SATYA NARAYANA VARA PRASAD DEVINENI,RAJAHMUNDRY RURAL vs. THE INCOME TAX OFFICER, RAJAMAHENDRAVARAM

PDF · subscribers
ITA 215/VIZ/2025Status: DisposedITAT Visakhapatnam19 June 2026AY 2015-1611 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the notice under Section 148 was issued beyond the permissible limitation period as per the unamended Section 149(1)(b). Therefore, the reassessment proceedings were quashed for want of valid jurisdiction.

What were the facts?

The Assessing Officer initiated reassessment proceedings under Section 147 for AY 2015-16 based on information about cash deposits. The assessee claimed the source of funds was agricultural income and advances from his son. The CIT(A) dismissed the appeal for non-prosecution.

What were the issues?

The primary issue was the validity of the reassessment notice issued beyond the prescribed limitation period. The Tribunal also considered the assessee's claims regarding agricultural income and advances from his son.

Which sections of the Income-tax Act were involved?

Section 147,Section 144,Section 148,Section 148A,Section 149,Section 69A,Section 10(1),Section 250

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, VISAKHAPATNAM BENCH,

Before: SHRI UDAYAN DAS GUPTA, HON’BLE & SHRI OMKARESHWAR CHIDARA, HON’BLE

For Respondent: Dr. Aparna Villuri, Sr AR

आदेश / ORDER

PER UDAYAN DAS GUPTA, JUDICIAL MEMBER: This appeal is filed by the assessee against order of the Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi [hereinafter in short “Ld. CIT(A)”] passed under section 250 of Income Tax Act, 1961 [hereinafter in short “the Act”] dated 14.11.2024 which has emanated from the order of the Ld. Assessing Officer [hereinafter in short “AO”] dated 29.03.2024 passed under section 147 r.w.s 144 of the Act.

2.

Condonation of delay : It is pointed out by the registry that this appeal is belatedly filed by 68 ( sixty eight ) days and the assessee has filed an application requesting condonation of the same, the assessee being a senior citizen was suffering from health constraints and could not compile the data required and approach his counsel for preparation and filing of this appeal within time, resulting in this delay and there was no intentional default or willful neglect on the part of the assessee and he prayed for condonation of the same. Considering sufficiency of reasons, we condone the same and admit the appeal to be heard on merits.

3.

The Assessee has raised the following grounds in Form No.36:-

1) The order passed by the Ld. CIT(A) u/s 250 of the Act is erroneous both on facts and in law to the extent the order is prejudicial to the interest of the appellant. 2) The Ld. CIT(A) erred in dismissing the appeal on account of non- prosecution and on merits. The Ld. CIT(A) ought to have annulled the assessment made u/s 147 of the Act, dated 29-03-2024. 3) The Ld. CIT(A) erred in appreciating from the assessment order that the basis for issuance of notice u/s 147 is the information available from bank statements of the appellant. 4) The Ld. CIT(A) erred in adding Rs. 17,74,063/- as unexplained money under Section 69A of the Income Tax Act, 1961. During reassessment proceedings, the Authorized Representative (AR) submitted detailed evidence showing that the advances were received from the Appellant’s son, Mr. Devineni Sriman, for family obligations and maintenance, thereby justifying their source.

5) The Ld. CIT(A) erroneously added Rs. 38,41,882/- as unexplained money under Section 69A of the Income Tax Act. ignoring the submissions during reassessment that the credits were from agricultural income, of which Rs. 6,58,382/- was received via online transfers and Rs. 31,83,500/- in cash, subsequently redeposited in the bank. Since agricultural income is exempt under Section 10(1) and the Appellant has no taxable income, the addition under Section 69A is unwarranted. 6) The Ld. CIT(A) erred in adding Rs. 22,90,000/- as unexplained money under Section 69A of the Act, as the source of these cash deposits was from cash withdrawals made during the assessment year, which were subsequently redeposited in the bank. 7) The CIT(A) erred in adding Rs. 18,00,000/- as unexplained money under Section 69A of the Act. The fixed deposits were made in earlier assessment years from agricultural income, which is exempt under Section 10(1). The funds are derived from legitimate agricultural activities and should not be subject to taxation, necessitating rectification of the addition. 8) The Income from Other Sources of Rs. 29,399/- (Rs. 28,123 as interest on FD and Rs. 1,276 as other income) is below the basic exemption limit and does not affect the tax liability. 9) The Appellant has the right to submit additional evidence as empowered under Rule 46A of The Income Tax Rules, 1962 10) The assessee may add, alter, or modify or substitute any other points to the grounds of appeal at any time before or at the time of hearing of the appeal.

