ITO (INTERNATIONAL TAXATION)-1, HYDERABAD V. ABILASH RAO JOSEPH, USA

MA 5/HYD/2026

AI Insights

The case revolves around a Miscellaneous Application (M.A.) filed by the Revenue seeking recall of an earlier Tribunal order which had quashed the assessment orders against Shri Abilash Rao Joseph for being time-barred. The Revenue contended that the notice under Section 148 of the Income Tax Act was served on 16.04.2021, not on 31.03.2021 as previously recorded, thus extending the limitation period for the assessments. The Tribunal, however, found that the notice was indeed served on 31.03.2021, as claimed by the assessee, and upheld the original decision, dismissing the M.A.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 846021 (ITAT-HYDERABAD)
• Duration Of Justice: 2 month(s) 3 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 25-03-2026
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: Hyderabad
• Assessment Year: 2015-2016
• Appeal Filed On: 21-01-2026
• Other Referred Cases: R.K. Upadhyaya vs. Shanabhai P Patel, JCIT (OSD), Mumbai vs. SCNS Pvt. Ltd., Reliance Telecom Ltd. Vs. ACIT
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 147; 148

Judgement Text

"1 आयकर अपीलीय न्यायाधिकरण में, हैदराबाद ‘बी’ बेंच, हैदराबाद IN THE INCOME TAX APPELLATE TRIBUNAL Hyderabad “B” Bench, Hyderabad श्री विजय पाल राि, माननीय उपाध्यक्ष एिं श्री मंजूनाथ जी, माननीय लेखा सदस्य SHRI VIJAY PAL RAO, HON’BLE VICE PRESIDENT AND SHRI MANJUNATHA G, HON’BLE ACCOUNTANT MEMBER M.A. No.05/Hyd/2026 आयकरअपीलसं./I.T.A. No.105/Hyd/2024) (निर्धारण वर्ा/ Assessment Year : 2015-16) The Income Tax Officer, (International Taxation)-1, Hyderabad. Vs. Shri Abilash Rao Joseph, USA. PAN : AKZPJ1922D. (अपीलधर्थी/ Appellant) (प्रत्यर्थी/ Respondent) करदाता का प्रतततितित्व/ Assessee Represented by : Shri A.V. Raghuram, Advocate. राजस्व का प्रतततितित्व/ Department Represented by : Dr. Sachin Kumar, Sr.A.R. सुिवाई समाप्त होिे की ततति/ Date of Conclusion of Hearing : 20.02.2026 घोषणा की तारीख/ Date of Pronouncement : 25.03.2026 O R D E R प्रतत मंजूिाि जी./PER MANJUNATHA G. A.M. The Revenue has filed the present Miscellaneous Application (in short, ‘M.A.’) under Section 254(2) of the Income-tax Act, 1961 (in short, ‘the Act’) seeking recall of the order passed by the Tribunal in ITA No.105/Hyd/2024 dated 09.07.2025 pertaining to the A.Y. 2015-16. Printed from counselvise.com M.A.No.5/Hyd/2026 in ITA No.105/Hyd/2024 2 2. The relevant contents of the Miscellaneous Application filed by the Revenue are reproduced as under : “……. 7.2. It is respectfully submitted that as per the provisions of Section 153 of the Act, the time-limit for completion of reassessment is to be reckoned from \"the end of the financial year in which the notice under section 148 is served. The expression \"served\" is material to the computation of limitation for the assessment proceedings and not the date of issue of no-tice. In the present case, the notice u/s.148 of the Act was served on the assessee on 16.04.2021 and hence falls in the FY 2021-22. Accordingly, the date of limitation for com-pleting the assessment order was 31.03.2024 as per the provisions of Section 153 of the Act, as the assessment order was passed u/s.144C(13) of the Act. 7.3. It is also submitted that in this case the draft assessment order was passed on 02.03.2023. Against the draft assessment order, the assessee filed objections before the Hon'ble DRP. The Hon'ble DRP issued directions to the Assessing Officer on 08.12.2023 within the date of limitation. Subsequently, the Assessing Officer passed the final assessment order on 29.12.2023, which is also within the date of limitation as per the provisions of Sec-tion 144C(13) of the Act. 7.4. As seen from the above, it is clearly evident that the appeal of the assessee was allowed by the Hon'ble ITAT solely on the ground that the notice u/s.148 of the Act was issued on 31.03.2021 and therefore the draft assessment order and the final assessment order were barred by limitation. However, while adjudicating the limitation issue, the Hon'ble ITAT has not referred to the