (2008) 296 ITR 333 (Del) has held that there being no valid service of notice u/s. 148 of the Act, the reassessment proceedings were bad in law. It is not therefore necessary only for the Revenue to issue notice u/s.148 of the Act for purpose of reassessment at the same time, there has to be valid service of notice u/s.148 of the Act and if that is not there, then such reassessment has to be held as bad in law.
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ITA Nos.194 & 195/RPR/2026
9. The Hon'ble High Court of Rajasthan in the case of Raju Ram S/o. Natha Ram Jat Vs. Union of India, Through Secretary, Department of Revenue, Ministry of Finance, New Delhi and State of Rajasthan, Through the Finance Secretary, Government of Rajasthan, Jaipur and The Income Tax Officer, the Sub-Registrar-III, Jodhpur, 2026 (4) TMI 1258 (Rajasthan High Court) had quashed the reassessment order on the ground that effective service of notice u/s. 148 of the Act was not established and such service was necessary for valid assumption of jurisdiction.
10. That on careful consideration of facts and circumstances and the judicial pronouncements, on the same parity of reasoning, I hold that the reassessment framed by the A.O vide his order passed u/s.147 r.w.s 144 of the Act, dated 27.09.2021 without any service of notice u/s.148 of the Act to the assessee, is held to be invalid, arbitrary and bad in law, hence quashed.
11. Since reassessment itself is quashed, subsequent all other proceedings becomes non-est as per law. Rest other grounds stands academic only.
12. That as per above terms, the appeal of the assessee in ITA No.194/RPR/2026 for A.Y.13-14 is allowed.
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ITA Nos.194 & 195/RPR/2026 ITA No.195/RPR/2026 A.Y.2013-14
13. The contention in law as assailed by the Ld. Counsel for the assessee as per Ground of appeal No.1 is that reassessment order passed u/s. 147 r.w.s 144 of the Act, dated 14.09.2021 is bad in law since notice u/s. 148 of the Act, dated 02.03.2020 has been issued by recording the reason that the assessee has deposited Rs.20 lakhs in the bank account as per Form 26AS, but in fact, there is no such information available in Form 26AS.
14. That at the time of hearing, the Ld. Counsel demonstrated through furnishing copy of Form 26AS bringing to the notice of the bench that in the said Form 26AS there is no information of cash deposits of Rs.20 lakhs by the assessee.
15. The Ld. Sr. DR could not furnish any evidence to demonstrate that such cash deposits were made as per Form 26AS. The point of the matter is that reopening has been done in terms with Section 147/148 of the Act, wherein the A.O was satisfied that certain income had escaped assessment and therefore, he had resorted to reassessment through furnishing notice u/s. 148 of the Act on the basis of that there had been cash deposits of Rs.20 lakhs as per Form 26AS. That the very Form 26AS itself is not reflecting any such transaction which clearly means that the 12 ITA Nos.194 & 195/RPR/2026 satisfaction recorded by the A.O is wrong, arbitrary, perverse and is absolutely misplaced. In other words, there is no valid satisfaction arrived at by the A.O that any income has escaped assessment in the case of the assessee. That when the entire premises of reopening of the assessment is based on the cash deposits of Rs.20 lakhs as per Form 26AS which itself is not reflected in the said Form 26AS, hence, there arises no reason for the A.O to proceed with reassessment proceedings in the case of the assessee.
16. The Co-ordinate Bench of the Tribunal, Chandigarh in the case of ITO, Mohali Vs. Taj Land Developers and Promoters Pvt. Ltd. 2026 (2) TMI 1176 has dealt with the similar issue observing as follows:
"A bare perusal of Section 147, as was applicable in the case of the assessee for assessment year 2011-12 (prior to Finance Act 2021) would reveal that expression used in the opening line of the Section would provide that AO should have information which has a direct live nexus with the formation of belief that income has escaped assessment. The Hon'ble Bombay High Court in the case of Tata Sons Ltd. [2022 (2) TMI 496 - BOMBAY HIGH COURT] as well as in the case of Ankita A. Choksey [2019 (1) TMI 862 -BOMBAY HIGH COURT] has taken note of the fact that if return has been accepted u/s.143(1), it would not automatically authorize the AO to reopen the assessment.
It is pertinent to note that if AO assumed that return was not filed, then this assumption would goad him on incorrect formation of opinion. It suggests that he has not verified the information received by him from the AIR and treated such information as a gospel truth, which is not permissible u/s
147. The transmission of information to the AO is only for the purpose that AO would apply his mind independently and then form an opinion that income has escaped assessment.13
ITA Nos.194 & 195/RPR/2026 AO has started his formation of belief on a wrong foundation of facts. Similarly, the approval granted by the Addl. Commissioner of income Tax is also in a mechanical manner because once she was not apprised with complete facts, then how he could approve it. He was also informed that assessee has not filed the return. That would give an indication that both the authorities were not possessing the complete record of the assessee pertaining to the assessment of this year. Therefore, we are of the view that CIT(A) has rightly applied his mind and rightly quashed the re-opening of the assessment. Decided against revenue."
17. Reverting to the facts of the present case, the A.O had assumed that there were cash deposits of Rs.20 lacs as per Form 26AS which therefore is an incorrect formation of opinion which is never reflecting in the Form 26AS of the assessee. The A.O had started his formation of belief on a wrong foundation of facts.
