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Facts
The assessee, Satavahana University, faced reopening of assessments for AYs 2016-17, 2018-19, and 2019-20 due to substantial financial transactions (time/cash deposits, interest income, professional receipts) not declared in filed returns. The Assessing Officer (AO) treated these as unexplained investments/income under Sections 69/69A and 115BBE, denying Section 10(23C) exemption, and framed reassessments under Section 147 r.w.s 144B. The Commissioner of Income Tax (Appeals) upheld these additions and orders.
Held
The Income Tax Appellate Tribunal quashed the assessment orders for all three Assessment Years. It ruled that the reopening proceedings, including the issuance of orders under Section 148A(d) and notices under Section 148, were invalid because they were initiated by the Jurisdictional Assessing Officer (JAO) instead of the Faceless Assessing Officer (FAO). This contravened the "Faceless Jurisdiction of the Income Tax Authorities Scheme, 2022" and "e-Assessment of Income Escaping Assessment Scheme, 2022" mandated under Section 151A of the Act, which require reassessments to be conducted in a faceless manner. The Tribunal relied on judgments of the Hon'ble High Court of Telangana and the Supreme Court in Ashish Agarwal, emphasizing strict adherence to the amended faceless assessment procedures.
Key Issues
The primary legal issue was the jurisdictional validity of reassessment proceedings initiated by the Jurisdictional Assessing Officer (JAO) instead of the Faceless Assessing Officer (FAO) under the Income Tax Act's amended faceless assessment schemes for AYs 2016-17, 2018-19, and 2019-20.
Sections Cited
147, 148, 148A(d), 144B, 151A, 10(23C)(iiiab), 69, 69A, 115BBE, 139
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Income Tax Appellate Tribunal, Hyderabad ‘B’ Bench, Hyderabad
Before: Shri Manjunatha G. & Shri Ravish Sood
The captioned appeals filed by the assessee, a State Government University, is directed against the orders passed by the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi (for short, “CIT(A)”), dated 30/07/2025 for Assessment Year (AY) 2016-17, AY 2018-19 and AY 2019-20, which in turn arises from the respective orders passed by the Assessing Officer (for short, “AO”) under section 147 r.w.s 144B of the Income Tax Act, 1961 (for short, “the Act”), dated 14/02/2024 and 12/02/2024 for AY 2016-17 and AY 2018-19, respectively AND under section 147 r.w.s 144 r.w.s 144B of the Act, dated 12/02/2024 for AY 2018-19. As common issues are involved in the present appeals, the same are being taken up and disposed of by way of a consolidated order. We shall first take up the appeal filed by the assessee for AY 2016-17 in and the order therein passed shall apply mutatis mutandis with respect to the common issues for the other appeals. The assessee has assailed the impugned order on the following grounds of appeal before us:
“1. The Ld. CIT (appeals) erred in passing his sec.250 Order, confirming the Sec. 147 Asst order of the Ld.AO. in the facts and circumstances of the case as it is not justified both on facts and in law. The Reopening of Asst by the Jurisdictional AO by issuing Sec. 148 1525, 1526/Hyd/2025 Satavahana University vs. ITO notice is being against the provisions of Sec. 151A and hence the Appeal Order Passed by the Ld CIT(A) is bad in law.
2. The Ld CIT(Appeals) erred in analyzing the facts and circumstances of the case, that though the Appellant is eligible for Sec. 10(230) (ab) exemption in denying the same on misapplication of wrong provisions.
3. The Ld. CIT(Appeals) erred in not considering the Audited Accounts filed during the Appeal proceedings and relying only on completed Assessment U/sec. 147. the AO 4. The Ld. CIT (Appeals) erred in concurring with the Id. A.O's view to treat the Bank Term Deposit as unexplained source Income and to be taxed U/Sec 69A of the Act read with Sec.115BBE, which is against the law and contrary to the facts and circumstances of the case.
5. Based on the above the appellant pleads for deletion of the Addition of Rs.7,44,39,182/-U/sec.69A for the Bank Fixed Deposit, made to the Nil Returned Income by the Ld.AO. and confirmed by CIT(Appeals), as it is against the principles of Law and Natural Justice.
6. The Appellant prays for adding, altering any other ground that will be taken up with the kind permission of the ITAT at the time of hearing.”
Succinctly stated, the AO based on information gathered as per Risk Management Strategy (RMS) formulated by the CBDT for AY 2016- 17, that the assessee who had made time deposits of Rs. 7,44,39,182/- during the subject year, i.e., AY 2016-17, had not filed its return of income for the said year under section 139 of the Act, reopened its case and passed an order under clause (d) of section 148A of the Act on 28/03/2023. Thereafter, the AO issued notice under section 148 of the Act, dated 30/03/2023. In compliance, the assessee filed its return of income for AY 2016-17y on 26/05/2023, declaring its income at Rs. NIL.
1525, 1526/Hyd/2025 Satavahana University vs. ITO 3. On perusal of the return of income, the AO observed that the assessee had, inter alia, raised a claim for exemption under section 10(23C) of the Act of Rs. 14,29,53,099/-.
As the assessee despite specific directions by the AO had failed to place on record supporting documentary evidence regarding its claim for exemption under section 10(23C) of the Act, and had also not filed any documentary evidence regarding the source of the time deposits made during the subject year, therefore, the AO in absence of any explanation forthcoming was constrained to treat the entire amount of time deposits of Rs.7,44,39,182/- made by the assessee in its bank account with State Bank of Hyderabad as its unexplained investment under section 69 of the Act. Accordingly, the AO vide his order under section 147 r.w.s 144B of the Act, dated 14/02/2024, determined the income of the assessee at Rs. 7,44,39,182/-.
