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Facts
The assessee, Balguri Rajeshwar Rao, an individual engaged in Kirana business and agriculture, did not file an Income Tax Return for AY 2016-17. Information revealed high-value transactions, including cash deposits and time deposits totaling Rs. 1,38,85,200/- in his bank account. The Assessing Officer initiated reassessment proceedings under Section 148A(b) and 148, subsequently making an addition of Rs. 1,18,92,850/- under Section 69A read with 115BBE for unexplained money and time deposits.
Held
The Tribunal held that the reassessment notices issued by the Jurisdictional Assessing Officer (JAO) under Sections 148A(b) and 148 were invalid because the proceedings did not follow the faceless assessment procedure mandated by Section 144B read with Section 151A of the Act. This decision was based on consistent rulings by various High Courts, including the jurisdictional Telangana High Court. Consequently, the reassessment order passed by the AO was vitiated and set aside, with other grounds of appeal kept open.
Key Issues
1. Whether reassessment proceedings initiated by the Jurisdictional Assessing Officer (JAO) under Sections 148A and 148 of the Income Tax Act, 1961, are valid if they do not adhere to the faceless assessment procedure mandated by Section 144B read with Section 151A. 2. Whether the addition made under Section 69A for unexplained money and time deposits is sustainable when the initiation of reassessment proceedings is deemed invalid.
Sections Cited
Section 250, Section 147, Section 144, Section 148, Section 148A(b), Section 148A(d), Section 151A, Section 69A, Section 115BBE, Section 133(6), Section 142(1), Section 144B, Section 149(1)(a), Section 158, Rule 11 of ITAT Rules, 1963, Finance Act, 2020, Finance Act, 2021, Article 142 of the Constitution of India
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Income Tax Appellate Tribunal, Hyderabad ‘A’ Bench, Hyderabad
Before: SHRI VIJAY PAL RAO & SHRI MADHUSUDAN SAWDIA
PER VIJAY PAL RAO, VICE PRESIDENT :
This appeal by the Assessee is directed against the Order dated 21.08.2025 of the learned CIT(A)-National Faceless Appeal Centre [in short “NFAC], Delhi, for the assessment year 2016-2017.
2 ITA.No.1728/Hyd./2025 2. The assessee has raised the following grounds of appeal:
1. “That the order passed by the Learned Commissioner of Income Tax (Appeals) under Section 250, dated 21.08.2025, confirming the assessment order passed under Section 147 r.w.s. 144 of the Income Tax Act, 1961, is contrary to law, facts, and circumstances of the case.
2. That the Learned Assessing Officer erred in reopening the assessment for A.Y. 2016-17 by issuing notice u/s 148 on 27.03.2023 by Jurisdictional Assessing Officer (JAO) without proper satisfaction or valid reasons, and hence the entire reassessment proceedings are bad in law and liable to be quashed.
3. The jurisdictional AO issued/handled u/s 148A(d) on 27.03.2023 contrary to the faceless regime mandated by s.151A read with CBDT's scheme/Notification, rendering the proceedings void ab initio. Telangana High Court in Kankanala Ravindra Reddy has held that reassessment under the post-2021 regime must follow the faceless procedure; non-adherence vitiates the action.
4. That the Learned Commissioner of income tax appeals erred in confirming the action of the Assessing Officer in making an addition of Rs.1,18,92,850/ u/s 69A of the Act towards alleged unexplained money without properly appreciating the nature of the transactions and the explanations submitted by the assessee.
That the authorities below failed to appreciate that the deposits reflected in the bank account were from recurring deposits and withdrawals of TDRs (Term Deposit Receipts), and from 3 ITA.No.1728/Hyd./2025 agricultural and rental income, hence cannot be treated as unexplained income.
6. That the Learned CIT(A) erred in dismissing the appeal without properly considering the detailed written submissions and supporting bank statements clearly showing repeated deposits and withdrawals of the same TDR amounts.
7. That the reopening and assessment proceedings were completed without proper service of notices and without affording reasonable opportunity of being heard, which is in gross violation of principles of natural justice.
