SHAIK NAZIMA,KURNOOL vs. ITO, WARD- 9(1), HYDERABAD

As per the information available with the Income-tax Department, the assessee has made cash deposits aggregating to Rs.6,70,000/- in savings bank accounts and also made term deposits aggregating to Rs.23,55,687/- with State Bank of Hyderabad, Kurnool, Krishnanagar, during the financial year relevant to A.Y. 2015–16. Therefore, the assessment has been reopened under section 147 of the Act, and notice under section 148 of the Act, dated 12.04.2022 was issued and served on the assessee. Since there was no compliance, the A.O. issued notice under section 142(1) of the Act, on various occasions calling upon the assessee to furnish details in respect of cash deposits and term deposits in bank account. In response, the assessee submitted that, she is a housewife and the term deposits were made out of retirement benefits received by her husband who retired as Superintendent of Police, however, the A.O., after considering the submissions of the assessee and material available on record, observed that, the assessee has failed to furnish any supporting evidence in support of the source for cash deposits and term deposits and further observed that the assessee could not substantiate the explanation with any documentary evidence and therefore, treated cash deposits of Rs.6,70,000/- as unexplained money under section 69A of the Act, and term deposits of Rs.23,55,687/- as unexplained investment under section 69 of the Act, and completed assessment under section 147 r.w.s. 144B of the Income-tax Act, 1961. 3. Aggrieved by the assessment order, the assessee preferred appeal before Ld. CIT(A). Before Ld. CIT(A), the assessee requested for an opportunity to appear in person and explain the details before the Assessing Officer and furnish information in support of the explanation offered before the A.O. However, Ld. CIT(A), after considering the facts available on record and observing that despite sufficient opportunities the assessee has failed to substantiate the grounds raised in appeal and failed to furnish any details in support of the contentions raised before the appellate authority, upheld the additions made by the A.O.

Aggrieved by the order of Ld. CIT(A), the assessee is now in appeal before the Tribunal.

The learned counsel for the assessee, Shri K. Dinesh Reddy, Advocate and Shri K. Chandrasekhar Reddy, Advocate, submitted that, the A.O. has issued show cause notice under section 148A(b) of the Act, on 23.03.2022 and thereafter passed order under section 148A(d) of the Act, and issued notice under section 148 of the Act, dated 12.04.2022. The learned counsel for the assessee further submitted that, the notice issued under section 148 of the Act, dated 12.04.2022 is barred by limitation as the period of six years expired on 31.03.2022 and further submitted that, the A.O. had sufficient time to complete the proceedings within the limitation period but failed to do so. The learned counsel for the assessee further submitted that, though proceedings under section 148A of the Act, were initiated before expiry of limitation, the final notice under section 148 of the Act, admittedly came to be issued beyond the limitation period prescribed under the unamended provisions of section 149 of the Act, and therefore, the reassessment proceedings are liable to be quashed. In support of their contention, they have relied upon the Judgment of Hon’ble Juri ictional High Court in the case of Cyberabad Citizens Health Services Private Limited vs. DCIT & Anr. dated 17.11.2025 in WP.No.25121/2024 and submitted that, the Hon’ble High Court has held that the limitation for issuing notice u/sec.148 of the Act for the assessment year ending before 01.04.2021 is 06 years from the end of the particular assessment year and therefore, the notice issued after the limitation period is held as barred by limitation. Ward-1, Ongole in ITA.No.1664/Hyd/2025, dated 28.01.2026. Thus, the learned counsel for the assessee have submitted that the issue of notice by the Assessing Officer u/sec.148 of the Act, dated 12.04.2022 is invalid being barred by limitation and the same is liable to be quashed.

The learned Senior A.R. for the Revenue, Dr. Sachin Kumar, on the other hand, submitted that, after amendment of the provisions relating to reopening with effect from 01.04.2021, the limitation for issuance of notice under section 148 of the Act, has been extended up to ten years in cases where the income escaping assessment exceeds Rs.50,00,000/- and therefore, the notice issued by the Assessing Officer is within the time limit. The learned Senior A.R. further submitted that, the proviso to section 149(1) of the Act, is applicable only in cases where limitation had expired before 01.04.2021 and where limitation was still available as on 01.04.2021, the amended provisions would apply. In support of his contention, he relied upon the decision of Hon’ble for the assessment year 2015–16 which is beyond the period of six years from the end of the relevant assessment year. As per the unamended provisions of section 149 of the Act, the notice under section 148 of the Act, could have been issued within six years from the end of the relevant assessment year and accordingly, the limitation expired on 31.03.2022. 8. We further find that, though as per the amended provisions of section 149 of the Act, the limitation for reopening of assessment has been extended up to ten years in cases where income escaping assessment exceeds Rs.50,00,000/-, however, the first proviso to section 149 clearly provides that no notice under section 148 shall be issued at any time in a case for the relevant assessment year beginning on or before 01.04.2021 if such notice could not have been issued at that time on account of being beyond the time limit specified under the provisions of the Act, as it stood prior to amendment. The scope and applicability of the said proviso has been considered and interpreted by the Hon’ble Supreme Court in the case of Union of India vs. Rajeev Bansal reported in (2024) 469 ITR 46 (SC), wherein it has been held that, the extended time limit under the amended provisions cannot be applied retrospectively to revive a time barred case.

We also find that, the Hon’ble Juri ictional Telangana High Order pronounced in the Open Court on 15th May, 2026. (श्री रवीश सूद) (मंजूनाथ जी) (RAVISH SOOD) (MANJUNATHA G.) न्याययक सदस्य/JUDICIAL MEMBER लेखा सदस्य/ACCOUNTANT MEMBER Hyderabad, dated 15.05.2026. TYNM/sps आदेशकी प्रनतनलनप अग्रेनर्त/ Copy of the order forwarded to:- 1. निर्धाररती/The Assessee : Shaik Nazima, R/o.8-11-104A, Abbas Nagar, Abbas Manzil Kallur, Kurnool, VTC, Kurnool, PO: Knl- Camp-b, District: Kurnool -518002, Andhra Pradesh. 2. रधजस्व/ The Revenue : The Income Tax Officer, Ward 9(1), Hyderabad.

The Principal Commissioner of Income Tax, Hyderabad. 4. नवभधगीयप्रनतनिनर्, आयकर अपीलीय अनर्करण, हैदरधबधद / DR, ITAT, Hyderabad 5. गधर्ाफ़धईल / Guard file