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Facts
The assessee did not file a return of income for AY 2019-2020. The Jurisdictional Assessing Officer (JAO) initiated reassessment proceedings by issuing a show cause notice under Section 148A(b) on 28.02.2023, followed by a notice under Section 148 on 29.03.2023. The AO made an addition of Rs.36,03,333/- as long-term capital gain on the sale of an immovable property, assessing total income at Rs.39,48,391/-. The CIT(A) upheld the assessment.
Held
The Tribunal, relying on Supreme Court judgments in *Ashish Agrawal* and *Rajeev Bansal* and jurisdictional High Court decisions in *Kankanala Ravindra Reddy* and *Kotha Kanthaiah*, held that the notices issued by the Jurisdictional Assessing Officer (JAO) under Section 148A(b) and Section 148 were invalid. The primary reasons were that the notices were issued by the JAO instead of the Faceless Assessing Officer and were time-barred, having been issued beyond the 'surviving period' as clarified by the Supreme Court. Consequently, the reassessment order was quashed, with liberty granted to both parties to seek revival if a Supreme Court judgment on this issue necessitates modification.
Key Issues
1. Whether the notices issued by the Jurisdictional Assessing Officer (JAO) under Section 148A(b) and Section 148 are valid after the introduction of the Faceless Jurisdiction of the Income Tax Authority Scheme. 2. Whether the notices issued were barred by limitation, specifically beyond the 'surviving period' as clarified by the Supreme Court. 3. Whether the consequential reassessment order is valid when the initiation of proceedings through such notices is deemed procedurally flawed.
Sections Cited
147, 148, 148A(b), 148A(d), 143(2), 142(1), 48, 144B, 149(1)(a), 158, 151A
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, Hyderabad ‘SMC-B’ Bench, Hyderabad
Before: SHRI VIJAY PAL RAO & SHRI MANJUNATHA G.
सुनवाई की तारीख/Date of hearing: 27.11.2025 घोषणा की तारीख/Pronouncement: 03.12.2025 आदेश/ORDER PER MANJUNATHA G. A.M. :
This appeal by the Assessee is directed against the Order dated 19.02.2025 of the learned CIT(A)-National Faceless Appeal Centre [in short “NFAC], Delhi, for the assessment years 2019-2020.
2 ITA.No.471/Hyd./2025 2. The assessee has raised the following grounds in the instant appeal :
“The order of the Appellate Commissioner is contrary to law, facts and circumstances of the case
The Appellate Commissioner erred in confirming the notice issued by the A. O, and in consequence the order passed u/s 147 r.w.s 1448, which is bad in law and deserves to be quashed
3. The Appellate Commissioner erred in confirming the issue of notice u/s 145A(b) issued by the A.O, on 28.02.2023, as its without jurisdiction, it being issued by the Jurisdictional A.O. Ward 13(1), Hyderabad, Telangana.
4. The Appellate Commissioner ought to have seen that the Jurisdictional A.O, Ward 13(1). Telangana, has no jurisdiction to issue a notice u/s, 148A(d), after the introduction of "Faceless Jurisdiction of the Income Tax Authority Scheme 2022", and as such the notice issued by the JAO needs to be quashed.
The Appellate Commissioner ought not to have ignored the judgement of the Telangana High Court, in the case of Kankala Ravindra Reddy, which is the judgement of the jurisdictional High Court, which says that the jurisdictional A.O, has no powers to issue notices, after the introduction of "Faceless Jurisdiction of the Income Tax Authority Scheme 2022
6. The Appellate Commissioner ought to have followed the rule of Judicial Precedence which demands that the view favourable to the assessee must be adopted, as laid down in the judgment of the Supreme Court in the case of Vegetable Products Ltd, 88 ITR 192
3 ITA.No.471/Hyd./2025 7. The Appellate Commissioner ought to have noticed that, the first notice issued under section 143(2) and the second notice issued under section 143(2) differ on the nature of income escaping assessment, and as such has been issued without application of mind and needs to be quashed 8. Without prejudice to the above grounds, the Appellate Commissioner erred in confirming the addition of an amount of Rs.36,03,333/-, being long term capital gain.