8. That the addition made merely on the basis of cash deposits without considering corresponding withdrawals results in double addition and is unsustainable both on facts and in law.
9. That the Learned CIT(A) erred in not appreciating that the Assessing Officer already had complete bank statements obtained u/s 133(6) and failed to verify the maturity and renewal of TDRs mentioned in the narration of transactions.
10. That the addition made u/s 69A without establishing that such cash represented unexplained income of the assessee is arbitrary, excessive, and deserves to be deleted.
That the appellant craves leave to add, alter, amend, or withdraw any of the above grounds at the time of hearing.”
Brief facts of the case are that the assessee is an individual and engaged in Kirana business and other items and income from agriculture on the lands in the name of his wife and son. The assessee has not filed his return of income for the assessment year 2016-2017. As per the information
4 ITA.No.1728/Hyd./2025 available with the department, the assessee deposited a sum of Rs.1,38,85,200/- in the bank account. In absence of return of income, the nature, source and genuineness of transactions remained unexplained and unaccounted for taxation, the Assessing Officer believed that income chargeable to tax has escaped assessment. Therefore, the Assessing Officer issued notice u/sec.148A(b) of the Income Tax Act [in short "the Act"], 1961 on 17.02.2023 calling the assessee to furnish his explanation. The assessee has filed his reply. However, the Assessing Officer being not satisfied with the explanation of the assessee has reopened the assessment u/sec.147 of the Act by issuing notice u/sec.148 of the Act dated 27.03.2023. Further, the Assessing Officer also issued notices u/sec.142(1) of the Act dated 25.08.2023, 24.11.2023 and show cause notices dated 20.12.2023 and 29.01.2024. Since the assessee did not comply with the notices, the Assessing Officer has made addition on account of unexplained money towards variations amounting to Rs.1,18,92,850/- u/sec.69A r.w.s.115BBE of the Income Tax
5 ITA.No.1728/Hyd./2025 Act, 1961 vide order dated 14.02.2024 passed u/sec.147 r.w.s.144 r.w.s.144B of the Income Tax Act, 1961.
Aggrieved by the assessment order, the assessee preferred an appeal before the learned CIT(A), but could not succeed.
5. Aggrieved by the order of the learned CIT(A), the assessee is in appeal before the Tribunal.
The learned Authorised Representative of the Assessee at the very outset, has invited the attention of the Bench to the ground nos.2 and 3 raised by the assessee challenging the validity of the notice issued by the Jurisdictional Assessing Officer [in short “JAO”], u/sec.148 of the Act dated 27.03.2023. When the Bench has asked a specific question whether this issue has been raised by the assessee in the grounds of appeal
before the learned CIT(A), the learned Authorised Representative of the Assessee has fairly submitted that the assessee has not raised these grounds before the learned CIT(A), however, being a legal ground which goes to the root of the matter be admitted as 6. ITA.No.1728/Hyd./2025 additional grounds. The learned Authorised Representative of the Assessee has submitted that these grounds of appeal nos.2 and 3 may be treated as additional grounds under Rule 11 of ITAT Rules, 1963.
We have heard the learned Authorised Representative of the Assessee and the learned DR on the admission of grounds of appeal nos.2 and 3/additional grounds. It is pertinent to note that for adjudication of the above grounds of appeal nos.2 and 3/additional grounds, no fresh material or record or facts are required to be investigated, verified or considered, but, the same can be adjudicated on the basis of the material and facts already on record. Accordingly, by following the Judgment of Hon’ble Supreme Court in the case of National Thermal Power Co. Ltd., vs., CIT [1998] 229 ITR 383 (SC), we admit the grounds of appeal nos.2 and 3/additional grounds raised by the assessee for adjudication.
