VENKATA RAMA KRISHNAM RAJU CHINTALAPATI,HYDERABAD vs. DCIT., CIRCLE 8(1), HYDERABAD

आयकर अपीलȣय अͬधकरण, हैदराबाद पीठ
IN THE INCOME TAX APPELLATE TRIBUNAL
Hyderabad ‘B’ Bench, Hyderabad
Įी रवीश सूद, माननीय ÛयाǓयक सदèय एवं Įी मधुसूदन सावͫडया, माननीय लेखा सदèय
SHRI RAVISH SOOD, HON’BLE JUDICIAL MEMBER
AND SHRI MADHUSUDAN SAWDIA HON’BLE ACCOUNTANT MEMBER

आ.अपी.सं /ITA No.143/Hyd/2025
(Ǔनधा[रण वष[/Assessment Year: 2018-19)

Venkata Rama Krishnam Raju
Chintalapati,
Hyderabad.
PAN: AFKPC3305H
Vs.
DCIT,
Circle-8(1),
Hyderabad.
(Appellant)

(Respondent)

Ǔनधा[ǐरती ɮवारा/Assessee by:
Shri KA Sai Prasad, CA
& CA P Yashodhan
राजè व ɮवारा/Revenue by:
Shri Waseem UR Rehman,
Sr.AR

सुनवाई कȧ तारȣख/Date of Hearing:
04/12/2025
घोषणा कȧ तारȣख/Date of Pronouncement:
10/12/2025

आदेश / ORDER
PER. RAVISH SOOD, JM :
The present appeal filed by the assessee is directed against the order passed by the CIT(Appeals), National Faceless Appeal Centre, Delhi dated
07/11/2024, which in turn arises from the order passed by the Assessing Officer
(for short, “AO”) under Section 147 r.w.s. 144B of the Income Tax Act, 1961 (for short, “Act”) dated 20.03.2024, for the Assessment Year 2018-19. The 2
Venkata Rama Krishnam Raju
Chintalapati vs. DCITG assessee has assailed the impugned order of the CIT(Appeals) on the following grounds of appeal before us:
“1. The Learned First Appellate Authority is not justified in passing an ex parte order since the appellant failed to respond due to pressing personal obligations, including arranging finances for the appellant's daughter's overseas education, alongside business responsibilities.
2. The Appellant craves leave to add, amend, alter or rescind any of the above grounds of appeal before or at the time of hearing.”
Also, the assessee has raised before us an additional ground of appeal which reads as under:
“On the facts and in the circumstances of the case, the notice issued U/s 148
of the Act on 18.04.2022 without prior approval of the Pr. Chief Commissioner of Income Tax being the appropriate authority in terms of section 151(ii) of the Act is invalid.”
As the assessee, by raising the aforesaid additional ground of appeal, has sought our indulgence for adjudicating a legal issue, which will not require looking any further beyond the facts available on record, therefore, we have no hesitation in admitting the same. Our aforesaid view is supported by the judgment of the Hon’ble Supreme Court in National Thermal Power
Management Strategy of the CBDT, indicating that the assessee during the subject year has carried out high-risk financial transactions aggregating to Rs.
85,83,558/-, initiated proceedings under section 148A of the Act. Notice under 3
Venkata Rama Krishnam Raju
Chintalapati vs. DCITG section 148 of the Act, dated 18.04.2022, was issued by the assessee. was issued on 18.04.2022. In response, the assessee e-filed his return declaring an income of Rs. 12,47,460/-.
3. The AO, during the course of the assessment proceedings, not being satisfied with the explanations furnished by the assessee regarding, viz. (i).
source of the cash deposits in his bank account with Federal Bank during the subject year: Rs. 46,08,000/-; and (ii). understatement of salary income: Rs.
27,30,098/-, vide his order of assessment passed under section 147 r.w.s. 144
r.w.s 144B of the Act, determined his income at Rs. 85,85,558/-
4. Aggrieved, the assessee carried the matter in appeal before the CIT(A). As the assessee, despite sufficient opportunity, failed to participate in the appellate proceedings, therefore, the CIT(A) disposed of the appeal vide an ex-parte order and confirmed both the additions.
5. We have heard the Learned Authorised Representatives of both parties, perused the orders of the lower authorities and the material available on record, as well as considered the judicial pronouncement that have been pressed into service by the Ld. AR to drive home his contentions.
6. Shri KA Sai Prasad, CA - learned Authorized Representative (for short
“Ld.AR”) for the assessee, at the threshold of hearing of the appeal, submitted that the A.O. had grossly erred in law and on facts of the case in assuming

