LALITHA KUCHIBHATLA,CHITTOR vs. ITO ,WARD-1(1), TIRUPATI

आयकर अपील�य अ�धकरण, हैदराबाद पीठ IN THE INCOME TAX APPELLATE TRIBUNAL Hyderabad ‘SMC’ Bench, Hyderabad BEFORE SHRI VIJAY PAL RAO, VICE PRESIDENT AND SHRI MADHUSUDAN SAWDIA, ACCOUNTANT MEMBER आ.अपी.सं /ITA.No.2371/Hyd/2025 Assessment Year 2016-2017 Lalitha Kuchibhatla, The Income Tax Officer, TIRUPATI – 517 501. Ward-1(1), vs. Chittoor District. TIRUPATI State of Andhra Pradesh State of Andhra Pradesh PAN AXDPK2304D (Appellant) (Respondent) िनधा�रती �ारा/Assessee by : MS S Sandhya, Advocate राज� व �ारा/Revenue by : Sri Ashutosh Pradhan, Sr. AR सुनवाई की तारीख/Date of hearing: 23.04.2026 घोषणा की तारीख/Pronouncement: 30.04.2026 आदेश/ORDER PER VIJAY PAL RAO, VICE PRESIDENT :

This appeal by the Assessee is directed against the Order dated 17.11.2025 of the learned CIT(A)-National Faceless Appeal Centre [in short “NFAC], Delhi, arising from penalty Order passed u/sec.271(1)(c) of the Income Tax Act [in short "the Act"], 1961 for the assessment year 2016-2017.

2 ITA.No.2371/Hyd./2025 2. The assessee has raised the following grounds of appeal:

1) “The order of the learned CIT (A) is erroneous both on facts and in law;

2) The learned CIT (A) ought to have considered the fact that the order of assessment is not valid and, therefore, consequently the penalty is not leviable;

3) The learned CIT (A) is not justified in confirming the addition could be made to the income admitted on the ground that the deposits made are not explained by the appellant herein;

4) The learned CIT (A) erred in confirming the action of the Assessing Officer in holding that penalty is leviable u/s 271(1)(c) of the I.T. Act; and further erred in confirming the penalty levied of Rs.6,62,057/-

5) The learned CIT (A) ought to have seen that there is no concealment of income and that, therefore, no penalty is leviable;

6) The learned CIT (A) erred in partially confirming the levy of penalty u/s 271(1)(c) of the LT.Act.

7) Any other ground/grounds that may be urged at the time of hearing/”

3 ITA.No.2371/Hyd./2025 by the Assessing Officer u/sec.148 of the Act as well as consequent re-assessment order passed by the Assessing Officer and therefore, once the assessment order itself is set aside by this Tribunal, the penalty levied u/sec.271(1)(c) of the Act would not survive.

“12. On perusal of the above, it is evident that, this Tribunal relying on the Judgment of Hon'ble Telangana High Court in the case of Kotha Kanthaiah dated 24/04/2025 in W.P.No.344 of 2025, has held that the notice issued under section 148 of the

4 ITA.No.2371/Hyd./2025 Act by the JAO on or after the date of CBDT notification(supra) is not valid and liable to be set aside/quashed. In the present case, there is no dispute on the fact that the notice under section 148 of the Act has been issued by the JAO after the date of CBDT notification (supra). Therefore, respectfully following the Judgment of Hon'ble Telangana High Court in the case of Kotha Kanthaiah (supra) as well as the decisions of this Tribunal in the case of Kotha Kanthaiah (supra), we hold that, the notice issued by the JAO under section 148 of the Act, dated 23.03.2023 is not valid and liable to be quashed. Accordingly, we set aside the order of the Ld. CIT(A) and quash the impugned assessment order passed by the Ld. AO in the same terms as laid down by the Hon'ble Telangana High Court in the case of Kotha Kanthaiah(supra). 13. Further, we find that the issue is pending for adjudication before the Hon'ble Supreme Court in the SLP filed by the Revenue in the case of Hexaware Technology Ltd., against the Judgment of Hon'ble High Court of Bombay and the Hon'ble Telangana High Court in the case of Kotha Kanthaiah (supra) has given the liberty to the parties to move an appropriate petition seeking revival of the petition in light of Judgment of Hon'ble Supreme Court in the case of Hexaware Technology Ltd., (supra) on this issue. Therefore, we grant liberty to the parties to get this appeal revived, if the Judgment of Hon'ble Supreme Court on this issue necessitates to modify this Order. 14. As we have allowed the appeal of the assessee on legal ground regarding the validity of notice issued under section 148 of the Act, we do not propose to adjudicate on the other grounds of appeal of the assessee, which are kept upon.”

5 ITA.No.2371/Hyd./2025 5.1. Since the assessment order itself has been set aside by this Tribunal in the quantum appeal therefore, the penalty levied u/sec.271(1)(c) of the Act against the additions made by the Assessing Officer does not survive and the same is deleted.

Order pronounced in the open Court on 30.04.2026.

Sd/- Sd/- [MADHUSUDAN SAWDIA] [VIJAY PAL RAO] ACCOUNTANT MEMBER VICE PRESIDENT Hyderabad, Dated 30th April, 2026 VBP Copy to: Lalitha Kuchibhatla, D.No.8-3-272, New Street, 1. TIRUPATI – 517 501. Chittoor District. The Income Tax Officer, Ward-1(1), TIRUPATI. 2. State of Andhra Pradesh 3. The Pr. CIT, TIRUPATI. 4. The DR, ITAT, “SMC” Bench, Hyderabad. 5. Guard file. BY ORDER VADREVU Digitally signed by VADREVU PRASADA PRASADA RAO Date: 2026.04.30 RAO 11:01:48 +05'30'