8. The learned Authorised Representative of the Assessee has submitted that notice issued by the JAO u/sec.148 of the Act dated 27.03.2023 is not valid and 7 ITA.No.1728/Hyd./2025 consequently, the re-assessment order on the ground that the procedure as per the National Faceless Assessment Scheme has not been followed and, therefore, the same is bad in law and liable to be set-aside. In support of this contention, the learned Authorised Representative of the Assessee has submitted that an identical issue has been decided by the Coordinate Bench of ITAT, Hyderabad Tribunal in favour of the assessee in the case of Vijay Kumar Kamdar, Adilabad vs., ITO, Ward-1, Adilabad in ITA.No.618/Hyd./2025 for the assessment year 2016-2017 vide order dated 08.10.2025 and relied on the order of the Tribunal.
On the other hand, the learned DR has relied upon the Orders of the authorities below and submitted that the issue is pending adjudication before the Hon’ble Supreme Court in the case of Hexaware Technology Ltd., in the SLP filed by the Department against the Judgment of Hon’ble High Court of Bombay and, therefore, the same may be kept in abeyance till the outcome of the SLP filed by the Department before the Hon’ble Supreme Court.
8 ITA.No.1728/Hyd./2025 10. We have heard the learned Authorised Representative of the Assessee as well as the learned DR and considered the relevant material on record. At the outset, we note that the JAO, Ward-11(1), Hyderabad has issued notice u/sec.148A(b) on 17.02.2023 and, therefore, passed Order u/sec.148A(d) as well as notice u/sec.148 of the Act, both dated 27.03.2023 as under :
9 ITA.No.1728/Hyd./2025 10 ITA.No.1728/Hyd./2025 11 ITA.No.1728/Hyd./2025 12 ITA.No.1728/Hyd./2025 11. Thus, it is clear that the notice issued u/sec.148A(b), Order u/sec.148A(d) and notice u/sec.148 for reopening of the assessment were issued by the Jurisdictional Assessing Officer, without following the procedure as per the National Faceless Assessment Scheme prescribed u/sec.144B read with Section 151A of the Act. An identical issue has been considered by this Bench of Hyderabad Tribunal in the case of Vijay Kumar Kamdar, Adilabad vs., ITO, Ward-1, Adilabad (supra) in Para Nos.7 to 9 as under :
“7. 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 :
13 ITA.No.1728/Hyd./2025 7.1. Thus, it is clear that the said notice was issued by the Jurisdictional 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:
14 ITA.No.1728/Hyd./2025 15 ITA.No.1728/Hyd./2025 7.2. Thereafter, the Assessing Officer has issued notice u/sec.148 of the Act dated 23.03.2023 which reads as under:
16 ITA.No.1728/Hyd./2025 7.3. 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 Jurisdictional 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 :
“5. We have heard the Learned Authorised Representative and Learned Departmental Representative on this issue which is pending adjudication before the Hon’ble Supreme Court. Ld. AR has relied upon the judgment of Hon’ble jurisdictional High Court in the case of Kanakala Ravindra Reddy Vs. ITO 156 taxman.com 478 and submitted that the impugned reassessment order is not valid and liable to be set aside. Having considered the rival submissions as well as relevant material on record, at the outset we note that the co- ordinate bench of this Tribunal in the case of Kanakala Ravindra Reddy Vs. ITO (supra) has considered an identical issue vide order dated 04.09.2025 in para Nos.9 to 16 as under : “9. We have considered the rival submissions as well as material on record. In the case of the assessee, notice u/sec.148A(b) was issued on 17 ITA.No.1728/Hyd./2025 21.02.2023 by JAO. For ready reference, the same is reproduced 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 :
18 ITA.No.1728/Hyd./2025 11. 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 Jurisdictional 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 :
“4. The contention of the petitioner is that the issue of proceedings being in violation of the Finance Act, 2021 ie., the impugned notices under Section 148A and Section 148 of the Act not being issued in a faceless manner, have already been dealt with and decided by this Court in the case of KANKANALA RAVINDRA REDDY vs. INCOME-TAX OFFICER decided on 14.09.2023 whereby a batch of writ petitions were allowed and the proceedings initiated under Section 148A as also under Section 148 of the Act were held to be bad with consequential reliefs on the ground of it being in violation of the provisions of Section 151A of the Act read with Notification 18/2022 dated 29.03.2022. The said judgment passed by this Court has also been subsequently followed in a large number of writ petitions which were allowed on similar terms.
