NARSIMHA REDDY KOTTUR,HYDERABAD vs. ITO, WARD-1, MAHABUBNAGAR

ITA 704/HYD/2026Status: DisposedITAT Hyderabad23 September 2026AY 2015-1614 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal admitted the additional ground of appeal concerning the validity of the notice under Section 148 beyond 6 years, citing the judgment in National Thermal Power Company Limited Vs. CIT. The Tribunal found substance in the assessee's contention that the notice issued by the AO under Section 148 dated 20/04/2022 was barred by limitation as per the mandate of the first proviso to Section 149 of the Act, as amended by the Finance Act, 2021. The Tribunal relied on the judgments in Hexaware Technologies Ltd. and Godrej Industries Ltd. V. Assistant Commissioner of Income-tax, which held that the fifth and sixth provisos to Section 149(1) extend the period of limitation for issuing notices under Section 148, but the first proviso acts as a restriction on issuing notices for assessment years up to 2021-22 beyond a certain date. If a notice is not within the time prescribed by the first proviso, it cannot be extended by the fifth or sixth proviso. Consequently, the reassessment proceedings and the consequential assessment order passed by the AO were quashed for want of valid assumption of jurisdiction. The Tribunal refrained from adjudicating other contentions raised by the assessee, leaving them open. The appeal filed by the assessee was allowed.

What were the facts?

The assessee, Narsimha Reddy Kottur, is appealing an order passed by the Commissioner of Income Tax (Appeals) (CIT(A)) dated 31/12/2025. This order arose from an assessment order passed by the Assessing Officer (AO) under section 147 read with section 144B of the Income Tax Act, 1961, dated 29/02/2024, for Assessment Year (AY) 2015-16. The AO initiated reassessment proceedings based on information from the Insight Portal indicating substantial cash deposits in the assessee's bank accounts (Rs. 70,16,000/- and Rs. 21,00,000/-) without filing a return. The assessee subsequently filed a return disclosing sportswear business receipts of Rs. 18,05,200/-. The AO determined the assessee's income at Rs. 76,91,200/-, treating Rs. 73,25,100/- as unexplained money under section 69A. The CIT(A) dismissed the assessee's appeal for non-prosecution.

What were the issues?

1. Whether the Ld. CIT(A) erred in dismissing the appeal for non-prosecution, contrary to Section 250(6) of the Income Tax Act, 1961, which mandates a reasoned order on merits? 2. Whether the reassessment proceedings under Section 147 are bad in law, based merely on Insight Portal information without independent application of mind? 3. Whether the AO erred in making an addition of Rs. 73,25,100/- under Section 69A as unexplained money without properly examining business receipts and commission income? 4. Whether the addition under Section 69A is unjustified as the deposits represent business turnover? 5. Whether the AO erred in taxing the addition under Section 115BBE, which is not applicable to business income already disclosed? 6. Whether the revenue is empowered to issue a notice under Section 148 beyond 6 years in light of the first proviso to Section 149(1)? Assessee's contentions: The AO assumed jurisdiction invalidly as the notice under Section 148 dated 20/04/2022 was issued beyond the time limit specified by the first proviso to Section 149(1) (as amended by the Finance Act, 2021), which expired on 31/03/2022. The fifth and sixth provisos to the amended Section 149 do not apply to the un-amended Section 149, which is governed by the first proviso. The assessment order is invalid and arbitrary. The addition under Section 69A is unjustified as it represents business turnover. Section 115BBE is not applicable. Reassessment proceedings are bad in law due to lack of independent application of mind. Revenue's contentions: Not recorded in the judgment.

Which sections of the Income-tax Act were involved?

Section 147,Section 144B,Section 69A,Section 115BBE,Section 149(1),Section 148,Section 250(6),Section 44AD,Section 148A

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 Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi (for short, “CIT(A)”), dated 31/12/2025 which in turn arises from the order passed by the Assessing Officer (“AO”) under section 147 r.w.s. 144B of the Income Tax Act, 1961 (for short, “the Act”), dated 29/02/2024

The order continues below.

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