9. Any other grounds which the Assessee may urge either before or at the time of the hearing.”
Through ground nos.2 to 5, the assessee has raised the legal issue challenging the validity of the notice issued u/sec.148 being barred by limitation beyond the surviving period.
The assessee is an individual and did not file his return of income during the assessment year 2019-2020 under consideration. The Jurisdictional Assessing Officer [in short “JAO”] thereafter issued notice u/sec.148 dated 29.03.2023 and in pursuance to Judgment of Hon’ble Supreme Court in the case of Union of India And Ors. vs. Ashish Agarwal [2022] 444 ITR 1 (SC), the Assessing Officer issued notice u/sec.148A(b) on 28.02.2023. The assessee did
4 ITA.No.471/Hyd./2025 not file any reply to the said show cause notice and the Assessing Officer passed the order u/sec.148A(d) on 29.03.2023. On the same day, the Assessing Officer has also issued notice u/sec.148 dated 29.03.2023. The assessee has filed it’s return of income in response to notice dated 29.03.2023 issued u/sec.148 of the Income Tax Act [in short "the Act"], 1961, on 14.04.2023 declaring total income of Rs.3,45,058/-. During the course of assessment proceedings, the Assessing Officer has noted that the assessee had sold an immovable property for a consideration of Rs.40 lakhs and claimed deduction towards cost of construction at Rs.37,65,152/- u/sec.48 of the Act. The Assessing Officer has issued various notices u/sec.143(2) and 142(1) of the Act as well as show cause notices calling upon the assessee to furnish his explanation. The assessee has filed his reply dated 29.12.2023 before the Assessing Officer. The Assessing Officer after considering the submissions of the assessee made an addition of Rs.36,03,333/- under the Head “Long term Capital Gains” and assessed the total income of the 5 ITA.No.471/Hyd./2025 assessee at Rs.39,48,391/- vide order dated 01.03.2024 passed u/sec.147 r.w.s.144B of the Income Tax Act, 1961.
5. Being aggrieved by the assessment order, the assessee preferred an appeal before the learned CIT(A). The learned CIT(A) after considering the submissions of the assessee upheld the order of the Assessing Officer.
Aggrieved by the Order of the learned CIT(A), the assessee is now, in appeal before the Tribunal.
Before the Tribunal, the learned Authorised Representative of the Assessee has submitted that the notice issued u/sec.148 on 29.03.2023 is barred by limitation and liable to be quashed. The learned Authorised Representative of the Assessee has submitted that since the notice u/sec.148 was issued by the Assessing Officer on 29.03.2023, therefore, the number of days available to the Assessing Officer for issuing the final notice under the new Scheme of Re-Assessment was zero as observed by the Hon’ble Supreme Court in the case of Union of India vs. Rajeev Bansal [2024] 469 ITR 46 (SC). The period as per
6 ITA.No.471/Hyd./2025 the Hon’ble Supreme Court in the case of Union of India And Ors., vs. Ashish Agrawal (supra) has to be excluded up-to the date of the said Judgment i.e., 04.05.2022. Consequently, the Assessing Officer issued show cause notice u/sec.148A(b) on 28.02.2023 granting the time to assessee to file the reply up- to 06.03.2023. The assessee did not file any reply in response to the show cause notice issued u/sec.148A(b). Therefore, since there was a zero surviving period with the Assessing Officer due to the reason that original notice u/sec.148 was issued on 28.02.2023 the last day of the limitation extended by TOLA Notification, therefore, the minimum period available as per the Judgment of Hon’ble Supreme Court in the case of Union of India And Ors., vs. Ashish Agrawal (supra), would be 07 days with the Assessing Officer i.e., up- to 07.06.2022. However, the Assessing Officer passed the order u/sec.148A(d) on 29.03.2023 and then, issued notice u/sec.148 dated 29.03.2023 which is beyond the period of limitation as the surviving period was available to the Assessing Officer up-to 07.06.2022. Thus, the learned Authorised Representative of the Assessee has submitted
