RAMESH SISTLA,HYDERABAD vs. ITO., WARD-14(1), HYDERABAD

(निर्धारण वर्ा/Assessment Year: 2015-16) Shri Ramesh Sistla Vs. Income Tax Officer Hyderabad Ward 14(1) PAN: AEAPS7184M Hyderabad (Appellant) (Respondent) निर्धाररती द्वधरध/Assessee by: CA Y. V. Bhanu Narayan Rao रधजस् व द्वधरध/Revenue by: Dr.Narendra Kumar Naik, CIT(DR) सुिवधई की तधरीख/Date of hearing: 07/10/2025 घोर्णध की तधरीख/Pronouncement: 15/10/2025 आदेश/ORDER Per Madhusudan Sawdia, A.M.: This appeal is filed by Shri Ramesh Sistla (“the assessee”), feeling aggrieved by the order passed by the Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), New Delhi (“Ld. CIT(A)”), dated 25.10.2024 for the A.Y 2015-16.

1. On the facts and in the circumstances of the case, the impugned order u/s. 250 of the I.T. Act, 1961 passed by the learned CIT(A), NFAC, Delhi for the AY 2015-16 is bad in law and on the facts and in the circumstances of the case, weight of evidence and probabilities of the case.

2. On the facts and in the circumstances of the case, the learned CIT(A), NFAC, Delhi erred in upholding the act of the learned A.O. who erred in reopening the assessment on presumptions, surmises and mere suspicion and without following Standard operating procedure (SOP) for the AY 2015- 16, which act of the learned A.O is against the intention of legislature in introducing the provisions of section 147 of the Act.

3. On the facts and in the circumstances of the case, the learned CIT(A), NFAC, Delhi erred in upholding the act of the learned A.O. who did not accept the income as per the return of income filed on 17.05.2022 by the appellant in response to notice u/s. 148 issued on 07.05.2022 for the AY 2015-16.

4. On the facts and in the circumstances of the case, the learned CIT(A), NFAC, Delhi erred in upholding the act of the learned A.O. who erred by making the addition of cash deposits of Rs. 92,75,690/- by treating the same as unexplained money u/s. 69A of the Act for the AY 2015-16 based on surmises and assumptions.

5. On the facts and in the circumstances of the case, the learned CIT(A), NFAC, Delhi erred in upholding the act of the learned A.O. who erred by making the addition of Rs. 12,08,10,000/- by treating the major credits in the bank accounts as unexplained cash credits u/s. 68 of the Act for the AY 2015-16 based on surmises and assumptions, which is against the ratio laid down by the honorable Supreme Court in the case of Parimiseƫ Seetharamamma Vs. CIT reported in 57 ITR 532, wherein it has been held that in all cases in which a receipt is sought to be taxed as income, the burden lies upon the department to prove that it is within the taxing provisions.

6. On the facts and in the circumstances of the case, the learned CIT(A), NFAC, Delhi erred in upholding the act of the learned AO as the above addition of Rs. 13,00,85,690/- (Rs. 92,75,690/- u/s. 69A of the Act and Rs. 12,08,10,000/- u/s. 68 of the Act), which is bad in law as the learned A.O. invoked the provisions of section 69A of the Act and section 68 of the Act respectively without considering the fact that the appellant has not maintained any books of accounts and by erroneously treating the bank statements as books of accounts for the AY 2015-16.

7. On the facts and in the circumstances of the case, the learned CIT(A), NFAC, Delhi erred in upholding the act of the learned A.O. who erred by invoking provisions of section 115BBE of the Act and levying tax under said section on the addition of Rs. 13,00,85,690/- and further erred by determining the tax payable at Rs. 12,64,58,072/- u/s. 115BBE of the Act inclusive of a total interest of Rs. 8,22,41,946/- (being Rs. 3,58,15,041/- u/s. 234A and Rs. 4,64,26,905/- u/s. 234B) for the AY 2015-16. 8. On technical grounds, the order u/s. 148A(d) of Act for the A.Y. 2015-16 dated 07.04.2022 vide DIN no. ITBA/AST/F/148A/2022-23/1042634427(1) and the consequential notice u/s 148 dated 07.04.2022 vide DIN ITBA/AST/S/148_1/2022- 23/1042641020(1) are passed/issued by the jurisdictional Assessing officer instead of the Faceless A.O. which is contrary to the e-assessment of Income Escaping Assessment Scheme, 2022, read with CBDT notification no. 18/2022/F.No. 370142/16/2022- TPL dated 29.03.2022 and thus all the proceedings emanating from such invalid notice and order are bad in law and null & void and are liable to be quashed.

