MEKA AMRUTHA,NUZIVD vs. INCOME TAX OFFICER, WARD-3(1), VIJAYAWADA

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ITA 224/VIZ/2025Status: DisposedITAT Visakhapatnam04 September 2025AY 2015-16Bench: SHRI DUVVURU RL REDDY, HON’BLE (Vice President), SHRI S BALAKRISHNAN, HON’BLE (Accountant Member)8 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal admitted the additional legal grounds raised by the assessee, stating they go to the root of the matter. These grounds, challenging the validity of the Section 148 notice and the subsequent assessment, were not raised before the lower authorities. The Tribunal found it necessary to adjudicate these grounds first. Consequently, the Tribunal decided to remit the entire issue back to the file of the Ld. CIT(A) for fresh adjudication. The assessee was directed to raise these additional legal grounds before the Ld. CIT(A), who was then directed to adjudicate them in accordance with the law after providing the assessee with an opportunity of being heard. The original grounds raised on merits were kept open. The appeal was allowed for statistical purposes.

What were the facts?

The assessee, Meka Amrutha, an individual, is in appeal against the order of the CIT(A)-NFAC for Assessment Year (AY) 2015-16. The Assessing Officer (AO) reopened the assessment under Section 147 of the Income Tax Act, 1961, based on information regarding significant transactions including TDS on interest, mutual fund purchases, cash deposits totaling Rs. 98,89,860, and sale of immovable property. The assessee filed a return declaring Rs. 2,74,490. Despite opportunities, the assessee failed to furnish substantiating replies regarding the cash deposits. Consequently, the AO assessed the cash deposits of Rs. 98,89,860 as unexplained money under Section 69A, determining the total income at Rs. 1,01,64,350. The CIT(A) dismissed the assessee's appeal.

What were the issues?

1. Whether the Ld. CIT(A) erred in sustaining the addition of Rs. 98,89,860 representing cash deposits as unexplained money under Section 69A of the Act, and rejecting the assessee's contention regarding opening cash balance. Assessee's arguments: The assessee contended that the Ld. CIT(A) erred in sustaining the addition of Rs. 98,89,860 and rejecting the claim of an opening cash balance of Rs. 92,09,200 as on 01/04/2014, arguing that sources were explained and the decision was based on surmises. Revenue's arguments: The revenue, through the Ld. DR, argued that a mere procedural mistake cannot invalidate the assessment proceedings and prayed for upholding the order of the Ld. CIT(A). Additional Legal Grounds raised by Assessee: 2. Whether the notice issued under Section 148 of the Act was without proper jurisdiction and satisfaction, rendering it invalid and void ab initio. 3. Whether the assessment completed based on an invalid notice under Section 148 is also invalid and void ab initio. 4. Whether the notice issued under Section 148 by the Income Tax Officer, Ward-1(1), Vijayawada, was invalid and without proper jurisdiction, as it should have been issued by a faceless assessment unit as per Section 151A of the Act.

Which sections of the Income-tax Act were involved?

Section 147,Section 144B,Section 139(1),Section 148,Section 142(1),Section 69A,Section 149(1)(b),Section 151A

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, VISAKHAPATNAM BENCH, VISAKHAPATNAM

Before: SHRI DUVVURU RL REDDY, HON’BLE & SHRI S BALAKRISHNAN, HON’BLE

For Appellant: CA yearet &r 33 A /
Hearing: 12/08/2025

(�नधा�रण वष� / Assessment Year: 2015-16) Meka Amrutha, Vs. Income Tax Officer, Nuzivd. Ward-3(1), PAN: BCOPM2622M Vijayawada. (अपीलाथ�/ Appellant) (��यथ�/ Respondent) अपीलाथ� क� ओर से/ Appellant by : Sri MV Prasad, CA ��याथ� क� ओर से / Respondent by : Dr. Aparna Villuri, Sr. AR सुनवाई क� तार�ख / Date of Hearing : 12/08/2025 घोषणा क� तार�ख/Date of : 04/09/2025 Pronouncement O R D E R PER DUVVURU RL REDDY, Vice President:

This appeal filed by the assessee is against the order of the Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi [“Ld. CIT(A)-NFAC”] in DIN & Order No.ITBA/NFAC/S/250/2024-25/1072851666(1), dt: 03/02/2025 arising out of the order passed U/s. 147 r.w.s 144B of the Income Tax Act, 1961 [“the Act”] for the AY 2015-16.