5. Aggrieved, the assessee carried the matter in appeal before the CIT(A), who, finding no infirmity in the order passed by the AO, upheld the same and dismissed the appeal. For the sake of clarity, we deem it apposite to cull out the observations of the CIT(A), as under: “4. Finding and Decision 4.1 Ground no. 1- order passed by the learned Assessing Officer is contrary to the facts and circumstances of the case and against the law. The learned assessing officer has erred in going through the facts 1525, 1526/Hyd/2025 Satavahana University vs. ITO of the case and erroneously issued the Sec.148 notice and computed the total income. 4.1.1 In this case, information was available for A.Y. 2016-17 with the AO in accordance with the risk management strategy formulated by the Board on the Insight Portal of the Income Tax Department that the appellant had made time deposits of Rs. 7,44,39,182/- during the AY 2016-17. Despite the said high value transactions made by the appellant, the appellant had not filed return of income u/s 139 of the IT Act, 1961 for the year under consideration. Accordingly, the case of the appellant was reopened u/s 148/147 of the IT Act, 1961 by the passing order under clause (d) of section 148A of the income tax Act,1961 on 28.3.2023 and a notice under section 148 of the income tax Act, 1961 was also issued on 30.3.2023. During the assessment proceedings, the appellant has filed its return of income u/s 148 of the IT Act, 1961 on 19.07.2022 declaring total income of Rs. NIL. Accordingly, notice u/s 143(2) of the IT Act, 1961 was issued to the assessee on 06.08.2023. 4.1.2 During the assessment proceedings despite giving multiple opportunities the appellant had did not file complete details which were sought by the AO. Therefore, AO passed an order u/s 147 r.w.s 144B of the Act. In view of the above, it is very clear that the AO has rightly passed the said order as per law. Reliance is placed on the following case laws 1. CIT Vs. Rayala Corporation (P) Ltd. (Mad) 215 ITR 883 2. CIT Vs. P.P. Khader Haji (Ker) 234 ITR 461 4.1.3 Accordingly ground of appeal no. 1 raised by the appellant is hereby dismissed. 4.2 Ground no. 2 - Non granting of exemption claimed u/s 10(23C)(iiiab)of the Act 4.2.1 On perusal of the records it is seen that the appellant had neither filed return of income u/s 139(1) not 148. Therefore, exemption claimed by the appellant without filing the return of income is not correct. Reliance is placed the decision of Hon'ble SC in the case of Goetze (India) Ltd. Vs. CIT (SC) 284 ITR 323. Therefore, action taken by the AO is confirmed and accordingly ground no. 2 raised by the appellant is hereby dismissed. 4.3 Ground no.4&5 - Addition made u/s 69 and 69A of the Act. 4.3.1 During the assessment proceedings, the appellant neither submitted any supporting documentary evidences with respect to the exemption claimed u/s 10 nor any documentary evidences with respect to the source of time deposits and source of cash deposits made during the year before AO. Thus in absence of documents/evidences time deposits of Rs. 7,44,39,182/- is added to the income of the appellant by the AO.
1525, 1526/Hyd/2025 Satavahana University vs. ITO 4.3.2 During the appellate proceedings submission made by the appellant is as below GROUND No.4 4. “The Ld. A.O’s view to treat the Bank Term Deposit as unexplained source Income and to be taxed U/Sec 69A of Income Tax Act 1961, is against the law and contrary to the facts and circumstances of the case. 4.1. The Ld.AO. having seen the Sec.10(23C) (iiiab) Exemption Claimed Income, treated the Bank Term Deposit as Income U/sec. 69A. For disallowing the exemption reason given is that there is no production of documents. He assumed that the University is carrying on Business. 4.2. Here the Appellant is not a private person. It is a public Education Institution—University promoted & Managed by a State Govt. Thus the facts are entirely different. No unaccounted money goes into the hands of a Public Body which can be brought down as taxable income U/sec.69A. Sec.69A applies only when there is: a) An Assessee found to be owner of Money b) which is not recorded in the books of accounts c) Assessee offers no explanation for the source of such money. Here in a Public University all the above conditions are not prevailing. There is no possibility of finding any Un-accounted money. The AO disallowing the exemption, treated the same as Unexplained money. It is surprising and astonishing to correlate the reasons given in the Assessment Order. May be with a predetermined view the Ld.AO has applied Sec.69A to rope in Sec.115BBE. 4.3. Only when the books of accounts are not reflecting such transactions Sec.69A shall Apply. Here as all the accounts are audited by Govt, treating as Unaccounted/unrecorded Income is against the provisions of the Law. May be with a predetermined biased view the Ld.AO has applied Sec.69A to rope in Sec.115BBE. Hence the Appellant prays the Ld.CIT (Appeals) to delete the total addition made in the Assessment and to categorically conclude that Sec.69A application is bad in law. GROUND No.5 5. “Here merely for Applying Sec.115BBE, the Ld AO treated the impugned income as Sec.69A income, which is against the provisions of the Law.” 5.1. The application of Sec.69A itself is against the provisions of Law based on the facts and circumstances of the case. Having done so application of Sec.115BBE is also against the provisions of Law. Merely because the Sec.142(1) Notices are served to an email id of a 1525, 1526/Hyd/2025 Satavahana University vs. ITO Registrar, who was not in employment and the Appellant University has not responded, the Assessment was completed U/sec. 144 read with Sec.147. Here too the Ld.AO treated the Appellant, a Statutory Body as an AOP. Applied the provisions and principles applicable to the Business entity. The main income of the Appellant is Govt Grants. The other income is Tution fees from Students of the University. There is no scope for unexplained income to creep in. Completing the Assessment merely based on some Assumptions, surmises and conjectures is against the principles of Natural Justice. 5.2. The Madras High court held in Ramya Vivek Iyer Vs. ITO (2022) 6 NYTCTR 892 (Mad) that absence of Proper service of Notice makes both assessment and penalties Null and void. 5.3. In the following decisions it is observed that even while completing Assessment U/sec. 144 there should be a reasonableness of estimation of Income, when the accounts are Audited. A reasoning shall be given to apply Sec. 145(3). CIT Vs. Paradise Holidays 48 DTR 349(Del). CIT Vs. Jacksons House 39DTR 212 (Del). DCIT Vs. TNG Retail P Ltd. NYP 36 TT.I 2018. 5.4. In a number of decisions, it was held that ar Sec.144 Order must have a reasonabie nexus to the available material and facts and circumstances of the case. 4.3.3 Submission made by the assessee is not acceptable. On perusal of the records it is seen that the appellant had not filed return of the income. Further during the appellate proceedings, the appellant had submitted audit report dated 20.2.2024 which has been beyond the time limit prescribed as per Act. Therefore, it is very clear that the appellant had not justified the said transactions with supporting documents. Reliance is placed on the decision of Hon'ble SC in the case of Roshan Di Hatti Vs. CIT (SC) 107 ITR 938. Thus grounds of appeal no. 4&5 raised by the appellant are hereby dismissed. 4.4 Ground No. 3, 6&7 are general in nature no adjudication is required.
