RATNAMMA POLINA,KADAPA vs. ITO, WARD-(1), KADAPA

ITA 1603/HYD/2026Status: DisposedITAT Hyderabad09 October 2026AY 2016-1745 pages
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What did the Tribunal hold?

The Tribunal decided to condone the delay in filing the appeals before the CIT(A) for both assessment years, taking a lenient view due to the assessee's illiteracy and the circumstances explained. For AY 2015-2016, the Tribunal found that the notice issued under Section 148 of the Act on 01.04.2022 was indeed barred by limitation as per the first proviso to Section 149(1)(b) of the Act. Consequently, the reassessment order was vitiated, and the appeal was allowed by quashing the Section 148 notice and the reassessment order. The Tribunal did not adjudicate other grounds for AY 2015-2016 as the primary issue of the invalid notice disposed of the appeal. For AY 2016-2017, the quantum appeal (ITA No. 1602/Hyd./2026) was set aside and remanded to the Assessing Officer for fresh adjudication after giving the assessee an opportunity to explain the source of bank deposits. The penalty appeal (ITA No. 1603/Hyd./2026) for AY 2016-2017 was allowed, as the penalty was consequential to the quantum additions, which were set aside. The ratio is that a notice issued beyond the prescribed time limit under Section 149 renders the reassessment proceedings invalid, and for matters where the quantum is set aside, consequential penalties do not survive.

What were the facts?

The assessee, Ratnamma Polina, filed three appeals before the ITAT Hyderabad against orders of the CIT(A)-NFAC, Delhi. These orders arose from assessment orders passed under Section 147 r.w.s. 144/144B and a penalty order under Section 271(1)(c) of the Income Tax Act, 1961, for Assessment Years (AY) 2015-2016 and 2016-2017. The appeals before the CIT(A) were dismissed in limine due to delays of 135 days for AY 2015-2016 and 203 days for AY 2016-2017. The assessee, an illiterate lady, attributed the delay to her lack of familiarity with the IT portal, the faceless assessment scheme, and receiving penalty notices which alerted her to the pending assessments. The Revenue opposed condonation of delay, citing vague reasons. The ITAT noted that the Section 148 notice for AY 2015-2016 was issued on 01.04.2022, beyond six years from the end of AY 2015-2016.

What were the issues?

1. Whether the delay in filing the appeals before the CIT(A) for AY 2015-2016 and AY 2016-2017 should be condoned, considering the assessee's illiteracy and unfamiliarity with the faceless assessment system, and whether the reasons provided constitute a sufficient cause under Section 250 of the Act. - Assessee's contention: The assessee, being illiterate and unacquainted with the IT portal and faceless assessment, was unaware of the proceedings. The delay occurred because she only became aware upon receiving penalty notices. The reasons provided in the condonation petition should be considered liberally in the interest of justice. - Revenue's contention: The reasons provided by the assessee for the delay are vague and do not constitute a reasonable or sufficient cause. The CIT(A)'s order dismissing the appeals should be upheld. 2. Whether the notice issued under Section 148 of the Act for AY 2015-2016, dated 01.04.2022, is barred by limitation under Section 149(1)(b) of the Act. - Assessee's contention: The notice under Section 148 was issued beyond the prescribed time limit of six years from the end of AY 2015-2016, making it invalid. - Revenue's contention: Not explicitly recorded, but implicitly opposed by their stance against condonation of delay and upholding CIT(A)'s order. 3. Whether the additions made on account of unexplained money (Rs. 35,00,000 for AY 2015-2016 and Rs. 10,15,750 for AY 2016-2017) and business income (Rs. 5,95,600 for AY 2015-2016) are sustainable, and whether interest under Sections 234A and 234B is leviable. - Assessee's contention: The additions and interest are erroneous. For AY 2016-2017, the deposit was an opening balance of cash and withdrawals, not considered by the AO. - Revenue's contention: Not explicitly recorded, but implicitly supported by the assessment orders and CIT(A)'s confirmations.

Which sections of the Income-tax Act were involved?

Section 147,Section 144,Section 144B,Section 271(1)(c),Section 250,Section 69A,Section 115BBE,Section 234A,Section 234B,Section 148,Section 149(1)(b)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, HYDERABAD

Before: SHRI VIJAY PAL RAO & SHRI MANJUNATHA G.

Pronounced: 09.10.2026

PER VIJAY PAL RAO, VICE PRESIDENT:

These three appeals by the Assessee are directed against three separate Orders all dated 23.02.2026 of the ld. CIT(A)-National Faceless Appeal Centre [in short "NFAC"], Delhi arising from assessment order passed u/sec.147 r.w.s.144; 147 r.w.s.144B and penalty u/sec.271(1)(c) Income Tax Act [in short "the Act"], 1961 for the assessment years 2015-2016 and 2016-2017, respectively.

ITA.No.1601/Hyd./2026 – A.Y. 2015-2016

The order continues below.

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