statutory trigger of \"service of notice\", nor examined the issue of limitation with reference to the financial year in which the notice was served. It is an undisputed and admitted fact on record that the notice u/s.148 of the Act was served on the assessee on 16.04.2021 and this factual aspect was not in dispute before the ITAT. 7.5. Here, it is also submitted that the Hon'ble Supreme Court of India in the case of R.K.Upadhyaya vs. Shanabhai P Patel (1997) (33 азтан 229) (SC) held that issuance of notice' refers to the act of Assessing Officer preparing and dispatching the notice and \"service of notice\" refers to actual delivery or receipt of notice by the assessee. Further, it is also submitted that the Hon'ble ITAT, Mumbai in the case of JCIT (OSD), Mumbai in-charge of DCIT-13(2)(2), Mumbai vs. SCNS Pvt. Ltd. MA No.114/MUM/2023 [Arising out of ITA No.2170/Mum/2021, AY 2019-20] held that the mistake in order can he corrected by filing Miscellaneous Application as Supreme Court orders can be operated retrospectively. 8. In view of the above, it is humbly submitted that by deciding the limitation issue solely on the basis of the date of issue of notice, the Hon'ble ITAT has applied a criterion not contemplated by the statute and omitted to apply the express language of section 153 of the Act. This constitutes a mistake apparent on record, warranting rectification in exercise of powers u/s. 254(2) of the Act in connection to the ITAT order in ITA No.105/Hyd./2024 dated 09.07.2025. Accordingly, this Miscellaneous Application is being filed w/s 254(2) of the Act, praying the Hon'ble ITAT to recall the impugned order in ITA No.105/Hyd./2024 Printed from counselvise.com M.A.No.5/Hyd/2026 in ITA No.105/Hyd/2024 3 dated 09.07.2025 (supra) and adjudicate the matter afresh on merits of the case.” 3. The learned Sr. A.R. for the Revenue, Dr. Sachin Kumar, referring to the Miscellaneous Application filed by the Revenue under Section 254(2) of the Income Tax Act, 1961, submitted that, there is an error in the order of the Tribunal in holding that the draft assessment order and final assessment order passed by the A.O. are beyond the limitation in terms of Section 153 of the Income Tax Act, 1961, because the Tribunal had given above finding on the basis of finding that notice under Section 148 of the Income Tax Act, dated 31.03.2021 was served on the assessee, however, the Revenue has filed relevant evidences and claimed that, notice issued under Section 148 of the Income Tax Act dated 31.03.2021 was served on the assessee on 16.04.2021 and as per the provisions of Section 153(2) of the Income Tax Act, the time limit for completion of the assessment is one year from the end of the financial year in which notice under Section 148 of the Act, was served on the assessee. Since the finding recorded by the Tribunal is on the basis of incorrect fact that the notice was served on the assessee on 31.03.2021, and in fact the notice was served on the assessee on 16.04.2021, the assessment order passed by the A.O. is well within the time limit provided under Section 153(2) of the Income Tax Act, 1961, and thus, the finding recorded by the Tribunal constitutes a mistake apparent on record which needs to be recalled. In this regard, the Printed from counselvise.com M.A.No.5/Hyd/2026 in ITA No.105/Hyd/2024 4 learned Senior A.R. relied upon the decision of Hon'ble Supreme Court in the case of R.K. Upadhyaya Vs. Shanabhai P. Patel [1987] 33 Taxman 229 (SC). 4. The learned counsel for the assessee, Shri A.V. Raghuram, Advocate, on the other hand, submitted that, there is no error in the order of the Tribunal in ITA No. 105/Hyd/2024 dated 09.07.2025, as claimed by the Revenue in the application filed under Section 254(2) of the Income Tax Act, 1961, because the findings recorded by the Tribunal while quashing the assessment order being time-barred in light of provisions under Section 153 of the Act, is on the basis of notice under Section 148 of the Act, dated 31.03.2021, and the same has been served on the assessee on 31.03.2021 itself by speed post, as claimed by the Income Tax Officer, International Taxation - 1, Hyderabad. Therefore, there is no merit in the M.A. filed by the Revenue and the same needs to be dismissed. 