5. In the result appeal filed by the appellant is dismissed”.
6. The assessee, being aggrieved with the order passed by the CIT(A), has carried the matter in appeal before us.
1525, 1526/Hyd/2025 Satavahana University vs. ITO 7. We have heard the Ld. Authorised Representatives of both parties, perused the orders of the authorities below and the material available on record, as well as considered the judicial pronouncements that have been pressed into service by them to drive home their respective contentions
Shri E. Phalguna Kumar, CA, the Learned Authorized Representative (for short “Ld. AR”) for the assessee, at the threshold of hearing of the appeal, submitted that the AO had grossly erred in law and facts of the case while assuming jurisdiction and framing the impugned assessment vide his order passed under section 147 r.w.s 144B of the Act, dated 14/02/2024. Elaborating on his contention, the Ld. AR submitted that the order under section 148A(d) of the Act, dated 30/03/2023, had been passed by the ACIT, Circle-1, Karimnagar, i.e., the Jurisdictional Assessing Officer (JAO). Also, the Ld. AR submitted that the notice under section 148 of the Act, dated 30/03/2023, was issued by the JAO. The Ld. AR submitted that though the impugned assessment under section 147 r.w.s 144B of the Act, dated 14/02/2024, has been framed by the Faceless Assessing Officer (FAO), i.e., Assessment Unit, Income Tax Department, but in the absence of any order U/sec. 148A(d) or notice U/sec. 148 of the Act having been issued by the FAO, the assessment so framed cannot 1525, 1526/Hyd/2025 Satavahana University vs. ITO be sustained and is liable to be quashed on the said count itself. Elaborating further on his contention, the Ld. AR, submitted that both the impugned order passed under Section 148A(d) of the Act, dated 3003/2023 and Notice U/s 148 of the Act, dated 30/03/2023 issued by the Jurisdictional Assessing Officer (JAO), i.e., outside the faceless mechanism as provided under the provisions of Section 144(b) read with Section 151A and the "E-Assessment Scheme of Income Escaping Assessment Scheme, 2022" notified by the Government of India on 29.03.2022 under Section 151A, are bad and illegal. Summing up his contention, the Ld. AR submitted that after the introduction of the "Faceless Jurisdiction of the Income Tax Authorities Scheme, 2022" and the "e-Assessment of Income Escaping Assessment Scheme, 2022", it is only the “Faceless Assessing Officer” (FAO) who can issue the notice under Section 148 of the Act and not the “Jurisdictional Assessing Officer” (JAO), and the assessments are statutorily required to be as per the prescribed faceless mechanism provided under the provisions of Section 144(b) r.w Section 151A of the Act. The Ld. AR submitted that as the AO had invalidly assumed jurisdiction and framed the impugned assessment, therefore, the same cannot be sustained and is liable to be struck down for want of a valid assumption of jurisdiction 1525, 1526/Hyd/2025 Satavahana University vs. ITO on his part. The Ld. AR submitted that the subject issue is squarely covered by the judgment of the Hon’ble High Court of Telangana in the case of Kankanala Ravindra Reddy Vs. ITO & 2 Others, Writ Petition Nos 25903 of 2023, dated 14.09.2023 and the Hon’ble High Court of Andhra Pradesh in the case of Mr. Kishan Kumar Thotakura & Ors. Vs. The Assistant Commissioner of Income- tax, Writ Petition No. 14681/2023 & Ors, dated 28.10.2025.
Per contra, Dr. Narendra Kumar Naik, Ld. CIT-DR relied upon the orders of the authorities below. The Ld. CIT-Departmental Representative (Ld. CIT-DR) fairly admitted that the issue involved in the present appeal is covered by the judgment of the Hon’ble High Court of Telangana in the case of Kankanala Ravindra Reddy Vs. ITO (supra).
We have given thoughtful consideration on the issue of validity of the jurisdiction assumed by the “Faceless Assessing Officer” (FAO) for framing the assessment vide his order passed under Section 147 r.w.s 144B of the Act, dated 14/02/2024 based on the order passed under Section 148A(d) of the Act, dated 30/03/2023 and Notice issued U/s 148 of the Act, dated 30/03/2023 by the ACIT, Circle-1, Karimnagar, i.e., the “Jurisdictional Assessing Officer” (JAO).
1525, 1526/Hyd/2025 Satavahana University vs. ITO 11. In our view, the issue involved in the present appeal, i.e., the validity of the assessment order passed under Section 147 r.w.s 144B of the Act, dated 14/02/2024 by the Assessment Unit, Income-Tax Department, i.e., Faceless Assessing Officer (FAO), based on the order passed u/s 148A(d), dated 30/03/2023 and Notice u/s 148 of the Act, dated 30/03/2023, issued by the ACIT, Circle-1, Karimnagar, i.e., the JAO, as on date is squarely covered by the Judgment of the Hon’ble High Court of Telangana in the case of Kankanala Ravindra Reddy Vs. ITO & 2 Others, Writ Petition Nos 25903 of 2023, dated 14.09.2023. The Hon’ble Jurisdictional High Court in its aforesaid order had held that after the formulation of the "e-Assessment of Income Escaping Assessment Scheme, 2022", the notice under Section 148 of the Act can only be issued by the FAO and not by the JAO. For the sake of clarity, the observations of the Hon’ble High Court are culled out as under: 23. In furtherance to the powers conferred under sub-sections 1 and 2 of section 130 of the aforesaid Income-tax Act, the Central Board of Direct Taxes framed a scheme called as the "Faceless jurisdiction of Income Tax Authorities Scheme, 2022." A plain reading of the aforesaid notification would clearly reflect that as has been amended under section 130. The Central Board of Direct Taxes has framed a scheme which defines the Act to be the Income Tax Act and it specifically defines automated allocation which is defined under section 2 (1)(b), which again for ready reference is being re-produced herein under: "In this Scheme, unless the context otherwise requires, -- (a) "Act" means the Income-tax Act, 1961 (43 of 1961); 1525, 1526/Hyd/2025 Satavahana University vs. ITO (b) "automated allocation" means an algorithm for randomised allocation of cases, by using suitable technological tools, including artificial intelligence and machine learning, with a view to optimise the use of resources;" Further Section 3 of the said scheme deals with vesting of the jurisdiction with the Assessing Officer, which again for ready reference is being reproduced herein under: "vesting the jurisdiction with the Assessing Officer as referred to in section 124 of the Act, shall be in a faceless manner, through automated allocation, in accordance with and to the extent provided in- (i) Section 144B of the Act with reference to making faceless assessment of total income or loss of assessee;"
In furtherance to the aforesaid notification, the Central Board of Direct Taxes again in exercise of its powers conferred under sub-sections 1 and 2 of section 151A framed another scheme called as the e-assessment of Income Escaping Assessment Scheme 2022, which defines automated allocation is reproduced herein under: "In this Scheme, unless the context otherwise requires,- (a) "Act" means the Income-tax Act, 1961 (43 of 1961); (b) "automated allocation" means an algorithm for randomised allocation of cases, by using suitable technological tools, including artificial intelligence and machine learning, with a view to optimise the use of resources." And the scope of the scheme again has been envisaged in Section 3 of the said scheme, which again for ready reference is being reproduced herein under: "For the purpose of this Scheme,- (a) assessment, reassessment or recomputation under sectopm 147 of the Act, (b) issuance of notice under section 148 of the Act, shall be through automated allocation, in accordance with risk management strategy formulated by the Board as referred to in section 148 of the Act for issuance of notice, and in a faceless manner, to the extent provided in section 144B of the Act with reference to making assessment or reassessment of total income or loss of assessee."
