UPPADA KESAVAJANARDHANA RAO,VISAKHAPATNAM vs. ACIT, CIRCLE INTERNATIONAL TAXN, VISAKHAPATNAM

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ITA 113/VIZ/2026Status: DisposedITAT Visakhapatnam26 October 2026AY 2016-1710 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal noted that the Section 148 notice dated 31.03.2021 was prima facie not issued in the assessee's name but in the name of another assessee. This legal issue was not examined by the lower authorities. The Tribunal held that a valid notice is a prerequisite for assessment. Therefore, in the interest of justice and fair play, the Tribunal remitted the issue back to the Assessing Officer (AO) to re-examine the validity of the notice and whether it was properly served. The AO was directed to pass an order after giving appropriate notice to the assessee and allowing the assessee to participate in the proceedings. The Tribunal also stated that if the assessee does not succeed on the legal grounds or other issues during the remand proceedings, the relief granted by the Ld. CIT(A) shall remain undisturbed. The appeal was allowed for statistical purposes.

What were the facts?

The assessee, Uppada Kesavajanardhana Rao, filed an appeal against the order of the Commissioner of Income Tax (Appeals)-10, Hyderabad, for Assessment Year 2016-17. The appeal was filed with a delay of 217 days, which the Tribunal condoned due to reasonable cause. The Assessing Officer (AO) initiated proceedings under Section 147, issuing a notice under Section 148. The assessee did not comply. The AO completed the assessment under Section 144 r.w.s 147, making an addition of Rs. 83,95,037/- to the short-term capital gains, assessing them at Rs. 1,83,71,987/- and raising a demand of Rs. 59,13,286/-. The CIT(A) partly allowed the assessee's appeal. The assessee then filed this appeal before the Tribunal.

What were the issues?

1. Whether the notice issued under Section 148 of the Income Tax Act, 1961, dated 31.03.2021, was valid, considering it was allegedly issued in the name of a different assessee and with a different PAN number, rendering the assessment under Section 147 void ab initio? (Question of law) Assessee's Contention: The assessee argued that the Section 148 notice was not issued in their name or PAN, but in the name of 'Sridevi Nallamilli' with PAN 'AGHPN1002C'. Therefore, the entire assessment proceedings are void ab initio due to the absence of a valid notice. They relied on judicial precedents establishing the importance of proper communication of orders and notices. They also contended that the AO failed to follow CBDT Circular No. 19/2019 regarding DIN generation and manual orders in case of technical glitches. Revenue's Contention: The revenue's representative supported the decisions of the lower authorities and argued that since the assessee participated in the proceedings, the issue of the notice's validity could not be raised at this level.

Which sections of the Income-tax Act were involved?

Section 144,Section 147,Section 148,Section 142(1),Section 139,Section 144C,Section 153

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, VISAKHAPATNAM BENCH, VISAKHAPATNAM

Before: SHRI SONJOY SARMA, HON’BLE & SHRI OMKARESHWAR CHIDARA, HON’BLE

PER SONJOY SARMA, JM:

This appeal is filed by the Assessee against the order of Learned Commissioner of Income Tax (Appeals)-10, Hyderabad [hereinafter in short “Ld.CIT(A)”] vide DIN: ITBA/APL/M/250/2025-26/1075701914(1) dated 21-Apr-2025 for the Assessment Year 2016-17.

2.

The Assessee has raised the following grounds of appeal:

