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Judgment
Per Bench:
These appeals o f the assessee are directed against the orders even dated 04.02.2025 of ld. CIT(A)/NFAC , Delhi passed u/s 250 of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’) w herein assessme nt order dated 16.03.2022, 27.03.2022 resp ectively, was se t aside to the file of the AO to make a fresh assessment after giving opportunity to the appellant after verification of the facts of the case and the principles of law .
By this commo n order, we propose to decide the ITA Nos. 1267, 1268, 1295 & 1339/Del/20 26 as the parties are same and factual matrix is also same and in order to avoid multiplicity of decisio n, the same are being disposed off accordingly. ITA No. 1267/Del/2026 is taken as lead case.
The assessee has filed an application seeking condonation of delay of 279 days (ITA No s. 1267 & 1268/Del/2026), 280 days (ITA No. 1295/Del/2026) and 281 days (IT A No. 1339/Del/2026) in filing the appeals. The contents o f the application are reproduced as under:
We have consid ered the contents of the condonation application and the submissions made by the ld. AR. We find that the assesse e has satisfactorily explained the reasons for the delay. In view of the principles laid down by the Hon'ble Supreme Co urt in Collector, Land Acquisition vs. Mst. Katiji & Ors. (1987) 167 ITR 471 (SC), wherein it has been held that a liberal approach should be adopted while considering applications for condonation of delay to substantial justice, we are satisfied that the assessee has shown sufficient cause. Accordingly, the 279 days (IT A Nos. 1267 & 1268/Del/2026), 280 days (ITA No. 1295/Del/20 26) and 281 da ys (ITA No. 1339/Del/2026) in filing the appeals are condoned in the larger interest of justice, and the appeals are admitted for adjudicatio n on merits.
Facts in brief as culled out from the orders of the authorities below are that the assessee who is an individual filed return of income for A.Y. 2013-14 on 31.07.2013 declaring total inco me of Rs.3 ,32,210/- and the same was processed u/s 143(1) of the Act on 07.10.2013. However, the case was reopened u/s 147 of the Act by issuing a no tice u/s 148 of the Act dated 30 .03.2021 and after obtaining necessary approval from Pr. CIT, Faridabad, as per section 151 of the Act. The assessee did no t file any response u/s 148 of the Act. Hence, notice u/s 142(1) of the Act was issued on 25.11.2021 which was duly served. However, no response was filed to the said notice and another notices u/s 142(1) of the Act was issued to the assessee on 14.12.2021, 06.01.2022 and 01.02.2022. The assessee did not comp ly with the requirements of the notices and hence the Assessing Officer proceeded u/s 144 of the Act for passing best judgme nt assessment by issuing show-cause notice u/s 144 of the Act dated 11.02.2022 asking for the details of investment amounting to Rs.48,53,745/- as unexplained income u/s 68 of the Act. No compliance was received from the asse ssee. The asse ssee repeatedly failed to comply the various notices and show-cause notices issued. Hence, assessment was co mpleted u/s 144 of the Act by making additio n of Rs.55,82,620/- u/ s 68 of the Act and penalty proceedings were also initiated .
Aggrieved, by the assessme nt order, the assessee filed appeal before the ld. CIT(A) w ho has set aside the assessment order vide impugned order dated 04.02.2025 by restoring the matter to the file of the AO, however without deciding the jurisdictional grounds raised before him.
Aggrieved by the impug ned order, the assesse e is in appeal before us which is instituted through legal heir Mr. Deepak Mangla who has moved an application for substituting himself u/s 159 of the Act for bringing legal heir o n re cord. Along with application, necessary documents including certified copy of death certificate of the deceased asse ssee has been filed. We have examined the documents and the conte nts o f the application and the said application for substituting Mr. Deepak Mangla as legal heir of the assessee is allowed. The assessee may file the necessary amended Form 36 by substituting the title according ly. The assessee has raised the follo wing grounds of appeal:
“ITA No. 1267/Del/2026
1.That t he lear ned CIT(A ) has erred in law and o n facts in not appr eciati ng that t he r eassessment order dated 16.03.2022 is void ab i nitio, as the notice u/s 148 dated 30.03.2021 falls wi thi n t he transitional peri od (20.03.2020 to 31.03.2021) c overed by t he H on'ble Supreme C ourt i n Rajeev Bans al & Anr. v. Uni on of India (2023) 469 ITR 4 6 (SC ). As per the bi ndi ng r atio, such notices are deeme d to be show-ca use notic es u/s 148A(b), requi ring compliance wit h Sectio n 1 48A proc edur e. Since no noti ce u/s 148A(b) was issued nor order u/s 148A(d) pass ed, the reassessment o rder dat ed 16.03.2022 is without j urisdicti on and deser ves to be annulled."
