NAMIREDDY KONDAL REDDY,NALGONDA vs. ITO, WARD-1, NALGONDA

The assessee also raised the following additional grounds of appeal:

The brief facts of the case are that, the assessee is an individual and has not filed return of income under section 139(1) of the Act for the A.Y. 2015–16. As per the information available with the Income-tax Department, the assessee has made cash deposits and term deposits aggregating to Rs.71,50,350/- in his bank account maintained with State Bank of India. Therefore, the assessment has been reopened under section 147 of the Act, and notice under section 148 of the Act dated 20.04.2022 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 deposits in bank account. In response, the assessee submitted that he is an agriculturist having agricultural lands and the source for deposits is out of agricultural income, savings, maturity of earlier deposits and also amount received from his son-in-law abroad, 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 such as crop details, sale bills, proof of agricultural income, evidence for remittances and linkage of deposits and further noticed that the deposits are disproportionate to the land holding proved by the assessee and therefore, treated the entire deposits of Rs.71,50,350/- as unexplained money under section 69A of the Act and completed assessment under section 147 r.w.s. 144 of the Income-tax Act, 1961. 5. Aggrieved by the assessment order, the assessee preferred appeal before Ld. CIT(A). Before Ld. CIT(A), the assessee submitted that the deposits made in the bank account are out of agricultural income derived from lands held by him and his family members and also from maturity of earlier deposits, re-deposits and amount received from his son-in-law abroad and contended that the A.O. erred in treating the entire deposits as unexplained money without appreciating the facts of the case, however, Ld. CIT(A), after considering the submissions of the assessee and examining the material available on record, observed that the assessee could not substantiate his claim of agricultural income with any documentary evidence such as crop-wise details, sale bills, buyer confirmations or agricultural income certificate and further observed that the assessee could establish ownership only to the extent of 4.2 acres in his own name and failed to prove cultivation on remaining lands and also failed to furnish evidence for remittance from abroad and linkage of deposits with maturity of earlier deposits and therefore, upheld the addition made by the A.O. towards unexplained money under section 69A of the Act, and dismissed the appeal filed by the assessee.

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

The learned counsel for the assessee, Ms. SNSR Chinmai, Advocate, submitted that, the additional grounds raised by the assessee are purely legal in nature and go to the root of the matter challenging the validity of reassessment proceedings and the same can be adjudicated on the basis of facts already available on record without requiring any fresh investigation and therefore, the additional grounds may be admitted for adjudication and in support of his contention relied upon the decision of Hon’ble Supreme Court in the case of National Thermal Power Co. Ltd. vs. CIT reported in [1998] 229 ITR 383 (SC).

On the other hand, the learned senior A.R. for the Revenue, Dr. Sachin Kumar, objected to admission of additional grounds and submitted that, the assessee has not raised these issues before the A.O. or before Ld. CIT(A) and further submitted that as per amended provisions of section 149 of the Act, the notice issued under section 148 of the Act, is within the prescribed time limit and therefore, the additional grounds raised by the assessee are not maintainable.

We have heard both parties and perused the material available on record. There is no dispute that the additional grounds raised by the assessee are purely legal in nature and go to the root of the matter challenging the validity of reassessment proceedings. The same can be adjudicated on the basis of facts already available on record and does not require any further verification or investigation. Therefore, following the decision of Hon’ble Supreme Advocate, submitted that the A.O. has issued show cause notice under section 148A(b) of the Act, on 19.03.2022 and thereafter passed order under section 148A(d) of the Act, and issued notice under section 148 of the Act, dated 20.04.2022. The learned counsel for the assessee further submitted that, the notice issued under section 148 of the Act, 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. In support of her contention, she relied upon the judgment of Hon’ble Juri ictional High Court in the case of Cyberabad Citizens Health Services Private Limited vs. DCIT as well as decision of the coordinate bench of the Tribunal in the case of Peda Subbarao Unnam vs. ITO.

On the other hand, the learned Senior A.R. for the Revenue, Dr. Sachin Kumar, 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. 14. 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 13th May, 2026. श्री विजय पाल राि (मंजूनाथ जी) (VIJAY PAL RAO) (MANJUNATHA G.) उपाध्यक्ष /VICE PRESIDENT लेखा सदस्य/ACCOUNTANT MEMBER

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