KROTHAPALLI SAMBASIVA RAO,RAJAHMUNDRY vs. INCOME TAX OFFICER, WARD-2(1), RAJAHMUNDRY

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ITA 662/VIZ/2025Status: DisposedITAT Visakhapatnam14 May 2026AY 2015-167 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the notice issued under Section 148 of the Act for AY 2015-16 on April 4, 2022, was barred by limitation as it was issued beyond six years from the end of the relevant assessment year. Consequently, the assessment order was also held invalid.

What were the facts?

The Assessing Officer added Rs. 12,45,000/- as unexplained cash deposits under Section 69A of the Income Tax Act, 1961, as the assessee failed to explain the sources. The CIT(A) confirmed this addition.

What were the issues?

Whether the notice issued under Section 148 of the Income Tax Act for AY 2015-16 was barred by limitation and consequently invalid. Whether the assessment framed based on such a notice is void ab initio.

Which sections of the Income-tax Act were involved?

Section 69A,Section 148,Section 149(1)(b),Section 151A

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 cited appeal, the Learned Assessing Officer [hereinafter in short “Ld. A.O.”] found that the assessee deposited an amount of Rs.12,45,000/- by way of cash into his Savings Bank Account and sources of these cash deposits were not explained. Till date of assessment, the sources were not explained and hence the same was added as unexplained money under section 69A of Income Tax Act, 1961 [in short “the Act”].

2.

Aggrieved by the above addition, an appeal was filed before the First Appellate Authority. The Ld. Commissioner of Income-tax [hereinafter in short “Ld.CIT(A)”] has confirmed the addition made by the Ld. A.O. stating that the Ld. A.O. is correct while making the addition as the appellant did not furnish the evidence regarding the cash deposited into the bank account.

3.

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

“1. The order of the learned Commissioner of Income Tax (Appeals) is contrary to the facts and also the law applicable to the facts of the Cases. 2. The learned commissioner of Income Tax (Appeals) ought to have quashed the notice issued u/s. 148 of the Act as invalid and the consequent reassessment proceedings as void ab initio. 3. Without prejudice to the above, the learned Commissioner of Income Tax (Appeals) is not justified in sustaining the addition of Rs.12,45,000 made by the assessing officer u/s. 69A of the Act towards unexplained cash deposits in bank account. 4. Any other ground that may be urged at the time of appeal hearing.”

4.

In addition to the above, the assessee took the following grounds of appeal which are basically legal in nature and the same are reproduced below: -

“Petition for admission of additional Grounds of Appeal:

1.

Assessment in the case of the appellant was completed u/s 147 r.w.s.144B vide order dt.08.03.2024. This is a case of reassessment and the same was initiated by notice u/s 148 of the Act issued on 04.04.2022. 2. The above mentioned notice dt.04.04.2022 issued u/s 148 is invalid for the following reasons: a) Firstly, the impugned assessment year is A.Y.2015-2016 and the notice u/s 148 was issued on 04.04.2022 which falls after expiry of 6 ears from the end of the relevant assessment year. As such, the notice is barred by limitation by virtue of 1 proviso to S.149(1)(b) of the Act. b) Secondly, the notice was issued by the JAO. After the introduction of 'E-Assessment of Income Escaping Assessment Scheme, 2022' w.e.f. 29.03.2022, the notice u/s 148 shall be issued in faceless manner by the FAO. However, the notice in the case of the appellant was issued by the JAO. Hence, the notice is invalid. 3. The above legal issues were not raised before the lower authorities due to inadvertence. However, all the issues are purely legal in nature and the relevant facts are already on record. Hence, the appellant prays the hon'ble ITAT Visakhapatnam Bench to kindly admit the following Additional Grounds of Appeal and pass appropriate orders in the interest of rendering substantial justice: Additional Grounds of Appeal "1. The notice dt.04.04.2022 Issued u/s 148 of the Act is barred by limitation by virtue of 1st proviso to S.149(1) of the Act. 2. The notice dt.04.04.2022 Issued u/s 148 of the Act is invalid as the same was issued by the JAO but not the FAO, in contravention of the provisions of S.151A of the Act and hence the notice is liable to be quashed as invalid.”

5.

