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Facts
The assessee challenged a reassessment notice issued under Section 148 of the Income Tax Act before the Hon'ble Jurisdictional High Court of Andhra Pradesh. The High Court initially stayed the assessment proceedings and subsequently quashed the Section 148 notices along with related notices under Section 148A(b) and 148A(d). The assessee filed the appeal against the CIT(A)'s order with a delay of 107 days, attributing it to a bonafide belief that no further proceedings would occur after the High Court's stay.
Held
The Tribunal condoned the 107-day delay, finding sufficient cause due to the High Court's interim stay and subsequent quashing of the Section 148 notices. It held that once the High Court set aside the Section 148 notice, the reassessment order by the Assessing Officer and the consequential order by the CIT(A) became infructuous and non-est, as the foundational notice was invalidated.
Key Issues
1. Whether there was sufficient cause to condone the 107-day delay in filing the appeal. 2. Whether the reassessment proceedings initiated under Section 148 of the Income Tax Act, 1961, and the consequential orders are valid when the underlying Section 148 notice has been quashed by the jurisdictional High Court for non-compliance with the faceless assessment mechanism.
Sections Cited
Section 148, Section 148A(b), Section 148A(d), Section 144, Section 147, Section 151A, Section 142(1), Section 250, Section 208
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Income Tax Appellate Tribunal, VISAKHAPATNAM BENCH : VISAKHAPATNAM AT HYDERABAD
Before: SHRI VIJAY PAL RAO & SHRI OMKARESHWAR CHIDARA
PER VIJAY PAL RAO, VICE PRESIDENT :
1. This appeal by the Assessee is directed against the Order dated 24.10.2024 of the learned CIT(A)-National Faceless Appeal Centre [in short “NFAC], Delhi, for the assessment year 2015-2016.
2 ITA.No.232/VIZ./2025 2. At the outset, there is a delay of 107 days in filing the present appeal. The assessee has filed a petition/affidavit for condonation of delay. The learned Authorised Representative of the Assessee has submitted that the assessee challenged the notice issued by the Assessing Officer u/sec.148 before the Hon’ble Jurisdictional High Court of Andhra Pradesh in WP.No.10636/2024. The Hon’ble Jurisdictional High Court of Andhra Pradesh vide interim order dated 06.05.2024 stayed the assessment order passed by the Assessing Officer as well as passed the directions that no coercive steps will be taken till the next date of listing. He has filed the copy of the interim order dated 06.05.2024 along with Judgment of Hon’ble Jurisdictional High Court of Andhra Pradesh whereby the writ petition filed by the assessee along with batch of other petitions were disposed of vide order dated 28.10.2025 and the notice issued u/sec.148 along with notices issued u/sec.148A(b) and 148A(d) were set-aside. Thus, the learned Authorised Representative of the Assessee has submitted that once the Hon’ble Jurisdictional High Court of Andhra Pradesh vide interim order stayed the 3 ITA.No.232/VIZ./2025 assessment order and finally the notice issued by the Assessing Officer u/sec.148 was quashed/set-aside, then the impugned order passed by the Assessing Officer as well as the learned CIT(A) have no legs to stand and liable to be quashed being contrary to the Judgment of Hon’ble Jurisdictional High Court of Andhra Pradesh. Thus, the learned Authorised Representative of the Assessee has submitted that assessee was not having the knowledge of the impugned order passed by the learned CIT(A) as the assessee was pursuing its matter before the Hon’ble Jurisdictional High Court of Andhra Pradesh wherein the Order of the Assessing Officer was stayed vide Interim Order dated 06.05.2024. Thereafter, the assessee came to know that the learned CIT(A) has passed the impugned order which is otherwise not sustainable in law and therefore, the assessee has filed the present appeal. He has thus, submitted that the delay in filing the appeal is neither intentional nor wilful but due to the bonafide belief of the assessee that after the stay granted by the Hon’ble Jurisdictional High Court of Andhra Pradesh there will be no proceedings. However, due to lack of 4 ITA.No.232/VIZ./2025 knowledge and understanding, the assessee could not came to know about the impugned order which has resulted a delay of 107 days in filing the present appeal before the Tribunal.
On the other hand, the learned DR has submitted that it is the case of non-filer of return of income by the assessee and therefore, the Assessing Officer has proceeded to pass the assessment order u/sec.147 r.w.s.144 of the Income Tax Act [in short "the Act"], 1961. The Assessing Officer issued various notices to the assessee but there was no response on behalf of the assessee to the notices issued by the Assessing Officer and hence, the assessee did not comply with the notices issued by the Assessing Officer u/sec.148 as well as u/sec.142(1) of the act. Thus, the learned DR has submitted that the assessee has not explained the ‘sufficient cause’ for the delay of 107 days in filing the present appeal and therefore, the delay should not be condoned by the Tribunal.