2.Misapplicati on of di scr eti onary power u/s 251(1 )(a) "The l earned C IT(A) gravely er red in law and o n facts in invoki ng powers u/s 251(1)(a) of the Act to set aside the assessment , despite r ecordi ng clear findi ngs that (i) t he Assessi ng Officer failed to pr oduce any tangi ble mat erial/evidence duri ng appellat e proceedi ngs , (ii) the sancti on u/s 151 was mec hanical and wit hout appl ication of mind, and (ii i) the ex parte order u/s 144 was i nv alid. Once s uc h j urisdictional de fects were established, t he CIT(A) ought to have annul l ed the assessment rat her tha n remanding the ma tter to A.O . to make fresh assessment .
3.Invalid "R eas ons to Believe" That the lear ned CIT(A) failed to appreci at e t hat t he Assessi ng Officer recorded "re asons to believe" on t he basis of vague, uncorroborat ed a nd borro wed i nformation from a p olice complai nt, which does not c onstitut e ta ngibl e mat erial as required under settl ed law (Ganga Saran & S ons (P) Ltd. v. ITO, 130 ITR 1 (SC); ITO v. Lakhmani Mewal Dass, 103 ITR 437 (SC)).
4.No Pr i or & Mechanical Approval u/s 151 That the l earned CIT(A) erred i n law and on facts in not appr eciati ng that reassessment pr oce edi ngs ar e bad in law as the mandatory approval u/s 1 51 was received late by A .O. on 8 .4.2022 agai ns t issuanc e o f 148 dt . 30.3.2021 and i n a mec hanical manner , witho ut applicatio n of mind, and on bo rrowed satisfaction, which vitiates t he j urisdiction assum ed by the Assess ing Officer.
5.Files i nspecti on not allowed That the l ear ned CI T(A) err ed in not appr eciati ng that Ld. AO has err ed i n l aw a nd on facts i n not allowing files inspec tion under circular no. 17(XL-36 ) dt. 28.06.1 965 and secti on 76 of Indian Evidence Act, 1872 on 28.03.2022 & 7.4.2022. Even if fil es ins pecti on was not allowed upon appli cation to Additional Com missioner, Range-1, Faridabad on 7.4.2022 and gri evanc e was upl oaded o n as sessee's Inc ome Tax Por tal on 6.4.2022 & 11.04.2022. (C opi es of files i nspection encl osed 6).
6.Additions Based on Suspicion and Conj ecture That t he l earned CIT(A ) erred i n sustai ni ng additi ons of Rs.7,28,875/- (alleged unexplai ned investm ent) and Rs. 48,53,745/- (alleged i nt er est incom e) especially when (i) alleged i ntere st income is nearly 7 times of alle ged investment and (ii) wit hout any corr oborati ve/tangi ble evidence, merely o n suspicion and unverified police informati on, whic h is a gai nst the settled pri ncipl e that suspicion, ho wever strong, canno t take t he place of proof.
7.Absence of Nexus B etwee n Informatio n and Escapement of Income That the lear ned CIT(A) failed to appreci at e t hat t he informati on relied upon by t he AO, on borr owed satisfacti on of Department , had no live nexus with the alleged escapement of i ncome, as no i ndependent i nquiry u/s 131, 133(6), or 142(2 ) was conducted t o establish tha t the appellant had mad e s uc h i nv est ment or earne d such i nter est. 8. Assessme nt Based on "R easons to Suspect" Inst ead of "R easons to B elieve" That t he reassess ment order suffers from fundament al illegal ity as t he additi ons were made on "r easons to suspect " rat her than "reas ons to believe," c ontrar y to t he mandate of secti on 147 a nd the cons ti tutional safeguard under Ar ticle 265 of the Co nstituti on of India.
9.Deni al of Effec ti ve Appellat e Adj udicati on That the l earned CIT(A ) erred in s etti ng aside t he assessment to the AO without adj udicating the jurisdictio nal grounds raise d by t he appellant, thereby fail ing to dischar ge the appellate functi on v ested u/s 250(6) and 251(1)(a) of the Act.
ITA N o. 1268/Del/2026
“1 . That the l earned C IT(A ) has err ed in l aw a nd on facts in not appr eciati ng that t he r eassessment order dated 27.03.2022 is void ab i nitio, as the notice u/s 148 dated 30.03.2021 falls wi thi n t he transitional peri od (20.03.2020 to 31.03.2021) c overed by t he H on'ble Supreme C ourt i n Rajeev Bans al & Anr. v. Uni on of India (2023) 469 ITR 4 6 (SC ). As per the bi ndi ng r atio, such notices are deeme d to be show-ca use notic es u/s 148A(b), requi ring compliance wit h Sectio n 1 48A proc edur e. Since no noti ce u/s 148A(b) was issued nor order u/s 148A(d) pass ed, the reassessment o rder dat ed 27.03.2022 is without j urisdicti on and deser ves to be annulled."