7 ITA.No.471/Hyd./2025 that the notice issued by the Assessing Officer u/sec.148 dated 29.03.2023 is barred by limitation as it is beyond the surviving period specified and explained by the Hon’ble Supreme Court in the case of Union of India vs. Rajeev Bansal (supra). He has referred to Para-108 of the Judgment of Hon’ble Supreme Court in the case of Union of India vs. Rajeev Bansal (supra), wherein the Hon’ble Supreme Court has clarified that the surviving period has to be calculated by computing the number of days between the date of issuance of deemed notice and the limitation extended by TOLA up-to 30.06.2021. Since, in the case of the assessee, the deemed notice was issued on 29.03.2023 itself, therefore, the surviving period would be zero days. The learned Authorised Representative of the Assessee has thus submitted that the Assessing Officer has to consider response of the assessee u/sec.148A(c) of the Act and then, pass the order u/sec.148A(d) and thereafter, issue notice u/sec.148 under new tax regime. All these procedures has to be completed within the surviving period and the notice issued beyond the surviving period is time barred and liable to be set-aside. The 8 ITA.No.471/Hyd./2025 Hon’ble Supreme Court in Paras-113 and 114 in the case of Union of India vs. Rajeev Bansal (supra) has set-aside such notice which are beyond the surviving period. Thus, the learned Authorised Representative of the Assessee has submitted that applying the above principle laid down by the Hon’ble Supreme Court, the notice issued by the Assessing Officer u/sec.148 in the case of the assessee on 29.03.2023 is for the assessment year 2019-2020 is invalid and liable to be quashed and consequently, the re-assessment order passed by the Assessing Officer is also liable to be quashed. In support of his contention, he has relied upon the Judgment of Hon’ble Jurisdictional Telangana High Court in the case of Kankanala Ravindra Reddy vs., ITO [2023] 156 taxmann.com 178 (Telangana) and Judgment of Hon’ble Telangana High Court in WP.No.29541 of 2024 Dated 30.04.2025. The learned Authorised Representative of the Assessee accordingly submitted that the notice issued by the Assessing Officer u/sec.148 dated 29.03.2023 is barred by limitation and consequently, the re-assessment
9 ITA.No.471/Hyd./2025 order passed by the Assessing Officer is also invalid and liable to be quashed.
The learned DR, on the other hand, has relied upon the orders of the Assessing Officer as well as the learned CIT(A) and submitted that once the Hon’ble Supreme Court has allowed the Assessing Officer to treat the original notice u/sec.148 as the show cause notice u/sec.148A(b) of the Act and to consider the reply of the assessee and pass the order u/sec.148A(d) of the Act and then issue the final notice u/sec.148 which is duly followed by the Assessing Officer and, therefore, the proceedings completed by the Assessing Officer in pursuance to the directions of the Hon’ble Supreme Court are valid.
We have considered the rival submissions of both the parties, perused the relevant material on record and gone through the Orders of the authorities below. In this case, the assessee has challenged the notice issued by the Jurisdictional Assessing Officer [in short “JAO”] u/sec.148 of the Income Tax Act, 1961 in light of provisions of sec.144B as notified by the Government for Faceless Scheme of 10 ITA.No.471/Hyd./2025 Assessment and also on the basis of decision of Hon’ble Jurisdictional Telangana High Court in the case of Shri Kankanala Ravindra Reddy vs. ITO 156 taxmann.com 178 (Telangana-HC) and argued that, notice issued by the Assessing Officer is bad in law, without any jurisdiction and consequently, the assessment order passed by the Assessing Officer u/sec.148 is also bad in law and liable to be quashed. We find that an identical issue has been considered by this Tribunal in series of decisions and in case of M/s. Pitti Holdings Pvt. Ltd., Hyderabad vs. ACIT, Central Circle- 1(1), Hyderabad, in ITA.No.450/Hyd./2025 for the assessment year 2018-2019 vide order dated 08.10.2025 has considered this issue in Paras-5 to 5.1 as under : “5. We have heard the Learned Authorised Representative and Learned Departmental Representative on this issue which is pending adjudication before the Hon’ble Supreme Court. Ld. AR has relied upon the judgment of Hon’ble jurisdictional High Court in the case of Kanakala Ravindra