KINETA GLOBAL LIMITED,HYDERABAD vs. DCIT., CIRCLE-2(1), HYDERABAD

आयकर अपीलीय अधिकरण, हैदराबाद पीठ
IN THE INCOME TAX APPELLATE TRIBUNAL
Hyderabad ‘B’ Bench, Hyderabad

Before Shri Manjunatha G., Accountant Member and Shri Ravish Sood, Judicial Member

आ.अपी.सं /ITA No.800/Hyd/2025
(निर्धारण वर्ा/Assessment Year: 2018-19)

Kineta Global Limited,
Hyderabad.

PAN: AACCK7944A
Vs. Deputy Commissioner of Income Tax,
Circle-2(1),
Hyderabad.
(Appellant)

(Respondent)
निर्धाररती द्वधरध/Assessee by: Sri S. Venkateswarlu,
Tax Consultant
रधजस् व द्वधरध/Revenue by: Dr. Narendra Kumar Naik,
CIT-DR

सुिवधई की तधरीख/Date of Hearing: 12/11/2025
घोर्णध की तधरीख/Date of Pronouncement:
19/11/2025

आदेश / ORDER
PER. RAVISH SOOD, J.M:
The present appeal filed by the assessee company is directed against the order passed by the Commissioner of Income Tax (Appeals),
National Faceless Appeal Centre, Delhi, dated 03/03/2025, which in turn arises from the order passed by the Assessing Officer under section 147
r.w.s 144B of the Income-tax Act, 1961 (for short, “Act”) dated
21/02/2024 for the Assessment Year 2018-19. The assessee company

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Kineta Global Limited vs. DCIT has assailed the impugned order on the following grounds of appeal before us:
“1. The order of the Ld. CIT(A) is bad in both law and on facts of the case.

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Kineta Global Limited vs. DCIT despite sufficient opportunities had failed to participate in the appellate proceedings on either of the four dates on which the appeal was fixed for hearing before the CIT(A), therefore, he was constrained to adjudicate the appeal based on the narrative submissions/contentions made by the assessee company vide the statement of facts/grounds of appeal that were filed before him. Accordingly, the CIT(A), finding no infirmity in the disallowance/additions made by the AO, upheld the same and dismissed the appeal.
5. The assessee, being aggrieved with the order of the CIT(A), has carried the matter in appeal before us.
6. We have heard the Learned Authorized Representatives of both parties, perused the orders of the lower authorities and the material available on record, as well as considered the judicial pronouncements that have been pressed into service by the Ld. AR to drive home his contentions.
7. Shri S. Venkateswarlu, the learned Authorized Representative (for short “Ld.AR”) for the assessee company, at the threshold of hearing of the appeal, submitted that the A.O. had grossly erred in law and on facts of the case in assuming juri iction and framing the impugned assessment vide his order passed u/s 147 r.w.s 144B of the Act, dated

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21.02.2024. Elaborating on his contention, the Ld. AR submitted that as notice u/s 148 of the Act, dated 21/04/2022 for the subject year i.e. A.Y.
2018-19 had been issued by the A.O. beyond a period of three years from the end of the relevant assessment year, i.e., on 21.04.2022, therefore, as per the mandate of Section 151 of the Act, as was made available on the statute vide the Finance Act, 2021 w.e.f. 01.04.2021, the said notice could have been issued only after obtaining the prior approval of the authorities contemplated in sub-section (ii) of Section 151
of the Act, viz. Principal Chief Commissioner/Principal Director
General/Chief Commissioner /Director General. The Ld. AR submitted that the notice under Section 148 of the Act, dated 21/04/2022, had been issued in the present case after obtaining the prior approval of the Principal Commissioner of Income-tax, Hyderabad-2, on 21/04/2022. The Ld. AR to fortify his contention had drawn our attention to the notice u/s 148 of the Act, dated 21.04.2022, which revealed that the same was issued after obtaining the prior approval of PCIT, Hyderabad-2, accorded on 21.04.2022 vide reference No.100000028982572 (Page 92 of APB).

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8. Per contra, Dr. Narendra Kumar Naik, Learned Commissioner of Income Tax-Departmental Representative (for short “Ld. CIT-DR”), on being confronted with the aforesaid factual position as was canvassed before us, failed to rebut the same. However, the Ld. CIT-DR submitted that as the A.O., after validly assuming juri iction, had issued notice u/s 148 of the Act, dated 21.04.2022, therefore, no infirmity emerges from the assessment order passed by him. The Ld. CIT-DR, submitted that on a conjoint reading of Section 151 and the “5th proviso” to Section 149(1) of the Act, for reckoning the period of three years from the end of the relevant assessment year as envisaged in Section 151 of the Act, based on which the specified authority whose sanction is required to be obtained for issuing notice under Section 148 of the Act is to be determined, the period allowed to the assessee as per the “Show Cause
Notice” (SCN) issued under clause (b) of Section 148A of the Act has to be excluded. The Ld. CIT-DR to support his contention had drawn our attention to the “5th Proviso” of Section 149 of the Act.

