POLAVARAPU BASAVESWARA RAO,BODHAN vs. ITO, WARD -1, NIZAMABAD

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ITA 2310/HYD/2025Status: DisposedITAT Hyderabad24 April 2026AY 2017-1824 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the notice under Section 148 was invalid because the approval was obtained from the Principal Commissioner of Income Tax, who is not the prescribed authority for notices issued beyond three years. Consequently, the reassessment order was quashed.

What were the facts?

The assessee challenged reassessment proceedings initiated under Section 148 of the Income Tax Act for AY 2017-18. The notice was issued beyond three years from the end of the assessment year, requiring approval from a higher authority as per Section 151(ii).

What were the issues?

Whether the reassessment notice issued beyond three years is invalid due to lack of approval from the prescribed authority under Section 151(ii) of the Income Tax Act.

Which sections of the Income-tax Act were involved?

Section 148,Section 149,Section 151,Section 147,Section 144B

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, Hyderabad ‘ SMC ‘ Bench, Hyderabad

Before: Shri Vijay Pal Rao, Vice-Shri Madhusudan Sawdia

Hearing: 20/04/2026

आयकर अपील�य अ�धकरण, हैदराबाद पीठ IN THE INCOME TAX APPELLATE TRIBUNAL Hyderabad ‘ SMC ‘ Bench, Hyderabad �ी �वजय पाल राव, उपा� य� एवं �ी मधुसूदन साव�डया, लेखा सद� य के सम� । Before Shri Vijay Pal Rao, Vice-President A N D Shri Madhusudan Sawdia, Accountant Member आ.अपी.सं /ITA No. 2310/Hyd/2025 (िनधा�रण वष�/Assessment Year: 2017-18) Shri Polavarapu Vs. Income Tax Officer Basaveswara Rao, Ward -1 BODHAN Nizamabad PAN:ADYPP6329A (Appellant) (Respondent) िनधा�रती �ारा/Assessee by: CA Nitin Rander राज� व �ारा/Revenue by: Shri Ashutosh Pradhan, Sr.AR सुनवाई की तारीख/Date of hearing: 20/04/2026 घोषणा की तारीख/Pronouncement: 24/04/2026 आदेश/ORDER Per Madhusudan Sawdia, A.M.:

This appeal is filed by Shri Polavarapu Basaveswara Rao (“the assessee”), feeling aggrieved by the order passed by the Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi (“Ld. CIT(A)”) dated22.10.2025 for the A.Y.2017-18. 2. The assessee has raised the following grounds of appeal: “1. The learned Assessing Officer (AO) erred in law and on facts by assuming jurisdiction under Section 148 of the Income Tax

Act. The notice issued is invalid as it fails to meet the requirements of Section 149(1)(b), which stipulates a specific limit of Rs. 50.00 Lakhs for escaped income and fails to comply with the provisions of Section 151 regarding the specified authority for such actions. 2. The order passed under Section 148A(d) of the Act is contrary to the actual facts of the case. Consequently, the subsequent notice issued under Section 148 is bad in law and deserves to be quashed. 3. The learned AO erred in passing the assessment order without providing the Appellant a fair and proper opportunity to be heard. 4. The learned CIT(A), National Faceless Appeal Center (NFAC), erred in law and on facts by disposing of the appeal without granting the Appellant a fair and reasonable opportunity to present their case. 5. The learned CIT(A) erred in confirming the addition of Rs.2,20,300/- made by the Ld. AO as unexplained for cash deposit made on 08.11.2016 alleged to be deposited during demonetization period, without appreciating the submissions made by the appellant. 6. The Appellant craves leave to add, alter, vary, omit, substitute or amend the above grounds of appeal, if deemed necessary, at any time before or at the time of hearing of the appeal, to enable Your Honour to decide this appeal according to law.” 3. The brief facts of the case are that the assessee had filed an appeal before the Ld. CIT(A) against the order of the Learned Assessing Officer (“Ld. AO”) passed for Assessment Year 2017-18 under Section 147 r.w.s. 144B of the Income Tax Act, 1961(“the Act”), dated 12.05.2023. The Ld. CIT(A) dismissed the appeal of the assessee.

4.

