GANGARAM REDDY TEKULAPALLI,HYDERABAD vs. ITO., INT TAXN- 2, HYDERABAD

PER MANJUNATHA G. :

The above appeals are filed by the two different assessee’s viz., Gangaram Reddy Tekulapalli and Smt.
Haripriya Tekulapalli who were husband and wife against the Order dated 26.06.2024 of the learned Commissioner of Income Tax-(Appeals)-10, Hyderabad and arises out of the 2
ITA.Nos.786 & 787/Hyd./2024

Final Assessment order passed by the Assessing Officer dated 02.11.2023 passed u/sec.147 r.w.s.144C(13) of the Income Tax Act, 1961 [in short “the Act”] pursuant to the directions of Disputes Resolution Panel [in short “the DRP”],
Bengaluru, dated 01.11.2023 passed u/sec.144C(5) of the Act, relating to assessment year 2014-2015. Since common issues are involved in both these appeals, these appeals were heard together and are being disposed of by this single consolidated order for the sake of convenience and brevity.
First, we take-up appeal ITA.No.786/Hyd./ 2024 in the case of Gangaram Reddy Tekulapalli and both the parties are agreed to that the decision taken in this appeal be applicable in appeal ITA.No.787/Hyd./ 2024. ITA.No.786/Hyd./2024 – A.Y. 2014-2015 :

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No.297/EE situated at Puppalguda (v), Rajendranagar (M),
Ranga
Reddy
District, for a total consideration of Rs.29,50,000/- and Rs.75,00,000/-. Since the assessee failed to disclose any income from capital gains on sale of the above mentioned properties, the assessment was reopened u/sec.147 of the Act by the Assessing Officer and notice u/sec.148 of the Act was issued and served upon the assessee on 26.03.2021. Since, there were no response from the side of the assessee, the Assessing Officer issued statutory notice u/sec.142(1) of the Act on 08.03.2022
calling the assessee to furnish his explanation. In response to the said notice, the assessee submitted computation of income, sale deed and passport copy. In case of assessee’s wife Smt. Haripriya Reddy also assessment proceedings u/sec.147 of the Act are pending. The Assessing Officer noted that she along with her husband had purchased a property i.e.,
Flat
No.603,
6th
Floor,
Tower-2LH admeasuring 3141 sft. in Survey No.201 of Manikonda Jagir
Village, Rajendra Nagar Mandal, Ranga Reddy District for a total consideration of Rs.1,07,23,955/- along with 4
ITA.Nos.786 & 787/Hyd./2024

registration charges, stamp duty, transfer duty, user charges of Rs.8,04,497/- totalling to Rs.1,15,28,452/-. The Assessing Officer after considering the submissions of the assessee computed the long term capital gain at Rs.68,06,390/- in the hands of Gangaram
Reddy
Tekulapalli and Rs.1,36,12,780/- in the hands of Smt.
Haripriya Tekulapalli by proposing to make the addition @
½ share in each hands of these two assessee’s at Rs.68,06,390/- and Rs.68,06,390/- respectively, u/sec.54F of the Act vide order both dated 02.11.2023 passed u/sec.147 r.w.s.144C(13) of the Act. The Assessing Officer while passing the above draft assessment order noted that since the assessee is an NRI and as per the provisions of Sec.144C(15) being an “eligible assessee”, Draft assessment order u/sec.144C needs to be issued to the assessee and accordingly, a draft order was issued to these two assessee’s on 15.03.2023. 3. Aggrieved by the above proposed additions under the head “Long term capital gains” by the Assessing Officer, the assessee has opted for filing objections before the 5
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Disputes Resolution Panel [in short “DRP”], Bangalore vide application dated 26.04.2023. The DRP after hearing the objections of the assessee, was of the opinion that the assessee ought to have file his objections against each such proposed variations in the Draft Assessment order within 30
days in prescribed Form-35A before it and the assessee had furnished Form-35A on 26.04.2023 after the prescribed time limit of 30 days and accordingly dismissed the objections of the assessee vide it’s directions dated
01.11.2023 u/sec.144C(5) of the Act.