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9. The Ld. A.R. rebutted the contentions advanced by the revenue’s counsel. The Ld. AR submitted that the “Proviso” to Section 151 of the Act, which, inter alia, contemplates exclusion of the time period provided in the “5th proviso” of Section 149 of the Act for computing the period of three years had been made available on the statute vide the Finance
Act, 2023, w.e.f 01.04.2023 and thus, cannot be applied retroactively to the subject year involved in the present appeal, i.e., AY 2018-19. 10. We have heard the Ld. Authorized Representatives of both parties, perused the orders of the lower authorities and the material available on record, as well as considered the judicial pronouncements that have been pressed into service by the Ld. Authorized
Representatives of both parties to drive home their respective contentions.
11. As the Ld. AR has assailed the validity of the juri iction assumed by the A.O. for issuing notice u/s 148 dated 21.04.2022 without obtaining approval from any of the authorities specified u/s 151 of the Act (as was applicable at the relevant point of time), therefore, we shall first deal with the same.
12. Admittedly, it is a matter of fact discernible from the record that the notice u/s 148 of the Act, dated 21.04.2022, had been issued by the 9
ACIT, Circle-2(1), Hyderabad, after obtaining the prior approval of the Pr. Commissioner of Income-Tax dated 21.04.2022 vide reference
No.100000028982572. For the sake of clarity, we deem it fit to cull out the notice u/s 148 dated 21.04.2022. 10
14. Apropos the challenge by the Ld. AR regarding the validity of the juri iction assumed by the A.O. for initiating proceedings u/s. 147 of the Act, i.e., without obtaining the approval of the specified authority u/s.
151(ii) of the Act, we find substance in the same. Admittedly, the reassessment proceedings u/s. 147 of the Act had been revamped vide the Finance Act, 2021 w.e.f. 01.04.2021. The substituted Sections 147
to 159 and Section 151 of the Act, applicable w.e.f. 01.04.2021 are culled out as under:

