VELLORE SMART CITY LIMITED,VELLORE vs. INCOME TAX OFFICER CIRCLE 1 VELLORE, VELLORE

Since identical facts and issues are involved in both these appeals, these appeals were heard together and disposed of by this common order. For the sake of clarity and convenience the facts relevant in the ITA No.672/CHNY/2026 for the Assessment Year 2013-14 are stated herein:

The Assessee raised the following grounds of appeal : “1. The order of Ld. Commissioner of Income Tax (Appeals) is contrary to law, weight of evidence and circumstances of the case.

Based on the information that the Appellant Co-operative Society made cash deposits to the extent of Rs.5,47,07,756/-, Time Deposit of Rs.50,00,000/- in the bank account maintained with The District Central Co-operative Bank, Perambur and Cash Withdrawal of Rs.5,00,000/- from Current Account, the Assessing Officer formed an opinion that income got escaped assessment from tax. Accordingly, a notice u/s.148 of the Act was issued on 29.03.2023 after duly complying with the procedure laid down u/s.148A of the Act. In response to the notice u/s.148 of the Act, the appellant filed return of income admitting gross total income at Rs.1,32,93,610/- as income from business. Against said return of income, the assessment was completed by the e-Assessment Unit of the Income Tax Department(hereinafter called ‘AO’) vide order dated 12.03.2024 passed u/s.147 r.w.s 144B of the Act at a total income of Rs.1,32,93,610/-. While doing so, the Assessing Officer made an addition of Rs.1,32,93,610/- by disallowing claim for deduction u/s.80P(2)(a)(i) of the Act on the ground that the Return of Income was not filed within the due date specified u/s.139(1) of the Act placing reliance on the provisions of section 80AC of the Act.

Being aggrieved, appellant preferred an appeal before ld.CIT(A) who vide impugned order confirmed action of the Assessing Officer.

Being aggrieved, the appellant preferred an appeal before us in the present appeal. It is submitted that the Appellant Co-operative Society has file a petition seeking the condonation of delay in filing the Return of Income before the CBDT. He further submitted that the ld.CIT(A) failed to adjudicate validity of the reassessment proceedings, as the notice u/s.148 was issued by Jurisdictional Assessing Officer not by Faceless Assessment unit violating the provisions of Section 151A of the Act.

On the other hand, the ld. Sr. DR had opposed the submissions made on behalf of the appellant and relied on the order of ld.CIT(A).

We shall take up this Ground No.3 at first instance as it goes to very root of the matter. In this case, we find that the appellant raised jurisdictional issue that the Jurisdictional Assessing Officer(JAO) have no jurisdiction to issue notice u/s.148 of the Act. The Jurisdiction to issue the above notice vests with the Faceless Assessing Officer(FAO) in accordance with the provisions of explanation inserted to Section 151A read with CBDT Notification dated 29.03.2022. The appellant cooperative society relied on the following decisions of Hon’ble Bombay High Court in Hexaware Technologies Ltd. Vs. ACIT [2023] 149 taxmann.com 451, Hon’ble Madras High Court in TVS Credit Services Ltd. vs. DCIT in WP No.14255 of 2023, 22.04.2025 and Hon’ble Telangana High Court in Kings Pride Infra Projects Pvt. Ltd. vs. DCIT [2024] 157 taxmann.com 134, wherein, it was held that the issuing notice u/s.148 by the Jurisdictional Assessing Officer(JAO) is ultra vires the notification no.18 of 2022 of CBDT and the consequently held that the notice issued u/s.148A(b) and 148A(d) and 148 are null and void.

In view of the amendment brought by Finance Act, 2026, in the light of orders passed by the Hon’ble Supreme Court in bunch of cases involving identical issue in Special Leave Petition (Civil) Diary No(s).57403/2025 vide order dated 03.02.2026 setting aside the orders passed by the Hon’ble Bombay High Court and Hon’ble Telangana High Court for fresh consideration before the Hon’ble High Courts, the matter requires remand to the file of ld.CIT(A)[NFAC] for fresh consideration and disposal in accordance with law after affording opportunity of being heard to the assessee.

In view of the above circumstances, we are of the considered opinion that in order to meet the ends of justice, the matter requires remand to the file of ld.CIT(A)[NFAC] for denovo disposal of appeal keeping in view of the Finance Act 2026. All the contentions raised by the appellant are left open for consideration before the ld.CIT(Appeals).

Accordingly, the appeal filed by the Assessee stands Partly Allowed for statistical purpose. ITA No.718/CHNY/2026 13. Since the facts and issues involved in the above captioned appeal is identical, therefore, our decision in ITA No.972/CHNY/2026 for the A.Y.2019- 20 shall apply mutatis mutandis to the present appeal of the assessee i.e. ITA No.718/CHNY/2026 for the A.Y.2018-19 also. Accordingly, grounds of appeal filed by the assessee are partly allowed for statistical purpose.