4.

Brief facts emerging from records are that on the basis of information available with the AO that the assessee has made cash deposits of Rs. 51.77 lakhs in bank along with other financial transactions with SBI , during the financial year under appeal and in absence of any regular return on record, notice was issued u/s 148A(b) of the Act dated 22/03/2022, and in absence of any response to such notice , proceedings were initiated vide notice u/s 148 dated 2nd April , 2022, after order u/s 148A(d) of even date.

5.

Even though no return was filed in response to notice u/s 148 , written submissions and explanation was filed by the assessee along with copies of bank statement claiming to be an agriculturist deriving income from agricultural activity and produced documentary evidence of agricultural land holdings and receipts of advance from his son along with confirmation, PAN and bank statement which together, as per explanation of the assessee , has formed the source of deposits in bank account. However, considering the said explanation not to his satisfaction the AO completed the assessment on a total income of Rs. 97.35 lakhs, being unexplained credits in bank u/s 69A.

6.

The matter carried in appeal has been dismissed by the Ld CIT ( A ) sustaining the additions made by the AO, in absence of any submissions or representation made to various notices issued in course of first appellate proceedings.

7.

Now the assessee is before the tribunal on the grounds contained in Form No. 36 and the assessee has also filed additional grounds of appeal ( being legal grounds which goes to the root of the case and do not require the court to establish a new factual matrix ) which are reproduced below :

“Ground No. 1 - Time-barred notice u/s 148 for A.Y. 2015-16 issued on/after 01.04.2022 That the notice u/s 148 dated 02.04.2022 for A.Y. 2015-16 is barred by limitation and consequently void ab initio, in view of binding principles laid down by the Hon'ble Supreme Court in UOI v. Rajeev Bansal and followed in subsequent decisions (including coordinate benches), holding that for A.Y. 2015-16 the maximum permissible period under the unamended Section 149 had expired on 31.03.2022, rendering any notice issued on or after 01.04.2022 invalid; hence, the entire reassessment is liable to be quashed for want of jurisdiction. The dates are admitted on record: SCN u/s 148A(d) 02.04.2022, and notice u/s 148 02.04.2022.

Ground No. 2 - Without prejudice: Preconditions for the extended 10- year period under Section 149(1)(b) not satisfied/ recorded Without prejudice to Ground No. 1, even assuming the amended regime, the precondition for invoking the extended time-limit of up to 10 years under Section 149(1)(b)-viz., a clear satisfaction, based on reasons recorded at the sanction stage, that income chargeable to tax represented in the form of an asset amounts to or is likely to amount to 750,00,000 or more for that year"-has not been demonstrated from the record. The assessment order merely refers to "total credits / cash deposits / FD redemptions" and aggregate figures, which do not ipso facto establish the statutory requirement as to escaped income represented in the form of asset meeting the Rs.50 lakh threshold in the manner contemplated by Section 149(1)(b). Therefore, the extended limitation could not have been invoked, and any notice beyond six years is bad in law. GROUND No.3 1. The learned CIT (Appeals)/Assessing officer issued notice, proceeded to pass order u/s.148 of the Act on 02.04.2022 which is contrary to the provisions of section 151A of the Act read with the CBDT notification. It is submitted that as per CBDT Circular No.18/2022, dt.29.03.2022, Faceless Assessing Officer ought to have issued notice under section 148 of the Act to continue the proceedings thereafter, whereas in the present matter the Jurisdictional Assessing Officer has issued notice under section 148 of the Act which is contrary to the procedure prescribed under the E-Assessment of Income Escaping Assessment Scheme, 2022, dt.29.03.2022. notice u/s 148 of the IT Act dated: 02.04.2022 by the Jurisdictional Assessing Officer (JAO). 2. The jurisdictional AO issued/handled u/s 148A(d) on 02.04.2022 contrary. to the faceless regime mandated by s.151A read with CBDT's scheme/Notification, rendering the proceedings void ab initio. Telangana High Court in Kankanala Ravindra Reddy has held that reassessment under the post-2021 regime must follow the faceless procedure; non- adherence vitiates the action.”

8.