“Income escaping assessment-
147. If any income chargeable to tax, in the case of an assessee, has escaped assessment for any assessment year, the Assessing
Officer may, subject to the provisions of sections 148 to 153, assess or reassess such income or recompute the loss or the depreciation allowance or any other allowance or deduction for such assessment year (hereafter in this section and in sections
148 to 153 referred to as the relevant assessment year).
Explanation.—For the purposes of assessment or reassessment or recomputation under this section, the Assessing Officer may assess or reassess the income in respect of any issue, which has escaped assessment, and such issue comes to his notice subsequently in the course of the proceedings under this section, irrespective of the fact that the provisions of section 148A have not been complied with.”.
Issue of notice where income has escaped assessment
148. Before making the assessment, reassessment or recomputation under section 147, and subject to the provisions of section 148A, the Assessing Officer shall serve on the assessee a notice, along with a copy of the order passed, if required, under clause (d) of section 148A, requiring him to furnish within such period, as may be specified in such notice, a return of his income or the income of any other person in respect of which he is 12
Kineta Global Limited vs. DCIT assessable under this Act during the previous year corresponding to the relevant assessment year, in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed; and the provisions of this Act shall, so far as may be, apply accordingly as if such return were a return required to be furnished under section 139:
Provided that no notice under this section shall be issued unless there is information with the Assessing Officer which suggests that the income chargeable to tax has escaped assessment in the case of the assessee for the relevant assessment year and the Assessing Officer has obtained prior approval of the specified authority to issue such notice.
Explanation 1.—For the purposes of this section and section 148A, the information with the Assessing Officer which suggests that the income chargeable to tax has escaped assessment means,—
(i) any information flagged in the case of the assessee for the relevant assessment year in accordance with the risk management strategy formulated by the Board from time to time;
(ii) any final objection raised by the Comptroller and Auditor
General of India to the effect that the assessment in the case of the assessee for the relevant assessment year has not been made in accordance with the provisions of this Act.
Explanation 2.—For the purposes of this section, where,—
(i) a search is initiated under section 132 or books of account, other documents or any assets are requisitioned under section 132A, on or after the 1st day of April, 2021, in the case of the assessee; or (ii) a survey is conducted under section 133A, other than under subsection (2A) or subsection (5) of that section, on or after the 1st day of April, 2021, in the case of the assessee; or (iii) the Assessing Officer is satisfied, with the prior approval of the Principal Commissioner or Commissioner, that any money, bullion, jewellery or other valuable article or thing, seized or requisitioned under section 132 or under section 132A in case of any other person on or after the 1st day of April, 2021, belongs to the assessee; or 13
(iv) the Assessing Officer is satisfied, with the prior approval of Principal Commissioner or Commissioner, that any books of account or documents, seized or requisitioned under section 132 or section 132A in case of any other person on or after the 1st day of April, 2021, pertains or pertain to, or any information contained therein, relate to, the assessee, the Assessing Officer shall be deemed to have information which suggests that the income chargeable to tax has escaped assessment in the case of the assessee for the three assessment years immediately preceding the assessment year relevant to the previous year in which the search is initiated or books of account, other documents or any assets are requisitioned or survey is conducted in the case of the assessee or money, bullion, jewellery or other valuable article or thing or books of account or documents are seized or requisitioned in case of any other person. Explanation 3.—For the purposes of this section, specified authority means the specified authority referred to in section 151.”
Conducting inquiry, providing opportunity before issue of notice under section 148-
“148A. The Assessing Officer shall, before issuing any notice under section 148,—
(a) conduct any enquiry, if required, with the prior approval of specified authority, with respect to the information which suggests that the income chargeable to tax has escaped assessment;
(b) provide an opportunity of being heard to the assessee, with the prior approval of specified authority, by serving upon him a notice to show cause within such time, as may be specified in the notice, being not less than seven days and but not exceeding thirty days from the date on which such notice is issued, or such time, as may be extended by him on the basis of an application in this behalf, as to why a notice under section 148 should not be issued on the basis of information which suggests that income chargeable to tax has escaped assessment in his case for the relevant assessment year and results of enquiry conducted, if any, as per clause (a);
(c) consider the reply of assessee furnished, if any, in response to the showcause notice referred to in clause (b);
(d) decide, on the basis of material available on record including reply of the assessee, whether or not it is a fit case to issue a notice under section 148, by passing an order, with the prior approval of 14
Kineta Global Limited vs. DCIT specified authority, within one month from the end of the month in which the reply referred to in clause (c) is received by him, or where no such reply is furnished, within one month from the end of the month in which time or extended time allowed to furnish a reply as per clause (b) expires:
Provided that the provisions of this section shall not apply in a case where,—
(a) a search is initiated under section 132 or books of account, other documents or any assets are requisitioned under section 132A in the case of the assessee on or after the 1st day of April,
2021; or (b) the Assessing Officer is satisfied, with the prior approval of the Principal Commissioner or Commissioner that any money, bullion, jewellery or other valuable article or thing, seized in a search under section 132 or requisitioned under section 132A, in the case of any other person on or after the 1st day of April, 2021, belongs to the assessee; or (c) the Assessing Officer is satisfied, with the prior approval of the Principal Commissioner or Commissioner that any books of account or documents, seized in a search under section 132 or requisitioned under section 132A, in case of any other person on or after the 1st day of April, 2021, pertains or pertain to, or any information contained therein, relate to, the assessee.
Explanation.—For the purposes of this section, specified authority means the specified authority referred to in section 151.”
Time limit for notice-
“149. (1) No notice under section 148 shall be issued for the relevant assessment year,—
(a) if three years have elapsed from the end of the relevant assessment year, unless the case falls under clause (b);
(b) if three years, but not more than ten years, have elapsed from the end of the relevant assessment year unless the Assessing
Officer has in his possession books of account or other documents or evidence which reveal that the income chargeable to tax, represented in the form of asset, which has escaped assessment amounts to or is likely to amount to fifty lakh rupees or more for that year:

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

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Director General, Chief Commissioner or Director General, if more than three years have elapsed from the end of the relevant assessment year.”

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

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

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

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

(v) The present order shall substitute/modify respective judgments and orders passed by the respective High Courts quashing the similar notices issued under unamended section 148 of the IT Act

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9. There is a broad consensus on the aforesaid aspects amongst the learned ASG appearing on behalf of the Revenue and the learned Senior Advocates/learned counsel appearing on behalf of the respective assessees.

We are also of the opinion that if the aforesaid order is passed, it will strike a balance between the rights of the Revenue as well as the respective assesses as because of a bonafide belief of the officers of the Revenue in issuing approximately 90000 such notices, the Revenue may not suffer as ultimately it is the public exchequer which would suffer.

