SUDHEER KUMAR KATTA,NANDIGAMA vs. ITO, WARD -1, ONGOLE

ITA 2405/HYD/2025Status: DisposedITAT Hyderabad30 September 2026AY 2018-1921 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the notice under Section 148 of the Act, dated 09.04.2022, was issued beyond a period of three years from the end of the relevant assessment year (AY 2018-19). As per Section 151 of the Act, as it stood after the Finance Act, 2021, for reassessments initiated beyond three years, approval from higher authorities like the Principal Chief Commissioner or Principal Director General was mandatory. In this case, the approval was obtained from the Principal Commissioner of Income-tax, Vijayawada, which was not the specified authority for reassessments beyond three years. The Tribunal rejected the revenue's contention that the proviso to Section 151, inserted by the Finance Act, 2023, could be applied retrospectively to exclude the period for furnishing a reply. Relying on the Supreme Court's decision in Assistant Commissioner of Income-tax vs. LinkedIn Singapore Pte. Ltd., the Tribunal concluded that the assumption of jurisdiction by the AO was invalid due to the lack of proper approval under Section 151. Consequently, the assessment order dated 01.03.2024 was quashed. Other contentions raised by the assessee were left undecided.

What were the facts?

The assessee, Sudheer Kumar Katta, is appealing an order passed by the CIT(A), NFAC, Delhi, dated 08.10.2025, which upheld the AO's order under Section 147 r.w Section 144B of the Income-tax Act, 1961, dated 01.03.2024, for Assessment Year 2018-19. The AO initiated reassessment proceedings based on information that the assessee had substantial cash withdrawals amounting to Rs. 1,55,70,000/- from his bank account and had not filed his return of income. A notice under Section 148A(b) was issued on 25.03.2022, and an order under Section 148A(d) was passed on 08.04.2022, with prior approval from the Principal Commissioner of Income-tax, Vijayawada. A notice under Section 148 was then issued on 09.04.2022. During assessment, the AO noted total credit entries of Rs. 4,29,05,840/- against disclosed gross receipts of Rs. 1,60,00,000/-. The AO treated the difference as undisclosed business income, estimated at 20% profit, leading to an addition of Rs. 73,01,168/-.

What were the issues?

1. Whether the assessment order passed under Section 147 r.w.s. 144B of the Income Tax Act, dated 01.03.2024, and upheld by the CIT(A) is contrary to the facts and law. (Assessee's contention: Yes, due to procedural infirmities). 2. Whether the submissions filed by the assessee were not considered properly by the AO and CIT(A). (Assessee's contention: Yes). 3. Whether the addition of Rs. 73,01,168/- under Section 69A r.w.s. 115BBE was based on an invalid order under Section 148A(d) dated 08.04.2022 and an invalid notice under Section 148 dated 08.04.2022, issued after 29.03.2022, contrary to CBDT notification no. 18/2022, rendering the assessment void ab initio. (Assessee's contention: Yes). 4. Whether the CIT(A) erred in upholding the addition by travelling beyond the notice issued under Section 148A(b) dated 25.03.2022, against the principles of reassessment. (Assessee's contention: Yes). 5. Whether the CIT(A) erred in upholding the addition of Rs. 73,01,168/- by estimating 20% profit on bank deposits, which is unreasonable. (Assessee's contention: Yes). 6. Whether the notice under Section 148 was issued without obtaining prior approval from the specified authority as required under Section 151, rendering the proceedings invalid. (Assessee's contention: Yes). Revenue's contentions were not explicitly recorded in the provided text, beyond their role in upholding the AO's order.

Which sections of the Income-tax Act were involved?

Section 147,Section 144B,Section 69A,Section 115BBE,Section 148A,Section 148,Section 151

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, HYDERABAD BENCHES, HYDERABAD

Before: SHRI MANJUNATHA G, HON’BLE & SHRI RAVISH SOOD, HON’BLE

For Respondent: Shri Krishna Moorthy K, SR-AR

PER RAVISH SOOD, JM: The present appeal, filed by the assessee, is directed against the order passed by the CIT(A), NFAC, Delhi, dated 08.10.2025, which in turn arises from the order passed by the AO under Section 147 r.w Section 144B of the Income-

ITA 2405/HYD/2025 SUDHEER KUMAR KATTA

tax Act, 1961 (for short, “the Act”), dated 01.03.2024 for the assessment year 2018

The order continues below.

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