MARRI USHA,USA vs. ACIT, INT-TAX-1, HYDERABAD

आदेश / O R D E R PER MANJUNATHA.G, AM:

This appeal filed by the assessee is directed against the final Assessment Order passed by the AO u/s.147 r.w.s.144C(13) of the Income Tax Act, 1961 (in short “the Act“) dated 10.01.2024, in pursuant to directions of the Dispute Resolution Panel-1, Bengaluru, u/s.144C(5) of the Act dated 29.12.2023 and pertains to AY 2017-18.

ITA No.60/Hyd/2024 Marri Usha :: 2 :: 2. The brief facts of the case are that the assessee is an individual & non-resident, presently residing in USA, purchased a plot situated at Shankar Hills Colony of Vattinagulappaly Village & Gramapanchayat, Rajendra Nagar Mandal, Serlingampalli, Ranga Reddy District, Telangana, registered vide document bearing No.5695/2016 dated 07.01.2016 for a total sale consideration of Rs.20 lakhs whereas the stamp duty value of the property was determined at Rs.70 lakhs. The assessee has not filed any Return of Income (RoI) for the impugned assessment year under consideration. The assessment has been reopened u/s.147 of the Income Tax Act, 1961 on the basis of information disseminated by the I & CI Wing and notice u/s.148 of the Act dated 29.03.2021 was claimed to be issued and served on the assessee. Subsequently, notice u/s.142(1) of the Act dated 29.11.2022 was issued and served on the assessee in her e-mail usha1015@gmail.com. In response to the notice, the assessee vide reply dated 10.02.2023 submitted that, she has not received any notice u/s.148 of the Act, either physically or by e-mail and it was further stated that the alleged notice is not available in the IT portal also. The assessee also requested the AO to provide copy of such notice. The AO has not given copy of notice claimed to have been issued u/s.148 of the Act, however, issued a show cause notice and called upon the assessee to explain ‘as to why’ addition shouldn’t be made in view of difference between consideration and fair market value of the property as per Section 56(2)(vii)(b) of the Act. In response, the assessee submitted

ITA No.60/Hyd/2024 Marri Usha :: 3 :: that, she had purchased a property for consideration of Rs.20 lakhs and paid relevant consideration as per the Sale Deed, however, as per the fair market value of the property, stamp duty has been determined at Rs.70 lakhs. She further claimed that, she had purchased only title of the property without any physical possession and in this regard filed relevant details of litigation pending before various Courts. The assessee also requested to refer the matter to the DVO as per Section 50C(2) of the Act.

ITA No.60/Hyd/2024 Marri Usha :: 4 :: consideration paid for purchase of property u/s.56(2)(vii)(b) of the Act. In pursuant to the directions of the DRP dated 29.12.2023, the AO passed final assessment order u/s.147 r.w.s.144C(13) of the Act on 10.01.2024 and determined the total income at Rs.50 lakhs.

ITA No.60/Hyd/2024 Marri Usha :: 5 :: relied upon the decision of the Hon’ble Telangana High Court in the case of Kalyan Chillara v. DCIT reported in [2024] 465 ITR 0729. The assessee had also relied upon the decision of the Co-ordinate Bench of this Tribunal in the case of Sama Sangeeta Reddy v. DCIT in ITA No.680/Hyd/2025 order dated 24.09.2025.

ITA No.60/Hyd/2024 Marri Usha :: 6 :: digital sign notice copy and also postal stamp. Further, once the notice has been issued within the due date provided u/s.149 of the Act, then subsequent delivery of notice is only a procedure and therefore, the assessee can’t question the service of notice once the assessee has not raised any objection before the AO. Since the documents in the possession of the Department clearly shows the service of notice to assessee, the assessee can’t question the service of notice subsequently in view of Section 292BB of the Act, where it has been clearly stated that when the assessee has appeared in any proceedings, it shall be deemed that notice issued under the provisions of this Act which is required to be served upon him has been duly served upon him in time in accordance with provisions of the Act and therefore, subsequently, the assessee can’t question service of notice, etc. Therefore, he submitted that there is no merit in legal ground taken by the assessee and the same should be rejected.

ITA No.60/Hyd/2024 Marri Usha :: 7 :: 10. We have heard both the parties, perused the materials available on record and had gone through orders of the authorities below. The assessee has challenged the notice claimed to have been issued u/s.148 of the Act on 29.03.2021 and submitted that the alleged notice u/s.148 of the Act dated 29.03.2021 was neither physically or through e-mail served on the assessee. The claim of the Department that the so-called notice was served on 30.03.2021 by dispatch from the Office of the AO is incorrect going by the consignment track statement downloaded from website of India Post where it has been clearly stated that the item was booked on 05.04.2021 at Begum pet SO. The assessee also took support of ITBA portal screenshot where the Department claims that the alleged notice u/s.148 of the Act was served on the assessee on 25.04.2021. We have gone through the relevant details including copy of notice issued u/s.148 of the Act dated 29.03.2021 which is available in the Paper Book filed by the assessee as well as the Department. Although, the notice issued u/s.148 of the Act dated 29.03.2021 was digital sign by the AO, but going by the dispatch details including the logbook available in the office of the DCIT (International Taxation), Hyderabad, the speed post no. EN409748627IN has been booked on 05.04.2021 at Begumpet S.O. and the same was sent to domestic location on 25.04.2021. Further as per the ITBA portal screenshot, the Department claims that the above notice was served to the assessee on 25.04.2021. From the dispatch details of the Office of the AO and consignment track details of India Post, it is