2.Misapplicati on of di scr eti onary power u/s 251(1 )(a) "The l earned C IT(A) gravely er red in law and o n facts in invoki ng powers u/s 251(1)(a) of the Act to set aside the assessment , despite rec ordi ng clear fi ndi ngs that (i) wrong reasons recorded treati ng assess ee as N on-PAN despite valid PA N and henc e filed no ITR, (ii) the sancti on u/s 151 was mec hanical and wit hout appl ication of mind, (iii) t he Assessi ng Officer failed to produce any ta ngibl e material /evide nce during a ppellate pr oceedi ngs, iv) reass essme nt order dated 27.03.2022 u/s 147 r.w.s. 144 directly as Jurisdi cti onal AO, i nstead of thro ugh t he Na tional Facel ess Assessment Centre (NFA C), which i s mandatory under sec tion 151A of the Inc ome Tax Act, 1961 & CB DT N oti fication No . 76/2020 dat ed 25.09.2020 and CB DT Circ ular No.19 /2020 dated 13.08.2020 whic h mandate t hat a ssessm ents and reassess ments for specified years mus t b e co nduct ed through NFAC a nd (v) the e x parte order u/s 144 was invalid. Once suc h jurisdictio nal defects wer e established, t he CIT(A) ought to have annulled the assess ment rather tha n remanding the ma tter to A.O . to make fres h ass essme nt.
3.Invalid "R eas ons to Believe" That the lear ned CIT(A) failed to appreci at e t hat t he Assessi ng Officer recorded "re asons to believe" on t he basis of vague, uncorroborat ed a nd borro wed i nformation from a p olice complai nt, which does not c onstitut e ta ngibl e mat erial as required under settl ed law (Ganga Saran & S ons (P) Ltd. v. ITO, 130 ITR 1 (SC); ITO v. Lakhmani Mewal Dass, 103 ITR 437 (SC)).
4.No Pr i or & Mechanical Approval u/s 151 That the l earned CIT(A) erred i n law and on facts in not appr eciati ng that reassessment pr oce edi ngs ar e bad in law as the mandatory approval u/s 151 was given by 'No n Jurisdicti onal ' Pr. CIT (Chandi garh) on wrong reasons of 'N ON PAN CAS E' i n the absenc e of Ta ngi ble Material in Hand and i n a mec hanical manner, wi thout applicatio n of mind, & on bor rowed satisfaction, which vitiates t he j urisdiction ass umed by t he 'Non Jurisdictional ' Ass essi ng Offic er, Wa rd 1(1 ) Nangal .
5.Additions Based on Suspicion and Conj ecture That t he l earned CIT(A ) erred i n sustai ni ng additi ons of Rs.4,68,35,000/- (alleged unexplai ned investment u/s 69A witho ut establishi ng ownership of gold , bul lion, jewellery , cas h etc.) and Rs. 83,64,605/- (alle ged inte rest i ncome which was not found credited in books of assessee) without bri ngi ng any corr oborati ve/tangi ble evidence on recor d a nd exercisi ng wrong j urisdiction mer ely on suspicion and unverifi ed police infor mation, whic h is agai nst t he settl ed pri nciple that sus picion, howev er strong, c annot take the place of proof.
6.Absence of Nexus B etwee n Informatio n and Escapement of Income That the learned C IT(A ) failed to appr eciate that the i nformati on relied upon by the AO , on borr owed satisfaction of Police Commissi o ner/Investi gati on Wi ng was wi thout non applicatio n of mi nd, whic h had no live nexus wit h the alleged escapement of i ncome, as no i ndependent i nquiry u/s 131, 133(6), or 142(2 ) was conducted t o establish tha t the appellant had ma de suc h investment or earned such i nter est.
7.Assessme nt Based on "R easons to Suspect" Inst ead of "R easons to B elieve" That t he reassess ment order suffers from fundament al illegal ity as t he additi ons were made on "r easons to suspect " rat her than "reas ons to believe," c ontrar y to t he mandate of secti on 147 a nd the cons ti tutional safeguard under Ar ticle 265 of the Co nstituti on of India.
8.Deni al of Effec ti ve Appellat e Adj udicati on That the l earned CIT(A ) erred in s etti ng aside t he assessment to the AO without adj udicating the jurisdictio nal grounds raise d by t he appellant, thereby fail ing to dischar ge the appellate functi on v ested u/s 250(6) and 251(1)(a) of the Act.
9.Violation of secti on 151A and CBD T Circ ulars applicabl e That the l earned CIT(A) erred i n law and on facts in not appr eciati ng that the reassess ment order was passed manually by the Jurisdictional AO, which is contrary to section 151A and CBDT instructions No. 76/2020 dated 25.09.2020 and CBDT Instructi o ns No. 19/2020 dated 13.08.2020 which mandated that as sessments and reass essme nts for spe cified years m ust be co nducted thr ough N FAC.