the ground that, against the directions of DRP the appeal lies with the Income Tax Appellate Tribunal and he lacks juri iction. Accordingly, the learned CIT(A) dismissed the appeal of the assessee in limine.

decide the ground nos.6 and 7 of assessee’s appeals alone and grounds of appeal nos.6 and 7 of assessee’s appeal in ITA.No.786/Hyd./2024 reads as under :

“6. The learned AO erred in law in passing an order of assessment without issuing notice under section 143(2) of Income Tax Act, 1961. 7. The learned AO has erred in law in not following Provisions of section 130, 144B and 153A of Income Tax Act, along with CBDT Circular's dated 28.03.2022 and 29.03.2022
mandating reassessment proceedings only in faceless manner. Appellant places reliance on the decision of the Telangana High Court in the batch of Writ Petition
No.25903, in the matter of Ravindra Reddy and others dated 14.09.2023.”

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the Faceless Assessment Scheme 2019 shall be passed by the National Assessment Centre through the Faceless
Assessment Scheme 2019, except, as provided herein in respect of assessment orders in cases assigned to central charges and assessment orders in cases assigned to international tax charges. The above Circular No.187/2020
is restricted only with respect to assessment orders and not for issuance of notice under section 148 of the Act which is governed by sec.151A of the Act, which mandates issue of notice under section 148 of the Act in faceless manner. He further submitted that, the Central Government to give effect to the Faceless Assessment Scheme as per section 151A of the Act has issued a Notification dated 29.03.2022
and as per the said Notification, issuance of notice under section 148 of the Act, shall be through automated allocation, in accordance with risk management strategy formulated by the Board as referred to in section 148 of the Act for issuance of notice and in a faceless manner to the extent provided in section 144B of the Act. Since, notice issued under section 148 of the Act by the juri ictional

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Assessing Officer i.e., Income Tax Officer, International
Taxation-2, Hyderabad, which is contrary to the provisions of section 151A of the Act and Notification issued by the CBDT is illegal, void abinitio and liable to be quashed. In this regard, he relied upon the decision of Hon'ble High
Court of Telangana in the case of S. Venkata Ramana Reddy
Patloola vs., DCIT, Circle-1(1), Hyderabad in Writ Petition
Nos.13353, 16141 and 16877 of 2024 Judgment dated
24.07.2024. 8. Learned
Counsel for the Assessee further referring to ground no.7 of the assessee’s appeal submitted that, the Assessing Officer has failed to issue notice u/sec.143(2) of the Act before completion of the assessment, which render the assessment order illegal, void abinitio and liable to be quashed. Learned Counsel for the Assessee referring to the decision of ITAT, Hyderabad A-Bench,
Hyderabad in the case of Jahangir Syed, Hyderabad vs.,
ITO, Ward-8(2), Hyderabad in ITA.No.646/Hyd./2023 dated
30.06.2025 submitted that, once an assessee filed his return of income, in response to notice issued under section 10
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148 of the Act, even if belated, it is the duty of the Assessing
Officer to issue notice u/sec.143(2) of the Act as mandated under the law and in case, the assessment has been completed without issuing statutory notice under section u/sec.143(2) of the Act, then, the said assessment order become illegal and liable to be quashed. In this regard he relied upon decision of Hon'ble Supreme Court in the case of ACIT vs., Hotel Blue Moon [2010] 321 ITR 362 (SC).

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under section 148 of the Act dated 26.03.2021 and Notification issued by the CBDT dated
29.03.2022
submitted that, the CBDT in order to give effect to the provisions of section 151A of the Act, has issued Notification for the purpose of Faceless Assessment, Re-assessment or Re-computation and as per the said Notification, issuance of notice u/sec.148 of the Act shall be through automated allocation and in a faceless manner to the extent provided in section 144B of the Act. Since the Notification of the CBDT is came into effect from the date of Gazette i.e., on 29.03.2022, issuance of notice by the Faceless Assessing
Officer as provided under section 144B of the Act, is not applicable to the present case. In this case, notice under section 148 of the Act has been issued before the Scheme was notified by the CBDT on 29.03.2022. Therefore, he submitted that, there is no merit in the ground taken by the assessee on this issue and thus, the same should be rejected.