Meka Amrutha vs. ITO 2. Briefly stated the facts of the case are that the assessee is an individual. As per the information available with the Department that the assessee has made the following transactions during the FY 2014-15 relevant to the AY 2015-16: Sl Nature of transaction Bank name Amount no (In Rs.) 1. TDS Statement – Interest other than HDFC Bank 73,646 interest on securities (section 194A) 2. Paid Rs. 2 lakhs or more for purchase of Axis Mutual 5,00,000 units of mutual fund Fund 3. Cash deposit Axis Bank Ltd 10,25,000 4. Cash deposit HDFC Bank 88,64,860 5. Sale of immovable property of Rs. 5 lakhs Sub Registrar 8,00,000 or more (value assessed for stamp duty)

It was further observed by the Ld. AO that the assessee has not offered any income for taxation arising out of such transactions by filing return of income U/s. 139(1) of the Act for AY 2015-16. Therefore, after obtaining necessary approval from the competent authority, the case was reopened by issuance of notice U/s. 148 of the Act dated 07/04/2022. Thereafter, the assessee has filed the return of income on 02/03/2024 against the notice issued U/s. 148 of the Act and declared the total income of Rs. 2,74,490/-. During the assessment proceedings, the Ld. AO issued statutory notices the assessee. Thereafter, the Ld. AO as per the information available on insight portal observed that the Meka Amrutha vs. ITO assessee has received interest income of Rs. 73,646/-, purchase of units of Mutual Fund amounting to Rs. 5 lakhs and sale / purchase of immovable property of Rs. 8 lakhs during the AY 2015-16. At para 4.1 of the assessment order, the Ld. AO observed that during the assessment proceedings, the assessee has been given sufficient opportunity. However, the assessee failed to furnish any reply / submission. At para 4.2.2 of his order, the Ld. AO also observed that during the assessment proceedings, the assessee has not complied with any notices U/s. 142(1) of the Act. However, subsequently, the assessee has filed reply on 19/12/2023, 17/01/2024, 22/01/2024, 24/02/2024 and 06/03/2024 in response to various notices issued to the assessee but, the assessee has not submitted any substantiating reply about the sources of cash deposits amounting to Rs. 98,89,860/-. Thus, the Ld. AO came to the conclusion that since the assessee has failed to substantiate the source of cash deposits by producing any supporting documentary evidence, the Ld. AO has left with no other alternative but to assess the total cash deposits of Rs. 98,89,860/- (Rs. 88,64,860 + Rs. 10,25,000 in the HDFC Bank and Axis Bank Ltd respectively during the FY 2014-15 relevant to the AY 2015-16) as unexplained money U/s. Meka Amrutha vs. ITO 69A of the Act. Accordingly, the Ld. AO completed the assessment and determined the total income at Rs. 1,01,64,350/- which includes the addition of Rs. 98,89,860/- U/s. 69A of the Act and passed the assessment order U/s. 147 r.w.s 144B of the Act, dated 20/03/2024. Aggrieved by the order of the Ld.AO, the assessee carried the matter in appeal before the Ld. CIT(A).

3. On appeal, the assessee made various submissions before the Ld. CIT(A) which were stated to be lacking before the Ld. AO. However, the Ld. CIT(A) did not consider the same and dismissed the appeal of the assessee. Aggrieved by the order of the Ld. CIT(A), the assessee is in appeal before the Tribunal by raising the following grounds of appeal:

“1. The Ld. CIT(A) is erred in facts as well as in law while passing the order.

2.

The Ld. CIT(A) erred in sustaining the addition of Rs. 98,89,860/- representing the cash deposits in the bank accounts as unexplained money U/s. 69A of the Act.

3.

The Ld. CIT(A) is not justified in upholding the decision of the AO and rejecting the contention of the appellant regarding availability of opening cash balance of Rs. 92,09,200/- as on 01/04/2014 even though the sources were explained properly.

4.