10.Invalid Notic e u/s 148 dat ed 30.03.2021 (without DIN) That t he notice u/s 148 dated 30.03.2021 was iss ued without DIN, contrary to CBDT Circular N o. 19/2019 dat ed 14.08.2019, which mandat es t hat all notices mus t bear a DIN unl ess covered by exceptional circ umstances. The AO wro ngl y invoked para 3(iv) of the circular, whereas the asses see had valid PA N and had filed ITR . As held in CIT v. L axma n Das K handel wal (2019) 417 ITR 325 (SC), abs enc e of valid notice renders reass essme nt void . Henc e, the notice is i nv alid and deemed ne ver to hav e been issued.”
ITA N o. 1295/Del/2026
“1 . That the l earned C IT(A ) has err ed in l aw a nd on facts in not appr eciati ng that t he r eassessment order dated 27.03.2022 is void ab i nitio, as the notice u/s 148 dated 30.03.2021 falls wi thi n t he transitional peri od (20.03.2020 to 31.03.2021) c overed by t he H on'ble Supreme C ourt i n Rajeev Bans al & Anr. v. Uni on of India (2023) 469 ITR 4 6 (SC ). As per the bi ndi ng r atio, such notices are deeme d to be show-ca use notic es u/s 148A(b), requi ring compliance wit h Sectio n 1 48A proc edur e. Since no noti ce u/s 148A(b) was issued nor order u/s 148A(d) pass ed, the reassessment o rder dat ed 27.03.2022 is without j urisdicti on and deser ves to be annulled."
2.Misapplicati on of di scr eti onary power u/s 251(1 )(a)
"The l earned C IT(A) gravely er red in law and o n facts in invoki ng powers u/s 251(1)(a) of the Act to set aside the assessment , despite rec ordi ng clear fi ndi ngs that (i) wrong reasons recorded i .e. witho ut ta ngibl e or coge nt mat erials in hand, (ii) t he sanc tion u/s 151 was mechanic al received on 8.4.2022 by JAO and without applicatio n of mi nd, (iii) the Assess ing Offi cer failed to prod uce any tangi ble material/evidenc e duri ng appellat e proc eedi ngs, iv) 148 notice dt .30.3.2021 without prior appr oval and without followi ng up 1 48А procedure (v) the ex pa rte orde r u/s 144 was invalid. Onc e suc h jurisdictio nal defects were , est ablished, the CIT(A) ought to have annulled the assess ment rather than remanding the ma tter to A.O. to make fres h ass essme nt.
3.Invalid NFAC DSC wit hout 'Signature Properties' That the l earned CIT(A ) has erre d in law and on facts in not appreciati ng t hat t he NFAC assessment order dated 16.03.2022 was di gitally si gned with the notation "V ali dity Unknown", failing to satisfy Section 282A of the Income-t ax Act, 1 961 read wit h Sectio ns 3 and 5 of t he Information Technology Act, 2000. Suc h an order is void ab i niti o and i nca pable of bei ng revived by remand.
4.Non-Ser vice of Notice u/s 148 That the l earned CIT(A ) has erre d in law and on facts in directi ng fres h as sessment despite the appellant ne ver having be en served wi th any notice u/s 148. N o such notice is availabl e on the assessee's portal, and mere citation i n para 3 of t he NFAC order c annot substitut e valid service. The abs enc e of notic e is a j uri sdicti onal defect that c annot be cur ed by r emand.
5.Juri sdictional Defect Not Curabl e by R emand That the l earned CIT(A ) has erre d in law and on facts in directi ng de novo ass essment despite multiple jurisdictio nal de fects-invalid DS C authentication, non-servic e of notice u/s 148, lack of valid juri sdictional appr oval, violation of Sec tion 14 9(1)(b) and S ection 148A, a nd absenc e of DIN. Thes e defects stri ke at t he roo t of j urisdicti on and cannot be c ured by remand under Secti on 251(1)(a).
6.Invalid "R eas ons to Believe" That the lear ned CIT(A) failed to appreci at e t hat t he Assessi ng Officer recorded "re asons to believe" on t he basis of vague, uncorroborat ed a nd borro wed i nformation from a p olice complai nt, which does not c onstitut e ta ngibl e mat erial as required under settl ed law (Ganga Saran & S ons (P) Ltd. v. ITO, 130 ITR 1 (SC); ITO v. Lakhmani Mewal Dass, 103 ITR 437 (SC)).
7.No Pr i or & Mechanical Approval u/s 151 That the l earned CIT(A) erred i n law and on facts in not appr eciati ng that reassessment pr oce edi ngs ar e bad in law as the mandatory approval u/s 151 was given by 'No n Jurisdicti onal ' Pr. CIT (Chandi garh) on wrong reasons of 'N ON PAN CAS E' i n the absenc e of Ta ngi ble Material in H and a nd i n a mechanical manner, without applicatio n of mind, & on bor rowed satisfaction, which vitiates t he j urisdiction ass umed by t he 'Non Jurisdictional ' Ass essi ng Offic er, Wa rd 1(1 ) Nangal .