19 ITA.No.1728/Hyd./2025 12. It was further noted by the Hon’ble jurisdictional 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:
5. Down the line, we find that the same issue has also been decided against the Revenue by various High Courts i.e.. by the Bombay High Court in the case of HEXAWARE TECHNOLOGIES LTD., vs. ASSISTANT COMMISSIONER OF INCOME TAX & OTHERS, Gauhati High Court in the case of RAM NARAYAN SAH vs. UNION OF INDIA', Punjab and Haryana High Court in the case of JATINDER SINGH BANGU vs. UNION OF INDIA, and Telangana High Court in the case of SRI VENKATARAMANA REDDY PATLOOLA vs. DEPUTY COMMISSIONER OF INCOME TAX where the issue was in respect of international taxation, Bombay High Court in the case of ABHIN ANILKUMAR SHAH vs. INCOME TAX OFFICER, INTERNATIONAL TAXATION which again on is international taxation and central circle, High Court of Himachal Pradesh in the case of GOVIND SINGH vs. INCOME TAX OFFICER, Gujarat High Court in the case of MANSUKHBHAI DAHYABHAI RADADIYA VS. INCOME TAX OFFICER, WARD 3(3)(5)
, Jharkand High Court in the case of SHYAM SUNDAR SAW vs. UNION OF INDIA", Rajasthan High Court in the case of SHARDA DEVI CHHAJER vs. INCOME TAX OFFICER & ANOTHER and batch of writ petitions" which stood decided on 19.03.2024. Similar views have also been taken by the Division Bench of 20 ITA.No.1728/Hyd./2025 Calcutta High Court in the case of GIRDHAR GOPAL DALMIA vs. UNION OF INDIA & ORS (Μ.Α.Τ 1690 of 2023), decided on 25.09.2024.”
In light of various judgements of the Hon’ble High Courts, including the judgement of the jurisdictional 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: “13. Another aspect which needs to be considered is that in fact it should have been realized by the Income Tax Department itself and should have found out via media in ensuring that proceedings under Sections 148-A and 148 should not have been issued in n faceless manner, at least till the Hon'ble Supreme Court decide the twelve hundred (1200) odd SLPs which it is already seized of or, at least the Income Tax Department should have found out some remedial steps to ensure that wherever the authorities intend to initiate proceedings under Sections 148-A and 148, other than in a faceless manner, the proceedings should have been deferred without precipitating the matter further intimating the assessee that they shall initiate appropriate proceedings only after the SLP's are decided by the Hon'ble Supreme Court on the very same issue. This again, the Income Tax Department, has not been able to give a convincing reply, except for the fact that such a decision if at all has to be taken, has to be taken for the whole of India, and which otherwise has to be by way of a policy decision and that too at the level of Central Board of Direct Taxes.
21 ITA.No.1728/Hyd./2025 Though the learned Standing Counsel for the Income Tax Department contended that the Delhi High Court dismissed a writ petition of similar nature, on the one hand when the High Court is struggling to reduce its pendency, such notices which are under challenge in this writ petition are forcing the assessee to knock the doors of this High Court resulting in filing of hundreds of new writ petitions which in the long run not only affects the disposal of the writ petitions but also consumes substantial time of the Bench in hearing these matters again and again on daily basis. Admittedly, in spite of the matter before the Hon'ble Supreme Court having been taken on many occasions, the Hon'ble Supreme Court which is seized of the matter has been reluctant in granting any interim protection to the Income Tax Department. Yet, the authorities concerned at the State level are not ready to accept the verdict passed by a majority of High Courts of different States on the same issue; and to make things further worse, the Income Tax Department is showing audacity by issuing notices continuously under Sections 148-A and 148 through the jurisdictional Assessing Officer whereas it ought to have been only in the faceless manner.