“1. That under the facts and circumstances of the case, the order passed u/s.144 r.w.s 147 of the IT Act dt. 11/05/2022 confirmed by Commissioner of Income-tax (Appeals) 10, Hyderabad (in short CIT(A)) dt.21-04-2025, modified vide corrigendum dt.17-12- 2025, is not in accordance with the provisions of law. 2. The Ld. Commissioner of Income Tax (Appeals) erred in not appreciating the fact the notice u/s 148 of the IT Act dt.31/03/2021 issued through IT portal in not in the name and PAN of assessee. Hence, in the absence of valid notice issued u/s 148 of the IT Act, the subject assessment framed u/s 147 of the IT Act is void ab initio. 3. The Ld. Commissioner of Income Tax (Appeals), while adjudicating the issue had failed to address the irregularity of having issued the notice u/s 148 in the name of the different assessee/PAN, instead Ld. CIT(A) based his observation with the comment that the notice was issued properly with a DIN being generated. 4. The Ld. Commissioner of Income Tax (Appeals) erred in not appreciating the fact that though the assessment order is dt.11/05/2022 the same is passed and issued beyond the time limit for passing the said order as prescribed under sub section (4) of section 144C of the IT Act which is dt.31/05/2022. 5. The Ld. Commissioner of Income Tax (Appeals) ought to have appreciated that the remand report of the Ld.AO evidencing the DIN generation traces from the Income Tax portal is containing a technical glitch which suggest that the order had not been uploaded in the portal, in respect of which, the Ld. AO failed to follow the guidelines issued by CBDT vide circular No. 19/2019 dt. 14/08/2019. 6. The judiciary has set a precedence that it is not sufficient if the order is just signed and kept aside, it is important to communicate the same to the assessee by either making it public or notifying it in some form / manner to say that the order has left the officer's hand, which in the present case is not done within the time limit for passing the order u.s 153 of the IT Act. 7. The Ld. CIT (A) ought to have known that Ld.AO failed to follow the following guidelines issued by CBDT vide circular No. 19/2019 dt. 14/08/2019, when there is a technical glitch in generating DIN: i) the manual order can be passed only with the prior approval of Chief Commissioner of Income tax; (indeed such order shall also be passed within the time limit prescribed u/s 153 of the IT Act) and ii) that the said order should contain the fact that the order is being issued without DIN with the prior approval of CCIT, containing the reference to such approval; and iii) further that the said scenario shall be corrected within a period of 15 days by generating a DIN in the system and communicating the same to the assessee. 8. For these and such other grounds that may be adduced at the time of hearing, Hon'ble Tribunal is prayed that the Order passed by AO u/s 144 r.w.s 147 of the IT Act be quashed as not valid in the eyes of law and the addition made by AO be deleted, in the interest of justice.”

3.

At the outset, it is noticed from the appeal record that there is a delay of 217 days in filing the appeal before the Appellate Tribunal. Explaining the reasons for belated filing of the appeal, the Ld. Authorised Representative [hereinafter “Ld.AR”] drew our attention to the affidavit filed by the assessee along with a petition seeking for condonation of delay and read out the contents of the petition which is as under: -

“1. It is respectfully submitted that the Ld.CIT(A) had initially passed an appellate order dt.21.04.2025, wherein the capital gains addition made by the Learned Assessing officer ('Ld.AO') was deleted substantially and the order was thus favorable to the appellant. On the said order of Ld.CIT(A), the appellant did not had had no grievance and, was under a bona fide belief, considered that no further appeal before the Hon'ble Tribunal was required. 2. Subsequently, the Ld. CIT(A) issued a corrigendum to the said appellate order on dt.17.12.2025, wherein the findings in the original appellate order were modified, resulting in additional capital gains assessed in the hands of assessee and this resulted in serious prejudice to the Appellant. It is only upon receipt and examination of the corrigendum order dated 17.12.2025 that the appellant became aggrieved and obtained legal advice to prefer an appeal before the Hon'ble Income Tax Appellate Tribunal, challenging the original appellate order dt.21.04.2025. 3. Consequently, the present appeal in Form No. 36 has been filed after the prescribed period of limitation, resulting in a delay of 217 days. 4. But for the reasons stated herein above, assessee has no malafide intentions in not filing the appeal within the due date as provided in the statute. Considering the above, it is most humbly and respectfully prayed before the Hon’ble Tribunal to kindly condone the delay of 217 days and admit the appeal for hearing and its disposal, in the interest of justice.”

4.

On perusal of the contents of the affidavit filed by the assessee as well as the submission of the Ld. AR, we find that the assessee is prevented by a

reasonable and sufficient cause in filing the appeal beyond the prescribed time limit with a delay of 217 days. Therefore, we hereby condone the delay of 217 days in filing the appeal before the Tribunal and proceed to adjudicate the appeals on merits in the following paragraphs.

5.

