MAHESH PULAVENI,ADILABAD vs. ITO, WARD -11(1), HYDERABAD

ITA 991/HYD/2026Status: DisposedITAT Hyderabad16 October 2026AY 2018-1927 pages
AI SummaryAllowed

What were the facts?

The assessee, Mahesh Pulaveni, filed an appeal against the order of the CIT(A) dated 08/01/2026, which upheld the assessment order passed by the Assessing Officer (AO) under section 147 r.w.s 144 r.w.s 144B of the Income Tax Act, 1961, for Assessment Year 2018-19. The AO initiated reassessment proceedings under section 147 based on information from the Insight Portal indicating substantial financial transactions and non-filing of return by the assessee. A notice under section 148A(b) was issued, followed by an order under section 148A(d) and a notice under section 148. The AO subsequently passed an assessment order dated 13/12/2023, making additions of Rs. 2,32,44,505/- as unexplained money under section 69A, Rs. 45,568/- on account of commission/brokerage, and Rs. 170/- for professional/technical services. The assessee's appeal before the CIT(A) was unsuccessful.

What did the Tribunal hold?

The Tribunal held that the notice issued under Section 148 of the Act on 02/04/2022 for AY 2018-19 was beyond a period of three years from the end of the assessment year. As per Section 151 of the Act (as available on the statute w.e.f. 01.04.2021), for reassessment proceedings initiated beyond three years, approval was statutorily obligated to be obtained from higher authorities, namely the Principal Chief Commissioner, Principal Director General, Chief Commissioner, or Director General. However, in this case, the AO obtained approval only from the Principal Commissioner of Income Tax, Hyderabad-2. The Tribunal noted that the proviso to Section 151, inserted by the Finance Act, 2023, which could potentially exclude the period of reply to a notice under Section 148A, cannot be applied retrospectively as it was effective from 01.04.2023. Citing the Hon'ble Supreme Court's decision in Assistant Commissioner of Income-tax, International Taxation vs. LinkedIn Singapore Pte. Ltd., the Tribunal concluded that the approval granted by an authority not vested with jurisdiction under Section 151 renders the assessment void. Consequently, the assessment order dated 13/12/2023 was quashed for want of valid assumption of jurisdiction. Other contentions were left undecided.

What were the issues?

1. Whether the notice issued under section 148 dated 02.04.2022 for AY 2018-19 is bad in law as it was issued in contravention of Section 151 of the Act, specifically regarding the proper approval from the specified authority. 2. Whether the notice issued under section 148 dated 02.04.2022 for AY 2018-19 is bad in law as it was issued in contravention of Section 149(1)(a) of the Act. 3. Whether the order under section 148A(d) dated 31.03.2022 and notice under section 148 dated 02.04.2022 are bad in law as they were issued in contravention of Section 151A of the Act, and whether the Jurisdictional Assessing Officer (JAO) had the authority to pass such orders. 4. Whether the reopening of assessment is valid when based on the wrong assumption that withdrawals from a bank account out of business income constitute escaped income. 5. Whether the addition of Rs 2,32,44,505/- as unexplained money under section 69A of the Act is correct, or if section 69A is not applicable. 6. Whether the CIT(A) failed to pass a speaking order in terms of section 250(6) of the Act. Assessee's Contentions: - The notice under section 148 dated 02.04.2022 was issued beyond three years from the end of AY 2018-19, requiring approval from higher authorities as per Section 151 of the Act (Finance Act, 2021). Approval was obtained only from the Principal Commissioner of Income-tax (PCIT-2), which is not the specified authority for cases beyond three years. - The reopening was based on a wrong assumption that bank withdrawals are escaped income. - Section 69A is not applicable to the case. - All credits in the ICICI account were digital transfers for cash withdrawal via credit cards, on which commission of approximately 1% was earned, which was less than the admitted commission income. - The CIT(A) failed to pass a speaking order. Revenue's Contentions: - The AO validly assumed jurisdiction and issued the notice under section 148, hence no infirmity arises from the assessment order. - Relied on the orders of the authorities below.

Which sections of the Income-tax Act were involved?

Section 147,Section 144,Section 144B,Section 148,Section 148A,Section 149,Section 151,Section 151A,Section 69A,Section 194H,Section 194J,Section 250

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, HYDERABAD BENCHES, HYDERABAD

Before: 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 08/01/2026, which in turn arises from the order passed by the Assessing Officer (for short “AO”) under section 147 r.w.s 144 r.w.

The order continues below.

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