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assessee has not filed return of income, in response to notice under section 148 of the Act, within the time allowed under the said notice, then, the question of issuance of notice u/sec.143(2) of the Act does not arise. In this regard, he relied upon decision of Hon'ble High Court of Jammu and Kashmir in the case of Pr.CIT vs., Broadway Shoe
Company in ITA.No.10/2017, Order dated 11.10.2019. Learned Counsel for the Assessee further referring to third proviso to section 148 of the Act submitted that, any return of income required to be furnished by an assessee under this section and furnished beyond the period allowed in the said notice, shall not be deemed to be a return under section 139 of the Act. Once the return of income is not furnished within the time allowed under the notice issued under section 148 of the Act, then, issuance of notice under section u/sec.143(2) of the Act is not required because, as per sec.143(2) of the Act, where return has been furnished under section 139, or in response to notice under sub- section (1) of section 142, the Assessing Officer, if, considers it necessary or expedient to ensure that the assessee has 13
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not understated the income or has not computed excessive loss or has not under-paid the tax in any manner, shall serve on the assessee a notice requiring him, to produce or cause to be produced any evidence on which the assessee may rely in support of the return. Since, the assessee has not filed return of income on or before the due date under section 139 or notice issued under section u/sec.148 of the Act, the Assessing Officer is not necessary to issue notice u/sec.143(2) of the Act and thus, the arguments of the Counsel for the Assessee lacks merit and needs to be rejected.

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Assessing Officer is contrary to provisions of section 151A and Notification of the CBDT. We find that, provisions of section 151A has been inserted by the Taxation and Other
Laws [Relaxation and Amendment of Certain Provisions] Act,
2020 [in short “TOLA”] w.e.f. 01.11.2020. As per section 151A(1), the Central Government may make a Scheme, by Notification in the Official Gazette, for the purpose of assessment, re-assessment or re-computation under section 147 or issuance of notice under section 148 or sanction for issue of such notice under section 151, so as to impart greater efficiency, transparency and accountability. Sub- section (2) of sec.151A makes it clear that, the Central
Government may, for the purpose of giving effect to the Scheme made under sub-section (1), by Notification in the Official Gazette, direct that any of the provisions of this Act shall not apply or shall apply with such exceptions, modifications and adaptations as may be specified in the notification, provided that no direction shall be issued after.
31st day of March 2022. Further to give effect to the Faceless Assessment of Income Scheme of as per section 15
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151A of the Act, the CBDT vide Notification dated
29.03.2022 formulated a Scheme for issue of notice in faceless manner to the extent provided in section 144B of the Act and such notification has been issued on 29.03.2022 in the Official Gazette. Before that, as per notification issued by the CBDT dated 13.08.2020 and 06.09.2021, the Faceless Assessment of income in respect of cases assigned to Central Charges or International Tax
Charges are, excluded from the Scheme of Faceless
Assessment. In otherwords, before issue of Notification dated 29.03.2022, issue of notice u/sec.148 or assessment of income of an assessee assessable under international tax charges is not mandated through Faceless Assessment
Scheme. Only upon issue of Notification dated 29.03.2022, it was mandatory to issue notice u/sec.148 of the Act through Automated Allocation in accordance with Risk
Management Strategy Formulated by the Board as referred to in sec.148 for issue of notice in a Faceless manner to the extent provided u/sec.144B of the Act. In the present case, admittedly, notice u/sec.148 of the Act was issued on 16
ITA.Nos.786 & 787/Hyd./2024

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Assessment Scheme, even though, the Faceless Assessment was notified by the CBDT on 29.03.2022. Therefore, under those facts, the Hon’ble High Court for the State of Telangana has held that, notice issued by juri ictional
Assessing Officer without following the Faceless Assessment
Scheme is void abinitio and liable to be quashed. In the present case, since the notice under section 148 of the Act was issued prior to notification of the Faceless Assessment
Scheme, in our considered view, the case law relied upon by the Learned Counsel for the Assessee does not apply and thus, rejected. Therefore, we are of the view that, there is no merit in the arguments of the Counsel for the Assessee in light of ground no.6 and thus, ground no.6 of assessee’s appeal is rejected.