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Venkata Rama Krishnam Raju
Chintalapati vs. DCITG juri iction and framing the impugned assessment vide his order passed u/s 147 r.w.s 144B of the Act, dated 20.03.2024. Elaborating on his contention, the Ld. AR submitted that as notice u/s 148 of the Act, dated 18/04/2022 for the subject year i.e. A.Y. 2018-19 had been issued by the A.O. beyond a period of three years from the end of the relevant assessment year, i.e., on 18.04.2022, therefore, as per the mandate of Section 151 of the Act, as was made available on the statute vide the Finance Act, 2021 w.e.f. 01.04.2021, the said notice could have been issued only after obtaining the prior approval of the authorities contemplated in sub-section (ii) of Section 151 of the Act, viz. Principal Chief
Commissioner/Principal
Director
General/Chief
Commissioner
/Director
General. The Ld. AR submitted that the notice under Section 148 of the Act, dated 18/04/2022, had been issued in the present case after obtaining the prior approval of the Principal Commissioner of Income-tax, Hyderabad-2, on 18/04/2022. The Ld. AR to fortify his contention had drawn our attention to the notice u/s 148 of the Act, dated 18.04.2022, which revealed that the same was issued after obtaining the prior approval of PCIT, Hyderabad-2, accorded on 18.04.2022 vide reference No.100000029981043 (copy on record).

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Tax-Departmental Representative (for short “Ld. CIT-DR”), on being confronted with the aforesaid factual position as was canvassed before us, failed to rebut the same. However, the Ld. CIT-DR submitted that as the A.O., after validly assuming juri iction, had issued notice u/s 148 of the Act, dated 18.04.2022, therefore, no infirmity emerges from the assessment order passed by him.
9. We have heard the Ld. Authorised Representatives of both parties, perused the orders of the lower authorities and the material available on record, as well as considered the judicial pronouncements that have been pressed into service by the Ld. Authorised Representatives of both parties to drive home their respective contentions.
10. As the Ld. AR has assailed the validity of the juri iction assumed by the A.O. for issuing notice u/s 148 dated 18.04.2022 without obtaining approval from any of the authorities specified u/s 151 of the Act (as was applicable at the relevant point of time), therefore, we shall first deal with the same.
11. Admittedly, it is a matter of fact discernible from the record that the notice u/s 148 of the Act, dated 18.04.2022, had been issued by the ACIT, Circle-8(1),
Income-Tax dated 18.04.2022 vide reference No.100000029981043. For the sake of clarity, we deem it fit to cull out the notice u/s 148 dated 18.04.2022. 7
13. Apropos the challenge by the Ld. AR regarding the validity of the juri iction assumed by the A.O. for initiating proceedings u/s. 147 of the Act, i.e., without obtaining the approval of the specified authority u/s. 151(ii) of the Act, we find substance in the same. Admittedly, the reassessment proceedings u/s. 147 of the Act had been revamped vide the Finance Act, 2021 w.e.f.
01.04.2021. The substituted Sections 147 to 159 and Section 151 of the Act, applicable w.e.f. 01.04.2021 are culled out as under:

“Income escaping assessment-
147. If any income chargeable to tax, in the case of an assessee, has escaped assessment for any assessment year, the Assessing
Officer may, subject to the provisions of sections 148 to 153, assess or reassess such income or recompute the loss or the depreciation allowance or any other allowance or deduction for such assessment year (hereafter in this section and in sections 148 to 153 referred to as the relevant assessment year).
Explanation.—For the purposes of assessment or reassessment or recomputation under this section, the Assessing Officer may assess or reassess the income in respect of any issue, which has escaped assessment, and such issue comes to his notice subsequently in the course of the proceedings under this section, irrespective of the fact that the provisions of section 148A have not been complied with.”.
Issue of notice where income has escaped assessment
148. Before making the assessment, reassessment or recomputation under section 147, and subject to the provisions of section 148A, the Assessing Officer shall serve on the assessee