ITA No.60/Hyd/2024 Marri Usha :: 8 :: undisputedly clear that notice u/s.148 of the Act dated 29.03.2021 was not dispatched from the Office of the AO on or before 31.03.2021 which is due date for issuing notice u/s.148 of the Act for the impugned assessment year. Although, the Department claims that once the notice has been dispatched from the Office of the AO on or before due date subsequent service of notice at a later date will not invalidate or notice issued by the AO and for this purpose, the Revenue took support from the provisions of Sec.292BB of the Act, but, in our considered view, the above arguments of the Revenue doesn’t hold good for the simple reason that the assessee has questioned non-service of notice u/s.148 of the Act, in response to the notice issued by the AO u/s.142(1) of the Act dated 29.11.2022 and claimed that no notice u/s.148 of the Act was served on the assessee either physically or by e-mail. Since the assessee has raised object of non-service of notice at the time of assessment proceedings, in our considered view, the Revenue can’t take shelter under the provisions of Sec.292BB of the Act and therefore, to this extent, the arguments of the Revenue is rejected.

ITA No.60/Hyd/2024 Marri Usha :: 9 :: India Post BNPL Scheme on 30.03.2021. However, going by the details of India Post including consignment track record, it clearly shows that the item containing the alleged notice u/s.148 of the Act was booked on 05.04.2021 and therefore, the arguments of the Revenue that the notice has been dispatched on 30.03.2021 is not supported by any contemporary evidences and thus, can’t be accepted. At this stage, it is necessary to refer to the decision of the Hon’ble Telangana High Court in the case of Kalyan Chillara (supra), where it has been clearly held that the requirement of issuing notice u/s.148 of the Act as contemplated u/s.149 of the Act is not mere signing of notice, but it should be sent to the proper person within the end of the relevant to assessment year. The Hon’ble Telangana High Court further held that “in order to determine when does "despatch", i.e., the transmission of electronic record or the notices in the present case, from the Department occurred, we may first note the precedence set by several High Courts in the context of Income Tax Business Application portal. Under section 13 of the Act of 2000, various High Courts have concluded that, the despatch of an electronic record occurs when it enters a computer resource outside the control of the originator, i. e, when the Income Tax Business Application's email system is triggered and the e-mail leaves the Income Tax Business Application servers”.

ITA No.60/Hyd/2024 Marri Usha :: 10 :: impugned notice was signed on 29.03.2021 and dispatched to the assessee on 31.03.2021 is incorrect and not in accordance with section 282 r.w.r.127 of the Income Tax Rules, 1962. Since, the notice u/s.148 of the Act was not served on the assessee within the time limit u/s.149 of the Act, in our considered view, the above notice issued u/s.148 of the Act dated 29.03.2021 is barred by limitation and liable to be quashed. Thus, we quashed the notice issued u/s.148 of the Act dated 29.03.2021 and consequent assessment order passed by the AO u/s.147 r.w.s.144C(13) of the Act.

Order pronounced on the 02nd day of September, 2026, in Hyderabad. Sd/- Sd/- (विजय पाल राि) (मंजूनाथा. जी) (VIJAY PAL RAO) (MANJUNATHA.G) उपाध्यक्ष /VICE-PRESIDENT लेखा सदस्य/ACCOUNTANT MEMBER

ITA No.60/Hyd/2024 Marri Usha :: 11 :: Hyderabad, dated 02nd September, 2026. TLN आदेशकी प्रतितलतप अग्रेतिि/ Copy of the order forwarded to: 1 तिर्ााररिी/The : Marri Usha, 445 E Trailwood Drive Terre Haute, IN-47802, USA-47802, USA Assessee 2 राजस्व/ The Revenue : The ACIT, International Taxation-1, Hyderabad. 3 The Principal Commissioner of Income Tax, Hyderabad. 4 तिभागीयप्रतितितर्, आयकर अपीलीय अतर्करण, हैदराबाद / DR, ITAT Hyderabad. 5 गार्ाफ़ाईल / Guard file

आदेशािुसार / BY ORDER TIRUPATI Digitally signed by TIRUPATI YAMINI NAGA YAMINI NAGA MALLESWARI Date: 2026.09.02 MALLESWARI 17:50:56 +05'30' Sr. Private Secretary ITAT, Hyderabad