been furnished under section 139 or in response to notice under sub-section (1) of section 142, the Assessing Officer as the case may be, if considers it necessary or expedient to ensure that the assessee has not understated the income, shall serve on the assessee a notice requiring him, on a date specified therein, either to attend the office of the Assessing
Officer or to produce or cause to be produced before the Assessing Officer any evidence on which the assessee may rely in support of the return. As per the plain reading of section 143(2) of the Act, notice u/sec.143(2) of the Act is required to be issued only in a case, where a return has been furnished under section 139 or in response to notice under section 142(1) of the Act. Further, third proviso to section 148 of the Act, deals with return of income and as per the said proviso, any return of income required to be furnished by an assessee under this section and furnished beyond the period allowed shall not be deemed to be a return filed under section 139 of the Act. On a conjoint reading of section 143(2) r.w.s.148 of the Act and third proviso provided therein, the requirement of issuance of 19
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notice u/sec.143(2) of the Act arise only in a case where the return of income has been furnished under section 139 of the Act or within the due date provided in the notice issued under section 148 of the Act or notice issued under section 142(1) of the Act.

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In the present case, although, the Assessing Officer has taken into account the return of income filed by assessee on 07.09.2022 in response to notice under section 142(1) of the Act dated 30.06.2022 and subsequently on 16.09.2022, but, failed to issue statutory notice as required u/sec.143(2) of the Act. Therefore, in our considered view, the assessment order passed by the Assessing Officer without issuing statutory notice under section u/sec.143(2) of the Act, is bad in law and liable to be quashed. This legal principal is supported by the decision of Hon’ble Supreme Court in the case of ACIT vs., Hotel Blue Moon (supra), where it was held that, the Assessing Officer pursuant to return of income filed by the assessee remains under the statutory obligation to issue notice under section u/sec.143(2) of the Act for framing the assessment”.

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(supra), where under identical set of facts, the Tribunal has held as under :

“12. 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 them to drive home their respective contentions.
13. The controversy involved in the present appeal lies in a narrow compass, i.e., whether the assessment framed by the A.O. u/s 143(3) r.w.s. 147 of the Act, dated 31.12.2019, in the absence of any notice issued u/s 143(2) of the Act, in the backdrop of the return of income filed by the assessee on 11.12.2019 is sustainable in the eyes of law?
14. We shall first deal with the Ld. DR’s contention that as the assessee had delayed the filing of his return of income in compliance to the notice issued under Section 148 of the Act, dated 27.03.2019 i.e. filed the same beyond the prescribed period of 30 days on 11.12.2019, therefore, the A.O. had rightly refrained from issuing notice u/s 143(2) of the Act, and had framed the assessment vide his order passed under Section 143(3) r.w.s. 147 of the Act, dated 31.12.2019. 15. It is a matter of fact borne from the record that the assessee pursuant to the notice u/s 148 of the Act, dated
27.03.2019, had filed his “return of income” beyond the prescribed period of 30 days i.e. on 11.12.2019. Admittedly, the A.O. not only in his order passed u/s 143(3) r.w.s. 147 of the Act, dated 31.12.2019 specifically mentioned that the assessee had filed his return of income for the subject year, but also had, inter