8.Approval from Non-Jurisdi cti onal Authority That the l earned CIT(A ) has erre d in law and on facts in overlooki ng that t he approval dated 28.03.2021 was accorded by the Pr incipal CIT, Chandi garh, who was not the jurisdicti onal author ity. The alleged appr oval was rec eiv ed by t he Jurisdictional AO onl y on 08.04.2022, well after issuance of the alle ged 148 notice dated 30.03.2021. Suc h i nvalid approval vitiat es the reass essme nt pr oce edi ngs and ca nnot be c ured by remand.
9.Violation of Sectio n 149(1)(b) and Secti on 148A That the l earned CIT(A ) has erre d in law and on facts in directi ng f res h assessment despite clear vi olation of Secti on 149(1 )(b) and S ec ti on 148A. The alleged notice dat ed 30.03.2021 was i ssued without tangi ble m ater ial in hand and wit hout followi ng the manda tory pr ocedure under S ecti on 148A. Thes e j urisdictional defec ts render the proceedings void ab i niti o.
10.Additi ons Based on Suspicion and Conj ecture That t he l earned CIT(A ) erred i n sustai ni ng additi ons of Rs.3,49,25,000/- (alleged unexplai ned investment u/s 69A witho ut establishi ng ownership of gold, bul lion, jewellery , cash e tc.) and Rs. 1,14,15,985/- (alle ged inte rest i ncome which was not found credited in books of assessee) especially when i ) whe n interest is higher si de i.e. @ 33% p.a. ii) without bri ngi ng any corrobo rative /tangible evidenc e on r ecor d and exercising wrong jurisdicti on merely o n suspi cion and unverified police i nfor matio n, whic h is agai ns t the settl ed pri nciple tha t suspicion, however str ong, cannot take the place of proof.
11.Absenc e of Nexus B et ween Information and Escapement of Income That the lear ned CIT(A) failed to appreci at e t hat t he informati on relied upon by t he AO, on borr owed satisfacti on of P olice Commissioner /Investi gation Wi ng was wit hout non appli cati on of mi nd, which had no live nex us wit h the all ege d esca pement of i nco me, as no independent i nquiry u/s 131, 133(6 ), or 142(2) was conduc ted to establish that the appel lant had made such investment or earne d s uch i nteres t.
12.Assessment Based on "Reasons to S uspect" Inst ead of "R eas ons to Believe" That t he reassess ment order suffers from fundament al illegal ity as t he additi ons were made on "r easons to suspect " rat her than "reas ons to believe," c ontrar y to t he mandate of secti on 147 a nd the cons ti tutional safeguard under Ar ticle 265 of the Co nstituti on of India.
13.Denial o f Effec ti ve Appellate Adj udicati on That the l earned CIT(A ) erred in s etti ng aside t he assessment to the AO without adj udicating the jurisdictio nal grounds raise d by t he appellant, thereby fail ing to dischar ge the appellate functi on v ested u/s 250(6) and 251(1)(a) of the Act.
14.Invalid Notic e u/s 148 dat ed 30.03.2021 (without DIN) That t he notice u/s 148 dated 30.03.2021 was iss ued without DIN, contrary to CBDT Circular N o. 19/2019 dat ed 14.08.2019, which mandat es t hat all notices mus t bear a D IN unl ess cove red by exceptional circumsta nces and i n the absence o f vali d notice renders reass essme nt void . Henc e, the notice is i nv alid and deemed ne ver to hav e been issued."
ITA N o. 1339/Del/2026
1.That t he lear ned CIT(A ) has erred in law and o n facts in not appr eciati ng that t he r eassessment order dated 27.03.2022 is void ab i nitio, as the notice u/s 148 dated 30.03.2021 falls wi thi n t he transitional peri od (20.03.2020 to 31.03.2021) c overed by t he H on'ble Supreme C ourt i n Rajeev Bans al & Anr. v. Uni on of India (2023) 469 ITR 4 6 (SC ). As per the bi ndi ng r atio, such notices are deeme d to be show-ca use notic es u/s 148A(b), requi ring compliance wit h Sectio n 1 48A proc edur e. Since no noti ce u/s 148A(b) was issued nor order u/s 148A(d) pass ed, the reassessment o rder dat ed 27.03.2022 is without j urisdicti on and deser ves to be annulled."