The Ld. CIT(A) is not justified in upholding the decision of the AO regarding the availability of opening cash balance on mere surmises and conjectures and not relying upon the submissions made by the appellant.

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

4. The assessee has filed a petition for admission of additional legal grounds for the first time before the Tribunal and the additional legal grounds raised read as under:

“Ground No.6 On the facts and circumstances of the case, the Ld. Assessing Officer erred in issuance of notice U/s. 148 of the Act without proper jurisdiction and satisfaction and hence need to be treated as invalid and void ab initio. Ground No.7 On the facts and circumstances of the case, the Ld. AO ought to have realized that the assessment completed on the basis of invalid notice issued U/s. 148 also is invalid and void ab initio. Ground No.8. On the facts and circumstances of the case, the notice issued U/s. 148 of the Act by Income Tax Officer, Ward-1(1), Vijayawada is invalid and without proper and valid jurisdiction since the same has to be issued by the faceless assessment unit as per the provisions of section 151A of the Act.”

5.

Since the additional legal grounds raised by the assessee challenge the validity of the assessment order, the Ld. AR pleaded that it goes to the root of the matter and prayed for adjudication of the same before deciding the case on merits.

6.

We admit the legal grounds raised by the assessee as the same goes to the root of the matter.

Meka Amrutha vs. ITO 7. At the outset, Ld. Authorised Representative [hereinafter “Ld.AR”] submitted that notice under section 148 of the Act for the A.Y.2015-16 was issued on 07.04.2022 without following the procedure prescribed by the new provision inserted on 01.04.2021. Ld.AR also submitted that notice under section 148 of the Act dated 07.04.2022 is barred by limitation as per the first proviso to section 149(1)(b) of the Act w.e.f 01.04.2021. Ld.AR pleaded that the legal ground raised by the assessee as above, shall first be addressed before adjudicating the other grounds raised on merits. On this issue, Ld.AR placed heavy reliance on the decision of Co-ordinate Bench in the case of Vaka Ghanta Nageswara Rao v. ITO in dated 10.07.2025.

9.

Per contra, Ld. Departmental Representative [hereinafter in short “Ld.DR”] submitted that the mere procedural mistake cannot invalidate the assessment proceedings. She therefore prayed for upholding the order of the Ld.CIT(A).

10.

We have heard both the sides and perused the material available on record as well as the orders of the Ld. Revenue Authorities and the written submissions made by the Ld. AR. It is an admitted fact that the assessee is raising additional legal grounds challenging the validity of the assessment order for the first time before the Tribunal. These legal Meka Amrutha vs. ITO grounds were not raised before the lower authorities. We therefore are of the considered view that since the additional legal grounds raised by the assessee goes to the root of the matter, we are admitting the same and remitting back to the file of the Ld. CIT(A) for fresh adjudication of the appeal. We direct the assessee to raise the additional legal grounds before the Ld. CIT(A) and the Ld. CIT(A) is directed to adjudicate the additional legal grounds in accordance with law after providing one more opportunity of being heard to the assessee. Accordingly, the additional legal grounds raised by the assessee are allowed for statistical purposes. Since we have admitted the additional grounds raised by the assessee and remitted back by remanding the same to the file of the Ld. CIT(A), the original grounds raised by the assessee on merits are kept open. It is ordered accordingly.

11.

In the result, appeal filed by the assessee is allowed for statistical purposes as indicated herein above.

Pronounced in the open Court on 04th September, 2025. Sd/- Sd/- (एस बालाकृ�णन) (दु�वू� आर.एल रे�डी) (S.BALAKRISHNAN) (DUVVURU RL REDDY) लेखा सद�य/ACCOUNTANT MEMBER उपा�य� /VICE PRESIDENT Dated :04/09/2025 Meka Amrutha vs. ITO OKK - SPS आदेश की �ितिलिप अ�ेिषत /Copy of the order forwarded to:- 1. �नधा�रती/ The Assessee – Meka Amrutha C/o. CA MV Prasad, D.No. 60-7-13, Ground Floor, Siddhartha Nagar, 4th Lane, Vijayawada. 2. राज�व/The Revenue – Income Tax Officer, Ward-3(1), CR Building, 1st Floor Annex, MG Road, Vijayawada-520002.

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