Brief facts of the case are that, assessee is a Non-Resident individual and filed return of income on 20.03.2019, wherein the assessee offered short-term capital gains of Rs.99,76,950/- and paid due taxes. In the case of the assessee, Assessing Officer was in possession of information that assessee had sold property to the extent of 2323.20 Sq.Yds to M/s. Chinni Krishna Builders and Developers for a consideration of Rs.6,58,15,500/-. On the basis of the said information, assessing officer had initiated proceedings under section 147 of the Act, followed by notice issued under section 148 of the Act to the assessee. In response to the notice, no compliance was made. Subsequently, notice under section 142(1) of the Act was issued, but no compliance was filed by the assessee. Accordingly, assessing officer completed the assessment under section 144 r.w.s 147 of the Act, on the basis of information available with him. The assessing officer viewed that, Assessee has filed return of income which was filed belatedly and which was not within the prescribed limit as per section 139 of the Act and he also viewed that assessee has suppressed short-term capital gain to the extent of Rs.83,95,037/-. Thus, the assessment order was completed under Section 144 r.w.s 147 of the Act on 11.05.2022 by adding a sum of Rs.83,95,037/- and assessed the short-term capital gain of Rs.1,83,71,987/-, thereby, raising a demand of Rs.59,13,286/-.

6.

Aggrieved by the order of the Assessing Officer, assessee filed appeal before the Ld. CIT(A), where the Ld. CIT(A) partly allowed the appeal of the assessee in following manner: -

7.

Still aggrieved by the above order, assessee is in appeal before this Tribunal, stating that legal ground that the very notice issued under Section 148 of the Act, issued to the assessee dated 31.03.2021, was not issued in the name of the assessee, which was in the name of other assessee, namely “Sridevi Nallamilli” and other distinct PAN number as being “AGHPN1002C”, the relevant extract filed by the assessee at Page Number 170. Extract of the same is hereinunder: -

8.

The AR therefore prayed that since 148 notice itself is not in the name of the assessee, therefore entire proceedings need to be set aside by deleting the addition. Since this issue is a purely legal issue, therefore this issue needs to be adjudicated at first. The other grounds are also raised by the assessee, which are also did not considered at the level of the lower authorities. Therefore, she prays that the entire proceedings need to be set aside by deleting the addition.

9.

On the other hand, the learned departmental representative supported the decision of the authorities below. He stated that, since the assessee participated in the proceedings, therefore, this question cannot be raised at this level.

10.

We, after hearing the rival submissions of the parties and perusing the material available on record, we prima facie noticed, in the case of the assessee as stated by the AR, that the notice dated 31-3-2021 was not issued in the name of the assessee, which was issued in the name of some other assessee. Therefore, this legal issue was never examined by the authorities below and this issue needs to be addressed at the level of the authorities below. Since without serving valid notice, assessment cannot be done, we therefore, in the interest of justice and fair play, remit back this issue to the file of the Assessing Officer with a direction to re-examine the legal issue first regarding the validity of the notice, whether it was properly served or not and any other issues are still remain to be opened, assessee can challenge before the Assessing Officer during the remand proceedings. In terms of the above, the appeal of the assessee is set aside to the file of Assessing Officer with a direction to examine all issues, including the legal issue regarding validity of notice. Assessing Officer shall pass the order after giving an appropriate notice to the assessee. Assessee is also directed to participate in the proceedings by filing supporting documents in support of his claim. It is noted that, in case assessee has failed to succeed on the legal grounds as well as on the other issues raised during the remand proceedings, the relief granted by Ld.CIT(A) shall remain undisturbed. In terms of the above, appeal of the assessee allowed for statistical purposes.

11.

In the result, appeal filed by the Assessee is allowed for statistical purposes.

Order pronounced in the open court on 28th October, 2026.

Sd/- Sd/- OMKARESHWAR CHIDARA SONJOY SARMA ACCOUNTANT MEMBER JUDICIAL MEMBER Visakhapatnam Dated: 28.10.2026 Giridhar, Sr.PS Copy to: UPPADA KESAVAJANARDHANA RAO, 31-38-272, RASALAMMA COLONY 1 KURMANNAPALEM, VISAKHAPATNAM-530046, ANDHRA PRADESH

ACIT, CIRCLE INTERNATIONAL TAXN, INCOME TAX OFFICE-INFINITY TOWER, 2 VISAKHAPATNAM-530016, ANDHRA PRADESH

3 THE PCIT / CIT, 4 THE D.R., ITAT, VISAKHAPATNAM BENCH 5 GUARD FILE

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