Reddy Vs. ITO 156 taxman.com 478 and submitted that the impugned reassessment order is not valid and liable to be set aside. Having considered the rival submissions as 11 ITA.No.471/Hyd./2025 well as relevant material on record, at the outset we note that the co-ordinate bench of this Tribunal in the case of Kanakala Ravindra Reddy Vs. ITO (supra) [As per Corrigendum dated 10th October, 2025 the correct citation is Kotha Kanthaiah, Karimnagar vs., The Income Tax Officer, Ward-2, Karimnagar in ITA.No.1259/Hyd./2024] has considered an identical issue vide order dated 04.09.2025 in para Nos.9 to 16 as under : “9. We have considered the rival submissions as well as material on record. In the case of the assessee, notice u/sec.148A(b) was issued on 21.02.2023 by JAO. For ready reference, the same is reproduced as under :
12 ITA.No.471/Hyd./2025
10. Thereafter, the AO also passed an order u/s 148A(d) on 29.03.2023, wherein, the AO has recorded that, despite sufficient time allowed to the assessee in accordance with the provisions of section 148A(b) for compliance to the show cause notice dated 21.02.2023, there is no compliance on behalf of the assessee to the said show cause notice. The AO decided that it is a fit case for issue of notice u/s 148 of the Act and consequently notice u/s 148 was issued on 30.03.2023 as under :
13 ITA.No.471/Hyd./2025 11. Undisputedly, the show cause notice u/s 148A(b) as well as notice u/s 148 were issued by the JAO and not by the faceless Assessing Officer. At the outset, we note that the Hon’ble Jurisdictional High Court has considered an identical issue in assessee's own case for the immediate preceding assessment year i.e. 2015-16 vide judgement dated 24.04.2025 in W.P.No.344 of 2025 and has recorded the issue involved in the said petition in para 4 of the said judgement as under : “4. The contention of the petitioner is that the issue of proceedings being in violation of the Finance Act, 2021 ie., the impugned notices under Section 148A and Section 148 of the Act not being issued in a faceless manner, have already been dealt with and decided by this Court in the case of KANKANALA RAVINDRA REDDY vs. INCOME-TAX OFFICER decided on 14.09.2023 whereby a batch of writ petitions were allowed and the proceedings initiated under Section 148A as also under Section 148 of the Act were held to be bad with consequential reliefs on the ground of it being in violation of the provisions of Section 151A of the Act read with Notification 18/2022 dated 29.03.2022. The said judgment passed by this Court has also been subsequently followed in a large number of writ petitions which were allowed on similar terms.
12. It was further noted by the Hon’ble jurisdictional High Court that this issue has been decided against the Revenue by various High Courts and the details of all the judgements of various High Courts are given in para 5 of the said judgement as under :
14 ITA.No.471/Hyd./2025 “5. Down the line, we find that the same issue has also been decided against the Revenue by various High Courts i.e.. by the Bombay High Court in the case of HEXAWARE TECHNOLOGIES LTD., vs. ASSISTANT COMMISSIONER OF INCOME TAX & OTHERS, Gauhati High Court in the case of RAM NARAYAN SAH vs. UNION OF INDIA', Punjab and Haryana High Court in the case of JATINDER SINGH BANGU vs. UNION OF INDIA, and Telangana High Court in the case of SRI VENKATARAMANA REDDY PATLOOLA vs. DEPUTY COMMISSIONER OF INCOME TAX where the issue was in respect of international taxation, Bombay High Court in the case of ABHIN ANILKUMAR SHAH vs. INCOME TAX OFFICER, INTERNATIONAL TAXATION which again on is international taxation and central circle, High Court of Himachal Pradesh in the case of GOVIND SINGH vs. INCOME TAX OFFICER, Gujarat High Court in the case of MANSUKHBHAI DAHYABHAI RADADIYA VS. INCOME TAX OFFICER, WARD 3(3)(5)", Jharkand High Court in the case of SHYAM SUNDAR SAW vs. UNION OF INDIA", Rajasthan High Court in the case of SHARDA DEVI CHHAJER vs. INCOME TAX OFFICER & ANOTHER and batch of writ petitions" which stood decided on 19.03.2024. Similar views have also been taken by the Division Bench of Calcutta High Court in the case of GIRDHAR GOPAL DALMIA vs. UNION OF INDIA & ORS (Μ.Α.Τ 1690 of 2023), decided on 25.09.2024.”