9. On the facts and in the circumstances of the case, the assessment order passed for the A.Y. 2015-16 u/s. 147 r.w.s. 144B issued is bad in law and lacks jurisdiction in view of the recent judgement of honorable jurisdictional High Court of Telangana in Writ Petition Nos.25903, 28214, 28271, 32075, 32090, 32688, 33050, 33402, 33478, 34100, 34101, 34340, 34598, 34604, 34661, 34698, 34746, 34836, 35774, 36598, 36828, 36945, 37414, 37491, 37536, 43427, 45047 of 2022, Writ Petition Nos. 15383, 47, 3719, 3721, 3729, 3738, 9695, 11599, 14485, 14492, 15421, 15736, 15745, 15768, 15779, 16164, 16223, 16224, 16761, 16783, 19966, 20914, 20929, 20959 and 23556 of 2023, wherein it has been held that as per the amended provisions w.e.f 1.4.2021 notices u/s 148 can be only given by the officers of the faceless assessment unit and as such the notice u/s 148 issued by the Jurisdictional Assessing Officer is without Jurisdiction. Hence, the income determined/additions made by the learned A.O. by way of an invalid assessment needs to be deleted and the demand raised also needs to be deleted.

10. The appellant craves leave to add, to amend or modify the above grounds of appeal either before or at the time of hearing of the appeal, if considered necessary.”

4. The brief facts of the case are that the assessee is an individual who had not filed any return of income under section 139 of the Income Tax Act, 1961 (“the Act”). The Learned Assessing Officer (“Ld. AO”), based on the information available with him, issued a notice under section 148 of the Income Tax Act, 1961 (“the Act”) to the assessee on 07.04.2022, after passing an order under section 148A(d) of the Act on the same date. In response to the said notice issued under section 148 of the Act, the assessee filed a return of income on 17.05.2022 declaring total income of Rs.8,540/-. During the course of assessment proceedings, the assessee partially complied with the notices issued under section 142(1) of the Act; however, there was no Page 4 of 27 compliance to the show-cause notice issued on 28.11.2023. Consequently, the Ld. AO completed the assessment under section 147 read with section 144B of the Act on 20.12.2023, making additions of Rs.92,75,690/- under section 69A of the Act and Rs.1,20,81,000/- under section 68 of the Act, thereby determining the total income at Rs.13,00,94,230/-.

5. Aggrieved by the assessment order of the Ld. AO, the assessee filed an appeal before the Ld. CIT(A). However, since the assessee repeatedly sought adjournments in response to notices issued by the Ld. CIT(A), the appeal was dismissed by the Ld. CIT(A) for non-prosecution.

, i.e. challenging the validity of the notice issued under section 148 of the Act and the order passed under section 148A(d) of the Act. He submitted that both the notice and the order were issued by the Jurisdictional Assessing Officer (“JAO”) instead of the Faceless Assessing Officer (“FAO”), which is contrary to the scheme of faceless reassessment introduced by the CBDT.

7. The Ld. AR invited our attention to the order under section 148A(d) dated 07.04.2022 and the notice issued under section 148 of the Act on the same date. He demonstrated that both documents clearly bear the name and designation of the JAO. It was submitted that the CBDT Notification No. 18/2022 Page 5 of 27 dated 29.03.2022, issued under section 151A(1) and (2) of the Act, mandates that with effect from 29.03.2022, all notices under section 148 of the Act must be issued through the Faceless Assessment Unit. Relying on various decisions of the Coordinate Benches of the Tribunal and Hon’ble High Courts, the Ld. AR argued that when a notice is issued by an authority having no jurisdiction in law, such notice is void ab initio, and all consequential proceedings stand vitiated. He therefore submitted that the notice issued under section 148 of the Act and the consequent assessment order passed under section 147 read with section 144B of the Act are bad in law and liable to be quashed.

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10. On perusal of para no.4 of the above, it is clear that the notice under section 148A(b) of the Act was issued by JAO on 23.03.2022. It is also evident that the order under section 148A(d)

Page 8 of 27 of the Act was passed by JAO on 7.4.2022. Further, we have carefully examined the CBDT Notification No. 18/2022 dated 29.03.2022, issued in exercise of power conferred under section 151A(1) and (2) of the Act, which is to the following effect:

11. On perusal of para no. 3(b) of the said notification, it is evident that any notice under section 148 of the Act issued on or after 29.03.2022 shall be issued in accordance with the Faceless Assessment Scheme by the FAO. In this regard, we have also gone through the notice issued under section 148 of the Act, which is to the following effect:

“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. 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 :

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13. In light of various judgements of the Hon’ble High Courts, including the judgement of the jurisdictional High Court in the case of Kankanala Ravindra Reddy Vs. Income Tax Officer [2024] 156 taxmann.com 178 (Telangana), the Hon’ble High Court has held in para 13 to 19 as under :

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14. 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 :

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.

Page 26 of 27 Accordingly, appeal of the assessee is allowed in terms of our above observation.