VIJAY KUMAR KAMDAR,HYDERABAD vs. ITO., WARD-1, ADILABAD

“The order of the Appellate Commissioner is contrary to low, facts and circumstances of the case

The Appellate Commissioner erred in confirming the order passed us.147 rws 144B is bad in law and deserves to be quashed

The Appellate Commissioner erred in confirming the notice u/s.148A(b) issued on 03/03/2023, as on the day of issue of notice, the AG. did not have any information and the information was gathered subsequent to the issue of notice

The Appellate Commissioner erred in confirming the issue of notice u/sec.148A(b) issued on 03.03.2023 as it is without juri iction, as it has been issued by the Juri ictional A.O Ward-1, Adilabad, Telangana

The Appellate Commissioner ought to have seen that the Juri ictional A.O. Ward-1, Adilabad, Telangana, has no juri iction to issue a notice u/s. 148A(d), after the introduction of "Faceless Juri iction of the income Tax Authority Scheme 2022 and as such the notice issued by the JAO needs to be quashed

The Appellate Commissioner erred in confirming the notice u/s 148 was issued on the presumption that no return was filed by the Assessee, and such presumption is wrong as the Assessee has filed his return of income on 27th of August, 2016. As the presumption itself is wrong the notice u/s.148 is void ab initio and needs to be struck down

The amount escaping of income, prescribed for reopening the assessment, under the new regime is more than Rs.50,00,000/-, if the assessment is beyond 3 years. In this case the assessment year is 2015-16 and was completed on a total income of Rs.15,84,838/- which is far below the amount of Rs.50,00,000/-. As such the notice is without juri iction and the Appellate Commissioner has erred in confirming the assessment order passed.

Without prejudice to the above grounds, the Appellate Commissioner erred in confirming the addition of an amount of Rs.15,84,838/- as commission income

Any other grounds which the Assessee may urge either before or at the time of the hearing

Grounds of appeal No.1 is general in nature and does not require any specific adjudication.

Grounds of appeal Nos.2 to 6 are regarding validity of the notice issued u/sec.148 of the Income Tax Act, 1961 [in short “the Act”] by the Juri ictional Assessing Officer [in short “JAO”] and consequently, vitiates the re-assessment order passed by the Assessing Officer.

Learned Authorised Representative for the Assessee CA A Srinivas has submitted that the Assessing Officer has issued notice u/sec.148A(b) of the Act on 03.03.2023. He has referred to the said notice and submitted that the JAO has issued the impugned notice u/sec.148A(b) of the Act instead of Faceless Assessing Officer and, therefore, the notice issued by the JAO is invalid as the JAO was not 4 ITA.No.618/Hyd./2025

The Learned DR for the Revenue, on the other hand, has submitted that this issue is pending adjudication before the Hon’ble Supreme Court of India in the case of Hexaware Technology Ltd., in the SLP filed by the Department against the Judgment of Hon’ble High Court of Bombay. Therefore, this issue

We have considered the rival submissions as well as relevant material on record. The Assessing Officer has issued notice u/sec.148A(b) of the Act on 03.03.2023 which reads as under :

1. Thus, it is clear that the said notice was issued by the Juri ictional Assessing Officer. Thereafter, the Assessing Officer passed an order u/sec.148A(d) dated 22.03.2023 by holding that “he has satisfied that it is a fit case for issue of notice u/sec.148 of the Act”. The same is reproduced as under:

2. Thereafter, the Assessing Officer has issued notice u/sec.148 of the Act dated 23.03.2023 which reads as under :

3. It is manifest from the above notice as well as the Order u/sec.148A(d) of the Act that these proceedings were conducted by the Juri ictional Assessing Officer and not in the Faceless manner as prescribed under the Income Tax Act. At the outset, we note that an identical issue has been considered by the Coordinate Bench of ITAT, Hyderabad in the 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 even date wherein the Tribunal in paras 5 to 5.2 of it’s Order held as under :

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 :

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 Juri ictional 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 :

It was further noted by the Hon’ble juri ictional 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 :

In light of various judgements of the Hon’ble High Courts, including the judgement of the juri ictional 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 :

Thus, it is clear that the issue raised by the assessee in the present appeal is now covered by the decision of Hon’ble Juri ictional 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 :

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. 16. 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, 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.

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 juri ictional High Court in the 24 ITA.No.618/Hyd./2025

4. Thus, it is clear that the Hon’ble Juri ictional High Court for the State of Telangana has taken a consistent view that the notice u/sec.148 of the Act by the Juri ictional Assessing Officer is not valid and liable to be set-aside/quashed. We, therefore, by respectfully following the Judgment of Hon’ble Juri ictional High Court for the State of 25 ITA.No.618/Hyd./2025

Further, since the issue is pending for adjudication before the Hon’ble Supreme Court in the SLP filed by the Department in the case of Hexaware Technology Ltd., against the Judgment of Hon’ble High Court of Bombay and the Order of Hon’ble Juri ictional High Court for the State of Telangana in the case of Kotha Kanthaiah, Karimnagar in WP.No.344 of 2025, dated 24.04.2025 (supra) has also given the liberty to the parties to move an appropriate petition seeking revival of the petition in light of Judgment of Hon’ble Supreme Court in the case of Hexaware Technology Ltd., (supra) on this issue. Therefore, we grant liberty to the parties to get this appeal revived, if the Judgment of Hon’ble Supreme

Since we have quashed the notice issued u/sec.148 of the Act and consequently, vitiates the re- assessment order passed by the Assessing Officer. Therefore, we do not propose to adjudicate the other grounds of appeal raised by the assessee on the merits of the additions.

In the result, appeal of the Assessee allowed.