We have considered the rival submissions as well as the relevant material on record. The Assessing Officer has issued notice u/sec.148 of the Act on 07.04.2022 based on 5 ITA.No.232/VIZ./2025 the information regarding the sale or purchase of motor vehicle and cash deposits in the bank account of the assessee total amounting to Rs.1.10 crores. The Assessing Officer has given the details of the notices given u/sec.148 and 142(1) as well as show cause notices as under:
6 ITA.No.232/VIZ./2025 4.1. Thus, it is manifest from the assessment order that except one show cause notice dated 29.02.2024, the assessee did not respond to any of the other notices issued by the Assessing Officer. The assessee challenged the notice issued by the Assessing Officer u/sec.148 of the Act before the Hon’ble Jurisdictional High Court of Andhra Pradesh in WP.No. 10636/2024 and vide Interim Order dated 06.05.2024 the Hon’ble Jurisdictional High Court of Andhra Pradesh has stayed the operation of the assessment order as well as also ordered that no coercive steps will be taken till the next date of listing. The assessee also challenged the order of the Assessing Officer before the learned CIT(A) by filing the appeal on 28.03.2024. However, once the Hon’ble Jurisdictional High Court of Andhra Pradesh has passed an Interim Order dated 06.05.2024, the learned CIT(A) ought to have not proceeded with the matter till the outcome of the writ petition pending adjudication before the Hon’ble Jurisdictional High Court. As it is manifest from the Interim Order of the Hon’ble Jurisdictional High Court of Andhra Pradesh that the department was represented by Sri Vijhay 7 ITA.No.232/VIZ./2025 K Punna, the learned Senior Standing Counsel. Therefore, the proceedings once stayed by the Hon’ble Jurisdictional High Court of Andhra Pradesh vide the Interim Order the same ought to have been followed by the Assessing Officer as well as the learned CIT(A). Further, the Hon’ble Jurisdictional High Court of Andhra Pradesh vide Judgment dated 28.10.2025 has quashed the notices issued u/sec.148A(b), 148A(d) and 148 of the Act. Once the notice u/sec.148 of the Act has been set aside by the Hon’ble Jurisdictional High Court of Andhra Pradesh, it also vitiates the re-assessment order passed by the Assessing Officer and consequently, the assessment order as well as the impugned order passed by the learned CIT(A) becomes infructuous/non-est. Therefore, we find that the assessee was having a bonafide reason for not participating in the proceedings before learned CIT(A) as the assessee challenged the notice issued u/sec.148 before the Hon’ble Jurisdictional High Court of Andhra Pradesh and also got an Interim Order of stay. Accordingly, in the facts and circumstances of the case, we are satisfied that the assessee was having a ‘sufficient cause’ for the delay of 107 8 ITA.No.232/VIZ./2025 days in filing the present appeal before the Tribunal. Even otherwise, after the Judgment of Hon’ble Jurisdictional High Court setting aside the notice u/sec.148 of the Act, the order of the Assessing Officer and consequential impugned order passed by the learned CIT(A) becomes infructuous and therefore, declining to condone the delay would amount to upholding the impugned order of the learned CIT(A) otherwise becomes infructuous and non-est. It is settled proposition of law that when the substantial justice and technical considerations are pitted against each other, the cause of substantial justice deserves to be preferred. Accordingly, in the facts and circumstances of the case and in the interest of justice, we condone the delay of 107 days in filing the present appeal before the Tribunal.
The Assessee has raised the following grounds in the instant appeal:
On the facts and in the circumstances of the case, the order passed by the learned C.I.T (Appeals) u/s 250 of the IT Act is bad in law as well as facts.
9 ITA.No.232/VIZ./2025 2. On the facts and in the circumstances of the case, the learned CIT(A) erred in dismissing the appeal on the ground that the appellant failed to pay advance tax u/s.208 of the I.T. Act is vague and incorrect.
3. On the facts and circumstance of the case, the Learned CIT(A) is not justified in not considering the fact that the appellant is a pure agriculturist and therefore, do not have any taxable income and hence not liable for payment of any advance tax.
4. On the facts and circumstance of the case, the Learned CIT(A) is not justified in dismissing the appeal without affording a reasonable time and opportunity to appellant to explain which is against the principles of natural justice.
5. On the facts and circumstance of the case, Learned CIT(A) ought to have considered the case on merits even though the appeal was rejected on pure technical issue and should have been disposed of on merits. Therefore, it is requested that the assessment may annulled and restored back to the Assessing Officer to reconsideration.
On the facts and circumstances of the case, the Learned CIT(A) ought to have realized that the Hon'ble High Court of Andhra Pradesh has directed to the department that impugned order of assessment shall remain stayed and hence initiation of any further proceedings on such assessment are barred. Therefore, the Learned CIT(A) ought not to have disposed off the appeal on pure technical ground.