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Venkata Rama Krishnam Raju
Chintalapati vs. DCITG a notice, along with a copy of the order passed, if required, under clause (d) of section 148A, requiring him to furnish within such period, as may be specified in such notice, a return of his income or the income of any other person in respect of which he is assessable under this Act during the previous year corresponding to the relevant assessment year, in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed; and the provisions of this Act shall, so far as may be, apply accordingly as if such return were a return required to be furnished under section 139:
Provided that no notice under this section shall be issued unless there is information with the Assessing Officer which suggests that the income chargeable to tax has escaped assessment in the case of the assessee for the relevant assessment year and the Assessing
Officer has obtained prior approval of the specified authority to issue such notice.
Explanation 1.—For the purposes of this section and section 148A, the information with the Assessing Officer which suggests that the income chargeable to tax has escaped assessment means,—
(i) any information flagged in the case of the assessee for the relevant assessment year in accordance with the risk management strategy formulated by the Board from time to time;
(ii) any final objection raised by the Comptroller and Auditor General of India to the effect that the assessment in the case of the assessee for the relevant assessment year has not been made in accordance with the provisions of this Act.
Explanation 2.—For the purposes of this section, where,—
(i) a search is initiated under section 132 or books of account, other documents or any assets are requisitioned under section 132A, on or after the 1st day of April, 2021, in the case of the assessee; or (ii) a survey is conducted under section 133A, other than under sub- section (2A) or subsection (5) of that section, on or after the 1st day of April, 2021, in the case of the assessee; or (iii) the Assessing Officer is satisfied, with the prior approval of the Principal Commissioner or Commissioner, that any money, bullion, jewellery or other valuable article or thing, seized or requisitioned

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Venkata Rama Krishnam Raju
Chintalapati vs. DCITG under section 132 or under section 132A in case of any other person on or after the 1st day of April, 2021, belongs to the assessee; or (iv) the Assessing Officer is satisfied, with the prior approval of Principal Commissioner or Commissioner, that any books of account or documents, seized or requisitioned under section 132 or section 132A in case of any other person on or after the 1st day of April,
2021, pertains or pertain to, or any information contained therein, relate to, the assessee, the Assessing Officer shall be deemed to have information which suggests that the income chargeable to tax has escaped assessment in the case of the assessee for the three assessment years immediately preceding the assessment year relevant to the previous year in which the search is initiated or books of account, other documents or any assets are requisitioned or survey is conducted in the case of the assessee or money, bullion, jewellery or other valuable article or thing or books of account or documents are seized or requisitioned in case of any other person.
Explanation 3.—For the purposes of this section, specified authority means the specified authority referred to in section 151.”
Conducting inquiry, providing opportunity before issue of notice under section 148-
“148A. The Assessing Officer shall, before issuing any notice under section 148,—
(a) conduct any enquiry, if required, with the prior approval of specified authority, with respect to the information which suggests that the income chargeable to tax has escaped assessment;
(b) provide an opportunity of being heard to the assessee, with the prior approval of specified authority, by serving upon him a notice to show cause within such time, as may be specified in the notice, being not less than seven days and but not exceeding thirty days from the date on which such notice is issued, or such time, as may be extended by him on the basis of an application in this behalf, as to why a notice under section 148 should not be issued on the basis of information which suggests that income chargeable to tax has escaped assessment in his case for the relevant assessment year and results of enquiry conducted, if any, as per clause (a);
(c) consider the reply of assessee furnished, if any, in response to the showcause notice referred to in clause (b);

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(d) decide, on the basis of material available on record including reply of the assessee, whether or not it is a fit case to issue a notice under section 148, by passing an order, with the prior approval of specified authority, within one month from the end of the month in which the reply referred to in clause (c) is received by him, or where no such reply is furnished, within one month from the end of the month in which time or extended time allowed to furnish a reply as per clause (b) expires:
Provided that the provisions of this section shall not apply in a case where,—
(a) a search is initiated under section 132 or books of account, other documents or any assets are requisitioned under section 132A in the case of the assessee on or after the 1st day of April, 2021; or (b) the Assessing Officer is satisfied, with the prior approval of the Principal Commissioner or Commissioner that any money, bullion, jewellery or other valuable article or thing, seized in a search under section 132 or requisitioned under section 132A, in the case of any other person on or after the 1st day of April, 2021, belongs to the assessee; or (c) the Assessing Officer is satisfied, with the prior approval of the Principal Commissioner or Commissioner that any books of account or documents, seized in a search under section 132 or requisitioned under section 132A, in case of any other person on or after the 1st day of April, 2021, pertains or pertain to, or any information contained therein, relate to, the assessee.
Explanation.—For the purposes of this section, specified authority means the specified authority referred to in section 151.”
Time limit for notice-
“149. (1) No notice under section 148 shall be issued for the relevant assessment year,—
(a) if three years have elapsed from the end of the relevant assessment year, unless the case falls under clause (b);
(b) if three years, but not more than ten years, have elapsed from the end of the relevant assessment year unless the Assessing
Officer has in his possession books of account or other documents or evidence which reveal that the income chargeable to tax,

