JELSU SHAIK,VIJAYAWADA vs. INCOME TAX OFFICER, WARD-1(4), VIJAYAWADA

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ITA 550/VIZ/2025Status: DisposedITAT Visakhapatnam14 May 2026AY 2015-166 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the notice issued under Section 148 of the Income Tax Act, 1961, on April 28, 2022, for AY 2015-16, was barred by limitation as it was issued beyond the prescribed six-year period. Consequently, the assessment order was deemed invalid.

What were the facts?

The Assessing Officer made an addition of Rs. 39,60,000/- for unexplained deposits in the assessee's bank account for AY 2015-16, as the assessee did not file a return and could not substantiate the sources. The CIT(A) set aside the assessment and referred the case back to the AO for a fresh assessment.

What were the issues?

Whether the notice issued under Section 148 for reassessment was barred by limitation. Whether the assessment order passed pursuant to a time-barred notice is valid.

Which sections of the Income-tax Act were involved?

Section 148,Section 149(1)(b),Section 69A,Section 115BBE,Section 251(1)(a)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, VISAKHAPATNAM BENCH,

Before: SHRI VIJAY PAL RAO, HONBLE & SHRI OMKARESHWAR CHIDARA, HONBLE

For Respondent: DR. Aparna Villuri, Sr.AR

आदेश / ORDER

PER OMKARESHWAR CHIDARA, AM: In the above captioned appeal, the Learned Assessing Officer [hereinafter in short “Ld. A.O.”] made an addition of Rs.39,60,000/- as the appellant could not substantiate the sources of the deposits in his bank account during the A.Y. 2015-16. The appellant did not file any return of income and hence notice under section 148 of Income Tax Act, 1961 [in short “the Act”] was issued by the Ld. A.O. requesting the assessee to explain the sources of the deposits made into his bank account. Since there is no convincing reply from the appellant with documentary evidence, the Ld. A.O. made addition of Rs.39,60,000/- while concluding the assessment proceedings. This amount was treated by the Ld. A.O. has unexplained money of the assessee under section 69A r.w.s. 115BBE of the Act.

2.

Aggrieved by the addition made by the Ld. A.O., an appeal was filed before the Ld. Commissioner of Income-tax [hereinafter in short “Ld.CIT(A)”] and the First Appellate Authority has issued Show-Cause notices to the appellant. The Ld.CIT(A) has made an observation that the appellant has filed its reply which is not feasible to make part of this order and therefore the same is kept in portal as record. The detailed submission made by the appellant on this issue were not examined by the Ld. A.O. and all these facts were submitted before the First Appellate Authority for the first time. Hence the Ld.CIT(A) held that it is a fit case for invoking the provisions of section 251(1)(a) of the Act along with the proviso which is reproduced as under:-

“5.1 Submission of the Appellant.-The appellant has filed its reply which is not feasible to make part of this order, therefore the same is kept on portal as record. I have perused facts of the case, assessment order of the AO, submission of the appellant and the documents available on record. On perusal of the submissions and the documents filed during appellate proceedings, it is observed that. The assessment in this case has been completed as per the provisions of sec. 147 r.w.s 144 of the Income Tax vide order dated 18.03.2024. As the appellant failed to furnish any information before the AO at the stage of completion of assessment proceeding. However, during the appellate proceedings, the appellant has filed detailed submissions on the issue, which need to be properly examined by the AO. In view of the facts of the case, I am of the opinion that it is a fit case for invoking the provisions of Section 251(1)(a)along with the proviso is reproduces as under: - "251(1) In disposing of an appeal, the Commissioner (Appeals) shall have the following powers- 1. In an appeal against an order of assessment, he may confirm, reduce, enhance or annul the assessment. Provided that where such appeal is against an order of assessment made under section 144, he may set aside the assessment and refer the case back to the Assessing officer for making a fresh assessment." By invoking the proviso to sec 251(1)(a), the order is set aside and referred back to the assessing officer for making fresh assessment. For statistical purposes, the appeal is deemed to have been disposed. 6. In the result, the appeal is dismissed.”

3.

As the appellant did not get the required relief, an appeal was filed by the appellant before ITAT with the following grounds of appeal: -

“1. That under the facts and circumstances of the case the order passed u/s 147 r.w.s 144 r.w.s 144B of the IT Act dt:04.07.2022 that was upheld by the Ld. CIT (A) vide order passed u/s 250 of the IT Act dt: 03.09.2025 is not in accordance with facts of the case and provisions of law. 2. The Ld. CIT(A) has erred both in law and on facts in setting aside the assessment order passed by the AO by invoking the powers u/s 251(1) of the IT Act, 1961. The factual circumstances of the case did not warrant a setting aside of the matter for a fresh assessment, nor was there justification to issue directions under the proviso to section 251(1)(a). 3. On the facts and in the circumstances of the case, the Ld. CIT(A) has erred in not adjudicating the matter on merits despite having all relevant facts and material on record. The Ld. CIT(A) ought to have exercised the appellate jurisdiction vested in him u/s 251 of the IT Act, 1961 and decided the issues arising from the assessment, instead of remanding the matter back to the Assessing Officer. 4. For these and other reasons that are to be urged at the time of hearing the appellant prays that the penalty imposed is liable to be deleted.”

