RAJA SHEKAR NAIK RATHLAVATH,HYDERABAD vs. ITO, WARD-9(1), HYDERABAD

ITA 361/HYD/2026Status: DisposedITAT Hyderabad23 September 2026AY 2015-1614 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the notice issued by the AO under Section 148 of the Act, dated 27/04/2022, was barred by limitation as per the mandate of the 'first proviso' to Section 149 of the Act, as introduced by the Finance Act, 2021. Consequently, the assessment order passed by the AO based on this notice was also unsustainable and liable to be quashed. The Tribunal relied on the judgments in Hexaware Technologies Ltd. and Godrej Industries Ltd. v. Assistant Commissioner of Income-tax, which clarified that the fifth and sixth provisos to Section 149(1) extend the limitation period for issuing a notice under Section 148, but they do not override the restriction imposed by the first proviso. The first proviso acts as an exception, restricting notices for assessment years up to 2021-22 from being issued beyond a certain date. Since the notice in this case was beyond the period prescribed by the first proviso, it was invalid, and the subsequent provisos could not extend this restriction. Therefore, the assessment order was quashed for want of valid assumption of jurisdiction. The Tribunal refrained from adjudicating on other contentions raised by the assessee, leaving them open.

What were the facts?

The assessee, Raja Shekar Naik Rathlavath, filed an appeal against the order of the CIT(A), NFAC, Delhi, which arose from an assessment order passed by the AO under Section 147 r.w. Section 144B of the Income Tax Act, 1961, for Assessment Year 2015-16. The AO initiated proceedings under Section 147 based on information regarding substantial financial transactions by the assessee, including time deposits and cash deposits in bank accounts, and the assessee's failure to file a return of income. The AO issued a notice under Section 148 on 27/04/2022. The assessee filed a return declaring an income of Rs.2,64,770/-. The AO's assessment order dated 05/03/2024 determined the income at Rs.28,90,033/- after making additions under Sections 69A, 68, and 56. The CIT(A) vacated an addition of Rs.5,00,000/- received from the assessee's father but sustained other additions.

What were the issues?

1. Whether the notice under Section 148 and the consequent assessment are invalid due to lack of jurisdiction, as the notice was issued by an Assistant Commissioner who allegedly lacked jurisdiction, and the period for reopening under Section 149(1)(b) had expired. - Assessee's contention: The AO lacked jurisdiction as the notice under Section 148A(b), order under Section 148A(d), and notice under Section 148 were issued by an Assistant Commissioner without jurisdiction. Furthermore, the total income escaping assessment (Rs.28,90,033/-) was below Rs.50 lakhs, and proceedings under Section 148 were invalid as more than three years had elapsed from the end of the assessment year before the notice under Section 148 was issued. The assessee also argued that the first proviso to Section 149(1) (post-amended) divested the AO of jurisdiction to issue a notice for AY 2015-16 beyond 31/03/2022, and the fifth and sixth provisos to the amended Section 149 do not apply to the un-amended Section 149. - Revenue's contention: Not recorded in the judgment. 2. Whether the addition of Rs.18,99,000/- under Section 69A for cash deposits is justified. - Assessee's contention: The CIT(A) erred in confirming the addition, as withdrawals from the bank account were available for re-deposit. - Revenue's contention: Not recorded in the judgment. 3. Whether the addition of Rs.2,00,000/- received from the assessee's mother, treated as income under Section 68, is justified. - Assessee's contention: The CIT(A) erred in confirming the addition, as all necessary intimations were submitted to prove the genuineness of the amount provided by the mother. - Revenue's contention: Not recorded in the judgment.

Which sections of the Income-tax Act were involved?

Section 147,Section 144B,Section 148A,Section 148,Section 149,Section 69A,Section 68,Section 56

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, HYDERABAD BENCHES, HYDERABAD

Before: SHRI RAVISH SOOD, HON’BLE & SHRI MADHUSUDAN SAWDIA, HON’BLE

PER RAVISH SOOD, JM: The present appeal filed by the assessee is directed against the order passed by the CIT(A), NFAC, Delhi, dated 26/12/2025, which in turn arises from the assessment order passed by the AO under Section 147 r.w. Section 144B of the Income Tax Act, 1961 (in short, “the Act”), dated 05/03/2024 for A.Y.

ITA 361/HYD/2026 RAJA SHEKAR NAIK RATHLAVATH

2015

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