ACE TYRES PRIVATE LIMITED,HYDERABAD vs. ACIT., CENTRAL CIRCLE-1(2), HYDERABAD

ITA 1084/HYD/2025Status: DisposedITAT Hyderabad24 September 2025AY 2014-1578 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal noted that grounds 1 and 2 were general and no arguments were advanced by the assessee. Regarding grounds 2 to 7, which challenged the validity of the reassessment proceedings initiated by issuing notice u/s 148, the assessee contended that the incriminating material was found from the laptop of a third party, Sri Ramesh Kumar Sanaka, and not from the assessee's possession. Therefore, the condition in clause (iv) of Explanation-2 to Section 148 was not satisfied. The assessee also argued that since the material was found from a third person, the Assessing Officer needed to record satisfaction and obtain prior approval from the Pr. CIT before issuing the notice u/s 148. The Tribunal observed that the learned counsel for the assessee relied on Supreme Court judgments. The judgment excerpt provided does not contain the Tribunal's findings or decision on these grounds, nor does it detail the revenue's arguments or the final outcome of the appeal. Therefore, the specific holdings, reasoning, ratio, and operative directions for these grounds are not available in the provided text.

What were the facts?

The assessee, M/s ACE Tyres (P) Ltd, along with other group companies, was subjected to search and seizure operations on January 4, 2023. During the search at the residential premises of the Senior Accounts Manager, Sri Sanaka Ramesh Kumar, loose sheets, promissory notes, Excel sheets, and a laptop containing FOCUS 5.5 software were seized. This software reportedly contained details of unaccounted cash receipts and expenditures for several financial years. The Managing Director of the group admitted unaccounted income of Rs. 107.63 crores for the three companies, with Rs. 42.15 crores attributed to the appellant company. For the assessment year 2014-15, the appellant admitted Rs. 1.13 crores, but the Assessing Officer made an additional addition of Rs. 0.27 lakhs. The assessee appealed to the CIT(A), who dismissed legal grounds regarding the validity of the Section 148 notice but granted partial relief on factual grounds, sustaining an addition of Rs. 0.07 lakhs. The assessee is now appealing to the ITAT.

What were the issues?

1. Whether the issuance of notice u/s 148 by the Assessing Officer was without jurisdiction, bad in law, and void ab initio due to non-fulfillment of conditions under Section 148 and Section 149 of the Income Tax Act, 1961? (Mixed law and fact) 2. Whether the assessment order passed u/s 143(3) r.w.s. 148 is vitiated because the approval u/s 148B was accorded mechanically? 3. Whether the sanction under Section 151 of the Act was granted mechanically and without proper satisfaction, rendering the notice u/s 148 bad in law? (Mixed law and fact) 4. Whether the Learned CIT(A) was justified in sustaining the addition of Rs. 7,35,052/-? Assessee's Contentions: - The material seized from the laptop of Sri Ramesh Kumar Sanaka cannot be considered as books of account or documents seized from the assessee's possession, thus not satisfying Explanation-2 to Section 148. - The material was found from a third person under a separate authorization, requiring the Assessing Officer to record satisfaction and obtain prior approval from the Pr. CIT before issuing the Section 148 notice. - The issuance of notice u/s 148 was bad in law as the Assessing Officer failed to fulfill prescribed conditions under Sections 148 and 149. - Sanction under Section 151 was granted mechanically without proper satisfaction. - Relied on Chandra Kishore Jha vs. Mahaveer Prasad and Cherrukuri Mani v. Chief Secretary, Govt. Revenue's Contentions: - No specific arguments were recorded for the revenue on these grounds in the provided excerpt.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 147,Section 148,Section 148B,Section 149,Section 151

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Cases cited in this judgment(6)Show list

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Income Tax Appellate Tribunal, Hyderabad DB-B‘ Bench, Hyderabad

Before: Shri Vijay Pal Rao, Vice- & Shri Manjunatha, G.

For Appellant: Shri M.V.Prasad, CA
For Respondent: Dr. Sachin Kumar, Sr. AR
Hearing: 02/09/2025

Per Vijay Pal Rao, Vice President

These six appeals by the assessee are directed against the six separate orders dated 29/05/2025, 30/05/2025, 04/06/2025, 096/06/2025, 17/06/2025 and 14/07/2025 of the learned CIT (A)-11, Hyderabad arising from the assessment order passed u/s 143(3) r.w.s. 147 of the Act, pursuant to the search & seizure operations u/s 132 of the Act, dated 04/01/2023 in case of Exel Group of Companies including the assessee for the A.Ys 2014-15 to 2019-20 respectively. Since common issues are raised in these gro

The order continues below.

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