2.Misapplicati on of di scr eti onary power u/s 251(1 )(a)
"The l earned C IT(A) gravely er red in law and o n facts in invoki ng powers u/s 251(1)(a) of the Act to set aside the assessment , despite rec ordi ng clear fi ndi ngs that (i) wrong reasons recorded treati ng assess ee as N on-PAN despite valid PA N and henc e filed no ITR, (ii) the sancti on u/s 151 was mec hanical and wit hout appl ication of mind, (iii) t he Assessi ng Officer failed to produce any ta ngibl e material /evide nce during a ppellate pr oceedi ngs, iv) reass essme nt order dated 27.03.2022 u/s 147 r.w.s. 144 directly as Jurisdi cti onal AO, i nstead of thro ugh t he Na tional Facel ess Assessment Centre (NFA C), which i s mandatory under sec tion 151A of the Inc ome Tax Act, 1961 & CB DT N oti fication No . 76/2020 dat ed 25.09.2020 and CB DT Circ ular No.19 /2020 dated 13.08.2020 whic h mandate t hat a ssessm ents and reassess ments for specified years mus t b e co nduct ed through NFAC a nd (v) the e x parte order u/s 144 was invalid. Once suc h jurisdictio nal defects wer e established, t he CIT(A) ought to have annulled the assess ment rather tha n remanding the ma tter to A.O . to make fres h ass essme nt.
3.Invalid "R eas ons to Believe" That the lear ned CIT(A) failed to appreci at e t hat t he Assessi ng Officer recorded "re asons to believe" on t he basis of vague, uncorroborat ed a nd borr owed i nformation from a p olice complai nt, which does not c onstitut e ta ngibl e mat erial as required under settl ed law (Ganga Saran & S ons (P) Ltd. v. ITO, 130 ITR 1 (SC); ITO v. Lakhmani Mewal Dass, 103 ITR 437 (SC)).
4.No Pr i or Appro val & Mecha nical Approval u/s 151 That the l earned CIT(A) erred i n law and on facts in not appr eciati ng that reassessment pr oce edi ngs ar e bad in law as the mandatory approval u/s 151 was giv en by 'No n Jurisdicti onal ' Pr. CIT (Chandi garh) on wrong reasons of 'N ON PAN CAS E' i n the absenc e of Ta ngi ble Material in H and a nd i n a mechanical manner, without applicatio n of mind, & on bor rowed satisfaction, which vitiates t he j urisdiction ass umed by t he 'Non Jurisdictional ' Ass essi ng Offic er, Wa rd 1(1 ) Nangal .
5.Additions Based on Suspicion and Conj ecture That t he l earned CIT(A ) erred i n sustai ni ng additi ons of Rs.2,27,36,000/- (alleged unexplai ned investment u/s 69A witho ut establishi ng ownership of gold, bul lion, jewellery , cas h etc.) and Rs. 84,77,125/- (alle ged inte rest i ncome which was not found credited in books of assessee) without bri ngi ng any corr oborati ve/tangi ble evidence on recor d a nd exercisi ng wrong j urisdiction mer ely on suspicion and unverifi ed police infor mation, whic h is agai nst t he settl ed pri nciple that sus picion, howev er strong, c annot take the place of proof.
6.Absence of Nexus B etwee n Informatio n and Escapement of Income That the lear ned CIT(A) failed to appreci at e t hat t he informati on relied upon by t he AO, on borr owed satisfacti on of P olice Commissioner /Investi gation Wi ng was wit hout non appli cati on of mi nd, which had no live nex us wit h the all ege d esca pement of i nco me, as no independent i nquiry u/s 131, 133(6 ), or 142(2) was conduc ted to establish that the appel lant had made such investment or earned s uch i nteres t.
7.Assessme nt Based on "R easons to Suspect" Inst ead of "R easons to B elieve" That t he reassess ment order suffers from fundament al illegal ity as t he additi ons were made on "r easons to suspect " rat her than "reas ons to believe," c ontrar y to t he mandate of secti on 147 a nd the cons ti tutional safeguard under Ar ticle 265 of the Co nstituti on of India.
8.Deni al of Effec ti ve Appellat e Adj udicati on That the l earned CIT(A ) erred in s etti ng aside t he assessment to the AO without adj udicating the jurisdictio nal grounds raise d by t he appellant, thereby fail ing to dischar ge the appellate functi on v ested u/s 250(6) and 251(1)(a) of the Act.
9.Violation of secti on 151A and CBD T Circ ulars applicabl e That the l earned CIT(A) erred i n law and on facts in no t appr eciati ng that the reassess ment order was passed manually by the Jurisdictional AO, which is contrary to section 151A and CBDT instructions No. 76/2020 dated 25.09.2020 and CBDT Instructi ons No. 19/2020 dated 13.08.2020 which mandated that as sessments and reass essme nts for spe cified years m ust be co nducted thr ough N FAC.
10.Invalid Notic e u/s 148 dat ed 30.03.2021 (without DIN) by Non Jurisdictional A.O. That the noti ce u/s 1 48 dat ed 30.03.2021 was iss ued by Non Jurisdicti onal A.O . without D IN, c ontr ary t o CBDT Circ ul ar No.19/2019 dated 14.08.2019, which mandates that all no tices must bear a DIN unless covered by exceptional ci rc umstanc es . The AO wrongly i nvoked para 3(iv) of the circular, wher eas t he assessee had valid PA N and had filed ITR. As held i n CIT v. L axma n Das K handel wal (2019) 417 ITR 325 (S C), abs ence of valid notice renders reass ess ment void . He nce, t he notice is invalid and deemed never to ha ve bee n issued.”