Aggrieved by the order of the Ld. CIT(A), the assessee is in further appeal before this Tribunal. At the outset, we observe that under ground No.1 of the grounds of appeal, the assessee has raised a pure legal ground challenging the validity of reassessment proceedings on the ground that the notice issued under section 148 of the Act is invalid, having been issued without obtaining the approval of the prescribed

authority as mandated under section 151 of the Act. In this regard, the Learned Authorized Representative (“Ld. AR”) submitted that the Ld. AO issued notice under section 148 of the Act on 22.07.2022, which is clearly beyond the period of three years from the end of the relevant assessment year 2017– 18. Inviting our attention to section 151(ii) of the Act, the Ld. AR submitted that in all cases where notice under section 148 of the Act is issued after expiry of three years from the end of the relevant assessment year, the prior sanction of the Principal Chief Commissioner or Principal Director General or Chief Commissioner or Director General is mandatory. It was submitted that in the present case the Ld. AO issued notice under section 148 of the Act only after obtaining approval of the Principal Commissioner of Income Tax, who is not the authority prescribed under section 151(ii) of the Act for granting approval in cases falling beyond the limitation of three years. In support of their contention, the assessee relied on the order of this Tribunal in the case of Sanjeev Kumar Nalam Vs. ITO in ITA No.669/Hyd/2025 dated 19.12.2025 for the A.Y 2017-18. The Ld. AR further submitted that the absence of approval from the prescribed authority goes to the very root of jurisdiction, and therefore the notice issued under section 148 of the Act is void ab initio. Since the jurisdictional condition precedent for assumption of reassessment jurisdiction has not been fulfilled, the consequential reassessment order passed under section 147 read with section 144B of the Act dated 12.05.2023 is liable to be quashed. 5. Per contra, the Learned Departmental Representative (“Ld. DR”) relied upon the findings of the lower authorities and supported the reassessment order.

6.

We have carefully considered the rival submissions and perused the material available on record including the case law relied upon. In this regard, we have gone through the notice issued by the Ld. AO under section 148 of the Act placed at page no. 46 and 47 of the paper book, which is to the following effect:

7.

On perusal of the above, it is evident that the notice under section 148 of the Act was issued on 22.07.2022, which is after expiry of the period of three years from the end of the assessment year 2017–18. It is also evident that the notice under section 148 of the Act have been issued after taking approval from the Principal Commissioner of Income Tax. In such a situation, the statutory requirement under section 151(ii) of the Act mandates that sanction must be obtained from the Principal Chief Commissioner or Principal Director General or Chief Commissioner or Director General, as the case may be. In the present case, however, the approval was obtained by the Ld. AO only from the Principal Commissioner of Income Tax, who is not the competent authority specified under section 151(ii) of the Act for the purpose of issuing notice under section 148 of the Act beyond three years. We also find that an identical issue came up for consideration before this Tribunal in the case of Shri Venkata Rama Krishnam Raju Chintalapati vs. DCIT in ITA No.143/Hyd/2025 for A.Y. 2018– 19, order dated 10.12.2025, wherein after relying on the decision of Hon’ble Jurisdictional High Court in the case of in Deloitte Consulting India Private Limited vs. The Assessment

Unit, Income Tax Department, Civil Writ Petition No. 4061 of 2024, dated 25/09/2025., in para nos. 7 to 8 of the said order, this Tribunal has held as under :

8.

On perusal of above, we find that, this Tribunal relying on the order of the Hon'ble jurisdictional High Court in the case of Deloittee Consulting India Private Limited (Supra) has held that a notice issued under section 148 of the Act without obtaining prior approval from the prescribed authority is not sustainable in law and the consequent reassessment order is liable to be quashed. The ratio decidendi of the aforesaid decision squarely applies to the facts of the present case. Therefore, following the aforesaid binding precedent of the jurisdictional High Court and this Tribunal and in view of the clear statutory requirement under section 151(ii) of the Act, we hold that the notice issued under section 148 of the Act on 22.07.2022 without obtaining the approval of the prescribed authority is invalid and void. Consequently, the reassessment order passed by the Ld. AO under section 147 read with section 144B of the Act dated 12.05.2023 is also unsustainable and liable to be quashed. 9. As we have decided the appeal in favor of the assessee on the preliminary legal ground that the notice under section 148 the Act is invalid for want of approval from the prescribed authority, we refrain from adverting to or adjudicating upon the other grounds raised by the assessee, which are left open. 10. In the result, the appeal of the assessee is allowed. Order pronounced in the Open Court on 24th April, 2026. Sd/- Sd/- (VIJAY PAL RAO) (MADHUSUDAN SAWDIA) VICE PRESIDENT ACCOUNTANT MEMBER Hyderabad, dated 24th April, 2026. Vinodan/sps

Copy to: S.No Addresses 1 Shri POLAVARAPU BASAVESWARA RAO 1-4-889 ,Gunj Road Bodhan Nizamabad 503180 ,Telangana 2 Income Tax Officer Ward-1 Nizamabad503003 3 Pr. CIT - Hyderabad 4 DR, ITAT Hyderabad Benches 5 Guard File By Order

TIRUPATI Digitally signed by TIRUPATI YAMINI NAGA YAMINI NAGA MALLESWARI Date: 2026.04.24 MALLESWARI 14:59:23 +05'30'

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