Any other legal or factual ground or grounds that may be urged at the time of hearing.
10 ITA.No.232/VIZ./2025 6. We have heard the learned Authorised Representative of the Assessee as well as learned DR and carefully perused the relevant material on record. The Hon’ble Jurisdictional High Court of Andhra Pradesh vide Judgment dated 28.10.2025 has set-aside the notice issued u/sec.148 of the Act in paras-7 to 9 as under:
“7. Discussion and findings: (A). The Division Bench of the Bombay High Court in the case of Prakash Pandurang Patil Vs. Income Tax Officer, Ward 5, Panvel & Others by following the judgment of a Division Bench of the High Court of Bombay, in the case of Hexaware Technologies Limited Vs. Assistant Commissioner of Income Tax & 4 Ors had considered the effect and interpretation of the Section 151 (A) of the Income Tax as extracted herein under: "3. It is apparent that the impugned notice dated 5 April, 2022 issued under Section 148 of the Act and the order of the same date under Section 148A(d) of the Act are issued by the Jurisdictional Assessing Officer ("JAO") and not under the mandatory faceless mechanism as per the provisions of Section 151 A of the Act. For a notice to be validly issued under Section 148 of the Act, the respondent No.2 would be required to comply with the provisions of Section 151A of the Act, so as to adhere to the faceless mechanism, as notified by the Central Government by notification dated 29 March 2022. A Division Bench of this Court in the case of Hexaware Technologies Limited Vs. Assistant Commissioner of Income Tax & 4 Ors had considered the effect and interpretation of 11 ITA.No.232/VIZ./2025 the said provision. The relevant extract of the said decision reads thus:- 35. Further, in our view, there is no question of concurrent jurisdiction of the JAO and the FAO for issuance of notice under Section 148 of the Act or even for passing assessment or reassessment order. When specific jurisdiction has been assigned to either the JAO or the FAO in the scheme dated 29.03.2022, then it is to the exclusion of the other. To take any other view in the matter, would not only result in chaos but also render the whole faceless proceedings redundant. If the argument of Revenue is to be accepted, then even when notices are issued by the FAO, it would be open to an assessee to make submission before the JAO and vice versa, which is clearly not contemplated in the Act. Therefore, there is no question of concurrent jurisdiction of both FAO or the JAO with respect to the issuance of notice under Section 148 of the Act. The Scheme dated 29th March 2022 in paragraph 3 clearly provides that the issuance of notice "shall be through automated allocation" which means that the same is mandatory and is required to be followed by the Department and does not give any discretion to the Department to choose whether to follow it or not. That automated allocation is defined in paragraph 2 (b) of the Scheme to mean an algorithm for randomised allocation of cases by using suitable technological tools including artificial intelligence and machine learning with a view to optimise the use of resources. Therefore, it means that the case can be allocated randomly to any 12 ITA.No.232/VIZ./2025 officer who would then have jurisdiction to issue the notice under Section 148 of the Act, It is not the case of respondent No.1 that respondent No.1 was the random officer who had been allocated jurisdiction.
With respect to the argument of the Revenue, i.e., the notification dated 29th March, 2022 provides that the Scheme so framed is applicable only 'to the extent' provided in Section 144 B of the Act and Section 144 B of the Act does not refer to issuance of notice under Section 148 of the Act and hence, the notice cannot be issued by the FAO as per the said Scheme, we express our view as follows:- Section 151A of the Act itself contemplates formulation of Scheme for both assessment, reassessment or re-computation under Section 147 as well as for issuance of notice under Section 148 of the Act. Therefore, the Scheme framed by the CBDT, which covers both the aforesaid aspect of the provisions of Section 151A of the Act cannot be said to be applicable only for one aspect, ie, proceedings post the issue of notice under Section 148 of the Act being assessment, reassessment or re-computation under Section 147 of the Act and inapplicable to the issuance of notice under Section 148 of the Act. The Scheme is clearly applicable for issuance of notice under Section 148 of the Act and accordingly, it is only the FAO which can issue the notice under Section 148 of the Act and not the JAO. The argument advanced by respondent would render clause 3(b) of the Scheme otiose and to be ignored or contravened, as according to respondent, even though the Scheme specifically 13 ITA.No.232/VIZ./2025 provides for issuance of notice under Section 148 of the Act in a faceless manner, no notice is required to be issued under Section 148 of the Act in a faceless manner. In such a situation, not only clause 3(b) but also the first two lines below clause 3(b) would be otiose, as it deals with the aspect of issuance of notice under Section 148 of the Act. Respondents, being an authority subordinate to the CBDT, and which has been laid before both House of Parliament is partly otiose and inapplicable....."