4.

The appellant has also filed the following additional grounds of appeal and requested the Bench to adjudicate these additional legal grounds because the same are purely legal in nature and does not require any investigations into the facts, in the light of judgment of Hon'ble Supreme Court in the case of NTPC Ltd., [229 ITR 383 (SC)].

Additional Grounds: “1. The notice issued u/s 148 dt. 28.04.2022 is barred by limitation as per section 149(1)(b) read with the proviso thereto, having been issued beyond the prescribed period considering the time period and also the amount involved. Consequently, the reassessment order passed u/s 147 r.w.s. 144 r.w.s 144B dt. 18.03.2024 is bad in law, void ab initio, and liable to be quashed. 2. The reassessment order suffers from jurisdictional infirmities. The notice issued u/s 148A(d) and 148 by the jurisdictional ITO, Ward-1(4), Vijayawada on dt.28.04.2022 are contrary to the provisions of sections 144B, 130, and 151A of the Act and hence are invalid. 3. The show cause notice u/s 148A(b) dt. 24.03.2022, served on the same day, is legally defective, violating the provisions of the section. Reassessment proceedings initiated on such notice are void ab initio.”

5.

As far as the merits are concerned, Learned Authorised Representative [hereinafter in short “Ld. AR"] of the appellant has mentioned that the appellant is a pensioner in Forest Department as Forest Beat Officer and he was receiving only pension during this year which is below taxable income and hence no return of income was filed by the appellant. The appellant has sold agricultural land, and the sale proceeds were deposited into the bank account. Ld. AR of the appellant has requested the Bench to adjudicate the legal grounds first and then adjudicate the factual issue subsequently. Accordingly, the Ld. AR of the appellant has stated that the notice issued by the revenue under section 148 of the Act for the A.Y.2015-16 dated 28.04.2022 is invalid as it crosses outer limit of six years. The Ld.AR has argued that the last date to issue notice under section 148 of the Act is 31.03.2022 for the A.Y. 2015-16 and in this case the notice was issued on 28.04.2022. Hence the notice issued by the Ld. A.O. is time barred and invalid. In view of the same the assessment order may be quashed.

6.

Learned Departmental Representative [hereinafter in short “Ld.DR”] has requested the Bench to pass the order as per the provisions of law because these are the additional grounds which are not emanating from the orders of lower authorities.

7.

Rival submissions are heard. While arguing the legal ground relating to issuance of notice under section 148 of the Act, the Ld.AR referred to the paper-book filed by him at the time of hearing. From this paper-book Page No. 5, it is observed that the notice under section 148 was issued on 28.04.2022 for the A.Y.2015-16. The Coordinate Benches of Tribunal and Hon’ble Telangana High Court in the case of Cyberabad Citizens Health Services Private Limited v. DCIT, Circle-1(1), in Writ Petition No.25121 of 2024 dated 17.11.2025 have consistently held that the notice issued under section 148 of the Act after six years from the end of the assessment commenced on or before 01.04.2022 is barred by limitation. In the impugned case, the notice under section 148 of the Act was issued on 28.04.2022 which is beyond the period of six years from the end of the assessment year. Hence the limitation provided under section 149(1)(b) read with Proviso says that notice under section 148 of the Act shall be issued within the period of six years from the end of the assessment year i.e., before 31.03.2022, whereas in this case the notice was issued on 28.04.2022. In view of the above discussion and decisions rendered by the Coordinate Benches and the judgement of Hon’ble Telangana High Court, it is held that the notice issued by the Ld.A.O. is barred by limitation and the consequent assessment order passed by the Ld.A.O is invalid. As the notice itself is invalid and as it is held that the assessment order also consequently invalid, other grounds raised by the Ld.AR of the appellant are not being adjudicated.

8.

In the result, appeal filed by the assessee is allowed.

Order pronounced in the open court on 14th May, 2026. Sd/- Sd/- VIJAY PAL RAO OMKARESHWAR CHIDARA VICE PRESIDENT ACCOUNTANT MEMBER Visakhapatnam Dated: 14th May, 2026 Giridhar, Sr.PS

Copy to: Jelsu Shaik 19-13/6-4, 6th Line Vijayawada H.O. 1 Vijayawada (Urban) Krishna District – 520001 Andhra Pradesh

Income Tax Officer – Ward-1(4) C.R. Building, 1st Floor Annex 2 M.G. Road, Vijayawada Andhra Pradesh-520002 3 THE PCIT / CIT, 4 THE D.R., ITAT, VISAKHAPATNAM BENCH 5 GUARD FILE

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