In light of various judgements of the Hon’ble High Courts, including the judgement of the jurisdictional 15 ITA.No.471/Hyd./2025 High Court in the case of Kankanala Ravindra Reddy Vs. Income Tax Officer [2024] 156 taxmann.com 478 (Gauhati), the Hon’ble High Court has held in para 13 to 19 as under: “13. Another aspect which needs to be considered is that in fact it should have been realized by the Income Tax Department itself and should have found out via media in ensuring that proceedings under Sections 148-A and 148 should not have been issued in n faceless manner, at least till the Hon'ble Supreme Court decide the twelve hundred (1200) odd SLPs which it is already seized of or, at least the Income Tax Department should have found out some remedial steps to ensure that wherever the authorities intend to initiate proceedings under Sections 148-A and 148, other than in a faceless manner, the proceedings should have been deferred without precipitating the matter further intimating the assessee that they shall initiate appropriate proceedings only after the SLP's are decided by the Hon'ble Supreme Court on the very same issue. This again, the Income Tax Department, has not been able to give a convincing reply, except for the fact that such a decision if at all has to be taken, has to be taken for the whole of India, and which otherwise has to be by way of a policy decision and that too at the level of Central Board of Direct Taxes. Though the learned Standing Counsel for the Income Tax Department contended that the Delhi High Court dismissed a writ petition of similar nature, on the one hand when the High Court is struggling to reduce its pendency, such notices which are under challenge in this writ petition 16 ITA.No.471/Hyd./2025 are forcing the assessee to knock the doors of this High Court resulting in filing of hundreds of new writ petitions which in the long run not only affects the disposal of the writ petitions but also consumes substantial time of the Bench in hearing these matters again and again on daily basis. Admittedly, in spite of the matter before the Hon'ble Supreme Court having been taken on many occasions, the Hon'ble Supreme Court which is seized of the matter has been reluctant in granting any interim protection to the Income Tax Department. Yet, the authorities concerned at the State level are not ready to accept the verdict passed by a majority of High Courts of different States on the same issue; and to make things further worse, the Income Tax Department is showing audacity by issuing notices continuously under Sections 148-A and 148 through the jurisdictional Assessing Officer whereas it ought to have been only in the faceless manner.
14. In the case of BANK OF INDIA vs. ASSISTAN COMMISSIONER, INCOME TAX", on an issue whether it was justifiable on the part of the Income Tax Department in no following an order passed by the adjudicating authority only on the ground that the appeals are pending, the Division Bench of the High Court of Bombay held at paragraph No.25 as under, viz.,:
"25. Mr. Paridwalla has rightly drawn out attention to the decision of this Court in Commissioner of Income Tax vs. Smt. Godavaridevi Saraf¹ as also the 17 ITA.No.471/Hyd./2025 recent decision of the co-ordinate Bench of this Court in Samp Furniture (P) Ltd. v. ITO of which one of us (Justice G.S. Kulkarni) was a member, wherein the Court categorically observed that the Revenue having not "accepted" the judgment of the High Court would not mean that till the same is set aside in a manner known to law, it would loose its binding force. Referring to the decision of the Supreme Court in Union of India vs. Kamlakshi Finance Corporation Ltd.", the Court observed that the approach of the officials of Revenue of treating decisions being "not acceptable" was criticized by the Supreme Court. In such decision, following are the relevant observations made by the Supreme Court. [(2025) 170 taxmann.com 422 (Bombay)] 12 [1978] 113 ITR 589 (Bombay) 13 [2024] 165 taxmann.com 581/300 Taxman 452 (Bombay) 14 [1992] taxmann.com 16/55 ELT 433 (SC)
6. Sri Reddy is perhaps right in saying that the officers were not actuated by any mala fides in passing the impugned orders. They perhaps genuinely felt that the claim of the assessee was not tenable and that, if it was accepted, the Revenue would suffer. But what Sri Reddy overlooks is that we are not concerned here with the correctness or otherwise of their conclusion or of any factual malafides but with the fact that the officers, in reaching In their conclusion, by-passed two appellate orders in regard to the same issue which were placed before them, one of the Collector (Appeals) and the other of the Tribunal. The High Court has, in our view, rightly criticized this conduct of the Assistant Collectors and the 18 ITA.No.471/Hyd./2025 harassment to the assessee caused by the failure of these officers to give effect to the orders of authorities higher to them in the appellate hierarchy. It cannot be too vehemently emphasized that it is of utmost importance that, in disposing of the quasi-judicial issues before them, revenue officers are bound by the decisions of the appellate authorities. The order of the Appellate Collector is binding on the Assistant Collectors working within his jurisdiction and the order of the Tribunal is binding upon the Assistant Collectors and the Appellate Collectors who function under the jurisdiction of the Tribunal. The principles of judicial discipline require that the orders of the higher appellate authorities should be followed unreservedly by the subordinate authorities. The mere fact that the order of the appellate authority is not acceptable" to the department in itself an objectionable phrase and is the subject matter of an appeal can furnish no ground for not following it unless its operation has been suspended by a competent court. If this healthy rule is not followed, the result will only be undue harassment to assesses and chaos in administration of tax laws. … …. ….