We have heard the ld. AR and the ld. DR and examined the record. The ld. AR at the very outse t drew our attention to the ground No. 9 as produced above with re spect to non-exercising of the jurisdiction by the ld. CIT(A) u/s 250(6) of the Act as the ld. CIT(A) has not adjudicated the jurisdictional ground raised by the appellant before him? T he only question before us is whether the ld. C IT(A) w as right in restor ing the matter to the file of the AO without deciding the jurisdictional ground raised before him. In that regard, it is argued on behalf of assessee that the ld. C IT(A) was duty bound to adjudicate the legal grounds and has wrongly restored the file to the AO without deciding the jurisdictional ground. In that regar d, the ld. AR has relied upon the case o f Hon’b le Delhi High Court in the case of Akasaki Technology (P) Ltd. Vs. PCIT in ITA 241/2025 vide order dated 27.11.2025 stating that the matter needs to be restored to the ld. CIT(A) for deciding the jurisdictional gro und raised before him.
The ld. DR, on the other hand, submitted that the ld. CIT(A) has no t adjudicated the jurisdictio nal ground while passing the impugned order and the Hon’ble Tribunal may in its own discretio n take a decision on that aspect accordingly. The ld. DR has not opposed for restoring the matter to the file of the ld. CIT(A) in view of judgment of Hon’ble High Court in Akashaki Technology (P) Ltd. refer red (supra).
We have examined the order of Hon’ble High Court and noticed that the facts and circumstances were identical to the facts and circumstances of the case in hand, as the assessment order in that case was also passed u/s 144 of the Act and the ld. CIT(A) has not returned any finding on the jurisdictional ground raised before him and has restored the matter to the file of the AO. In these circumstances, the Hon’ble jurisdictional High Court in para 14 & 15 was pleased to hold as under:
“14.A perus al of the order would reveal that the ITAT does not deal with the pleas urged by the appellant before it. Even the CIT(A) wi thout dealing wit h the submissi ons , has primarily by observi ng that t he appellant had s ubmi tted that the assessment order was pass ed under Section 144 of the Act without issui ng notice under Secti on 143(2) of the Act, has rema nded the mat ter back to t he AO. The re i s no findi ng of the C IT(A ) on t he s aid aspect inasmuch as it ought to ha ve t o c ome to the c onclusion whethe r such a notice had in fact been issued, if not what is the effec t and als o, in suc h circumstances, the matt er c ould have been rema nded bac k t o the AO, as it is the case of Mr. Krishnan t hat as no valid order under Section 144 of the Act was pas sed , the matt er could not have been re manded back to t he AO. Similarly, the ITAT has also wit hout decidi ng the issue as rais ed by t he appellant, upheld the or der passed by the CIT(A ).
15.Since an i nfirmity has aris en at t he lev el of the CIT(A), who was exercising j urisdiction under S ection 251 of the Act, t he iss ue r aise d need t o be decided by the CIT(A) a nd not by the AO. We acco rdi ngly, se t aside the order passed by the ITAT dated 07.05.2025 and also the or der of the CIT(A ) dat ed 25.10. 2024 and remand the mat ter bac k to the CIT (A) who s hall decide t he ap peal afr esh i ncl uding on the plea advanced by Mr. Krishnan, as noted above .”
We have also examined the impugned order wherein the ld. CIT(A) has decided the appeal making following observation in para 5.1 o nwards as under:
“5 .1 During t he course of appellate proceedi ngs, appellant filed exhaustive written submission mai nly challengi ng the j urisdictio n of t he AO to the issue of notice u/s 148 of t he I.T. Act on the grounds that appellant’s name was not ap pearing in the list of appr oval u/s 151 of the I.T. Act gr anted by Pr .CIT Chandi garh whereas as per lett er no. 2528 dated 28.03.2021 Addl.CIT Chandigarh granted approval u/s 151(1) of the I.T. Act to non-jurisdictional ITO Wd.1 (1) Na ngal o n the basis of said approv al letter of Pr.CIT Chandi garh, that the AO has not m ade any independent enquir y into verac ity of alleged i nformation and that t he re-openi ng was b ased on borrowed satisfacti on and the additi ons were made wit hout application of mi nd, that as per the i nfor mation provided by Faridabad Pol ice Commissi o ner there we re i nvestments i n flats agai ns t rec eipt o f Rs. 12,000/- onl y whereas additi ons were made agai nst i nvest ment and i nterest ther eon, that the AO has not brought any tangi ble material / c orr oborative evidences on record t o show t hat the appellant has undisclosed i ncome or una cc ounted funds, e tc . etc. and theref ore impugne d assessment order passed is bad in law. Appellant also relied upon pletho ra of j udgements in support of c onte ntions raised.