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Venkata Rama Krishnam Raju
Chintalapati vs. DCITG represented in the form of asset, which has escaped assessment amounts to or is likely to amount to fifty lakh rupees or more for that year:
Provided that no notice under section 148 shall be issued at any time in a case for the relevant assessment year beginning on or before
1st day of April, 2021, if such notice could not have been issued at that time on account of being beyond the time limit specified under the provisions of clause (b) of subsection (1) of this section, as they stood immediately before the commencement of the Finance Act,
2021:
Provided further that the provisions of this subsection shall not apply in a case, where a notice under section 153A, or section 153C read with section 153A, is required to be issued in relation to a search initiated under section 132 or books of account, other documents or any assets requisitioned under section 132A, on or before the 31st day of March, 2021:
Provided also that for the purposes of computing the period of limitation as per this section, the time or extended time allowed to the assessee, as per show cause notice issued under clause (b) of section 148A or the period during which the proceeding under section 148A is stayed by an order or injunction of any court, shall be excluded:
Provided also that where immediately after the exclusion of the period referred to in the immediately preceding proviso, the period of limitation available to the Assessing Officer for passing an order under clause (d) of section 148A is less than seven days, such remaining period shall be extended to seven days and the period of limitation under this subsection shall be deemed to be extended accordingly.
Explanation.—For the purposes of clause (b) of this subsection,
“asset” shall include immovable property, being land or building or both, shares and securities, loans and advances, deposits in bank account.
(2) The provisions of subsection (1) as to the issue of notice shall be subject to the provisions of section 151.’
Sanction for issue of notice-

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“151. Specified authority for the purposes of section 148 and section 148A shall be—
(i) Principal Commissioner or Principal Director or Commissioner or Director, if three years or less than three years have elapsed from the end of the relevant assessment year;
(ii) Principal Chief Commissioner or Principal Director General or where there is no Principal Chief Commissioner or Principal Director
General, Chief Commissioner or Director General, if more than three years have elapsed from the end of the relevant assessment year.”

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6.3 But prior to pre-Finance Act, 2021, while reopening an assessment, the procedure of giving the reasons for reopening and an opportunity to the assessee and the decision of the objectives were required to be followed as per the judgment of this Court in the case of GKN Driveshafts (India)
Ltd. (supra).

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(i) The respective impugned section 148 notices issued to the respective assessees shall be deemed to have been issued under section 148A of the IT Act as substituted by the Finance Act, 2021 and treated to be showcause notices in terms of section 148A(b). The respective assessing officers shall within thirty days from today provide to the assessees the information and material relied upon by the Revenue so that the assessees can reply to the notices within two weeks thereafter;

(ii) The requirement of conducting any enquiry with the prior approval of the specified authority under section 148A(a) be dispensed with as a onetime measure visàvis those notices which have been issued under Section 148 of the unamended Act from 01.04.2021 till date, including those which have been quashed by the High Courts;

(iii) The assessing officers shall thereafter pass an order in terms of section 148A(d) after following the due procedure as required under section 148A(b) in respect of each of the concerned assessees;

(iv) All the defences which may be available to the assessee under section 149 and/or which may be available under the Finance Act, 2021 and in law and whatever rights are available to the Assessing Officer under the Finance
Act, 2021 are kept open and/or shall continue to be available and;

(v) The present order shall substitute/modify respective judgments and orders passed by the respective High Courts quashing the similar notices issued under unamended section 148 of the IT Act irrespective of whether they have been assailed before this Court or not.

(i) The impugned section 148 notices issued to the respective assessees which were issued under unamended section 148 of the IT Act, which were the subject matter of writ petitions before the various respective High Courts shall be deemed to have been issued under section 148A of the IT Act as substituted by the Finance Act, 2021 and construed or treated to be show- cause notices in terms of section 148A(b). The assessing officer shall, within thirty days from today provide to the respective assessees information and material relied upon by the Revenue, so that the assesees can reply to the showcause notices within two weeks thereafter;

(ii) The requirement of conducting any enquiry, if required, with the prior approval of specified authority under section 148A(a) is hereby dispensed with as a onetime measure visàvis those notices which have been issued under section 148 of the unamended Act from 01.04.2021 till date, including those which have been quashed by the High Courts. Even otherwise as observed hereinabove holding any enquiry with the prior approval of specified authority is not mandatory but it is for the concerned Assessing Officers to hold any enquiry, if required;

(iii) The assessing officers shall thereafter pass orders in terms of section 148A(d) in respect of each of the concerned assessees;
Thereafter after following the procedure as required under section 148A may issue notice under section 148 (as substituted);

(iv) All defences which may be available to the assesses including those available under section 149 of the IT Act and all rights and contentions which may be available to the concerned assessees and Revenue under the Finance Act, 2021 and in law shall continue to be available.