We have dealt with this aspect at some length, because it has been suggested by the learned Additional Solicitor General that the observations made by the High Court, have been harsh on the officers. It is clear that the observations of the High Court, seemingly vehement, and apparently unpalatable to the Revenue, are only intended to curb a tendency in revenue matters which, if allowed to become widespread, could result in 19 ITA.No.471/Hyd./2025 considerable harassment to the assesses-public without any benefit to the Revenue. We would like to say that the department should take these observations in the proper spirit. The observations of the High Court should be kept in mind in future and the utmost regard should be paid by the adjudicating authorities and the appellate authorities to the requirements of judicial discipline and the need for giving effect to the orders of the higher appellate authorities which are binding on them."
What is worrying this Bench more is the fact that an endeavour is being made whole heartedly to ensure not to generate further litigation on issues which have been laid to rest by a large number of High Courts all of whom have taken a consistent stand that the action of the Income Tax Department being violative of the Finance Act, 2020 and Finance Act, 2021. Now, in order to protect the interest of the Revenue as also that of the assessee, it would be trite at this juncture, if we dispose of the writ petition with an observation/direction that the disposal of the instant writ petition in terms of the judgment rendered by this High Court in the case of Kankanala Ravindra Reddy (1 supra) shall however be subject to the outcome of the SLPs which were filed by the Income Tax Department and which is pending consideration before the Hon'ble Supreme Court.
16. In the given facts and circumstances, this Bench is of the considered opinion that unless and until we do not timely dispose of matters which are squarely covered by the decision of this Court and which stands fortified by the decisions of the various other High Courts on the very same issue, the 20 ITA.No.471/Hyd./2025 pendency of this High Court would further be burdened which otherwise can be decided and disposed of as a covered matter.
So far as the interest of the Revenue is concerned, we are of the considered opinion that the interest of the Revenue has already been considered and protected, as has been observed in paragraphs 36, 37 and 38 of the order which, for ready reference, is reproduced hereunder:
“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 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 nuliified automatically.
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 21 ITA.No.471/Hyd./2025 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.”
We would only further like to make observations that since we are inclined to dispose of the instant writ petition, conscious of the fact that the earlier order of this High Court in the case of Kanakala Ravindra Reddy (1 supra) is subjected to challenge before the Hon'ble Supreme Court in SLP No.3574 of 2024, preferred by the Income Tax Department, we make it clear that allowing of the instant writ petition is subject to outcome of the aforesaid SLP preferred by the Revenue against the decision of this High Court in the case of Kanakala Ravindra Reddy (1 supra). This, in other words, would mean that either of the parties, if they so want, may 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 SLP on the very same issue.
Accordingly, the instant writ petition stands allowed in favour of the assessee so far as the issue of jurisdiction is concerned. As a consequence, the impugned notice under challenge under Sections 148- A and 148 stands set aside/quashed. The consequential orders, if any, also stand set aside/quashed in similar terms as have been passed by this 22 ITA.No.471/Hyd./2025 High Court in the case of Kankanala Ravindra Reddy (1 supra). There shall be no order as to costs. Consequently, miscellaneous petitions pending, if any, shall stand closed.
