RADHAKISHAN POTHARAJULA,KARIM NAGAR vs. ITO (INT TAXN)-2, HYDERABAD

ITA 2340/HYD/2025Status: DisposedITAT Hyderabad16 October 2026AY 2016-1710 pages
AI SummaryAllowed

What were the facts?

The assessee, Shri Radhakishan Potharajula, an NRI, is in appeal against the order of the CIT(A)-10, Hyderabad, dated 08.10.2025, for Assessment Year 2016-17. The assessee had not filed a return of income for AY 2016-17. The Assessing Officer (AO) initiated reassessment proceedings by issuing a notice under section 148 on 27.03.2023. The assessee filed a return declaring income of Rs. 5,26,235. The AO proposed an addition of Rs. 21,80,500 under section 69A for unexplained cash deposits, leading to a final assessment order on 06.05.2024. The CIT(A) upheld the addition. The appeal before the ITAT challenges the validity of the notice under section 148 and the consequent assessment.

What did the Tribunal hold?

The Tribunal held that the notice issued under section 148 of the Act dated 27.03.2023 was barred by limitation. The Tribunal found that the AO's computation of alleged escaped income at Rs. 57,57,235 included a duplicate entry of Rs. 17,00,500, as evidenced by the AO's own assessment order which stated total cash deposits in the ICICI Bank account as Rs. 26,30,500. Upon excluding the duplicate amount, the alleged escaped income was reduced to Rs. 40,56,735. This amount is below the statutory threshold of Rs. 50 lakhs stipulated in section 149(1)(b) of the Act, which is a prerequisite for issuing a notice beyond three years from the end of the relevant assessment year. The Tribunal rejected the revenue's contention that the initial figure of Rs. 57,57,235 conferred jurisdiction, emphasizing that the correctness of the amount must be examined with reference to the underlying material. Since the conditions for invoking the extended period under section 149(1)(b) were not met, and the ordinary period of three years from the end of AY 2016-17 (which expired on 31.03.2020) had also passed, the notice dated 27.03.2023 was beyond limitation. Consequently, the AO did not validly assume jurisdiction, and the assessment order dated 06.05.2024 was quashed. The remaining grounds on merits were rendered academic.

What were the issues?

1. Whether the notice issued under section 148 of the Income-tax Act, 1961 ('the Act') dated 27.03.2023 for AY 2016-17 is barred by limitation as per section 149 of the Act? Assessee's Contention: The assessee argued that the AO computed escaped income at Rs. 57,57,235, which included a duplicate entry of Rs. 17,00,500. After excluding this duplicate, the escaped income was Rs. 40,56,735, which is below the Rs. 50 lakhs threshold required under section 149(1)(b) for issuing a notice beyond three years. The ordinary period of three years from the end of AY 2016-17 expired on 31.03.2020, making the notice dated 27.03.2023 invalid. Revenue's Contention: The revenue contended that at the time of issuing the notice, the AO had information of income escapement amounting to Rs. 57,57,235. It was argued that the AO had ten years from the end of the relevant assessment year, and considering the first proviso to section 149(1), the limitation expired on 31.03.2023. Therefore, the notice issued on 27.03.2023 was within limitation.

Which sections of the Income-tax Act were involved?

Section 148,Section 149,Section 149(1)(b),Section 147,Section 144C(3),Section 69A,Section 139,Section 143(2),Section 127,Section 148A(d)

AI-generated summary — verify with the full judgment below

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

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

Hearing: 29/09/2026

Per Madhusudhan Sawdia, A.M.: This appeal is filed by Shri Radhakishan Potharajula (“the assessee”), feeling aggrieved by the order passed by the Learned Commissioner of Income Tax (Appeals)- 10, Hyderabad (“Ld. CIT(A)”) dated 08.10.2025 for the A.Y. 2016-17. ITA No 2340 of 2025 Radhakishan Potharajula

2.

The assessee has raised the following grounds of appeal:

“1. In the facts and circumstances of the case, the respected CIT(A) ought to have considered that the ass

The order continues below.

Read the full judgment

A free account opens 10 full judgments a month. Re-reading one you have already opened does not count again.

Create a free accountSign in

See plans and prices

The summary, the parties, the sections and the citations above are open to everyone and always will be. Only the text of the order and the PDF are metered.

More judgments on Section 148

All 35,022 judgments and leading authorities on Section 148 →

Recent GST High Court judgments

Search GST case law →