KOMMA REDDY SATYANARAYAN REDDY,HYDERABAD. vs. INCOME TAX OFFICER WARD- 8(2), HYDERABAD.

The assessee has submitted that the ground number 4 raised in Form No.36 is in the nature of additional ground. The assessee has also filed a petition for admission of such additional ground.

The Learned Authorized Representative (“Ld. AR”) submitted that additional ground raised by the assessee is admissible in view of judgment rendered by the Hon’ble Supreme Court in the case of National Thermal Power Co. Ltd. v. CIT (1998) 229 ITR 383 (SC). The prayer for admission of additional ground raised by the assessee is admitted for adjudication in terms of Rule 11 of the Income Tax (Appellate Tribunal) Rules, 1963 owing to the fact that objections raised in additional ground is legal in nature for which relevant facts are stated to be emanating from the existing records.

The brief facts of the case are that the assessee is an individual who did not file any return of income for the Assessment Year 2017–18. Accordingly, the Learned Assessing Officer (“Ld. AO”) issued a notice under section 142(1) of the Income Tax Act, 1961 (“the Act”) on 09.02.2018 calling upon the assessee to file her return of income on or before 11.03.2018. In response to the said notice, the assessee filed her return of income for the Assessment Year 2017–18 only on 13.10.2019 declaring a total income of Rs.8,46,360/-. However, in the assessment order, the Ld. AO recorded that no return of income had been filed by the assessee. The Ld. AO further observed that the assessee did not comply with any of the notices issued during the assessment proceedings. Based on the bank statement obtained from the Bank under section 133(6) of the Act, the Ld. AO found that the assessee had total credit of Rs.1,81,95,640/- in her bank account. Since the assessee failed to explain the source of such credits, the Ld. AO treated the entire credits as unexplained money under section 69A of the Act and added the same to the income of the assessee. The ITA No 1634 of 2025 Komma Reddy Satyanarayan Reddy Page 4 of 17

Aggrieved with the order of the Ld. AO, the assessee filed an appeal before the Ld. CIT(A). Since the assessment was completed under section 144 of the Act, the Ld. CIT(A) set aside the matter to the file of the Ld. AO for fresh examination.

Aggrieved with the order of the Ld. CIT (A), the assessee is in further appeal before this Tribunal. During the course of hearing, the Learned Authorized Representative (“Ld. AR”) submitted that the legal ground raised by the assessee goes to the root of the matter. The Ld. AR submitted that the assessment order passed by the Ld. AO is invalid in law as no notice under section 143(2) of the Act was ever issued to the assessee. He submitted that the assessee had filed her return of income on 13.10.2019, though belatedly, yet the return was filed during the pendency of the assessment proceedings. Therefore, it became a valid return in the eyes of law. He further submitted that once a return of income is filed, whether original or belated, the Ld. AO acquires juri iction to frame a scrutiny assessment only if a statutory notice under section 143(2) of the Act is issued within the prescribed time. In this regard, the Ld. AR relied upon the decision of the Coordinate Bench of the ITAT in the case of Nimmana Narasimharao, Eluru v. ITO, ITA No.50/VIZ/2025 for AY 2017–18 dated 30.09.2025, wherein it was held that even if the return of income is filed after the specified date, so long as it is filed during the pendency of the assessment proceedings it is to be treated as a ITA No 1634 of 2025 Komma Reddy Satyanarayan Reddy Page 5 of 17

Per contra, the Learned Departmental Representative (“Ld. DR”) supported the orders of the lower authorities. The Ld. DR submitted that the assessee did not file the return voluntarily under section 139(1) of the Act. Even when notice under section 142(1) of the Act required the assessee to file her return by 11.03.2018, the assessee neither filed the return by the due date prescribed in the notice nor by the due date prescribed under section 139(4) of the Act, i.e., 31.03.2018. The Ld. DR submitted that the return filed on 13.10.2019 cannot be treated as a valid return since it was beyond the time permitted under section 139(4) of the Act. Therefore, according to the Ld. DR, there was no requirement for issuance of notice under section 143(2) of the Act, and the assessment framed under section 144 of the Act was valid.

We have considered the rival submissions and perused the material available on record. It is an undisputed fact that the assessee filed her return of income on 13.10.2019 before the Ld. AO during the pendency of assessment proceedings. It is also not in dispute that the Ld. AO completed the assessment without issuing any notice under section 143(2) of the Act. The only question that arises is whether a notice under section 143(2) of the Act is mandatory when the return of income is filed belatedly and ITA No 1634 of 2025 Komma Reddy Satyanarayan Reddy Page 6 of 17

On perusal of the above, we find that the Tribunal, after considering the statutory scheme, held that even if a return of income is filed after the specified date, so long as it is filed during the pendency of the assessment, it is a valid return and the Ld. AO must issue notice under section 143(2) of the Act if he wishes to proceed with scrutiny assessment. Failure to do so renders the assessment order void. In the present case, the assessee filed her return of income before the ITA No 1634 of 2025 Komma Reddy Satyanarayan Reddy Page 16 of 17