Therefore, we have proposed to pass the present order with a view avoiding filing of further appeals before this Court and burden this Court with approximately 9000 appeals against the similar judgments and orders passed by the various High Courts, the particulars of some of which are referred to hereinabove. We have also proposed to pass the aforesaid order in exercise of our powers under Article 142 of the Constitution of India by holding that the present order shall govern, not only the impugned judgments and orders passed by the High Court of Judicature at Allahabad, but shall also be made applicable in respect of the similar judgments and orders passed by various High Courts across the country and therefore the present order shall be applicable to PAN INDIA.

(i) The impugned section 148 notices issued to the respective assessees which were issued under unamended section 148 of the IT Act, which were the subject matter of writ petitions before the various respective High Courts shall be deemed to have been issued under section 148A of the IT Act as substituted by the Finance Act, 2021 and construed or treated to be showcause notices in terms of section 148A(b). The assessing officer shall, within thirty days from today provide to the respective assessees information and material relied upon by the Revenue, so that the 21
Kineta Global Limited vs. DCIT assesees can reply to the showcause notices within two weeks thereafter;

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

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

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

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Courts particulars of which are mentioned hereinabove, shall stand modified/substituted to the aforesaid extent only.

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

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

(emphasis supplied by us)

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Kineta Global Limited vs. DCIT with the same. We say so, for the reason that as the “proviso” to section 151 of the Act (as was then available on the statute) inter alia, contemplating the exclusion of the time period allowed to the assessee, as per show cause notice issued under clause (b) of section 148A, as mentioned in the “fifth proviso” to section 149 of the Act, had been made available on the statute vide Finance Act, 2023, w.e.f. 01/04/2023, therefore, the same cannot be applied to the subject year before us.
18. At this stage, we may herein observe that our aforesaid view that in a case where a period of more than three years have elapsed from the end of the relevant assessment year, then, approval for issuing the notice under section 148 of the Act has to be taken from the Principal
Chief
Commissioner or Principal
Director
General or Chief
Commissioner or Director General for issuing the notice under section 148 of the Act is supported by the recent judgment of the Hon’ble
Civil Writ Petition No. 4061 of 2024, dated 25/09/2025. For the sake of clarity, we deem it apposite to cull out the observations of the Hon’ble juri ictional High Court in the case of Deloitte Consulting India Private
Limited vs. The Assessment Unit, Income Tax Department (supra), as under:

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“48. The proviso to Section 151 has been introduced by the Finance Act, 2023
with effect from 01.04.2023. The relevant Section 151 with its proviso is applicable to the case of the petitioner is quoted hereunder:
151. Sanction for issue of notice:- Specified authority for the purposes of Section 148 and Section 148A shall be,-
(i) Principal Commissioner or Principal Director or Commissioner or Director, if three years or less than three years have elapsed from the end of the relevant assessment year;
(ii) Principal Chief Commissioner or Principal Director General or Chief
Commissioner or Director General, if more than three years have elapsed from the end of the relevant assessment year:
Provided that the period of three years for the purposes of clause (i) shall be computed after taking into account the period of limitation as excluded by the third or fourth or fifth provisos or extended by the sixth proviso to sub-section (1) of Section 149. 49. In the present case, the order under Section 148A(d) and notice under Section 148 have been issued on 07.04.2022 relatable to the relevant
Assessment Year 2018- 19 i.e., after more than three years from the end of the relevant assessment year. The approval before passing the order under Section 148A(d) of the Act and before issuing of notice under Section 148 of the Act has been taken from the Principal Commissioner of Income Tax by the respondent No.1, which is permissible only if three years or less than three years have lapsed from the end of the relevant assessment year. In the present case, the relevant three years lapsed on 31.03.2022. Therefore, the prior approval of the Principal Chief
2023 with effect from 01.04.2023. In taxing statutes, intendment cannot be assumed unless specifically expressed in the provision enacted by the legislature. Therefore, the reopening of assessment without sanction/approval of the specified authority in accordance with Section 151 of the Act was bad in law. Consequently, reassessment order dated
16.01.2024 also is bad in law.”
(emphasis supplied by us)

Copy to:

S.No Addresses
1
Kineta Global Limited, Plot No. 566, Road No. 31, Jubilee
Hills, Hyderabad, Telangana-500034. 2
Deputy Commissioner of Income Tax, Circle-2(1), R. No.
514, 5th Floor, Signature Towers, Hyderabad, Telangana.
3
The Pr. CIT, Hyderabad.
4
The DR, ITAT Hyderabad Benches
5
Guard File

By Order

Sr. Private Secretary,
ITAT, Hyderabad.