When an authority acts contrary to law, the said act of the Authority is required to be quashed and set aside as invalid and bad in law and the person seeking to quash such an action is not required to establish prejudice from the said Act. An act which is done by an authority contrary to the provisions of the statue, itself causes prejudice to assessee. All assessees are entitled to be assessed as per law and by following the procedure prescribed by law. Therefore, when the Income Tax Authority proposes to take action against an assessee without following the due process of law, the said action itself results in a prejudice to assessee. Therefore, there is no question of petitioner having to prove further prejudice before arguing the invalidity of the notice. 4. It is hence apparent that in the present case, the impugned order and the notices issued by respondent no.1 are not in compliance with the Scheme notified by the Central Government implementing the provisions of Section 151A of the Act. The Scheme, as tabled before the Parliament 14 ITA.No.232/VIZ./2025 as per the requirements of the said provision, is in the nature of a subordinate legislation, which governs the conduct of proceedings under Section 148A as well as Section 148 of the Act. Thus, in view of the explicit declaration of the law in Hexaware Technologies Limited (supra), the grievance of the petitioner- assessee insofar as it relates to an invalid issuance of the impugned order and the notice is required to be accepted.
5. Learned Counsel for the parties agree that in this view of the matter, the proceedings initiated under Section 148 of the Act would not be sustainable and are rendered invalid in view of the judgment rendered in Hexaware Technologies Limited (supra)."
(B). Further, it is very apt to refer the judgment of the High Court of Telangana in the case of Kanakanala 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 151 A of the Act read with Notification 18/2022 dated 29.03.2022. (C). It is also to be noted that the same issue had also been decided by various High Courts in India i.e., 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 Banngu Vs. Union of India and Telangana High Court in the case of Sri Venkataramana Reddy Patloola Vs. Deputy Commissioner of Income Tax. Some views have been taken by the Division Bench of Calcutta High Court in the case of Giridhar Gopal Dalmia Vs. Union of India Vs. Ors, [ 3(2023) 156 taxmann.com 178 (Telangana); 15 ITA.No.232/VIZ./2025 4(2024) 156 taxmann.com 478 (Gauhati); 5 (2024) 165 taxmann.com 115(Punjab & Haryana); 6 (2024) 167 taxmann.com 411 [Telangana); 7.MAT. 1600 of 2023 ] decided on 25.09.2024. In these decisions, the various High Courts allowed the Writ Petitions in favour of the assessee in so far as the issue of jurisdiction is concerned.
(D). Admittedly, the Supreme Court has upheld the decision of the Bombay High Court in the case of Prakash Pandurang Patil Vs. Income Tax Officer, Ward 5 Panvel & Ors in S.L.P. (Civil) Diary No.39689/2025, dated 18.08.2025, wherein, the Bombay High Court has allowed the said Writ Petition by following the judgment of the Division Bench of the Bombay High Court in the case of Hexaware Technologies Limited Vs. Assistant Commissioner of Income Tax & 4 Ors. In view of the above factual position, we are of the considered view that the issue involved in the present batch of Writ Petitions is no more res integra.
(E). Considering the background in notifying the (E- Assessment Scheme of Income Escaping Assessment Scheme, 2022) notified by the Government of India on 29.03.2022, and in the light of the decisions of various High Courts stated supra and upon careful consideration of the contentions raised by the learned counsel appearing on either side, we hold that the impugned notices and orders which have been issued by the Jurisdictional Assessing Officer, or outside the faceless mechanism as provided under the provisions of Section 144 (b) read with Section 151 A and the "E-Assessment Scheme of Income Escaping Assessment Scheme, 2022" notified by the Government of India on 29.03.2022 under Section 151 A, is bad and illegal. It is made clear that the Jurisdictional Assessing Officer ("JAO") had no jurisdiction to issue the impugned orders/notices.
16 ITA.No.232/VIZ./2025 (F). In view of the foregoing reasons, all these Writ Petitions are to be allowed in favour of the petitioners, by setting aside the impugned notices/orders.
8. Accordingly, these Writ Petitions are allowed. (i) Consequently, the impugned notices/orders issued under Sections 148-A(b), 148-A(d) and 148 of the Income Tax Act, 1961, in all these Writ Petitions, are hereby set-aside. (ii) The consequential orders, if any, shall stand set- aside.
There shall be no order as to costs.”
7. Accordingly, when the notice issued by the Assessing Officer u/sec.148 has been set aside by the Hon’ble Jurisdictional High Court of Andhra Pradesh, then the consequential order passed by the Assessing Officer has no legs to stand. Hence, in the facts and circumstances of the case and in view of Judgment of Hon’ble Jurisdictional High Court of Andhra Pradesh we set aside the impugned orders passed by the Assessing Officer as well as learned CIT(A) being infructuous and non-est.
In the result, appeal of the Assessee is allowed.
17 ITA.No.232/VIZ./2025 Order pronounced in the open Court on 23.01.2026.