5. We have heard both parties and considered the relevant contents of miscellaneous application filed by the Revenue under Section 254(2) of the Income Tax Act, 1961, in light of the order of the Tribunal in ITA No. 105/Hyd/2024 dated 09.07.2025. We find that, the Tribunal has quashed the assessment order passed by the A.O. under Section 147 r.w.s. 144 of the Income Tax Act, dated 29.12.2023 being barred by limitation, in view of the provisions of Section 153(2) of the Act, and held that, the assessment order passed by the A.O. dated 29.12.2023 Printed from counselvise.com M.A.No.5/Hyd/2026 in ITA No.105/Hyd/2024 5 is clearly beyond the time limit provided under Section 153 of the Income Tax Act, 1961. Further, the above findings have been recorded on the basis of notice issued under Section 148 of the Act, dated 31.03.2021 and subsequent letter of the Income Tax Officer, International Taxation–1, Hyderabad, addressed to the CIT-DR, where the A.O. categorically admitted that notice issued under Section 148 of the Act, dated 31.03.2021 has been sent to the assessee on the speed post on the very same date. In our considered view, once the notice has been issued and dispatched to the assessee, then the date of issuance and dispatch to the assessee constitutes the date of service on the assessee, as referred to under Section 153(2) of the Income Tax Act, 1961. Therefore, if we consider the date of service of notice on 31.03.2021, then the assessment order passed by the A.O. is beyond the time limit provided under Section 153(2) of the Income Tax Act, 1961. Therefore, in our considered view, the findings recorded by the Tribunal in ITA No. 105/Hyd/2024 dated 09.07.2025, is on the basis of relevant facts available on record and arguments advanced on both sides. Therefore, the application filed by the Revenue u/s 254(2) of the Act, is nothing but an attempt made by the Revenue to review the decision rendered in the given facts and circumstances of the case, and thus, the same cannot be considered as mistake apparent on record, which can be rectified under Section 254(2) of the Income Tax Act. At this stage, it is also relevant to refer to the decision of Hon'ble Supreme Printed from counselvise.com M.A.No.5/Hyd/2026 in ITA No.105/Hyd/2024 6 Court in the case of Reliance Telecom Ltd. Vs. ACIT [2021] 133 taxmann.com 41 (SC), wherein it has been clearly held that the power under Section 254(2) of the Act, is limited to rectification of a mistake apparent on record and the Tribunal has no power to review its own order. 6. In this view of the matter and considering the contents of miscellaneous application filed by the assessee, we are of the considered view that, there is no merit in the M.A. filed by the Revenue under Section 254(2) of the Income Tax Act, 1961, and thus, the same is dismissed. 7. In the result, the Miscellaneous Application filed by the Revenue is dismissed. Order pronounced in the Open Court on 25th March, 2026. Sd/ विजय पाल राि (VIJAY PAL RAO) उपधध्यक्ष /VICE PRESIDENT Sd/- (मंजूिाि जी) (MANJUNATHA G.) लेखध सदस्य/ACCOUNTANT MEMBER Hyderabad, dated 25.03.2026. TYNM/sps Printed from counselvise.com M.A.No.5/Hyd/2026 in ITA No.105/Hyd/2024 7 आदेशकी प्रतततिति अग्रेतषत/ Copy of the order forwarded to:- 1. तििााररती/The Assessee : Shri Abhilash Rao Joseph, 5508 Stout Street, Dubli, CA, USA PIN – 94568, C/o. Shri A.V. Raghu Ram, Advocate, & Tax Consultant, Flat No.610, 6th Floor, Babukhan Estates, Basheerbagh, Hyderabad – 500 001. 2. राजस्व/ The Revenue : The Income Tax Officer, International Taxation – 1, Hyderabad – 500 004. 3. The Principal CIT, Hyderabad 4. तवभागीयप्रतततिति, आयकर अिीिीय अतिकरण, हैदराबाद / DR, ITAT, Hyderabad. 5. गार्ाफ़ाईि / Guard file आदेशािुसार / BY ORDER Sr. Private Secretary ITAT, Hyderabad Printed from counselvise.com TIRUPATI YAMINI NAGA MALLESWARI Digitally signed by TIRUPATI YAMINI NAGA MALLESWARI Date: 2026.03.27 17:59:15 +05'30' "