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alia, while quantifying the assessed income considered the “income from other sources” of Rs.3,47,921/- that was declared by the assessee in the said return of income. We are of the firm conviction, that merely for the reason that the assessee had delayed the filing of his “return of income” in compliance to the notice u/s. 148 of the Act, dated 27.03.2019, and had filed the same on 11.12.2019, i.e. after the lapse of the prescribed period allowed in the aforesaid notice, the same could by no means form a basis for treating the said “return of income” as invalid.
Our aforesaid conviction is fortified by the fact that in case of a delay involved in filing the “return of income” in compliance to the notice under Section 148 of the Act, i.e. furnishing of the same after the prescribed period, the assessee is visited with the levy of interest for the delayed period u/s. 234A of the Act. On a bare perusal of Section 234A(3) of the Act, it transpires that though the said statutory provision contemplates that the delay involved in the filing of a “return of income” in response to the notice under Section 148, i.e. furnished after the “due date” is to be subjected to levy of interest, but the same in no way provides that the “return of income” so filed is to be held as invalid. Our aforesaid view is fortified by the order of the ITAT, Mumbai in the case of Smt. Amina Ismil Rangari Vs. ITO, Ward-17(2)(4), ITA
No.6261/Mum/2013 dated 15.09.2017. In the aforesaid case, the assessee's claim for exemption u/s. 54F of the Act was declined by the A.O., for the reason that the same was raised in the “return of income” that was filed u/s. 148 of the Act beyond the specified period. The A.O. was of the view that as the “return of income” filed in compliance to the notice u/s. 148 of the Act was not a valid "return of income", thus, the assessee was not entitled to the claim of exemption u/s. 54F of the Act as was raised by her. On appeal, the aforesaid view of the A.O. was 23
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vacated by the Tribunal. It was observed that the “return of income” filed by the assessee beyond the specified period contemplated in the notice u/s. 148 of the Act would though lead to characterizing the same as a “return of income” filed beyond the prescribed period, but the same would not cease to be a “return of income” filed in response to the notice u/s. 148 of the Act. Also, we find that our aforesaid view is fortified by the judgment of the Hon'ble High Court of Kerala in the case of The Chirakkal Service Co-operative Bank Ltd. Vs. The Commissioner of Income Tax, (2016) 384 ITR 490 (Ker). The indulgence of the Hon'ble High Court was, inter alia, sought for adjudicating the following substantial question of law.
“Whether the return filed by the assessee beyond the period stipulated u/s 139(1)/139(4) or Section 142(1)/148 can be held as non-est in the eyes of law and has invalidated for the purpose of deciding exemption u/s 80P of the Income Tax Act, 1961 ?”
The Hon'ble High Court answered the aforesaid issue, and held, that the “return of income” filed by the assessee beyond the period stipulated under Section 139(1) or Section 139(4) or Section 142(1) or Section 148 can also be accepted and acted upon provided further proceedings in relation to such assessment are pending in the statutory hierarchy of adjudication in terms of the provisions of the Income-tax Act. As in the present case before us, the “return of income” filed by the assessee in compliance to the notice issued under Section 148 of the Act, dated 27.03.2019
was filed on 11.12.2019, i.e during the pendency of the assessment proceedings which had thereafter culminated vide order passed under Section 143(3) r.w.s 147 of the Act, dated
31.12.2019, therefore, we are of the firm conviction that there was no justification for the A.O. to have held the said “return of 24
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income” as invalid and non-est in the eyes of law. Also, support is drawn from the judgment of the Hon'ble High Court of Patna in the case of CIT
Vs.
Nagendra
Prasad,
(2023)
156
Taxmann.com 191 (Patna). The Hon'ble High Court, had observed that where the notice was used by the A.O. u/s 148
requiring the assessee to file his return of income within thirty days but the said return was filed after eight and a half months, since the return was filed by assessee in response to the said notice, though delayed, there should have been a notice issued under Section 143(2) as the requirement to issue notice could not be dispensed with. Accordingly, based on our aforesaid observations, we are of the view that the “return of income” filed by the assessee on 11.12.2019 i.e in response to the notice u/s.
148 of the Act dated 27.03.2019, though delayed, did not cease to be a “return of income” in the eyes of the law.
16. Apropos the support drawn by the Ld. DR from the “3rd proviso” to Section 148 of the Act, which provides that where the return of income is furnished beyond the period allowed in the notice u/s 148 of the Act, the same shall not be deemed to be a return of income under Section 139 of the Act and, thus, no obligation is cast upon the AO to issue notice u/s 143(2) of the Act by acting upon such delayed return of income, we are unable to concur with the same. As the aforesaid “3rd proviso” has been made available on the statute vide Finance Act, 2021 w.e.f
01.04.2021 (i.e prior to its amendment vide the Finance Act, 2022
w.e.f 01.04.2022), and was not available on the date when notice under Section 148 of the Act, dated 27.03.2019 was issued to the present assessee before us, therefore, the same will not carry the case of the revenue any further. Also, the Ld. DR’s claim that the notice under Section 143(2) that it is not mandatory for the AO to issue notice u/s 143(2) of the Act in case of every return of 25
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income filed under Section 148 of the Act, and the same is issued only where he considers it necessary or expedient to ensure that the assessee has not understated his income or computed excessive loss or has not under the paid the tax in any manner, we are afraid that the same will not come to the rescue of the revenue. We say so, for the reason that even if the said claim of the Ld. DR is to be accepted, the AO in the present case having disturbed the returned income of the assessee and made additions in his hands remained under an obligation to have issued notice under Section 143(2) of the Act.
17. We shall now deal with the second facet of the controversy involved in the present appeal, i.e. as to whether or not the assessment framed by the A.O. vide his order passed
143(3) r.w.s. 147 of the Act, dated 31.12.2019, in the absence of a notice u/s. 143(2) of the Act having been issued by him is sustainable in the eyes of law?
18. Apropos the validity of the assessment framed by the A.O.
vide his order passed u/s 143(3) r.w.s. 147 of the Act, dated
31.12.2019, wherein he despite taking cognizance of the “return of income” filed by the assessee on 11.12.2019 in response to the notice issued under Section 148 of the Act, dated 27.03.2019
(which has been held by us hereinabove to be a valid return of income), had by treating the said “return of income” as invalid, dispensed with the statutory requirement of issuing a notice u/s 143(2) of the Act and framed the assessment vide his order passed u/s 143(3) r.w.s. 147 of the Act, dated 31.12.2019, we find that the said issue is covered by the judgments of the Hon'ble Supreme Court in the cases of ACIT and Anr. Vs.
ITA.Nos.786 & 787/Hyd./2024

