GOWRAN RAMESH,DHARMAPURI vs. ITO WARD 1, DHARMAPURI

The Assessee raised the following grounds of appeal : “1) The Impugned Order is unjust, unreasonable and bad in law. 2) ADDITIONAL GROUNDS OF APPEAL (A) Entire reassessment is null and void, as notice issued under sec.148A(b) dated 07/03/2023 required compliance on or before 14/03/2023, thereby violating the mandate of SEVEN CLEAR DAYS. (Relying on ITA No:3597/Chny/2025) (B) As notice under sec. 148 dated 31/03/2023 has been issued by he JAO and not by the FAO, it amounts to violation of sec.151A, thereby making the entire assessment null and void. 3) Without prejudice, taxing the entire credits in the bank accounts as income is highly perverse. And for other reasons that may be adduced at the time of hearing, the Appellant prays that this appeal be admitted, considered and justice be rendered.” 3. Briefly the facts of the case are that appellant is an Individual. The appellant had not filed regular return of income for the Assessment Year 2016-17. Based on the information available in the Insight Portal of the Department that the appellant made cash deposits in the bank account maintained with ICICI Bank Limited and South Indian Bank Limited for sum aggregating to Rs.1,17,84,690/-. The Jurisdictional Assessing Officer formed an opinion that the income escaped assessment to tax. Accordingly, a notice u/s.148 was issued on 31.03.2023 after duly complying with the procedure laid down u/.148A of the Act. In response to notice u/s.148, the appellant filed return of income disclosing income of Rs.2,07,050/- on 30.04.2023. Against the said return of income, the assessment was completed by the e-Assessment Unit of the Department (herein after called ‘AO’) vide order dated 23.02.2024 passed u/s.147 r.w.s 144B of the Income Tax Department at a total income of Rs.1,19,91,740/-. While doing so, the Assessing Officer made addition of Rs.1,17,84,690/- being the cash deposits in the bank accounts maintained with ICICI Bank and South Indian Bank for the inability of the assessee to offer any plausible explanation as to the source of the cash deposits.

Being aggrieved by the above assessment order, appellant filed appeal before the ld.CIT(A) contending that the Assessing Officer had failed to consider the submissions made during the assessment proceedings. However, ld.CIT(A) had dismissed the appeal for non-prosecution.

Being aggrieved by the order of the ld.CIT(A), the appellant is in appeal before us in the present appeal. Before us, the ld.Counsel submits that the assessment proceedings initiated by the Assessing Officer are bad in law as the notice u/.s148A(b) was issued by the Jurisdictional Assessing Officer have no jurisdiction to issue notice u/s.148 of the Act, in view of the provisions of section 151A of the Income Tax Act, 1961.

On the other hand, the ld. Sr. DR had opposed the submissions made on behalf of the appellant and relied on the order of ld.CIT(A).

We shall take up this Ground No.4 at first instance as it goes to very root of the matter. In this case, we find that the appellant raised jurisdictional issue that the Jurisdictional Assessing Officer(JAO) have no jurisdiction to issue notice u/s.148 of the Act. The Jurisdiction to issue the above notice vests with the Faceless Assessing Officer(FAO) in accordance with the provisions of explanation inserted to Section 151A read with CBDT Notification dated 29.03.2022. The appellant relied on the following decisions of Hon’ble Bombay High Court in Hexaware Technologies Ltd. Vs. ACIT [2023] 149 taxmann.com 451, Hon’ble Madras High Court in TVS Credit Services Ltd. vs. DCIT in WP No.14255 of 2023, 22.04.2025 and Hon’ble Telangana High Court in Kings Pride Infra Projects Pvt. Ltd. vs. DCIT [2024] 157 taxmann.com 134, wherein, it was held that the issuing notice u/s.148 by the Jurisdictional Assessing Officer(JAO) is ultra vires the notification no.18 of 2022 of CBDT and the consequently held that the notice issued u/s.148A(b) and 148A(d) and 148 are null and void.

In view of the amendment brought by Finance Act 2026, in the light of orders passed by the Hon’ble Supreme Court in bunch of cases involving identical issue in Special Leave Petition (Civil) Diary No(s).57403/2025 vide order dated 03.02.2026 setting aside the orders passed by the Hon’ble Bombay High Court and Hon’ble Telangana High Court for fresh consideration before the Hon’ble High Courts. The matter requires remand to the file of ld.CIT(A)[NFAC] for fresh consideration and disposal in accordance with law after affording opportunity of being heard to the assessee.

In view of the above circumstances, we are of the considered opinion that in order to meet the ends of justice, the matter requires remand to the file of ld.CIT(A)[NFAC] for denovo disposal of appeal keeping in view of the Finance Act 2026. All other contentions raised by the appellant are left open for consideration before the ld.CIT(Appeals).

Accordingly, the appeal filed by the Assessee stands Partly Allowed for statistical purpose. Order pronounced in the open Court on 28th April, 2026.