Somnath Ramdas Jadhav Vs ITO (ITAT Pune)
Information Emerged During Search Mandates Action u/s 153C, Not u/s 147: Pune ITAT Holds Reopening Invalid—
Pune Tribunal examined the legality of reassessments framed u/s 147 r.w.s 144/144B & penalties u/s 271(1)(c). AO had reopened the assessments on the basis of information unearthed during a search u/s 132 at M/s Shri Renuka Mata Multistate Credit Society Ltd., where Assessee’s substantial cash deposits (Rs. 50,51,750/- for AY 2013-14) were revealed. Since Assessee failed to file returns or respond to notices, AO treated the cash deposits as unexplained money u/s 69A & completed assessments ex-parte.
Before CIT(A)/NFAC, Assessee contended that the proper provision was u/s 153C, as the information forming the foundation of the reassessment emanated from a third-party search. CIT(A) rejected the legal ground citing Sec.124(3) & held that jurisdictional challenges were barred due to non-compliance. CIT(A) also confirmed additions on merits owing to absence of evidences explaining the cash deposits.
On further appeal, Tribunal noted that AO’s “reason to believe” was entirely founded on materials detected during the search of the credit society, where Assessee’s financial transactions surfaced. Referring to its earlier coordinate bench rulings in Vijaykumar Mangilal Chordiya vs NFAC (ITA 1075/PUN/2024, dated 19-09-2024) & Narendra Sampatlal Bafna (ITA 688/PUN/2024), Tribunal reiterated that when incriminating information relating to a person arises from a search on another person, the statutory route is exclusively u/s 153C, not u/s 147. Since Sec.153C applies whenever seized material “pertains to” or “relates to” a person other than the searched person, reopening u/s 147 is impermissible.