14. In the case of BANK OF INDIA vs. ASSISTAN COMMISSIONER, INCOME TAX", on an issue whether it was justifiable on the part of the Income Tax Department in no following an order passed by the adjudicating authority only on the ground that the appeals are pending, 22 ITA.No.1728/Hyd./2025 the Division Bench of the High Court of Bombay held at paragraph No.25 as under, viz.,: "25. Mr. Paridwalla has rightly drawn out attention to the decision of this Court in Commissioner of Income Tax vs. Smt. Godavaridevi Saraf¹ as also the recent decision of the co-ordinate Bench of this Court in Samp Furniture (P) Ltd. v. ITO of which one of us (Justice G.S. Kulkarni) was a member, wherein the Court categorically observed that the Revenue having not "accepted" the judgment of the High Court would not mean that till the same is set aside in a manner known to law, it would loose its binding force. Referring to the decision of the Supreme Court in Union of India vs. Kamlakshi Finance Corporation Ltd.", the Court observed that the approach of the officials of Revenue of treating decisions being "not acceptable" was criticized by the Supreme Court. In such decision, following are the relevant observations made by the Supreme Court. [(2025) 170 taxmann.com 422 (Bombay)] 12 [1978] 113 ITR 589 (Bombay) 13 [2024] 165 taxmann.com 581/300 Taxman 452 (Bombay) 14 [1992] taxmann.com 16/55 ELT 433 (SC)
6. Sri Reddy is perhaps right in saying that the officers were not actuated by any mala fides in passing the impugned orders. They perhaps genuinely felt that the claim of the assessee was not tenable and that, if it was accepted, the Revenue would suffer. But what Sri Reddy overlooks is that we are not concerned here with the correctness or otherwise of their conclusion or of any factual malafides but with the fact that the officers, in 23 ITA.No.1728/Hyd./2025 reaching In their conclusion, by-passed two appellate orders in regard to the same issue which were placed before them, one of the Collector (Appeals) and the other of the Tribunal. The High Court has, in our view, rightly criticized this conduct of the Assistant Collectors and the harassment to the assessee caused by the failure of these officers to give effect to the orders of authorities higher to them in the appellate hierarchy. It cannot be too vehemently emphasized that it is of utmost importance that, in disposing of the quasi-judicial issues before them, revenue officers are bound by the decisions of the appellate authorities. The order of the Appellate Collector is binding on the Assistant Collectors working within his jurisdiction and the order of the Tribunal is binding upon the Assistant Collectors and the Appellate Collectors who function under the jurisdiction of the Tribunal. The principles of judicial discipline require that the orders of the higher appellate authorities should be followed unreservedly by the subordinate authorities. The mere fact that the order of the appellate authority is not acceptable" to the department in itself an objectionable phrase and is the subject matter of an appeal can furnish no ground for not following it unless its operation has been suspended by a competent court. If this healthy rule is not followed, the result will only be undue harassment to assesses and chaos in administration of tax laws. … …. ….
We have dealt with this aspect at some length, because it has been suggested by the learned Additional Solicitor General that the observations made 24 ITA.No.1728/Hyd./2025 by the High Court, have been harsh on the officers. It is clear that the observations of the High Court, seemingly vehement, and apparently unpalatable to the Revenue, are only intended to curb a tendency in revenue matters which, if allowed to become widespread, could result in considerable harassment to the assesses-public without any benefit to the Revenue. We would like to say that the department should take these observations in the proper spirit. The observations of the High Court should be kept in mind in future and the utmost regard should be paid by the adjudicating authorities and the appellate authorities to the requirements of judicial discipline and the need for giving effect to the orders of the higher appellate authorities which are binding on them."
What is worrying this Bench more is the fact that an endeavour is being made whole heartedly to ensure not to generate further litigation on issues which have been laid to rest by a large number of High Courts all of whom have taken a consistent stand that the action of the Income Tax Department being violative of the Finance Act, 2020 and Finance Act, 2021. Now, in order to protect the interest of the Revenue as also that of the assessee, it would be trite at this juncture, if we dispose of the writ petition with an observation/direction that the disposal of the instant writ petition in terms of the judgment rendered by this High Court in the case of Kankanala Ravindra Reddy (1 supra) shall however be subject to the outcome of the SLPs which were filed by the Income Tax Department and which is pending consideration before the Hon'ble Supreme Court.
