IN THE INCOME TAX APPELLATE TRIBUNAL “H(SMC)” BENCH, MUMBAI BEFORE SMT. BEENA PILLAI (JUDICIAL MEMBER)

AND SHRI OMKARESHWAR CHIDARA (ACCOUNTANT MEMBER)

I.T.A. No. 3409/Mum/2024 Assessment Year: 2016-17 Mahavir Co-operative Vs. ITO Ward 19(1)(1), Housing Society Limited Mumbai

2nd Floor, Flat No.16 37, ITO Ward 19(1)(1), Ridge Road, Walkeshwar Piramal Chambers, Mumbai-400006 6^th Floor, Lalbaug, PAN:AAAAM9751H Mumbai-400012 (Appellant) (Respondent)

Appellant by Shri V.H. Jariwala Respondent by Shri Pravin Salunkhe, SR. D.R.

Date of Hearing 26.03.2025 Date of Pronouncement 28.03.2025 ORDER Per: Smt. Beena Pillai, J.M.:

The present appeal filed by the assessee arises out of order dated 07/06/2024 passed by NFAC, Delhi, for assessment year

2016-17 on following grounds of appeal :

“1. On facts and in the circumstances of the case learned CIT (A) erred in upholding assumption of jurisdiction by learned A.O. to make reassessment u/s 147 read with sections 148 and 148A of the 1.T.

Act, 1961 as the same is barred by limitation provided in section

149 of the I.T. Act, 1961.

2. Assumption of jurisdiction by AO is bad in law as notice u/s 148 is issued after elapse of more than 3 years from end of relevant assessment year and hence as per section 151(ii) of the 1.T. Act, 1961 specified authority to sanction issue of notice u/s 148 and 148A is PCCIT whereas sanction is given by PCIT which is not the authority specified u/s 151(ii) of the I.T. Act, 1961.

3. In view of provisions of section 149(1)(b) of the I.T. Act, 1961, learned CIT (A) ought to have held that assumption of jurisdiction by A.O. u/s 147 r.w.s 148 and 148A is vitiated as at the time of passing order u/s 148A(d) A.O. was not in possession of books of account or other documents or evidence which reveal that the income chargeable to tax, represented in the form of an asset, amounting to or likely to amount to fifty lacs or more has escaped assessment.

4. Notice u/s 148 is bad in law also on the ground that it does not bear DIN, does not give reason for issuing the same without DIN, does not mention that approval of specified authority is obtained to issue it without DIN and hence is in violation of circular issued by CBDT being circular No 19 of 2019 dated 14th August, 2019.

5. On facts and in the circumstances of the case and in law learned CIT (A) erred in upholding the sanction u/s 151 given by Pr CIT although it was given by Pr CIT carelessly, without carefully perusing the underlying record, notice, information vis a vis draft order and hence sanction given without application of mind renders the order u/s 148A(d) of the I.T. Act, 1961 bad in law.

6. Learned CIT (Appeals) erred in ignoring and not following binding judicial precedent laid down by high court although cited and relied upon by appellant.

7. Learned CIT (A) and AO ought to have allowed expenses claimed against income from other sources.”

Brief facts of the case are as under:

2. The assessee is a Co operative Housing society and filed return of income for the A.Y. 2016-17 on 28.02.2017 returning total income at Rs.2,83,370/- after claiming deduction u/s 80P of Rs.50,000. Subsequently the Ld.AO received information from a survey conducted u/s 133A(2A) in the case of M/s Bombay Mercantile Co-Operative Bank Ltd that, the assessee deducting paid interest of Rs. 3,15,865/- in the previous year without TDS. On verification it was found that the interest income was not offered for tax. Thus the case of the assessee by was reopened, by issuing notice u/s 148 by the Ld.AO on 07.05.2021.

2.1 Thereafter, following the directions of the Hon'ble Apex Court in the case of Union of India Vs. Ashish Agarwal, opportunity of being heard was granted by issuing notice u/s 148A(b) to the assessee on 24/05/2022. On receipt of the reply from the assessee order u/s 148A(d) was passed on 26.07.2022 and the case was reopened by issuing notice u/s 148 dated 26.07.2022.

3. In response to the notice issued u/s.148, the assessee filed return of income on 23.0