Thus, it is clear that the issue raised by the assessee in the present appeal is now covered by the decision of Hon’ble Jurisdictional High Court in the assessee’s own case for the A.Y.2016-17. As regards the contention of the Ld.DR that no such issue was raised by the assessee before the authorities below, we find from the Grounds of Appeal
raised before the CIT(A) that the assessee had raised this issue in ground No.2 to 5 as under : “2. On the facts and in the circumstances of the case and in law, the Jurisdictional Assessing Officer erred by initiating proceedings u/s 147 of the Act, simply relied on the SFT information shown in the verification module of Insight Portal at the time of reopening, however, either no information gathered or not conducted any Inquiry further in order to form an honest, and a reasonable belief that certain income had escaped assessment in the case of the appellant, As such, said proceedings and the consequent order ought to be declared full and void-ab- Initio.
3. The Notice issued up 148 of the Act, 1901dated 30.03.2023 is illegal and unsustainable in law since the income alleged to have escaped assessment, actually is far below the threshold limit of Rs50 Lacs in the present case, it is actually Rs.30.61,000/- only and thereby, barred by limitation under the provisions of section 149(1) (a) of the Act. Since the impugned notice issued u/s.148 of the LT Act, 1961 dated 30.03.2023, legal 23 ITA.No.471/Hyd./2025 and unsustainable in law, accordingly, the impugned reassessment order u/s.147 r.w.s.144B of the Act dated 01.03.2024 and the notice of demand dated 01.03.2024 Issued u/s 158 of the Act are also bad in law and unsustainable and the same, is hereby, quashed and set aside. 4 On the facts and in the circumstances of the case and in law, the Assessment Unit/NaFAC erred by making the additions without supplying the relevant documents or tangible material to the appellant and without obtaining the bank account statement(s) relied on which the case was reopened by the JAO, as such, said proceedings and the consequent order ought to be declared null and vold-ab-Initio.
5. On the facts and in the circumstances of the case and in law, the Jurisdictional Assessing Officer erred in the proceedings Initiated u/s 147 of the Act without following due procedure prescribed by CBDT vide Instruction No F.No.299/ 10/2022- Dir(Inv.1)/647 dt., 22.08.2022 and accordingly the said proceedings and the consequent order ought to be declared null and void ab initio.”
15. In view of the facts emanating from the record, we find that the assessee has duly raised this issue before the CIT(A) and therefore, the contention raised by the Ld.DR is devoid of any merit. Accordingly, the show cause notice issued u/s 148A(b) dated 21.02.2023 as well as notice issued u/s 148 dated 30.03.2023 by the JAO are not valid and liable to be quashed. We order accordingly.
However, since the matter is pending adjudication before the Hon’ble Supreme Court and Hon’ble High Court has also given the liberty to the parties to move an appropriate petition, seeking revival of W.P. in light of judgement of Hon’ble Supreme Court on this very issue, 24 ITA.No.471/Hyd./2025 we also grant liberty to the parties to get this appeal revived, if, in case the judgement of the Hon’ble Supreme Court on this issue necessitate to modify this order.” 5.1. In the case in hand it is not disputed that the notice u/s. 148 of the Act was issued by the JAO and not by the Faceless Assessing Officer. By following the judgment of Hon’ble jurisdictional High Court in the case of Kotha Kanthaiah dated 24.04.2025 in Writ Petition No.344 of 2025 as well as the decision of co-ordinate bench of this Tribunal (supra), we hold that the notice issued u/s. 148A(b) of the Act as well as the decision of co-ordinate bench as well as u/s. 148 of the Act in the case of the assessee by the JAO are not valid and liable to be set aside. We order accordingly.”
Following the Judgment of Hon’ble Jurisdictional High Court as well as the decision of this Tribunal in the case of M/s. Pitti Holdings Pvt. Ltd., Hyderabad vs. ACIT, Central Circle-1(1), Hyderabad (supra), we hold that the notice u/sec.148 issued by JAO without following the procedure as per NFAC Scheme is invalid and liable to be set- aside. We Order accordingly. However, an identical issue is pending adjudication before the Hon'ble Supreme Court and the Hon’ble Jurisdictional High Court in the case of Kotha Kanthaiah (supra) has also given the liberty to the parties to move an appropriate petition seeking revival of the case in 25 ITA.No.471/Hyd./2025 light of Judgement of Hon'ble Supreme Court on this very issue. Therefore, we also grant the liberty to the parties to get this appeal revived, if Judgment of Hon'ble Supreme Court on this issue necessitate to modify this order.
In the result, appeal of the Assessee is allowed.
Order pronounced in the open Court on 03.12.2025.