A plain reading of the aforesaid two notifications issued by the Central Board of Direct Taxes dated 28-3-2022 and 29-3- 2022, it would clearly indicate that the Central Board of Direct 1525, 1526/Hyd/2025 Satavahana University vs. ITO Taxes was very clear in its mind when it framed the aforesaid two schemes with respect to the proceedings to be drawn under section 148A, that is to have it in a faceless manner. There were two mandatory conditions which were required to be adhered to by the Department, firstly, the allocation being made through the automated allocation system in accordance with the risk management strategy formulated by the Board under section 148 of the Act. Secondly, the re-assessment has to be done in a faceless manner to the extent provided under section 144B of the Act.
After the introduction of the above two schemes, it becomes mandatory for the Revenue to conduct/initiate proceedings pertaining to reassessment under section 147, 148 & 148A of the Act in a faceless manner. Proceedings under section 147 and section 148 of the Act would now have to be taken as per the procedure legislated by the Parliament in respect of reopening/re-assessment i.e., proceedings under section 148A of the Act.
27. In the present case, both the proceedings i.e., the impugned proceedings under section 148A of the Act, as well as the consequential notices under section 148 of the Act were issued by the local jurisdictional officer and not in the prescribed faceless manner. The order under section 148A(d) of the Act and the notices under section 148 of the Act are issued on 29-4- 2022, i.e., after the "Faceless Jurisdiction of the Income-tax Authorities Scheme, 2022" and the "e-Assessment of Income Escaping Assessment Scheme, 2022" were introduced.
28. From the afore given factual matrix, firstly the statutory provisions enumerated in the preceding paragraphs and secondly, the subsequent direction given by the Hon'ble Supreme Court in the case of Ashish Agarwal, supra, what is clearly reflected is the fact that when the Hon'ble Supreme Court had partly allowed the petitions which were filed by the Union of India challenging the judgements of various High Courts whereby the notice under section 148 of the unamended Act were set aside by the High Courts, the Hon'ble Supreme Court has only permitted the Union of India to proceed further with the reassessment proceedings under the amended provision of law, more particularly, as amended by the Finance Act, 2021. It never intended the authorities concerned to continue with the proceedings from the stage of the issuance of notices under section 148, nor is the directions to that effect. And there cannot 1525, 1526/Hyd/2025 Satavahana University vs. ITO be any confusion, ambiguity or mis-conception for the respondent-Department to have in this regard.
The Hon'ble Supreme Court has in paragraph No. 7 specifically held that the High Courts have rightly held that the benefit of new provisions shall be made available in respect of the proceedings relating to past assessment years. Further, the Hon'ble Supreme Court again in paragraph No. 8 very emphatically had said that the proceedings ought not to have been issued under the unamended Act. Rather ought to had been issued under the substituted provisions as per the Finance Act, 2021. Further, in the same paragraph clearly directed the Income-tax Department to proceed further as per the Finance Act, 2021, subject to compliance of all the procedural requirements and defences available to the assessee under the substituted provisions under the Finance Act, 2021. The fact that the Hon'ble Supreme Court allowed the notice earlier issued under section 148 be treated as notice one under section 148A and further it was also be treated as the show cause notice issued under section 148A(b) by itself establishes the fact the directions given by the Hon'ble Supreme Court for the respondent-Department was to proceed further in accordance with the substituted provisions which stood introduced by the Finance Act, 2021.
30. In the instant case, undisputedly the respondent-Department has not proceeded against the petitioner under the substituted provisions of the Finance Act, 2021. Rather, it proceeded with the unamended provisions of law. This in other words takes the position back to the stage as it stood when the initial notices under section 148 under the unamended provisions of law were issued. This in other words also takes us to a position or a stage prior to the large number of writ petitions being allowed across the country, approximately 9,000 in number and confirmed by the Hon'ble Supreme Court also vide the judgement of Ashish Agarwal, supra.
31. It is well settled principle of law that where the power is given to do certain things in certain way, the thing has to be done in that way alone and no any other manner which is otherwise not provided under the law.
32. The Hon'ble Supreme Court in the case of Chandra Kishore Jha v. Mahaveer Prasad [1999] 8 SCC 266 in paragraph No. 17 laying down the aforesaid principle held as under "it is well settled solitary principle that if statute provides for a thing to be 1525, 1526/Hyd/2025 Satavahana University vs. ITO done in a particular manner, then it has to be done in that manner and in no other manner. The said principle of law was further reiterated in the case of Cherrukuri Mani v. Chief Secretary Government of Andhra Pradesh [2015] 13 SCC 722, wherein, again in paragraph No. 14, the aforesaid principle has been reinforced by the Hon'ble Supreme Court holding that "where law prescribe a thing to be done in a particular manner following a particular procedure, it shall have to be done in the same manner following the provisions of law without deviating from the prescribed procedure. The said principle has again recently been reiterated and followed in the case of Municipal Corporation Greater Mumbai (MCGM) v. Abhilash Lal [2019] 111 taxmann.com 405/[2020] 157 SCL 477 (SC)/[2020] 13 SCC 234, and in the case of Opto Circuit India Ltd. v. Axis Bank [2021] 127 taxmann.com 290/165 SCL 703 (SC)/[2021] 6 SCC 707 and again in the case of Union of India v. Mahendra Singh [CAP No. 4807 of 2022, dated 25-7-2022]. In the case of Tata Chemicals Ltd. v. Commissioner of Customs (preventive) Jam Nager [2015] 58 taxmann.com 126/[2015] 11 SCC 628, wherein it has been held that there can be no stopple against the law. If the law requires something to be done in a particular manner, then it must be done in that manner, if it is not done in that manner then it would have no existence in the eye of law. In paragraph 18 of the said judgment, the Hon'ble Supreme Court held as under: "The Tribunal's judgment has proceeded on the basis that even though the samples were drawn contrary to law, the appellants would be estopped because their representative was present when the samples were drawn and they did not object immediately. This is a completely perverse finding both on fact and law. On fact, it has been more than amply proved that no representative of the appellant was, in fact, present at the time the Customs Inspector took the samples. Shri K.M. Jani who was allegedly present not only stated that he did not represent the Clearing Agent of the appellants in that he was not their employee but also stated that he was not present when the samples were taken. In fact, therefore, there was no representative of the appellants when the samples were taken. In law equally the Tribunal ought to have realized that there can be no estoppel against law. If the law requires that something be done in a particular manner, it must be done in that manner, and if not done in that manner has no existence in the eye of law at all. The Customs Authorities are not absolved from following the law depending upon the acts of a particular assessee. Something that is illegal cannot convert itself into something legal by the act of a third person."
If we look into the principle of law laid down by the Hon'ble Supreme Court as enumerated in the preceding paragraphs and when we look into the facts of the present case, it would clearly reflect that the Parliament had by virtue of the Finance Act 2021, brought certain amendments to the provisions of the Income-tax Act, more particularly, in respect of the manner in which the reassessment and the procedure to be adopted by the Income- tax Department. The amendment was brought with an intention to make the law more transparent and effective. The Hon'ble Supreme Court also while deciding the case of Ashish Agarwal, supra, as is discussed with in the preceding paragraph had specifically directed the Union of India to proceed further in terms of the substituted provisions brought in by way of Finance Act 2021.