25 ITA.No.1728/Hyd./2025 16. In the given facts and circumstances, this Bench is of the considered opinion that unless and until we do not timely dispose of matters which are squarely covered by the decision of this Court and which stands fortified by the decisions of the various other High Courts on the very same issue, the pendency of this High Court would further be burdened which otherwise can be decided and disposed of as a covered matter.
So far as the interest of the Revenue is concerned, we are of the considered opinion that the interest of the Revenue has already been considered and protected, as has been observed in paragraphs 36, 37 and 38 of the order which, for ready reference, is reproduced hereunder:
“36. For all the aforesaid reasons, the impugned notices issued and the proceedings drawn by the respondent-Department is neither tenable, nor sustainable. The notices so issued and the procedure adopted being per se illegal, deserves to be and are accordingly set aside/ quashed. As a consequence, all the impugned orders getting quashed, the consequential orders passed by the respondent-Department pursuant to the notices issued under Section 147 and 148 would also get quashed and it is ordered accordingly. The reason we are quashing the consequential order is on the principles that when the initiation of the proceedings itself was procedurally wrong, the subsequent orders also gets nullified automatically.
The preliminary objection raised by the petitioner is sustained and all these writ petitions stands allowed on this very jurisdictional issue. Since the 26 ITA.No.1728/Hyd./2025 impugned notices and orders are getting quashed on the point of Jurisdiction, we are not inclined to proceed further and decide the other issues raised by the petitioner which stands reserved to be raised and contended in an appropriate proceedings.
Since the Hon'ble Supreme Court had, in the case of Ashish Agarwal, supra, as a one-time measure exercising the powers under Article 142 of the Constitution of India, permitted the Revenue to proceed under the substituted provisions, and this Court allowing the petitions only on the procedural flaw, the right conferred on the Revenue would remain reserved to proceed further if they so want from the stage of the order of the Supreme Court in the case of Ashish Agarwal, supra.”
We would only further like to make observations that since we are inclined to dispose of the instant writ petition, conscious of the fact that the earlier order of this High Court in the case of Kanakala Ravindra Reddy (1 supra) is subjected to challenge before the Hon'ble Supreme Court in SLP No.3574 of 2024, preferred by the Income Tax Department, we make it clear that allowing of the instant writ petition is subject to outcome of the aforesaid SLP preferred by the Revenue against the decision of this High Court in the case of Kanakala Ravindra Reddy (1 supra). This, in other words, would mean that either of the parties, if they so want, may move an appropriate petition seeking revival of this writ petition in the light of the decision of the Hon'ble Supreme Court in the pending SLP on the very same issue.
Accordingly, the instant writ petition stands allowed in favour of the assessee so far as the issue of jurisdiction is concerned. As a 27 ITA.No.1728/Hyd./2025 consequence, the impugned notice under challenge under Sections 148- A and 148 stands set aside/quashed. The consequential orders, if any, also stand set aside/quashed in similar terms as have been passed by this High Court in the case of Kankanala Ravindra Reddy (1 supra). There shall be no order as to costs. Consequently, miscellaneous petitions pending, if any, shall stand closed.
14. Thus, it is clear that the issue raised by the assessee in the present appeal is now covered by the decision of Hon’ble Jurisdictional 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 : “2. On the facts and in the circumstances of the case and in law, the Jurisdictional Assessing Officer erred by initiating proceedings u/s 147 of the Act, simply relied on the SFT information shown in the verification module of Insight Portal at the time of reopening, however, either no information gathered or not conducted any Inquiry further in order to form an honest, and a reasonable belief that certain income had escaped assessment in the case of the appellant, As such, said proceedings and the consequent order ought to be declared full and void-ab- Initio.