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12. The impugned common judgments and orders passed by the High Court of Allahabad and the similar judgments and orders passed by various High Courts, more particularly, the respective judgments and orders passed by the various High Courts particulars of which are mentioned hereinabove, shall stand modified/substituted to the aforesaid extent only.

All these appeals are accordingly partly allowed to the aforesaid extent.

In the facts of the case, there shall be no order as to costs.”

(emphasis supplied by us)

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“48. The proviso to Section 151 has been introduced by the Finance Act, 2023 with effect from 01.04.2023. The relevant Section 151 with its proviso is applicable to the case of the petitioner is quoted hereunder:
151. Sanction for issue of notice:- Specified authority for the purposes of Section 148
and Section 148A shall be,-
(i) Principal Commissioner or Principal Director or Commissioner or Director, if three years or less than three years have elapsed from the end of the relevant assessment year;
(ii) Principal Chief Commissioner or Principal Director General or Chief Commissioner or Director General, if more than three years have elapsed from the end of the relevant assessment year:
Provided that the period of three years for the purposes of clause (i) shall be computed after taking into account the period of limitation as excluded by the third or fourth or fifth provisos or extended by the sixth proviso to sub-section (1) of Section 149. 49. In the present case, the order under Section 148A(d) and notice under Section 148
have been issued on 07.04.2022 relatable to the relevant Assessment Year 2018- 19
i.e., after more than three years from the end of the relevant assessment year. The approval before passing the order under Section 148A(d) of the Act and before issuing of notice under Section 148 of the Act has been taken from the Principal
Commissioner of Income Tax by the respondent No.1, which is permissible only if three years or less than three years have lapsed from the end of the relevant assessment year. In the present case, the relevant three years lapsed on 31.03.2022. Therefore, the prior approval of the Principal Chief Commissioner or Principal Director General or the Chief Commissioner or the Director General was required to be obtained before passing of the order under Section 148A(d) or before issuance of the notice under Section 148 of the Act.
50. Learned counsel for the respondent has relied upon the proviso to Section 151 of the Act inserted by the Finance Act, 2023 with effect from 01.04.2023 quoted above to contend that the period of seven days furnished to the assessee to submit reply to the notice under Section 148A(b) issued on 23.03.2022 has to be excluded for counting the period of three years. It is submitted that the proviso is clarificatory in nature and as such, it would operate from the date when the amended Section 151 was brought into force i.e., 01.04.2021. However, such a contention is fit to be rejected since the proviso to Section 151 has been inserted by the Finance Act, 2023 only with effect from 01.04.2023. It, therefore, cannot be applied retrospectively to exclude the period of seven days in furnishing the reply to the notice under Section 148A(b) of the Act by the assessee.
The Assessing Officer could not have assumed exclusion of such a period while passing the order under Section 148A(d) of the Act or issuing notice under Section 148 of the Act on 07.04.2022 that such a proviso excluding the period consumed in furnishing the reply is going to be brought into the statute book by amendment by the Finance Act, 2023 with effect from 01.04.2023. In taxing statutes, intendment cannot be assumed unless specifically expressed in the provision enacted by the legislature. Therefore, the reopening of assessment without sanction/approval of the specified authority in accordance with Section 20
16.01.2024 also is bad in law.”
(emphasis supplied by us)

Hyderabad,
Dated 10th December, 2025
OKK / SPS

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Copy to:

S.No Addresses
1
Venkata Rama Krishnam Raju Chintalapati, Flat No.304, Tower-A,
Lodha Meridian, 4th Phase, KPHB, KPHB Colony, Medchal-500085,
Telangana.
2
DCIT, Circle-8(1), Signature Towers, Gachibowli-Miyapur Road,
Venkat Enclave, Whitefields, Kondapur, Telangana-500084. 3
The Pr. Commissioner of Income Tax, Hyderabad.
4
The DR, ITAT, Hyderabad Bench
5
Guard FileSENIOR PRIVATE SECRETARY
ITAT, Hyderabad.