PADARTHI VENKATA SIVANAGENDRA PRASADA,GUNTUR vs. INCOME TAX OFFICER, WARD-1, TENALI

PDF · subscribers
ITA 457/VIZ/2025Status: DisposedITAT Visakhapatnam29 October 2025AY 2016-179 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal addressed two main issues. Firstly, regarding the validity of the notice under Section 148, the Tribunal found that the Assessing Officer had followed the procedure prescribed by CBDT Instruction 1/2022, which was issued consequent to the Hon'ble Supreme Court's decision in Union of India Vs. Ashish Agarwal. The AO had issued a deemed show-cause notice under Section 148A(b) on 24.05.2022, received a reply from the assessee, and passed an order under Section 148A(d) on 19.07.2022. The Tribunal concluded that the AO was well within his jurisdiction and the extended timelines while issuing the notice under Section 148 on 19.07.2022. Therefore, the legal grounds challenging the AO's jurisdiction were rejected. Secondly, concerning the addition under Section 69A, the Tribunal acknowledged that the CIT(A) had provided multiple opportunities to the assessee, which were not responded to. However, in the interest of natural justice and considering the assessee's prayer, the Tribunal decided to provide one final opportunity to the assessee to present its case before the CIT(A). The CIT(A) was directed to grant this opportunity, and the assessee was directed to furnish relevant documents without seeking unnecessary adjournments. The Tribunal stated that if the assessee failed to comply, the CIT(A) would be at liberty to pass an order based on the available material. The ground raised by the assessee on this issue was allowed for statistical purposes.

What were the facts?

The assessee, Padarthi Venkata Sivanagendra Prasada Rao, filed an appeal before the Income Tax Appellate Tribunal (ITAT) challenging an order passed by the Commissioner of Income Tax (Appeals) for Assessment Year 2016-17. The appeal was filed with a delay of 55 days, which the Tribunal condoned due to the assessee's medical condition. The Assessing Officer (AO) initiated reassessment proceedings under Section 147 of the Income Tax Act, 1961, based on information that the assessee had deposited Rs. 1,12,13,500/- in his savings account without filing a return of income. The AO treated this amount as unexplained money under Section 69A and determined the total income at Rs. 1,17,00,520/-. The CIT(A) sustained the addition, leading to the present appeal.

What were the issues?

1. Whether the notice under Section 148 of the Income Tax Act, 1961, was barred by limitation and consequently invalid, rendering the reassessment proceedings void? (Question of law) Assessee's Contention: The assessee argued that the notice under Section 148 was issued on 19.07.2022, which was beyond the prescribed time limit of three years as per Section 149(1)(b), making the consequent order bad in law. Revenue's Contention: The revenue contended that the initial notice under Section 148 was issued on 09.04.2021. Following the Supreme Court's order and CBDT Instruction 1/2022, a deemed show-cause notice under Section 148A(b) was issued on 24.05.2022, and the assessee filed a reply. The AO followed the prescribed procedures under Section 148A(b), 148A(d), and 148 notices, adhering to the timelines. Therefore, the notice issued on 19.07.2022 was not invalid. 2. Whether the addition of Rs. 1,12,13,500/- under Section 69A of the Act as unexplained cash deposits is justified, considering the assessee was not provided adequate opportunity by the CIT(A)? (Question of mixed law and fact) Assessee's Contention: The assessee argued that the CIT(A) passed an ex-parte order without providing adequate opportunity and requested the matter be remitted back to the CIT(A) for a fresh opportunity, following principles of natural justice. The assessee also admitted to not appearing before the AO. Revenue's Contention: The revenue argued that the CIT(A) provided multiple opportunities, but the assessee failed to respond to any of them. Therefore, the revenue objected to remitting the issue back.

Which sections of the Income-tax Act were involved?

Section 147,Section 148,Section 148A,Section 148A(b),Section 148A(d),Section 142(1),Section 144B,Section 69A,Section 139(1),Section 149(1)(b)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, VISAKHAPATNAM “DIVISION” BENCH, VISAKHAPATNAM

Before: SHRI RAVISH SOOD, HON’BLE

For Appellant: Shri GVN Hari, Advocate
For Respondent: Dr. Aparna Villuri, Sr.AR

आदेश /O R D E R

PER SHRI S. BALAKRISHNAN, ACCOUNTANT MEMBER:

1.

This appealis filed by the assessee against the order of Learned Commissioner of Income Tax (Appeals), National Faceless Appeal centre, Delhi [hereinafter in short “Ld.CIT(A)”] vide DIN & Order No.

I.T.A.No.457/VIZ/2025 Padarthi Venkata Sivanagendra Prasada Rao ITBA/NFAC/S/250/2024-25/1075206363(1) dated 28.03.2025 for the A.Y.2016-17 arising out of order passed under section 147of Income Tax Act, 1961 (in short ‘Act’) dated 13.05.2023.

