Raghvendra Rathore vs. ITO, Cantt. Guna

Parties Involved

Facts Summary

The facts of ITA No. 556/Agr/2026 are being narrated as under. A search and seizure action under section 132 of the Income Tax Act, 1961 was carried out in case of P.N. Group (belong to Rathore family) on 09.01.2020. It was revealed that the assessee had given an unsecured loan of Rs. 18,75,000/- to entities related to PN Group during the F.Y. 2018-19. The cash was deposited into the bank account of the assessee and immediately transferred to entities related to PN Group in the name of unsecured loan. After recording reasons, the assessee’s case was reopened under section 147 of the Act to verify the genuineness of the unsecured loan. The assessing officer concluded that the assessee deposited cash in bank account through unaccounted source and the unsecured loan of Rs. 18,75,000/- was treated as unexplained investment under section 69 of the Act and added in the income of the assessee. The assessee preferred an appeal before the Commissioner of Income Tax/ NFAC(Delhi), who dismissed the appeal, confirming the additions made by the assessing officer. The assessee has raised fourteen grounds of appeal, including that the order passed by the learned National Faceless Appeal Centre (NFAC), Delhi is arbitrary, illegal, unjustified, without jurisdiction, bad in law and against the principal of natural justice hence void ab initio. The assessee also argued that the learned CIT(A) has grossly erred in upholding the initiation of assessment proceedings under section 147 read with sec…

Legal Issues

• 1. Whether the order passed by the learned National Faceless Appeal Centre (NFAC), Delhi is arbitrary, illegal, unjustified, without jurisdiction, bad in law and against the principal of natural justice hence void ab initio.
• 2. Whether the learned CIT(A) has grossly erred in upholding the initiation of assessment proceedings under section 147 read with section 144B of the Act, ignoring that the entire basis of the proceedings was material emanating from a Search and Seizure action under section 132 conducted on the P.N. Group on 09.01.2020 in relation to the Appellant, a person other than the searched person, and the assessment ought therefore to have been framed under the special machinery of section 153C read with section 153A, and not under section 147/148.

Judgment Outcome

Decided in favour of Assessee.

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