TIRUMALASETTI YUGANDHAR,VIJAYAWADA vs. INCOME TAX OFFICER, WARD - 2(3), VIJAYAWADA

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ITA 110/VIZ/2026Status: DisposedITAT Visakhapatnam30 October 2026AY 2015-165 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the notice issued by the Revenue under Section 148 of the Act is invalid. This decision was based on the Supreme Court's ruling in the case of ITO Vs. Sri Sai Kumar Mateti, which followed the principles laid down in Union of India Vs. Ashish Agarwal and Union of India Vs. Rajeev Bansal. The Tribunal noted that the Solicitor General had conceded before the Supreme Court that assessments pertaining to AY 2015-16, where notices were issued/proposed beyond the prescribed time limit, would be barred by time. Consequently, all consequent additions made by the AO were deemed void-ab-initio. The Tribunal deleted the addition made by the AO and allowed the assessee's appeal. No issue was expressly left undecided.

What were the facts?

The assessee, Tirumalasetti Yugandhar, filed an appeal against the order of the CIT(A), NFAC, Delhi, for Assessment Year 2015-16. The Assessing Officer (AO) had made an addition of Rs. 20,89,500/- under Section 69A of the Income Tax Act, 1961, treating cash deposits into the assessee's bank account as unexplained money. The assessee's explanation of receiving gifts from his mother and brother-in-law was not supported by corroborative evidence. The CIT(A) confirmed the AO's addition, finding the assessee's explanation contradictory and lacking documentary evidence. The assessee then appealed to the ITAT.

What were the issues?

1. Whether the addition of Rs. 20,89,500/- as unexplained money under Section 69A of the Income Tax Act, 1961, is justified when the assessee claimed the deposits were from matured fixed deposits withdrawn and redeposited during demonetization. 2. Whether the assessment order framed by the AO is invalid in view of the Supreme Court's decisions in Union of India Vs. Ashish Agarwal and Union of India Vs. Rajeev Bansal, concerning notices issued under Section 148 beyond the prescribed period of 3 years where the income escaped is less than Rs. 50 lakh. Assessee's Contentions: The assessee argued that the AO was incorrect in treating the deposit amount as unexplained income, stating that one of his fixed deposits matured and was withdrawn, then redeposited as cash into his bank account during the demonetization period. Additionally, the assessee contended that the assessment order was invalid due to the AO issuing notice under Section 148 beyond the prescribed period of 3 years, citing the Supreme Court's rulings in Ashish Agarwal and Rajeev Bansal, where such notices are held invalid if the escaped income is less than Rs. 50 lakh. The assessee pleaded for deletion of the addition. Revenue's Contentions: The Revenue relied on the orders of the lower authorities.

Which sections of the Income-tax Act were involved?

Section 69A,Section 148

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, VISAKHAPATNAM BENCH, VISAKHAPATNAM

Pronounced: 30.10.2026

PER SHRI OMKARESHWAR CHIDARA, ACCOUNTANT MEMBER: This appeal is filed by the Assessee against the order of the Commissioner of Income Tax (Appeals) [“Ld.CIT(A)”], National Faceless Appeal Centre (“NFAC”), Delhi vide DIN: ITBA/NFAC/S/250/2025- 26/1083258547(1) dated 03.12.2025 for the Assessment Year 2015- 16.

ITA 110/VIZ/2026 Tirumalasetti Yugandhar 2. In the above cited case, the Ld.AO made addition of Rs.20,89,500/- as unexplained money u/s 69A of the Income Tax Act, 1961 (“the Act”), because the appellant was not able to explain the source of cash deposits made into his bank account with evidences. When the assessee was asked to explain the nature and source of the cash deposits, the appellant has claimed that he received certain gifts from his mother and brother-in-law etc. But, as there are no corroborative evidences for receiving the above amounts as gifts, the Ld.AO was not satisfied with the explanation and made addition u/s 69A of the Act.

3.