5.2I hav e carefully perused the writt en submission filed by the appella nt during appellate proceedi ngs. I hav e also carefull y perused the fi ndings given by the AO in t he impugned assessme nt or der and fo und tha t t he AO has not provided com plete i nformation relat ed to informati on and d ocume ntary evidenc es received by him rela ti ng t o a ppell ant’s said i nvestme nt i n Piyus h Gr oup of compani es and i nt eres t rec eived the reon as also appro val accorded u/s 151(1) of t he I. T. Act. At t he s ame time, it is not ed that the appellant has also failed to comply to any of the statutor y notices iss ued by the AO i ncluding notices u/s 148 and u/s 142(1 ) of the I. T. Act duri ng t he course of assessment procee di ngs a nd thus fail ed to provide requi red detai ls and docume ntary evidences to show that t he r e-assess ment pr oceedings i nitiated by t he AO is not i n acc ordanc e wi th pro visio n of law and that the said information r eceived by the AO is not correct. Ther efore i n the absenc e of c ompl ete information and the view of the AO in the mat ter of re-ope ni ng of ass essment and said i nfor mation received, t hi s office is unable to adj udicate grounds of appeal raised by the appellant.
5.3Ther efore, consid ering the tot ality of t he case and consideri ng the fact that the impugned assessm ent or der has been passed by the AO ex-par te u/s 147 r. w.s. 144 of t he I.T. Act mainly for t he r eas on t hat the appellant fail ed to respond to any of the statutory notices issued by the A O, a nd t hus fail ed to provide r equi red detai ls / explanati ons and necessary docum entary evidences, I am of the c onsidered view that the A O nee d to properly ve rify and bring evidences on recor ds to show that appellant has actually done the said transaction of investment of Rs.7,28,875/- in Pi yush Group of compani es and earned i nt erest i ncome o f Rs.48,53,745/-on s uch i nv estment and taxa bility of the same. The appellant should also get an opport unity to pr ese nt his case a nd file writte n s ubmission and necessary doc ument ary evidences to give rebuttal to the fi ndi ngs of the AO and counteri ng the ar guments of the AO relat ed to re-ope ni ng of assessment and investme nt of Rs. 7,28,875/- in Piyus h Group of c ompani es and taxabi lity of inter est income ear ned of Rs.4 8,53,745/- o n such investment.
5.4Ther efore, i n vi ew of powers vested i n t he undersigned vi de pr ovis o under clause (a) o f sub-s ection (1 ) of section 251 of the Act, in my considered opinio n, it woul d meet the ends of justice if the ass essme nt i s set aside to the file of the A .O. to make a fresh ass essment after of feri ng s ufficient a nd reasonabl e o pportuni ty of bei ng heard to appell ant and afte r verifi cati on of the facts of the cas e a nd i n the principle of law. The impugned ass essment order pass ed by t he A.O . is theref ore s et aside t o t he file of t he A .O. t o ma ke t he same de-novo.
6.In the res ul t, t he appeal is set aside.”
On perusal of the contents of the imp ugned order extracted above, we have noticed that the ld. CIT(A) has not followed the provision of section 250(6) of the Act and has no t adjudicated the appeal as per require ment of law while restoring the matter to the file of the AO. Section 250(6) of the Act reads as under:
“250.
(6 ) The order of the Joi nt Commissioner (Appeals) or the Commissi o ner (Appeals) disposi ng of t he ap peal s hall be in writing and shall stat e t he poi nts for determination, the decisi on t hereon and the rea son for the decision.”
The ld . C IT(A) has observed that “the appellant should also get an opportunity to present his case and file written submissions and necessary documentary evidence to give rebuttal to the finding of the AO and co untering the arg ume nts of the AO relate d to reopening of assessment”. It is thus clear that the ld. CIT(A) has not adjudicated the legal grounds taken before him alleging that the reopening of assessment was bad in law. T hese facts and circumstances and the contents of the impugned order, bring the case within the parameters of the law laid down by the Hon’ble jurisd ictional Hig h Court in ITA No. 241/2025 referred (supra). For the above reasons, we are of the considered opinion that the impugned order has been passed witho ut follow ing the principle of section 250(6) of the Act. Accordingly, ground No. 9 (ITA No. 12 67/Del/2026), ground No. 8 (ITA No. 1268/Del/2026), ground No. 13 (ITA No. 1295/Del/2026) and ground No. 8 (ITA No. 13 39/Del/2026), raised by the assessee in this regard are allo wed and the impugned order is set aside. The matter is restored to the file of the ld. CIT(A) for deciding the same afresh, after afford ing the assessee an effective opportunity of hearing , and for deciding all the grounds r aised before him, including the jurisdictional ground , in accordance with law.
The finding of ITA No. 1267/Del/2026 shall mutatis mutandis apply to ITA Nos. 1268, 1295 & 1339/Del/2026.
In the result, the appeals of the assessee are allowed for statistical purposes.