KOTA RADHA,VIJAYAWADA vs. INCOME TAX OFFICER, WARD-3(1), VIJAYAWADA

Thereafter, the AO, pursuant to the notice issued under section 133(6) of the Act dated 02.12.2023 issued to Union Bank of India Branch, Machavaram, received a copy of the statement of the bank account of the assessee. The AO, on a perusal of the bank statement, observed that the assessee had, during the subject year, made cash deposits aggregating to Rs. 94,12,850/-. As the assessee had failed to come forth with any explanation regarding the source of the aforesaid cash deposits of Rs. 94,12,850/-, the A.O held the entire amount as having been sourced from the assessee’s unexplained money under section 69A of the Act. Apart from that, the AO made an addition of the interest income that was received by the assessee during the subject year of Rs. 1,936/-. Accordingly, the A.O vide his order passed under section 147 r.w.s 144 of the Act, dated 28.03.2024, determined the income of the assessee at Rs. 94,14,786/-. Also, the AO, while culminating the assessment, initiated penalty proceedings under section 271(1)(c) of the Act for concealing the income particulars.

Aggrieved, the assessee carried the matter in appeal before the CIT(A). As the appeal filed by the assessee before the CIT(A) involved a delay of 164 days,

The assessee, aggrieved with the order of the CIT(A) has carried the matter in appeal before us.

We have heard the Learned Authorized Representatives of both the parties, perused the orders of the authorities below and the material available on record, as well as considered the judicial pronouncements that have been pressed into service by the Ld. AR to buttress her contentions.

Smt. A. Aruna, Learned Authorized Representative (for short, “Ld.AR”) for the assessee, at the threshold of hearing of the appeal, submitted that, as the notice under section 148 of the Act dated 03.04.2022, bearing DIN No. ITBA/AST/S/148-1/2022-23/1042457805(1) issued by the Income Tax Officer, Ward -2(1), Vijayawada i.e., Jurisdictional Assessing Officer (for short “JAO”); Page No. 11 of APB, on a writ petition filed by the assessee before the Hon’ble High Court of Andhra Pradesh had been quashed, therefore, the consequential assessment order passed by the A.O, vide his order passed under section 147 r.w.s 144 of the Act dated 28.03.2024 cannot be sustained and is liable to be quashed for absence of jurisdiction. The Ld. AR further submitted that as the notice under section 148 of the Act, dated 03.04.2022, had been quashed by the Hon’ble High

Elaborating further on her contention, the Ld.AR submitted that now when the notice issued by the A.O under section 148 of the Act dated 03.04.2022 in itself had been quashed by the Hon’ble High Court of Andhra Pradesh vide order passed in Writ Petition No. 256/2026 dated 06.01.2026, therefore, the consequential assessment order passed by the A.O under section 147 r.w.s 144

Per contra, Sri K. Prasad, learned Senior Department Representative (for short “Ld. DR”), relied upon the orders of the authorities below. The Ld. DR submitted that the CBDT had issued a letter directing the Departmental Representatives to seek adjournment in a matter, inter alia, involving the issue of notice for re-assessment by JAO, considering the clarification proposed under the Finance Bill, 2026. The Ld. DR submitted that, taking cognizance of the aforesaid factual position, the hearing of the present appeal be adjourned.

We have given thoughtful consideration to the contentions advanced by the Learned authorized Representatives of both parties regarding the issue in hand.

We are of a firm conviction that as the Hon’ble High Court of Andhra Pradesh on a writ petition filed by the assessee in Radha Kota W/o. Lakshmi Narasimha Rao vs. (i) ITO, Ward -2(1), Vijayawada; (ii) ITO, Ward – 3(1), Vijayawada; Writ Petition No. 256/2026 dated 06.01.2026, had followed its earlier orders passed in the case of Smt. Parameela Pasumarthi v. DCIT, Circle – II, Vijayawada and another in W.P. NO. 14681 of 2023 and other batch matters, wherein the impugned notices and orders issued by the JAO’s outside the faceless mechanism as provided under the provisions of section 144(b) r.w.s. 151A and Page. No 6

Although it is the Ld. DR’s contention that as per the directions of the CBDT the Departmental Representatives have been directed to seek adjournment in matters involving issue of notice for re-assessment by JAO, based on the clarification proposed in Finance Bill, 2026, but we are unable to persuade ourselves to accept the same. We say so, for the reason that as the notice issued by the A.O under section 148 of the Act dated 03.04.2022 had been quashed by the Hon’ble High Court on a writ petition filed by the assessee, i.e, Writ Petition No. 256/2026 dated 06.01.2026 and thus, ceases to exist, therefore, there can be no justification to sustain the order of assessment passed by the A.O under section 147 r.w.s 144 of the Act dated 28.03.2024, which finds its genesis in the aforesaid notice under Section 148 of the Act, dated 03.04.2022 that having been quashed by the High Court ceases to exist on date.

Before parting, we may herein observe, that although the assessment order passed by the A.O under section 147 r.w.s 144 of the Act dated 28.03.2024, in the backdrop of the aforesaid facts available on record as on date cannot be sustained and is liable to be quashed in the absence of notice under section 148 of the Act, but, in case if the Department gets a revival of the aforesaid notice by approaching the Hon’ble High Court or the Hon’ble Supreme Court, then, it shall remain at liberty to seek necessary amendment of the present order.

We, thus, in terms of our aforesaid deliberations, quash the assessment order passed by the A.O under section 147 r.w.s 144 of the Act, dated 28.03.2024.

Resultantly, the appeal filed by the assessee is allowed in terms of our aforesaid observations.

As the assessment order passed by the A.O under section under section 147 r.w.s 144 of the Act dated 28.03.2024 has been quashed by us in terms of our aforesaid observations while disposing of the assessee’s appeal in ITA 562/Viz/2025, therefore, the impugned penalty imposed by the A.O vide his order under section 271(1)(c) of the Act, dated 22.07.2024 cannot survive on a standalone basis and has to meet the same fate. We, thus, on the same terms and Page. No 8

Resultantly, the appeal filed by the assessee is allowed in terms of our aforesaid observations.

In the result, both the appeals filed by the assessee are allowed.