3. The Notice issued up 148 of the Act, 1901dated 30.03.2023 is illegal and unsustainable in law since the income alleged to have escaped assessment, actually is far below the threshold limit of Rs50 Lacs in the present case, it is actually 28 ITA.No.1728/Hyd./2025 Rs.30.61,000/- only and thereby, barred by limitation under the provisions of section 149(1) (a) of the Act. Since the impugned notice issued u/s.148 of the LT Act, 1961 dated 30.03.2023, legal and unsustainable in law, accordingly, the impugned reassessment order u/s.147 r.w.s.144B of the Act dated 01.03.2024 and the notice of demand dated 01.03.2024 Issued u/s 158 of the Act are also bad in law and unsustainable and the same, is hereby, quashed and set aside. 4 On the facts and in the circumstances of the case and in law, the Assessment Unit/NaFAC erred by making the additions without supplying the relevant documents or tangible material to the appellant and without obtaining the bank account statement(s) relied on which the case was reopened by the JAO, as such, said proceedings and the consequent order ought to be declared null and vold-ab-Initio.
5. On the facts and in the circumstances of the case and in law, the Jurisdictional Assessing Officer erred in the proceedings Initiated u/s 147 of the Act without following due procedure prescribed by CBDT vide Instruction No F.No.299/ 10/2022- Dir(Inv.1)/647 dt., 22.08.2022 and accordingly the said proceedings and the consequent order ought to be declared null and void ab initio.”
15. 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.
29 ITA.No.1728/Hyd./2025 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.”
5.1. 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 jurisdictional High Court in the case of Kotha Kanthaiah dated 24.04.2025 in Writ Petition No.344 of 2025 as well as the decision of co-ordinate bench of this Tribunal (supra), we hold that the notice issued u/s. 148A(b) of the Act as well as the decision of co-ordinate bench as well as u/s. 148 of the Act in the case of the assessee by the JAO are not valid and liable to be set aside. We order accordingly.
5.2. Since the matter is pending adjudication before the Hon'ble Supreme Court and the Hon'ble High Court in the case of Kotha Kanthaiah (supra) has also given the liberty to the parties to move an appropriate petition seeking revival of the petition in the light of judgement of Hon'ble Supreme Court on this very issue, therefore, we grant the liberty to the parties to get this appeal revived, if judgment of Hon'ble Supreme Court on this issue necessitate to modify this order.
7.4. Thus, it is clear that the Hon’ble Jurisdictional High Court for the State of Telangana has taken a consistent view that the notice u/sec.148 of the Act by the Jurisdictional Assessing Officer is not valid and liable to be set-aside/quashed. We, therefore, by respectfully following 30 ITA.No.1728/Hyd./2025 the Judgment of Hon’ble Jurisdictional High Court for the State of Telangana as well as the decisions of this Tribunal (supra), we hold that, the notice issued by the Jurisdictional Assessing Officer u/sec.148A(b) dated 03.03.2023 as well as notice issued u/sec.148 dated 23.03.2023 are not valid and liable to be quashed. We order accordingly.
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 Jurisdictional 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 Court on this issue necessitates to modify this Order. Accordingly, grounds of appeal nos.2 to 6 are allowed.
9. 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.”
31 ITA.No.1728/Hyd./2025 12. Respectfully following the Judgment of Hon’ble Jurisdictional High Court as relied upon by this Tribunal in the earlier Order (supra) as well as to maintain rule of consistency, we decide this issue in favour of the assessee by holding that the notice issued u/sec.148 of the Act by the JAO without following the procedure provided u/sec.144B read with Section 151A is invalid and liable to be quashed. We Order accordingly.
13. Since the matter is pending adjudication before the Hon’ble Supreme Court in the case of Hexaware Technology Ltd., therefore, the parties are at liberty to get this appeal revived as per the outcome of the SLP on the same issue pending adjudication before the Hon’ble Supreme Court. Since, we have quashed the notice issued u/sec.148 of the Act, it also vitiates the re-assessment order passed by the Assessing Officer, therefore, we do not propose to decide other grounds which are also not pressed by the learned Authorised Representative of the Assessee at this stage and prayed 32 ITA.No.1728/Hyd./2025 for keeping the same open, if need arises. Hence, the other issues raised by the assessee are kept open.
In the result, appeal of the Assessee is allowed.
Order pronounced in the open Court on 07.01.2026.