PRABHAKAR GOLKONDA,HYDERABAD vs. ITO, WARD - 9(1), HYDERABAD

ITA 994/HYD/2026Status: DisposedITAT Hyderabad23 September 2026AY 2014-1517 pages
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What were the facts?

The assessee, Prabhakar Golkonda, filed an appeal against the order of the CIT(Appeals), NFAC, Delhi, dated 25.02.2025, which upheld the order of the Assessing Officer (AO) passed under Section 147 r.w. Section 144 r.w. Section 144B of the Income Tax Act, 1961, dated 30.05.2023, for Assessment Year 2014-15. The AO initiated reassessment proceedings based on information that the assessee had made an undisclosed investment of Rs. 78,01,964/- in shares of M/s Stampede Capital Limited. The AO issued a notice under Section 148 on 12.04.2021. Following the Supreme Court's decision in Union of India Vs. Ashish Agarwal, this notice was treated as a show-cause notice under Section 148A(b). Subsequently, an order under Section 148A(d) was passed on 26.07.2022, and a fresh notice under Section 148 was issued on the same date. The assessee denied beneficial ownership of the shares, claiming they were given to him free of cost and his demat account was operated by his employer's associates without his knowledge.

What did the Tribunal hold?

The Tribunal held that the grounds challenging the validity of the notice under Section 148 of the Act and the consequential reassessment proceedings are dismissed. The Tribunal found that the subsequent notice dated 26.07.2022 was issued within the surviving period and rejected the assessee's contentions regarding procedural infirmities in the issuance of the notice and assumption of jurisdiction by the AO. Regarding the addition on merits, the Tribunal observed that the assessee had specifically denied making the investment and claimed the demat account was operated by his employer's associates. The Tribunal found that the matter required deeper factual verification concerning the underlying documentary evidence, such as demat account records, contract notes, bank statements, and details of fund sources and transfers. Therefore, the Tribunal set aside the issue relating to the addition of Rs. 78,01,964/- under Section 69 of the Act to the file of the AO for fresh adjudication on merits, with directions for necessary verification and a speaking order, while affording the assessee an opportunity to be heard. The Tribunal explicitly stated it had not expressed any final opinion on the merits of the assessee's explanation or the sustainability of the addition.

What were the issues?

1. Whether the reassessment proceedings initiated by the Assessing Officer (AO) are valid, considering the various grounds raised by the assessee challenging the notices issued under Section 148 and the compliance with procedural requirements under Sections 147, 148, 148A, 149, and 151A of the Income Tax Act, 1961, and CBDT Circular No. 19/2019. The assessee argued that notices were issued beyond time limits, without proper approval, without quoting a valid DIN, and without complying with Supreme Court directions. The revenue contended that the notices were valid and issued within the surviving limitation period. 2. Whether the addition of Rs. 78,01,964/- made by the AO under Section 68 (or Section 69 as later stated) of the Act on account of alleged unexplained investment in shares is justified on merits. The assessee argued that the investment was not made by him, he was not the beneficial owner, and he lacked the financial capacity. The revenue, through the AO's order, rejected these contentions, treating the investment as unexplained.

Which sections of the Income-tax Act were involved?

Section 147,Section 144,Section 144B,Section 250,Section 149,Section 148,Section 148A,Section 151A,Section 68,Section 10,Section 69,Section 151

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(Appeals), NFAC, Delhi, dated 25.02.2026, which in turn arises from the order passed by the Assessing Officer (for short, “AO”) under Section 147 r.w Section 144 r.w Section 144B of the Income Tax Act, 1961 (for short, “Act”), dated 30.05.2023 for A.Y. 2014-15. The assessee has assailed the impugned order on the following grounds of appeal before us:

ITA 994/HYD/2026 PRABHAKAR GOLKOND

The order continues below.

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