Adam Haji Amir Hamza Nadaf Vs ITO (ITAT Pune)
Invalid Reopening: Tribunal Holds 147 Proceedings Void Where 153C Route Mandatory- ITAT Pune Quashed ₹39.99 Lakh Addition
Pune Tribunal has quashed a reassessment order passed u/s 147 r.w.s. 144 on the ground that the information forming the basis of reopening had emanated from a search conducted on a third party, thereby attracting provisions of section 153C and not section 147.
Assessee, an individual, had not filed return of income for AY 2017-18. Based on information gathered during a search u/s 132 on Shri Renukamata Multistate Urban Co-operative Credit Society Ltd. (RMM) on 26.05.2017, AO noted that the Assessee had deposited cash of ₹39.99 lakh in RMM. AO reopened the case u/s 147 by issuing notice u/s 148 and completed assessment u/s 147 r.w.s. 144, treating the cash deposits as unexplained investment u/s 69. NFAC confirmed the addition.
Before the Tribunal, Assessee argued that the very same issue had been examined by the Tribunal in the cases of Vijaykumar Mangilalji Chordiya Vs. NFAC, Delhi (ITA No.1075/PUN/2024, order dated 19.09.2024) and ITO Vs. Narendra Sampatlal Bafna (ITA No.688/PUN/2024, order dated 19.08.2024), where it was held that when information emerges from a search at a third party, the proper course of action is to initiate proceedings u/s 153C, not u/s 147. Since the AO had resorted to section 147 in the present case, the reassessment proceedings were bad in law.
