RAGULU RAJU,VIJAYAWADA vs. INCOME TAX OFFICER, VIJAYAWADA

In the above cited appeal, even though the appellant has taken eight grounds of appeal, the first five grounds of appeal relate to the issue of notice u/s 148 and completion of the proceedings u/s 147 and the appellant’s main argument is that the reassessment notice and the proceedings are vitiated by law, as they are barred by limitation. As far as the merits are concerned, certain cash deposits were added, treating them as unexplained receipts u/s 69A of the Act.

During the proceedings before the ITAT, Ld.AR of the appellant argued mainly on the point of limitation, by stating that this issue of reassessment notice u/s 147, 148 of the Act was held to be invalid and barred by limitation by several decisions across the country by all Tribunals and the decision of Hon’ble High Court of Telangana in the case of Cyberabad Citizens Health Services Vs. DCIT dated 17.11.2025 in WP No.25121/2024. The Ld.AR of the appellant has pointed out that for this A.Y.2015-16, notice u/s 148 was issued on 19.04.2022 by the ITO, Ward-1(1), Vijayawada and hence the notice as well as the consequent proceedings are invalid and pleaded the ITAT to quash the proceedings.

The Ld.DR has stated that the Ld.AO followed CBDT Circular, which says that reassessment proceedings can be initiated for A.Y.2015-16 also as this assessment year falls within the limitation period. Accordingly, the Ld.AO has issued notices and in view of the same, the notices and the proceedings are correct and valid.

After hearing both the sides, it is noticed that the undisputed fact is, for the A.Y.2015-16, in this case, notice u/s 148 was issued on 19.04.2022 by the ITO, Ward-1(1), Vijayawada and assessment was reopened. Subsequently, the assessee has been asked to file return of income and proceeded with completion of assessment by making addition relating to the cash deposits. During the proceedings before ITAT, the Ld.AR of the appellant relied on the decisions of coordinate Bench of Visakhapatnam in the case of Penugonda Yagnasree in ITA No.722/Viz/2025 dated 14.05.2026 and Ikramudin Mohammed, Zaheerabad Vs. ITO, Hyderabad in ITA No.2043/Hyd/2025, for the proposition that the notice issued u/s 148 after 31.03.2022 is invalid as far as the A.Y.2015-16 is concerned, because, the notice was issued beyond limitation period of six years. In the case of Penugonda Yagnasree (supra), this issue was elaborately dealt and the coordinate Bench relied on the decision of Hon’ble High Court of Telangana in the case of Cyberabad Citizens Health Services (supra) and held that notices issued beyond six years period as invalid. The limitation provided u/s 149(1)(b) read with proviso to the said section makes it clear that no notice u/s 148 shall be issued after expiry of six years from the end of the assessment year beginning on or before 01.04.2021. As mentioned above, this issue is covered in favour of the assessee in the following decisions also:

In the result, appeal of the assessee is allowed.