Abhimanyu Gupta Vs DCIT (ITAT Chandigarh)
Reassessment Quashed – JAO Lacked Jurisdiction Under Faceless Scheme Third-Party Excel Sheet Insufficient for Sec. 69 Addition – ITAT Chandigarh
ITAT allowed the assessee’s appeal and quashed reassessment proceedings holding that notice u/s 148 issued by the Jurisdictional AO was invalid after implementation of the faceless assessment regime, as only the Faceless AO had jurisdiction under sec.151A and relevant CBDT notifications. Tribunal further held that where material is seized from a third-party search, proceedings ought to be initiated u/s 153C and not u/s 147/148, rendering the reassessment void ab initio.
On merits also, the addition of ₹50 lakh alleged as cash component in property purchase u/s 69 was deleted. The Tribunal observed that the entire case was based on third-party digital excel sheets and statements without corroborative evidence, receipts, or cross-examination. Since payments were through banking channels and no incriminating material was found from the assessee, the addition was held unsustainable and deleted. Appeal allowed.
FULL TEXT OF THE ORDER OF ITAT CHANDIGARH
This is an appeal filed by the Assessee against the order of the Ld. CIT(A), NFAC, Delhi dt. 07/07/2025 pertaining to Assessment Year 2018-19.
2. In the present appeal Assessee has raised the following grounds:
1. That the Jurisdictional AO (‘the JAO’) is not empowered to issue notice under s. 148 of the IT Act, 1961 after the new regime of faceless assessment has been brought into force by the amendment made under s. 148 of the Act. 1961 which has so been held by the Jurisdictional High Court of Punjab and Haryana in the case of JASJIT SINGH V/S UNION OF INDIA AND OTHERS reported in[2024] 165 com 114 (Punjab & Haryana) [29-07-2024| and as such the re-assessment order passed and upheld by the Commissioner of Income Tax(Appeals) in pursuance of an invalid notice dated 31.03.2022 is illegal. arbitrary and unjustified.
2. That the learned Commissioner of Income Tax (Appeals) has erred in upholding initiation of proceedings under section 147/148A of the Act and framing the assessment under section 147 rws 144 read with section 144B of the Act without satisfying the statutory pre-conditions required for initiation of proceedings and upholding of assessment is illegal, arbitrary and unjustified.
3. That the learned Commissioner of Income Tax (Appeals) has failed to appreciate that there was no tangible material on record that income of the appellant had escaped assessment which is based only on borrowed information that also extracted from some computers of third persons and in view thereof the proceedings initiated are illegal, untenable and therefore unsustainable.
4. That initiation of proceedings was mechanical and without any application of mind much less independent application of mind, therefore the notice issued w/s 148 of the Act was an invalid notice and assumption under section 147 of the Act was without jurisdiction.
5. That the Ld. Commissioner of Income Tax (Appeals) has erred in law in upholding the initiation of proceedings under section 148 of the Act as against Section 153C as the evidence being relied upon was found from the premises of the searched person and as such upholding of the issuance of notice under section 148 as against Section 153C is illegal, arbitrary and unjustified.
6. Without prejudice to the above, the Ld. Commissioner of Income Tax (Appeals) has further erred both in law and on facts in upholding the addition of Rs.50,00,000/- representing alleged unexplained cash paid in lieu of purchase of property from M/s Homeland Heights Group under section 69 of the Act which is arbitrary and unjustified.
7. That the Ld. Commissioner of Income Tax has erred in brushing aside the explanations given alongwith evidence that no cash was ever given while purchasing the property which is arbitrary and unjustified.
8. That the Ld. Commissioner of Income Tax has erred in upholding the addition only the basis of some digital information extracted from the computers of third parties which cannot be made the basis to burden the assessee with tax liability and as such the addition made is arbitrary and unjustified.
9. That while upholding the above addition, the learned Commissioner of Income Tax (Appeals) has failed to appreciate the factual substratum of the case, statutory provisions of law and as such, addition so made is highly misconceived, totally arbitrary, wholly unjustified and therefore, unsustainable.
10. That the Ld. Commissioner of Income Tax (Appeals) has failed to appreciate that burden is on the revenue which burden has not been discharged before making addition under section 69 of the Act.
11. That the Ld. Commissioner of Income Tax (Appeals) has further erred in not appreciating that the addition upheld is based on the statements of third parties without providing cross examination of the persons on the basis of which the alleged addition has been made despite requesting for the same which is against the Principals of Natural Justice and as such the addition upheld is arbitrary and unjustified.
12. That the Ld. Commissioner of Income Tax (Appeals) has further erred in upholding the application of the provisions of Section 115BBE which are not attracted in the instant case and as such the order passed is arbitrary and unjustified.
13. That the Ld. Commissioner of Income Tax (Appeals) has erred in upholding the levying of interest under section 234 of the Act which is not leviable on the facts of the instant case.
13. That the appellant craves leave to add or amend the grounds of appeal before the appeal is finally heard or disposed off.
14. That the order of the Ld. Commissioner of Income Tax(Appeals) is erroneous, arbitrary, opposed to law and facts of the case and is, thus, untenable.