What is also relevant to take note of the fact that the Hon'ble Supreme Court while exercising its power under Article 142 of the Constitution of India has also not relaxed the applicability of the Finance Act 2021. Rather, the Hon'ble Supreme Court in very clear and unambiguous terms had held that the notices issued under the un-amended provisions, which were struck down by the High Court, shall be treated as a notice under new amended provisions and the Union of India was directed to proceed further from that stage in terms of the amended provisions of law. In spite of such specific clear directions by the Hon'ble Supreme Court, the Union of India for reasons best known again proceeded with the procedure as it stood prior to the amended provisions which came into force from 1-4-2021.
35. In view of the aforesaid discussions, it is by now very clear that the procedure to be followed by the respondent-Department upon treating the notices issued for reassessment being under section 148A, the subsequent proceedings was mandatorily required to be undertaken under the substituted provisions as laid down under the Finance Act, 2021. In the absence of which, we are constrained to hold that the procedure adopted by the respondent-Department is in contravention to the statute i.e. the Finance Act, 2021, at the first instance. Secondly, it is also in direct contravention to the directives issued by the Hon'ble Supreme Court in the case of Ashish Agarwal, supra.
36. For all the aforesaid reasons, the impugned notices issued and the proceedings drawn by the respondent-Department is neither tenable, nor sustainable. The notices so issued and the procedure adopted being per se illegal, deserves to be and are 1525, 1526/Hyd/2025 Satavahana University vs. ITO accordingly set aside/quashed. As a consequence, all the impugned orders getting quashed, the consequential orders passed by the respondent-Department pursuant to the notices issued under section 147 and 148 would also get quashed and it is ordered accordingly. The reason we are quashing the consequential order is on the principles that when the initiation of the proceedings itself was procedurally wrong, the subsequent orders also gets nullified automatically.
37. The preliminary objection raised by the petitioner is sustained and all these writ petitions stands allowed on this very jurisdictional issue. Since the impugned notices and orders are getting quashed on the point of jurisdiction, we are not inclined to proceed further and decide the other issues raised by the petitioner which stands reserved to be raised and contended in an appropriate proceedings.
Since the Hon'ble Supreme Court had, in the case of Ashish Agarwal, supra, as a one-time measure exercising the powers under Article 142 of the Constitution of India, permitted the Revenue to proceed under the substituted provisions, and this Court allowing the petitions only on the procedural flaw, the right conferred on the Revenue would remain reserved to proceed further if they so want from the stage of the order of the Supreme Court in the case of Ashish Agarwal, supra.
39. No order as to costs.”
We, thus, respectfully follow the judgment of the Hon’ble Jurisdictional High Court in the case of Kankanala Ravindra Reddy Vs. ITO & 2 Others (supra), and on the same terms hold the impugned orders and notices issued by the Jurisdictional Assessing Officer (JAO), i.e., outside the faceless mechanism as provided in Section 144(b) r.w Section 151A and the "E-Assessment Scheme of Income Escaping Assessment Scheme, 2022" notified by the Government of India on 29.03.2022 under Section 151A of the Act, as bad and illegal.
1525, 1526/Hyd/2025 Satavahana University vs. ITO Consequent thereto, we herein set aside the order passed by the CIT(A), and quash the impugned assessment order passed by the Assessment Unit, Income-tax Department, i.e., FAO under Section 147 r.w.s 144B of the Act, dated 14/02/2024, for want of a valid assumption of jurisdiction on his part.
As we have quashed the assessment for want of valid assumption of jurisdiction by the Assessment Unit, Income-Tax Department, i.e., Faceless Assessing Officer (FAO) for framing the impugned assessment vide order passed under Section 147 r.w.s 144B of the Act, dated 14/02/2024, based on the Notice u/s 148 of the Act, dated 30/03/2023 issued by the ACIT, Circle-1, Karimnagar, i.e., JAO, therefore, we refrain from adverting to the other grounds based on which the assessee has assailed the impugned order of the CIT(A) before us, which, thus, are left open.
Resultantly, the order passed by the Assessment Unit, Income- Tax Department, i.e., Faceless Assessing Officer (FAO) under Section 147 r.w.s 144B of the Act, dated 14/02/2024, is quashed for want of a valid assumption of jurisdiction by him.
Before parting, we may herein observe that the Hon’ble Jurisdictional High Court, while disposing of the appeal in the case of 1525, 1526/Hyd/2025 Satavahana University vs. ITO Kankanala Ravindra Reddy Vs. ITO & 2 Others (supra), observed that since the Hon'ble Supreme Court had, in the case of Ashish Agarwal, supra, as a one-time measure exercised the powers under Article 142 of the Constitution of India, and permitted the Revenue to proceed under the substituted provisions, therefore, on the same terms as the petitions before them, i.e., the Hon’ble High Court, were being allowed only on the procedural flaw, hence right conferred on the Revenue would remain reserved to proceed further if they so want from the stage of the order of the Supreme Court in the case of Ashish Agarwal, supra. We, thus, respectfully follow the aforesaid observation of the Hon’ble High Court and, on the same terms, allow the same liberty to the revenue regarding the present appeal.
We would further observe that the Hon’ble High Court of Jurisdiction in its order in the case of Yashnu Yasasvi Polucherla Vs. Income-tax Officer (2025) 179 taxmann.com 470 (Telangana), had held that as its earlier order in the case of Kankanala Ravindra Reddy Vs. ITO & 2 Others (supra) is subjected to challenge before the Hon'ble Supreme Court in SLP No.3574 of 2024, preferred by the Income Tax Department, therefore, the allowing of the writ petition in the case before them is subject to the outcome of the aforesaid SLP preferred by the Revenue against its decision in the case of Kankanala Ravindra Reddy 1525, 1526/Hyd/2025 Satavahana University vs. ITO Vs. ITO & 2 Others (supra). Thus, the Hon’ble High Court had allowed liberty to either of the parties, if they so want, to move an appropriate petition seeking revival of this writ petition in the light of the decision of the Hon'ble Supreme Court in the pending “Special Leave Petition” (SLP) on the very same issue. We, thus, respectfully follow the aforesaid observation of the Hon’ble Jurisdictional High Court and, thus, on the same terms, allow liberty to either of the parties before us to seek revival of the matter as per the extant law in light of the decision of the Hon’ble Supreme Court in the aforesaid SLP.