The assessee by raising the aforesaid additional grounds of appeal has prayed for adjudicating the validity of the notice issued by the A.O under section 148 of the Act, dated 02.04.2022, on the ground that the same was barred by limitation by virtue of the “first proviso” to section 149(1) of the Act, which is purely a legal issue and would not require looking any further beyond the facts borne on record, therefore, we admit the same as per law laid down by the Hon’ble Supreme Court in the case of National Thermal Power Co. Ltd. v. Commissioner of Income Tax [(1998) 229 ITR 383 (SC)].

9.

Shri A. Chaitanya, CA, Learned Authorized Representative (for short, “Ld.AR”) for the assessee, at the threshold of hearing of the appeal, requested for taking up the additional ground No -1 ( and has not pressed on additional ground No – 3). He submitted that the AO had grossly erred in law and the facts of the case in assuming jurisdiction for framing the impugned assessment vide his order passed under section 147 r.w.s. 144 of the Act, dated 29.03.2024. Elaborating on his contention, the Ld.AR submitted that as the AO as per the “first proviso” to section 149(1) of the Act as was applicable at the time of issuing the notice under section 148 of the Act, dated 02.04.2022, was divested of his jurisdiction to issue any such notice seeking to reopen the case of the assessee for the subject year A.Y. 2015-16 beyond 31.03.2022, i.e., beyond the time limit specified under the clause (b) of sub-section (1) of section 149 of the Act as was available on the statute before commencement of the Finance Act, 2021. Therefore, he submitted that the initiation of the impugned proceedings and the consequential assessment framed by him based on the said notice cannot be sustained and is liable to be struck down on account of invalid assumption of jurisdiction.

10.

The Ld. AR further relied upon the decision of the Hon’ble High Court of Karnataka in the case of Independent & Public Spirited Media Foundation & Ors. v. ACIT (2025) 9 NYPCTR 1555 (Kar) and the Judgement of the Hon’ble Supreme Court in the case of Union of India & Ors v. Rajeev Bansal (2024) 8 NYPCTR 1291 (SC) and submitted that the Hon’ble High Court of Karnataka in the aforesaid case , by relying on the judgement of the Hon’ble Supreme Court in Union of India & Ors v. Rajeev Bansal (supra) quashed the notice issued under section 148 of the Act, dated 10.04.2023 for A.Y.2016-17, by holding the same as barred by limitation as per the mandate of “1st Proviso” to section 149(1)(b) of the Act.

11.

The Ld.AR relying on the decision of the Hon’ble Apex court prayed for quashing of the notice u/s 148 to be barred by limitation and has also filed his written submissions on the above issue which are reproduced below:

“25. It is respectfully submitted that for A.Y. 2015-16, the period of six years from the end of the relevant assessment year expired on 31.03.2022. Therefore, notice under section 148 could not have been validly issued after 31.03.2022. In the present case, the notice under section 148 was admittedly issued on 02.04.2022. Therefore, the notice is beyond limitation and is invalid. 26. The appellant respectfully places reliance on the judgment of the Hon'ble Supreme Court in the case of Union of India vs. Rajeev Bansal. In view of the principles laid down therein, the reassessment proceedings for A.Y. 2015-16 cannot be sustained where notice under section 148 was issued beyond the permissible limitation period. The law laid down by the Hon'ble Supreme Court squarely applies to the facts of the present case. 27. The appellant further places reliance on the order of the Hon'ble ITAT, Visakhapatnam Bench, in the case of Vaka Ghanta Nageswararao in ITA No.251/VIZ/2025 for A.Y. 2015-16. In that case also, the assessee had not filed return of income under section 139(1). The notice under section 148 was issued after 31.03.2022. The Hon'ble ITAT, after considering the decision of the Hon'ble Supreme Court in Union of India vs. Rajeev Bansal, held that the notice issued under section 148 after expiry of six years from the end of A.Y. 2015-16 was barred by limitation and invalid. Consequently, the reassessment proceedings were quashed and the appeal of the assessee was allowed. 28. The facts of the present case are on a stronger footing. In the present case, the notice under section 148 was issued on 02.04.2022 for A.Y. 2015-16. The limitation expired on 31.03.2022. Therefore, the notice issued on 02.04.2022 is beyond limitation. The ratio of the decision in Vaka Ghanta Nageswararao squarely applies to the present case.

29.