18. The A.O has further failed to apply his mind to derive the accurate satisfaction for invoking Sections 147/148 of the Act. The Co-ordinate Bench of Delhi in the case of Sanjeev Kumar c/o M/s Raj Kumar & Associates vs. ITO Ward 2(3)(2), Bulandshahr, reported in 2023(10) TMI 1027-ITAT Delhi on the same issue of 'non-application of mind', it had observed and held as follows:
"14. In view of foregoing discussion, I reach to a logical conclusion that the complete cash book statement clearly explains the source of cash deposit to the bank account of assessee, wherein the assessee has not only included cash receipts as salary and capital withdrawal from two partnership firms M/s Umang Beverages and M/s Mohan Oil & Cattle Feed and a cash salary from Bihar Milk Foods Pvt. Ltd. and has also reduced the amount of drawings for 14 ITA Nos.194 & 195/RPR/2026 household expenses. The copy of return of income of wife of assessee Smt. Shalini and father of assessee Shri Kalu Mal co-jointly established that the other family members of assessee are also earning and contributing towards household expenses. Therefore, in my humble understanding the source of cash deposit during demonetization to the bank account of assesses is properly explained by the assessee by way of self speaking documentary evidence and explanation. Secondly, the AO has made addition u/s 69 of the Act which pertains to unexplained investments, whereas the assessee has not made any investment either in movable or any immovable property during the relevant period by way of using cash amount. The Ld.CIT(A) though has given credit of 25% of Impugned cash deposit confirming the remaining part of addition but there is no logic of this segregation. From the relevant operative part of first appellate order, I also note that the Ld.CIT(A) has upheld the part addition without mentioning any charging section and impliedly adopting section 69 of the Act in the line of assessment order. Therefore, respectfully following the proposition rendered by the Hon'ble Jurisdictional High Court of Allahabad in the case of Sarika Jain (supra). I have no hesitation to hold that the addition made by the AO by mentioning incorrect and irrelevant charging section is not sustainable and valid being bad in law. Accordingly, grounds of assessee are allowed and AO is directed to delete the entire addition.
15. In the result, appeal of the assessee is allowed."
19. Similarly, in the decision of Hon'ble High Court of Allahabad in the case of Smt. Sarika Jain Vs. The Commissioner of Income Tax, Bareilly and Another, reported in (2018) 407 ITR 254 (All) which decision was referred to and applied in the earlier decision of the Co- ordinate Bench of Delhi (supra), the Hon'ble High Court of Allahabad held as follows:
"In the present case, it is apparent that the subject matter of the dispute all through before the Tribunal in appeal was only with regard to the addition of alleged amount of the gift received by the appellant-assessee as his personal income 15 ITA Nos.194 & 195/RPR/2026 under Section 68 of the Act and not whether such an addition can be made under Section 69-A of the Act.
In view of the above, it can safely be said that the Tribunal travelled beyond the scope of the appeal in making the addition of the said income under Section 69-A of the Act. It may be worth noting that the Tribunal has recorded a categorical finding that "it is clear that under the provisions of Section 68, the addition made by the Assessing Officer and sustained by the CIT (Appeals) cannot be sustained, meaning thereby that the Tribunal was of the opinion that the Assessing Officer and the CIT (Appeals) committed an error in adding the aforesaid amount in the income of the appellant- assessee under Section 68 of the Act.
In view of the above, when the said income cannot be added under Section 68 of the Act and the Tribunal was not competent to make the said addition under Section 69-A of the Act, the entire order of the Tribunal stand vitiated in law.
Accordingly, we answer the question of law, as framed above, in favour of the appellant-assessee and against the Revenue and hold that the Tribunal was not competent to make any addition under Section 69-A of the Act and as the same was subject matter of the appeal before it."
20. Considering the entire facts and circumstances of the case and the judicial pronouncements referred hereinabove, I am of the considered view that since the very premise, on which, the notice u/s.148 of the Act had been issued to the assessee is incorrect and misplaced, such notice stands void ab initio and in turn, cannot give birth to a valid reassessment order which therefore, is quashed.
21. Since the reassessment itself is quashed, subsequent all other proceedings becomes non-est as per law. Rest other grounds stands academic only.
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ITA Nos.194 & 195/RPR/2026
22. That as per above terms, the appeal of the assessee in ITA No.195/RPR/2026 for A.Y.13-14 is allowed.
23. In the result, both the appeals of the assessee are allowed.
Order pronounced in open court on 28th day of April, 2026.
Sd/-
(PARTHA SARATHI CHAUDHURY) या यक सद य/JUDICIAL MEMBER रायपुर / Raipur; दनांक / Dated : 28th April, 2026. SB, Sr. PS आदे श क त ल प अ े षत / Copy of the Order forwarded to :
1. अपीलाथ / The Appellant.
2. यथ / The Respondent.
3. The Pr. CIT-1, Raipur (C.G.)
4. वभागीय त न ध, आयकर अपील य अ धकरण, "एक-सद य" बच, रायपुर / DR, ITAT, "SMC" Bench, Raipur.
5. गाड फ़ाइल / Guard File.
आदेशानुसार / BY ORDER, Samiran Bera, // True Copy // Sr. PS, ITAT, Senior Private Secretary Raipur आयकर अपील य अ धकरण, रायपर / ITAT, Raipur ु Digitally signed by Samiran Bera, Sr. PS, ITAT, Raipur Date: 2026.04.28 16:43:13 +05'30'