In the result, the appeal filed by the assessee is allowed in terms of our aforesaid observations. (AY: 2018-19)
We shall now take up the appeal filed by the assessee for AY 2018-19 in ITA No.1525/Hyd/2025. The assessee has assailed the impugned order of the CIT(A) on the following grounds of appeal:
The Ld.CIT (appeals) erred, in passing his sec.250 Order, confirming the Sec. 147 Asst order of the Ld.AO. in the facts and circumstances of the case as it is not justified both on facts and in law. The Reopening of Asst by the Jurisdictional AO by issuing Sec. 148 notice is being against the provisions of Sec. 151A and hence the Appeal Order Passed by the LdCIT(A) is bad in law.
2. The Ld.CIT(Appeals), erred in analyzing the facts and circumstances of the case, that though the Appellant is eligible for Sec.
1525, 1526/Hyd/2025 Satavahana University vs. ITO 10(23C) (iiiab) exemption, in denying the same on misapplication of wrong provisions.
3. The Ld. CIT(Appeals) erred in not considering the Audited Accounts filed during the Appeal proceedings and relying only on the AO completed Assessment U/sec. 147.
4. The Ld. CIT (Appeals) erred in concurring with the Ld. A.O's view to treat the Bank Term Deposit as unexplained source Income and to be taxed U/Sec 69A of the Act read with Sec. 115BBE, which is against the law and contrary to the facts and circumstances of the case.
Based on the above the appellant pleads for deletion of the All Additions of Rs.7,82,61,114/-(U/sec.69for the Bank Fixed Deposit of Rs.6,40,00,000-,U/sec 69A for cash deposit of Rs11,63,700/-, for Rs. 1,25,49,414/ for Bank FD interest and Rs.5,48,000/- for professional Income) made to the Nil Returned Income by the Ld.AO. and confirmed by CIT(Appeals), as it is against the principles of Law and Natural Justice.
The Appellant prays for adding, altering any other ground that will be taken up with the kind permission of the ITAT at the time of hearing.”
As is discernible from the record, the AO based on information gathered by him as per the Risk Management Strategy (RMS) formulated by the CBDT for AY 2018-19, which revealed that the assessee during the subject year had carried out substantial financial transactions, viz., (i) cash deposits: Rs.11,63,700/-; (ii) time deposits: Rs.6,40,00,000/-; (iii) interest income: Rs.1,25,49,414/-; and (iv) payment made for professional or technical services to the tune of Rs.5,48,000/-, but had not filed its return of income under section 139 of the Act, reopened its case and passed an order under clause (d) of section 148A of the Act, dated 21/04/2022. Thereafter, the AO issued notice under section 148 of the Act, dated 21/04/2022.
During the course of the assessment proceedings, the assessee, at the fag end of the proceedings, submitted before the AO that it was a State Government University, i.e., an educational institution existing solely for educational purposes and not for any profit purpose and was being wholly financed by the State Government of Telangana. Elaborating on the source of its receipts, it was the claim of the assessee that the same were sourced from the grants received from the Government and the fees received from the students, which were exempt under section 10(23C)(iiiab) of the Act. However, as the assessee had failed to substantiate its aforesaid claim of exemption based on any documentary evidence evidencing its claim for exemption under section 10(23C) of the Act; nor filed any material to substantiate the source of the time deposits and cash deposits made during the year under consideration, therefore, the AO was constrained to treat the cash deposits of Rs.11,63,700/- as the unexplained money of the assessee under section 69A of the Act.
Apart from that, the AO, in the absence of any explanation forthcoming regarding the source of the time deposits of Rs. 6.40 crores, treated the same as an unexplained investment under section 69 of the Act. Further, the AO made an addition of the undisclosed interest income 1525, 1526/Hyd/2025 Satavahana University vs. ITO that was earned by the assessee during the subject year, amounting to Rs. 1,25,49,414/-. Also, the AO, taking cognizance of the fact that the assessee had not declared income from receipts of professional or technical services, made an addition of Rs. 5,48,000/-. Accordingly, the AO vide his order passed under section 147 r.w.s 144B of the Act, dated 12/02/2024, determined the income of the assessee at Rs. 7,82,61,114/-
Aggrieved, the assessee carried the matter in appeal before the CIT(A) but without success. For the sake of clarity, we deem it apposite to cull out the observations of the CIT(A), as under: “4. Finding and Decision: 4.1 Ground no. 1- order passed by the learned Assessing Officer is contrary to the facts and circumstances of the case and against the law. The learned assessing officer has erred in going through the facts of the case and erroneously issued the Sec. 148 notice and computed the total income. 4.1.1 In this case, information was available for A.Y. 2019-20 with the AO in accordance with the risk management strategy formulated by the Board on the Insight Portal of the Income Tax Department that the appellant had made cash deposits of Rs.6,40,00,000/-, made time deposits of Rs. 1,25,49,414/- and made payment of Rs. 5,48,000/- for professional or technical services during the AY 2018-19. Despite the said high value transactions made by the appellant, the appellant had not filed return of income u/s 139 of the IT Act, 1961 for the year under consideration. Accordingly, the case of the appellant a was reopened u/s 148/147 of the IT Act, 1961 by the passing order under clause (d) of section 148A of the income tax Act, 1961 on 21.4. 2022 and a notice under section 148 of the income tax Act, 1961 was also issued on 21.4.2022. During the assessment proceedings, the appellant has filed its return of income u/s 148 of the IT Act, 1961 on 19.07.2022 declaring total income of Rs. NIL. Accordingly, notice u/s 143(2) of the IT Act, 1961 was issued to the assessee on 06.08.2023. 4.1.2 During the assessment proceedings despite giving multiple opportunities the appellant had did not file complete details which were sought by the AO. Therefore, AO passed an order u/s 147 r.w.s 144B 1525, 1526/Hyd/2025 Satavahana University vs. ITO of the Act. In view of the above, it is very clear that the AO has rightly passed the said order as per law. Reliance is placed on the following case laws.