more res integra. The Hon'ble Apex Court in its aforesaid judicial pronouncements, has held, that the A.O. pursuant to the return of income filed by the assessee remains under the statutory obligation to issue notice u/s 143(2) of the Act for framing the assessment.
19. Our aforesaid view is further fortified by the judgment of the Hon’ble High Court of Delhi in the case of Pr. CIT Vs. Shri
Jai Shiv Shankar Traders (P) Ltd. (2016) 3783 ITR 488
(Del). The Hon’ble High Court had held that the absence of notice u/s.143(2) of the Act impregnates the proceeding with a juri ictional defect, and hence, renders it as invalid in the eyes of law. The aforesaid view had thereafter been reiterated by the Hon’ble High Court in the case of Pr. CIT Vs. Dart Infrabuild (P)
Ltd., (2024) 166 taxmann.com 4 (Del). Also, the Hon’ble High
Storage (P) Ltd. (2015) 228 Taxman 48 (Allahabad) had after relying upon the judgment of the Hon’ble Apex Court in the case of CIT Vs. Hotel Blue Moon (supra), held that the requirement of issuance of notice u/s.143(2) of the Act was mandatory and cannot be brought within the meaning of a procedural irregularity. The Hon’ble High Court of Madras in the case of Sapthagiri Finance & Investments Vs. ITO, (2012) 25
taxmann.com 341 (Mad), has held that where the A.O found that there was a problem in the “return of income” filed by the assessee u/s.148 of the Act, which required an explanation, then he ought to have followed up by a notice u/s.143(2) of the Act.
The Hon’ble High Court of Delhi in the case of Pr. CIT Vs. S.G
Portfolio (P) Ltd. (2023) 454 ITR 761 (Del.) has, inter alia, held that where the assessee has filed a “return of income” in response to notice u/s. 148 of the Act, the A.O. was required to issue notice u/s.143(2) of the Act for framing the assessment. We