The appellant also relies on the order of the Hon'ble ITAT, Visakhapatnam Bench, in the case of Srinivasa Rao Sirivuri in ITA No.459/VIZ/2025, wherein under similar circumstances, the appeal of the assessee was allowed by following the legal position on limitation and validity of notice issued under section 148 for A.Y. 2015-16. 30. It is respectfully submitted that where the notice under section 148 is barred by limitation, the defect is not a curable procedural defect. It is a jurisdictional defect. The Assessing Officer derives jurisdiction to reassess only from a valid notice under section 148. If the notice itself is invalid, the entire reassessment proceedings fall to the ground. Therefore, the assessment order dated 29.03.2024 passed under section 147 r.w.s. 144 is liable to be quashed. 31. It is further submitted that the appellant's non-filling of return under section 139(1) cannot validate an otherwise time-barred notice. The appellant had no taxable income except exempt agricultural income and small interest income below the basic exemption limit. Therefore, the appellant was not under a statutory obligation to file return of income. In any event, limitation under section 149 is mandatory and cannot be extended merely because the appellant had not filed return of income.”

12.

On the other hand, Ld. Departmental Representative (hereinafter in short “Ld.DR”) relied on the upon the orders of the authorities below.

13.

We have heard the rival submissions and considered the materials on record and we find that the impugned order of assessment passed by the AO under section 147 r.w.s. 144 of the Act, dated 29.03.2024, which in turn is based on the notice issued under section 148 of the Act, dated 02.04.2022, for the AY 2015-16.

14.

Admittedly, it is a matter of fact borne from record that the impugned notice under section 148 of the Act, dated 02.04.2022 had been issued beyond the time limit specified under the provisions of clause (b) of sub-section (1) of section 149 of the Act as they stood immediately before the commencement of the Finance Act, 2021.

We also take note that the approval to the said notice also has been accorded by the Ld PCCIT , AP and Telangana on 2nd April, 2022 , and as per the pre-amended section 149(1)(b) of the Act a notice under section 148 of the Act for the AY 2015-16 could have been issued by the AO latest by 31.03.2022.

15.

Considering the aforesaid factual position, we find substance in the Ld. AR’s contention that as the notice under section 148 of the Act, dated 02.04.2022 had been issued beyond the time period specified under the provisions of clause (b) of sub-section (1) of section 149 of the Act because when the Finance Act restructured the reassessment provisions it explicitly included a first proviso to section 149(1) which acts as a strict statutory bar stating that no notice u/s 148 can be issued for past assessment years like Asst year 2015-16 if such notice had already become time barred under the unamended old provisions.

16.

As such respectfully following the law laid down by the Hon’ble Apex court in the case of Union of India vs. Rajeev Bansal ( supra ) and also relying on the decisions of this bench on identical facts , in the case of Vaka Ghanta Nageswararao ITA 251/VIZ/2025 Asst year 2015-16 dated 10/07/2025 and also in the case of Srinivasa Rao Sirivuri in ITA No.459/VIZ/2025, and in terms of our aforesaid deliberations, quash the assessment order passed by the AO under section 147 r.w.s. 144 of the Act, dated 29.03.2024, for want of valid assumption of jurisdiction and we hold the notice issued u/s 148 dated 02.04.2022 for the Asst year 2015-16 , to be void ab initio.

17.

As we have quashed the assessment order passed by the AO under section 147 r.w.s. 144 of the Act, dated 29.03.2024, therefore, we do not adjudicate on the remaining grounds of appeal which becomes simply academic.

18.

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

Order pronounced in the open court on 19th June, 2026.

Sd/- Sd/- OMKARESHWAR CHIDARA UDAYAN DAS GUPTA ACCOUNTANT MEMBER JUDICIAL MEMBER Visakhapatnam Dated:19.06.2026 Giridhar, Sr.PS Copy to: SATYA NARAYANA VARA PRASAD DEVINENI, DOOR NO. 4-179/1/B, BOMMURU, RAJAHMUNDRY RURAL, 1 RAJAHMUNDRY-533124, ANDHRA PRADESH

THE INCOME TAX OFFICER, WARD- 1(1), RAJAMAHENDRAVARAM, 2 RAJAHMUNDRY-533101, ANDHRA PRADESH

3 THE PCIT / CIT, 4 THE D.R., ITAT, VISAKHAPATNAM BENCH 5 GUARD FILE

More judgments on Section 147

All 49,210 judgments and leading authorities on Section 147 →

Recent GST High Court judgments

Search GST case law →