1. CIT Vs. Rayala Corporation (P) Ltd. (Mad) 215 ITR 883 2. CIT Vs. P.P. Khader Haji (Ker) 234 ITR 461 6.1.3 Accordingly ground of appeal no. 1 raised by the appellant is hereby dismissed. 4.2 Ground no. 2-Non granting of exemption claimed u/s 10(23C)(illab) of the Act 4.2.1 On perusal of the records it is seen that the appellant had neither filed return of income u/s 139(1) not 148. Therefore, exemption claimed by the appellant without filing the return of income is not correct. Reliance is placed the decision of Hon'ble SC in the case of Goetze (India) Ltd. Vs. CIT (SC) 284 ITR 323. Therefore, action taken by the AO is confirmed and accordingly ground no. 2 raised by the appellant is hereby dismissed. 4.3 Ground no.485 - Addition made u/s 69 and 69A of the Act. 4.3.1 During the assessment proceedings, the appellant neither submitted any supporting documentary evidence with respect to the exemption claimed u/s 10 nor any documentary evidence with respect to the source of time deposits and source of cash deposits made during the year before AO. Thus in absence of documents/evidences of source of cash deposits of Rs.11,63,700/- and source of time deposits of Rs. 6,40,00,000/-, interest income of Rs.1,25,49,414/- and professional and technical service amounting to Rs.5,48,000/- are added to the income of the appellant by the AO. 4.3.2 During the appellate proceedings submission made by the appellant is as below. GROUND No.4 4. "The Ld. A.O's view to treat the Bank Term Deposits unexplained source Income and to be taxed U/Sec 69/69A of Income Tax Act & Cash deposits, as 1961, is against the law and contrary to the facts and circumstances of the case." 4.1. The Ld.AO. having seen the Sec.10(23C) (iiiab) Exemption Claimed Income, treated the Bank Term Deposit as Income U/sec. 69A. For disallowing the exemption reason given is that there is no production of documents. He assumed that the University is carrying on Business. 4.2. Here the Appellant is not a private person. It is a public Education Institution-University promoted & Managed by a State Govt. Thus the facts are entirely different. No unaccounted money goes into the hands 1525, 1526/Hyd/2025 Satavahana University vs. ITO of a Public Body which can be brought down as taxable income U/sec.69A. Sec.69A applies only when there is: a) An Assessee found to be owner of Money b) which is not recorded in the books of accounts c) Assessee offers no explanation for the source of such money. Here in a Public University all the above conditions are not prevailing. There is no possibility of finding any Un-accounted money. The AO disallowing the exemption, treated the same as Unexplained money. It is surprising and astonishing to correlate the reasons given in the Assessment Order. May be with a predetermined view the Ld.AO has applied Sec.69A to rope in Sec. 115BBE. 4.3. Only when the books of accounts are not reflecting such transactions Sec.69A shall Apply. Here as all the accounts are audited by Govt, treating as Unaccounted/unrecorded Income is against the provisions of the Law. May be with a predetermined biased view the Ld.AO has applied Sec.69A to rope in Sec. 115BBE. Hence the Appellant prays the Ld.CIT (Appeals) to delete the total addition made in the Assessment and to categorically conclude that Sec.69A application is bad in law. GROUND No.5 5. "Here merely for Applying Sec. 115BBE, the Ld AO treated the impugned income as Sec.69A income, which is against the provisions of the Law." 5.1. "The application of Sec.69A itself is against the provisions of Law based on the facts and circumstances of the case. Having done so application of Sec.115BBE is also against the provisions of Law. Merely because theSec.142(1) Notices are served to an email id of a Registrar, and the Appellant University has not responded, the Assessment was completed U/sec. 144 read with Sec.
147. Here too the Ld.AO treated the Appellant, a Statutory Body as an AOP. Applied the provisions and principles applicable to the Business entity. The main income of the Appellant is Govt Grants. The other income is Tution fees from Students of the University. There is no scope for unexplained income to creep in. Completing the Assessment merely based on some Assumptions, surmises and conjectures is against the principles of Natural Justice. 5.2. The Madras High court held in Ramya Vivek lyer Vs. ITO (2022) 6 NYTCTR 892 (Mad) that absence of Proper service of Notice makes both assessment and penalties Null and void. 5.3. In the following decisions it is observed that even while completing Assessment U/sec. 144 there should be a reasonableness of estimation of Income, when the accounts are Audited. A reasoning shall be given to apply Sec. 145(3). CIT Vs. Paradise Holidays 48 DTR 349(Del). CIT Vs. Jacksons House 39DTR 212 (Del). DCIT Vs. TNG Retail P Ltd. NYP 36 TTJ 248.
5.4. In a number of decisions, it was held that a Sec. 144 Order must have a reasonable nexus to the available material and facts and circumstances of the case. 6.3.3 Submission made by the assessee is not acceptable. On perusal of the records, it is seen that the appellant had not filed return of the income. Further during the appellate proceedings, the appellant had submitted audit report dated 27.02.2024 which has been beyond the time limit prescribed as per Act. Therefore, it is very clear that the appellant had not justified the said transactions with supporting documents. Reliance is placed on the decision of Hon'ble SC in the case of Roshan Di Hatti Vs. CIT (SC) 107 ITR 938. Thus grounds of appeal no. 4&5 raised by the appellant are hereby dismissed. 4.4 Ground No. 6- Short credit of TDS- During the appellate proceedings the appellant had had stated that while completing the assessment proceedings TDS has not given credit by the AO. In this regard AO is direct to verify this fact and take necessary action as per law. According ground of appeal no 6 is allowed for statistical purpose. 4.5 Ground No. 3, 7 & 8 are general in nature no adjudication is required.
5. In the result appeal filed by the appellant is dismissed.”
23. The assessee, being aggrieved with the order of the CIT(A), has carried the matter in appeal before us.
24. Shri E. Phalguna Kumar, CA, the Learned Authorized Representative (for short, “Ld. AR”) for the assessee, at the threshold of hearing of the appeal, submitted that the issue involved in the present appeal remains same as was there in the appeal of the assessee for AY 2016-17, i.e., i.e., invalid assumption of jurisdiction by the AO for framing the impugned assessment vide his order passed under section 147 r.w.s 144B of the Act, dated 12/02/2024. Elaborating on his contention, the Ld. AR submitted that though the 1525, 1526/Hyd/2025 Satavahana University vs. ITO impugned assessment for the subject year, i.e., AY 2018-19 had been framed by the Faceless Assessing Officer (FAO), i.e., Assessment Unit, Income Tax Department, but the order under section 148A(d) of the Act, dated 21/04/2022 was passed by the Jurisdictional Assessing Officer (JAO), i.e., ACIT, Circle-1, Karimnagar. It was, thus, the Ld. AR’s claim that as the AO, based on an invalid notice under section 148 of the Act, dated 21/04/2022, had wrongly assumed jurisdiction, therefore, the impugned assessment order passed by him under section 147 r.w.s 144B of the Act, dated 12/02/2024, cannot be sustained and is liable to be quashed on the said count itself.
25. Per contra, Dr. Narendra Kumar Naik, CIT-DR, relied upon the orders of the lower authorities.
26. We have given thoughtful consideration to the contentions advanced by the Learned Authorised Representatives of both parties, perused the orders of the lower authorities and the material available on record.
As the facts and the issue involved in the present appeal, i.e., validity of the jurisdiction assumed by the AO for framing of the impugned assessment, viz., (i) order under section 148A(d) of the Act, dated 21/04/2022 passed by the Jurisdictional Assessing Officer (JAO); and 1525, 1526/Hyd/2025 Satavahana University vs. ITO (ii) notice under section 148 of the Act, dated 21/04/2022 issued by the Jurisdictional Assessing Officer (JAO), remains the same as was there before us in its appeal for AY 2016-17 in therefore, the observations therein recorded shall apply mutatis mutandis for the purpose of disposing of the present appeal. Accordingly, we herein on the same terms quash the assessment order passed by the AO under section 147 r.w.s 144B of the Act, dated 12/02/2024, for want of a valid assumption of jurisdiction along with a liberty as had been granted by us while disposing of the aforementioned appeal for AY 2016-17.