2. At the outset, it is noticed from the appeal records that there is a delay of 55 days in filing appeal before the Tribunal. Explaining the reasons for belated filing of the appeal, the Ld. Authorised Representative [hereinafter “Ld.AR”] drew our attention to the affidavit filed by the assessee along with a petition seeking for condonation of delay and read out the contents of the petition which is as under: - “1. The order of the learned Commissioner of Income Tax (Appeals) was passed on 28.03.2025. As such, the appeal against this order ought to have been filed on or before 27.05.2025. However, the appellant could file the appeal only on 25.07.2025 resulting in a delay of 55 days in filing the appeal.

2.

The appellant suffered from severe back pain due to disc problem during the second week of May, 2025. He was advised to take complete bed rest along with medication till the pain is reduced. The appellant was thus under bed rest and treatment during the period from 20.05.2025 to 14.07.2025 (copy of medical certificate is enclosed herewith). Therefore, the appellant could not attend to any other affairs during this period. As soon as the condition improved, he took necessary steps and filed the appeal on 25.07.2025.

3. Thus, the delay of 55 days in filing the appeal was due to the reasons mentioned above which were beyond the control of the appellant. The delay is neither intentional nor deliberate. Therefore, the appellant prays the hon'ble ITAT to kindly condone the delay in filing the appeal and pass appropriate orders in the interest of rendering substantial justice.”

3.

On perusal of the contents of the affidavit filed by the assessee and medical certificate as well as the submission of the Ld. AR, we find that the Page. No 2

I.T.A.No.457/VIZ/2025 Padarthi Venkata Sivanagendra Prasada Rao assessee is prevented by a reasonable and sufficient cause in filing the appeal beyond the prescribed time limit with a delay of 55 days. Therefore, we hereby condone the delay of 55 days in filing the appeal before the Tribunal and proceed to adjudicate the appeals on merits in the following paragraphs.

4.

Brief facts of the case are, assessee is an individual and has not filed return of income under section 139(1) of the Act. As per the information available with the department, the assessee has entered into the following transactions and has not filed return of income: -

Amount Information Description Bank Details (Rs.) Deposited cash of Rs. 10,00,000/- City Union Bank Limited 1,12,13,500/- or more in Saving Bank Account Tenali Branch

5.

Ld. Assessing Officer [hereinafter in short “Ld. AO"] issued notice u/s.148 of the Act on 09.04.2021 based on the information that assessee had deposited cash aggregating to Rs.1,12,13,500/- in his saving account and has not filed return of income as such income chargeable to tax has escaped assessment. Initially notice under section 148 of the Act was issued under un-amended provisions of the Act on 09.04.2021. Consequent to the directions of the CBDT vide Instruction 1/2022 dated 11.05.2022, notice issued under section 148 of the Act dated 09.04.2021 was deemed to be considered as show-cause notice under section 148A(b) of the amended Act. Accordingly, a letter dated 24.05.2022 was issued and served on the assessee on 24.05.2022 to treat the notice issued

Page. No 3

I.T.A.No.457/VIZ/2025 Padarthi Venkata Sivanagendra Prasada Rao u/s. 148 of the act dated 09.04.2021 as deemed show-cause notice as per section 148A(b) of the Act with a request to the assessee to submit its reply on or before 06.06.2022. In response to the notices, assessee filed its income Tax return on 20.08.2022 admitting a total income of Rs.4,87,020/-. Subsequently, notice under section 142(1) of the Act were issued on various dates to submit the details and evidences required for the purpose of verification and examination of issues involved in the scrutiny assessment proceedings. In response, assessee furnished his submission on 29.04.2023 submitting that the assessee is engaged in business of trading of pulses and dals and the source of cash deposits were from the trading activity carried on by the assessee. After considering the submissions of the assessee, the Ld. AO rejected the assessee contentions by observing that the assessee has not furnished any documentary evidences in support of his submissions. Therefore, Ld. AO proceeded to complete the assessment under section 147 r.w.s. 144B of the Act by determining the income of the assessee at Rs.1,17,00,520/- by treating an amount of Rs.1,21,13,500/- as unexplained money under section 69A of the Act.

6. On being aggrieved by the order of the Ld. AO, the assessee carried the matter before the Ld. CIT(A). The Ld. CIT(A) after considering the submissions sustained the addition made by the Ld. AO, thereby dismissed the appeal of the assessee.

Page. No 4

I.T.A.No.457/VIZ/2025 Padarthi Venkata Sivanagendra Prasada Rao 7. On being aggrieved by the order of the Ld. CIT(A), assessee is in appeal before us by raising following grounds of appeal: -

1. The order of the learned Commissioner of Income Tax (Appeals) is contrary to the facts and also the law applicable to the facts of the case.

2. The learned Commissioner of Income Tax (Appeals) is not justified in deciding the appeal ex-parte.

3. The learned Commissioner of Income Tax (Appeals) ought to have held that the notice u/s 148 of the Act is barred by limitation.