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further find that Hon’ble High Court of Madras in the case of Amec Foster Wheeler Iberia SLU-India Project Office Vs.
DCIT, (2023) 148 taxmann.com 124 (Mad), has held that where the A.O did not issue notice u/s.143(2) of the Act upon the assessee, then the initiation of reassessment proceedings; order rejecting the assessee’s objection against the assumption of juri iction for reopening and also the reference to the TPO were to be quashed.
20. Apropos the Ld. DR’s claim that as the assessee in the course of the proceedings before the A.O had not objected to the assumption of the juri iction by him, and on the contrary participated in the assessment proceedings, therefore, the non- issuance of the notice u/s 143(2) of the Act will be saved by the provisions of Section 292BB of the Act, we are unable to concur with the same. We say so, for the reason that the deeming provisions of the said statutory provision only cure the infirmities in the manner of service of notice and is not intended to cure the complete absence of notice itself. Our aforesaid view is supported by the judgment of the Hon’ble Supreme Court in the case of CIT Vs. Laxman Das Khandelwal (2019) 417 ITR 325 (SC).
The Hon’ble Apex Court relying on its earlier order in the case of ACIT Vs. Hotel Blue Moon (supra), has held that the failure to issue a notice under Section 143(2) renders the assessment order void even if the assessee had participated in the proceedings.
21. We thus, based on our aforesaid deliberations conclude as under:
(a).
the “return of income” filed by the assessee on 11.12.2019
in response to the notice issued by the A.O. under Section 148 of the Act, dated 27.03.2019, having been filed during the pendency of the assessment proceedings which had culminated

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vide the order of assessment passed u/s 143(3) r.w.s. 147 of the Act, dated 31.12.2019, is a valid “return of income” though involving a delay.
(b).
the A.O by treating the “return of income” filed by the assessee on 11.12.2019 in response to notice u/s 148, dated
27.03.2019 as invalid and non-est, had wrongly assumed juri iction by dispensing with the statutory obligation cast upon him to issue notice u/s 143(2) of the Act, and wrongly framed the impugned assessment vide his order passed u/s 143(3) r.w.s.
147 of the Act, dated 31.12.2019..; AND (c). that as the deeming provisions of Section 292BB of the Act only cure the infirmities in the manner of service of notice and is not intended to cure the complete absence of notice itself, therefore, the non-issuance of notice u/s 143(2) of the Act, based on the “return of income” filed by the assessee on 11.12.2019 in response to the notice issued under Section 148 of the Act, dated
27.03.2019 will not be saved by the deeming provisions of the said statutory provision.
22. Accordingly, we are of the view that as the A.O in the present case before us, had erroneously held the “return of income” filed by the assessee on 11.12.2019 i.e in response to the notice u/s 148 of the Act, dated 27.03.2019 as invalid and non-est, and thereafter had on the said wrong premises dispensed with the statutory requirement of issuing the notice u/s 143(2) of the Act, and framed the impugned assessment vide his order passed under Section 143(3) r.w.s. 147 of the Act, dated 31.12.2019, therefore, the assessment order so passed by him cannot be sustained and is liable to be quashed for want of valid assumption of juri iction.

29
ITA.Nos.786 & 787/Hyd./2024

ITA.No.787/Hyd./2024 – A.Y. 2014-2015 :

30
ITA.Nos.786 & 787/Hyd./2024

in appeal ITA.No.786/Hyd./2024 in the case of Gangaram
Reddy Tekulapalli. The reasons given by us in the preceding paragraph nos.10 to 15 shall equally apply to this appeal as well. Therefore, for similar reasons, we reject ground no.6 of assessee’s appeal and allow ground no.7 of the assessee.

Order pronounced in the open Court on 10.09.2025. [VIJAY PAL RAO]

[MANJUNATHA G]
VICE PRESIDENT

ACCOUNTANT MEMBER
Hyderabad, Dated 10th September, 2025
VBP
Copy to 1
&
2. Gangaram Reddy Tekulapalli, AND Smt. Haripriya Tekulapalli, Plot No.56,
Street No.7, Telecom Nagar, Gachibowli,Hyderabad – 500 032. State of Telangana
3. The Income Tax Officer, (Int. Taxn)-2, Hyderabad.
4. The CIT(A)-10, 2nd Floor, Aayakar Bhawan, Basheerbagh, Hyderabad – 500 004. 5. The Disputes Resolution Panel, Bengaluru.
6. The DR ITAT “A” Bench, Hyderabad.
7. Guard File.
//By Order//
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