Aggrieved by the order of the Ld.AO, assessee preferred an appeal before the CIT(A). The Ld.CIT(A) confirmed the addition made by the Ld.AO, because the explanation given by the appellant is contradictory and there are no documentary evidences for receiving the gifts etc. Hence, the Ld.CIT(A) adjudicated the issue by stating that the appellant has not proved his claim with corresponding documentary evidences.

4.

Aggrieved by the order of the Ld.CIT(A), an appeal was filed by the appellant before ITAT and the only ground of appeal taken before ITAT is that one of his fixed deposits got matured, which was withdrawn from the bank account and the same was redeposited by way of cash into his bank account during the demonetization period

ITA 110/VIZ/2026 Tirumalasetti Yugandhar and hence, the Ld.AO is not correct in treating the deposit amount as unexplained income. An additional ground was taken during the appeal proceedings before ITAT, which is purely legal in nature, stating that the assessment order framed by the Ld.AO is invalid, in view of the adjudication made by Hon’ble Supreme Court in the case of Union of India Vs. Ashish Agarwal 444 ITR 01 (SC) and Union of India Vs. Rajeev Bansal (SC) 8 NYPCTR 1291(SC). In these cases, it was held that if the notice issued by Revenue u/s 148 beyond the prescribed period of 3 years and the income escaped is less than Rs.50 lakh, then the notice is invalid. In view of the same, the Ld.AR of the appellant pleaded that the addition made by the Ld.AO should be deleted.

5.

The Ld.DR relied on the orders of the lower authorities.

6.

After going through the submissions of Ld.AR of appellant, hearing Ld.DR and perusal of the decision of Hon’ble Supreme Court in the case of ITO Vs. Sri Sai Kumar Mateti, Civil Appeal 2026 arising out of SLP (Civil) No.8682 of 2024, the Bench decides that the notice issued by the Revenue u/s 148 of the Act is invalid and all the consequent additions also become void-ab-initio. In fact, the Solicitor General himself has conceded before the Hon’ble Supreme Court that the assessment cannot be reopened for the A.Y.2015-16. The relevant portion of the order of Hon’ble Supreme Court are reproduced below :

ITA 110/VIZ/2026 Tirumalasetti Yugandhar “4. The instant cases were segregated through the above-mentioned order on the premise that they may be pertaining to Assessment Year 2015-16. It is fairly conceded by Mr. N. Venkataraman, learned Additional Solicitor General of India, representing the Revenue, that in the assessment cases pertaining to the year 2015-16, the notices issued/proposed to be issued for reassessment would stand barred by time in light of the view taken by this Court in Union of India & Ors. v. Rajeev Bansal, 2024 SCC OnLine SC 2693. 5. There is no quarrel that if the instant cases are found to pertain to Assessment Year 2015-16, then the impugned notices are liable to be struck down outrightly in terms of the concession on behalf of the Department recorded in paragraph 19(f) of Rajeev Bansal (supra) and reiterated before us by the learned Additional Solicitor General of India.”

6.1. In view of the above decision of Hon’ble Supreme Court, addition made by the Ld.AO is deleted and the assessee’s appeal is allowed.

7.

In the result, appeal of the assessee is allowed.

Order pronounced in the open court on 30th October, 2026.

Sd/- Sd/- (SONJOY SARMA) (OMKARESHWAR CHIDARA) न्याययक सदस्य /JUDICIAL MEMBER ऱेखा सदस्य/ACCOUNTANT MEMBER Visakhapatnam dated 30.10.2026. L.Rama/Sr.PS

ITA 110/VIZ/2026 Tirumalasetti Yugandhar Copy to: SHRI TIRUMALASETTI YUGANDHAR, 62-6-3 NEAR RAMALAYAM, PATAMATA, 1 LANKA VIJAYAWADA, VIJAYAWADA-520010, ANDHRA PRADESH THE INCOME TAX OFFICER, WARD - 2(3), 2 CR BUILDING, VIJAYAWADA-520002, ANDHRA PRADESH 3 THE PCIT / CIT, 4 THE D.R., ITAT, VISAKHAPATNAM BENCH 5 GUARD FILE

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