4. The learned Commissioner of Income Tax (Appeals) ought to have held that the notice u/s 148 of the Act was not in accordance with law and ought to have quashed the notice as invalid and consequently the learned Commissioner of Income Tax (Appeals) ought to have quashed the entire reassessment proceedings as invalid.

5. The learned Commissioner of Income Tax (Appeals) is not justified in sustaining the addition of Rs.1,12,13,500 made by the assessing officer u/s 69A of the Act towards cash deposits in the bank account of the appellant as unexplained.

6.

Any other ground that may be urged at the time of appeal hearing.”

8.

With respect to the issue of challenging the jurisdiction of the Ld. AO which is barred by limitation in accordance with the provisions of section 149(1)(b) of the Act, Ld.AR submitted that notice under section 148 of the Act was issued on 19.07.2022 beyond the prescribed time limit of three years and therefore order passed in consequent to such invalid notice is bad in law. He therefore prayed for quashing the assessment order.

9.

On the contrary, Ld. Departmental Representative [hereinafter in short “Ld. DR”] submitted that the initial notice u/s. 148 of the Act was issued to the assessee on 09.04.2021 and in consequence to Hon’ble Supreme Court Order

Page. No 5

I.T.A.No.457/VIZ/2025 Padarthi Venkata Sivanagendra Prasada Rao dated 04.05.2022, the directions vide CBDT Instruction No. 1/2022 dated 11.05.2022 and again letter dated 24.05.2022 was issued on 25.05.2022 and the assessee also filed his reply to the deemed show-cause notice u/s.148A(b) of the Act. Further, there is no lapse in the procedures as per section 148A(b), 148A(d) and 148 notices and timelines as per CBDT Instructions are duly followed. She therefore pleaded that the Ld. AO has rightly followed the procedure laid down as per the unamended Act / Amended Act, in accordance with the Instruction of the CBDT and hence notice issued u/s 148 dated 19.07.2022 cannot be considered as invalid.

10.

We have heard both the sides and perused the material available on record. Initially notice under section 148 was issued on 09.04.2021. The time limit for extension for issuance of notice under section 148 of the Act was extended up to 30.06.2021 vide notification No 38/2021 dated 27.04.2021. Further, we also find that the Ld. AO has followed CBDT Instruction 1/2022 dated 11.05.2022, consequent to the decision of the Hon’ble Supreme Court dated 04.05.2022 in the case of Union of India Vs. Ashish Agarwal, has issued deemed show-cause notice under section 148A(b) of the Act on 24.05.2022. Considering the reply furnished by the assessee, order under section 148A(d) of the Act was passed on 19.07.2022. We are therefore of the considered view that the Ld. AO has duly followed the procedure prescribed vide CBDT Instruction 1/2022 and was well within his jurisdiction within the extended time lines while

Page. No 6

I.T.A.No.457/VIZ/2025 Padarthi Venkata Sivanagendra Prasada Rao issuing notice under section 148 of the Act on 19.07.2022. We therefore reject the arguments of the Ld.AR while dismissing the legal grounds challenging jurisdiction of the Ld. AO.

11.

Further, on merits, with regard to addition made under section 69A of the Act for Rs.1,12,13,500/-, Ld.AR submitted that Ld. CIT(A) has not provided adequate opportunity to the assessee and has passed an exparte order while dismissing the appeal. Ld.AR also further submitted that, even before the Ld.AO, assessee could not appear and respond to the notices issued by the Ld.AO. He therefore prayed for remitting the matter back to the file of Ld.CIT(A) by providing one more opportunity to the assessee, following principles of natural justice.

12.

Per contra, Ld. DR submitted that Ld. CIT(A) has provided various opportunities but the assessee failed to respond to any of the notices issued by the Ld. CIT(A). She strongly objected for remitting the issue back to the file of Ld.CIT(A).

13.

We have heard both the sides and perused the material available on record. It is an admitted fact that the Ld. CIT(A) has provided multiple opportunities i.e., on 20.12.2024, 13.01.2025, 03.02.2025, 17.02.2025 & 27.02.2025. The assessee has never responded to any of the opportunities provided by the Ld. CIT(A). However, considering the prayer of the Ld.AR and Page. No 7

I.T.A.No.457/VIZ/2025 Padarthi Venkata Sivanagendra Prasada Rao following principles of natural justice, we consider it deem fit to provide one more final opportunity to the assessee to represent its case before the Ld.CIT(A). The Ld. CIT(A) is directed to provide one more opportunity of being heard to the assessee and the assessee is directed for furnishrelevant documents before Ld. CIT(A) without seeking unnecessary adjournments, failing which the Ld. CIT(A) is at liberty to pass order based on the material available on record. Accordingly, the ground raised by the assessee is allowed for statistical purposes.

14.

In the result, appeal of the assessee is allowed for statistical purposes.

Order pronounced in the open court on 29th October, 2025.

More judgments on Section 147

All 49,210 judgments and leading authorities on Section 147 →

Recent GST High Court judgments

Search GST case law →