During the course of hearing before ITAT, the Learned Authorised Representative [hereinafter in short “Ld. AR"] of the appellant requested the Bench to adjudicate the legal issues raised by the appellant first and then the case may be adjudicated on merits subsequently. The Ld. AR of the appellant has emphasized for the A.Y.2015-16 notice under section 148 of the Act can be issued before 31.03.2022 and if the notice is issued beyond that date, then the notice is barred by limitation by virtue of First Proviso to Section 249(1)(b) of the Act. Since the notice was issued in this case on 04.04.2022 which falls after the expiry of six years from the end of relevant assessment year, the notice issued under section 148 of the Act is invalid and consequently the assessment framed thereon is void ab-initio. Thus, the Ld. AR of the appellant argued that the assessment order be quashed, and additions be deleted. The Ld. AR of the appellant has also relied upon the decision of Pentyala Madhavi v. ITO, Ward-12(1), Hyderabad in ITA No.392/HYD/2025 for the A.Y. 2015-16 dated 07.11.2025 and the ITAT Visakhapatnam Bench decision in the case of Andhra Pradesh Housing Board v. CIT, Circle-1(1), Vijayawada in ITA No.732/VIZ/2025 for the A.Y.2015-16 dated 18.02.2026. In both these cases, the Coordinate Bench has taken a decision that the notice issued after 31.03.2022 for the A.Y. 2015-16 is barred by limitation in view of the clear mandate of First Proviso to section 149 of the Act which was inserted by the Finance Act, 2021. While passing these orders favoring the appellant, ITAT Benches of Hyderabad and Visakhapatnam relied on the decision of 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. In view of the proviso as well as the decisions rendered by the coordinate Benches, Ld. AR of the appellant has requested the Bench to quash the notice issued by the Ld. A.O. under section 148 of the Act.

6.

Learned Departmental Representative [hereinafter in short “Ld.DR”] has stated that the correct legal position may be adopted.

7.

After hearing both the sides, it is observed that the decisions relied upon by the Ld. AR of the appellant in the case of Andhra Pradesh Housing Board v. CIT, Circle-1(1), Vijayawada (supra) and Pentyala Madhavi v. ITO, Ward-12(1), Hyderabad (supra) are squarely applicable in the impugned case also. In the case of Union of India v. Rajeev Bansal [2024 SCC OnLine SC 2693] rendered by the Hon'ble Supreme Court held the same, in fact the revenue has conceded before the Hon'ble Supreme Court that the notices issued after 31.03.2022 are barred by limitation for the A.Y. 2015-16 because of outer limit of six years. On 04.05.2026 the Hon'ble Supreme Court reiterated the same position in the case of ITO & Anr. v. Sai Kumar Mateti arising out SLP (Civil) No. 8682 of 2024 dated 04.05.2026 and the order of the Hon'ble Supreme Court is reproduced below: -

“4. The instant cases were segregated through the above mentioned order on the premise that they may be pertaining to Assessment year 2015-16. It is fairly conceded by Mr. N. Venkataraman, Learned Additional Solicitor General of India, representing the Revenue, that in the assessment cases pertaining to the year 2015-16, the notices issued for reassessment would stand barred by time in light of the view taken by this court in Union of India & Ors. v. Rajeev Bansal [2024 SCC OnLine SC 2693]. 5. There is no quarrel that if the instant cases are found to pertain to Assessment year 2015-16, then the impugned notices are liable to be struck down outrightly in terms of the concession on behalf of the Department recorded in paragraph 19(f) of Rajeev Bansal (supra) and reiterated before us by the learned Additional solicitor general of India.”

8.

Thus, the decision of Union of India v. Rajeev Bansal (supra) reiterated in the above case of ITO & Anr. v. Sai Kumar Mateti (supra)and held that if the notices are issued after 31.03.2022, the notices are held to be time barred and invalid. Following the decision of Hon'ble Supreme Court and the decisions of Coordinate Benches of Hyderabad and Visakhapatnam, it is held that the notice issued in the month of April i.e., 04.04.2022 are held as invalid and accordingly the assessment order passed are also held has invalid.

9.

In the result, the appeal of 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:

Krothapalli Sambasiva Rao D.No.72-21-2/2 Lalacheruvu 1 Janardhan Nagar Rajahmundry East Godavari District-533106 Andhra Pradesh Income Tax Officer – Ward -2(1) Income Tax Office Aayakar Bhavan Veerabhadrapuram 2 Kambala Cheruvu Rajahmundry – 533105 Andhra Pradesh 3 THE PCIT / CIT, 4 THE D.R., ITAT, VISAKHAPATNAM BENCH 5 GUARD FILE

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