In the result, the appeal filed by the assessee for the AY 2018-19 is allowed in terms of our aforesaid observations.
ITA No. 1526/Hyd/2025 (AY: 2019-20)
29. We shall now take up the assessee’s appeal for AY 2019-20. The assessee has assailed the impugned order of the CIT(A) on the following grounds of appeal:
“1. The Ld.CIT (appeals) erred in passing his sec.250 Order, confirming the Sec. 147 Asst order of the Ld.AO. in the facts and circumstances of the case as it is not justified both on facts and in law. The Reopening of Asst by the Jurisdictional AO by issuing Sec. 148 notice is being against the provisions of Sec. 151A and hence the Appeal Order Passed by the Ld CIT(A) is bad in law.
2. The Ld.CIT(Appeals), erred in analyzing the facts and circumstances of the case, that though the Appellant is eligible for Sec. 10(23C) (iiiab) exemption, in denying the same on misapplication of wrong provisions.
The Ld. CIT(Appeals) erred in not considering the Audited Accounts filed during the Appeal proceedings and relying only on the AO completed Assessment U/sec. 147.
4. The Ld.CIT (Appeals) erred in concurring with the Ld. A.O's view to treat the Bank Term Deposit as unexplained source Income and to be taxed U/Sec 69A of the Act read with Sec.115BBE, which is against the law and contrary to the facts and circumstances of the case.
5. Based on the above the appellant pleads for deletion of the All Additions of Rs.3,93,45,193/-(U/sec.69for the Bank Fixed Deposit of Rs.80,00,000-,U/sec 69A for cash deposit of Rs36,14,130/-, for Rs.2,77,31,063/- for Bank FD interest )made as assesed Incomeby the Ld.AO. and confirmed by CIT(Appeals), as it is against the principles of Law and Natural Justice. 6. The Appellant prays for adding, altering any other ground that will be taken up with the kind permission of the ITAT at the time of hearing.”
Succinctly stated, the AO based on information available as per the Risk Management Strategy (RMS) formulated by the CBDT for AY 2019-20, observed that the assessee during the subject year, i.e., AY 2019-20 carried out substantial financial transactions, viz., (i) cash deposits: Rs.36,14,130/-; (ii) time deposits: Rs.80,00,000/-; and (iii) interest income: Rs.2,77,31,063/-, but had not filed its return of income under section 139 of the Act, initiated proceedings under section 147 of the Act. Thereafter, the AO passed an order under section 148A(d) of the Act, dated 29/03/2023. Notice under section 148 of the Act, dated 30/03/2023, was issued and served upon the assessee.
During the course of the assessment proceedings, the AO called upon the assessee to furnish the details of the source of cash deposits of Rs. 36,14,130/-, and time deposits of Rs. 80 lakhs made in its bank account with Andhra Bank during the subject year. Also, the assessee was called upon to put forth an explanation as to why the interest income received on its bank account with Andhra Bank of Rs. 2,77,31,063/-, may not be treated as its undisclosed income and brought to tax.
As the assessee failed to come forth with any explanation, therefore, the AO was constrained to frame the assessment to the best of his judgment under section 147 r.w.s 144 r.w.s 144B of the Act, dated 12/02/2024, and after making the aforementioned additions, determined the income of the assessee at Rs. 3,93,45,193/-.
33. Aggrieved, the assessee carried the matter in appeal before the CIT(A) but without success.
34. The assessee, being aggrieved with the order of the CIT(A), has carried the matter in appeal before us.
We have heard the Learned Authorised Representatives of both parties, perused the orders of the lower authorities and the material available on record.
Sri E. Phalguna Kumar, CA, the Learned Authorized Representative (for short, “Ld.AR”) for the assessee, at the threshold of hearing of the appeal, submitted that the AO in the present case had grossly erred in law and facts of the case in assuming jurisdiction and framing the impugned assessment vide his order under section 147 r.w.s 144 r.w.s 144B of the Act, dated 12/02/2024. Elaborating on his contention, the Ld. AR submitted that though the impugned assessment had been framed by the Faceless Assessing Officer (FAO), but the very foundation for initiating/framing the assessment, viz., (i) order under section 148A(d) of the Act, dated 29/03/2023; and (ii) notice under section 148 of the Act, dated 30/03/2023, had been both passed/issued by the Jurisdictional Assessing Officer (JAO), i.e., ACIT, Circle-1, Karimnagar. The Ld. AR submitted that as the assessment framed in the present case was based on an invalid assumption of jurisdiction, therefore, the same cannot be sustained and is liable to be quashed.
Per contra, Dr. Sachin Kumar, Learned Senior Departmental Representative (for short, “Ld. Sr. AR”), relied upon the orders of the lower authorities.
38. We have given thoughtful consideration to the contentions advanced by the Learned Authorised Representatives of both parties,
As the facts and the issue involved in the present appeal, i.e., validity of the jurisdiction assumed by the AO for framing of the impugned assessment, viz., (i) order under section 148A(d) of the Act, dated 29/03/2023 passed by the Jurisdictional Assessing Officer (JAO); and (ii) notice under section 148 of the Act, dated 30/03/2023 issued by the Jurisdictional Assessing Officer (JAO), remains the same as was there before us in its appeal for AY 2016-17 in therefore, the observations therein recorded shall apply mutatis mutandis for the purpose of disposing of the present appeal. Accordingly, we herein on the same terms quash the assessment order passed by the AO under section 147 r.w.s 144 r.w.s 144B of the Act, dated 12/02/2024, for want of a valid assumption of jurisdiction along with a liberty as had been granted by us while disposing of the aforementioned appeal for AY 2016-17.
In the result, the appeal filed by the assessee for the AY 2019-20 is allowed in terms of our aforesaid observations.
Ex-consequenti, all three appeals filed by the assessee are allowed in terms of our aforesaid observations.
Order pronounced in the open court on 10th December, 2025.
Sd/- Sd/- (MANJUNATHA G.) (RAVISH SOOD) ACCOUNTANT MEMBER JUDICIAL MEMBER Hyderabad, Dated 10th December, 2025 *OKK / SPS Copy to: S.No Addresses 1 Satavahana University, Near Chemist Bhavan, Jyothi Nagar, Karimnagar, Telangana-505001. 2 Income Tax Officer, Ward-2, O/o. ITO, Aayakar Bhavan, Near Nataraj Theatre, Karimnagar, Telangana-505001. 3 The Pr. CIT, Hyderabad 4 The DR, ITAT Hyderabad Benches 5 Guard File By Order
Sr. Private Secretary, ITAT, Hyderabad.