VIJAY KUMAR KAMDAR,HYDERABAD V. ITO., WARD-1, ADILABAD

ITA 618/HYD/2025

AI Insights

The case involves Vijay Kumar Kamdar, the appellant, contesting the validity of notices issued by the Income Tax Officer, Ward-1, Adilabad, under sections 148A(b) and 148 of the Income Tax Act, 1961, for the assessment year 2016-2017. The notices were challenged on grounds of lack of jurisdiction and procedural improprieties, particularly the failure to issue them in a faceless manner as mandated by the Income Tax Authority Scheme 2022. The Tribunal considered various judgments, including those from the High Courts of Telangana, Bombay, Gauhati, Punjab and Haryana, and Jharkhand, which supported the assessee's position. The Tribunal's decision was influenced by the ongoing Supreme Court proceedings regarding similar issues, granting the parties the option to revive the case based on the Supreme Court's decision.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 780114 (ITAT-HYDERABAD)
• Duration Of Justice: 6 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-10-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2016-2017
• Appeal Filed On: 07-04-2025
• Other Referred Cases: Kotha Kantaiah vs. ITO, Kanakala Ravindra Reddy vs. ITO, Sevensea Vincom (P.) Ltd. vs. Pr. CIT, M/s. Pitti Holdings Pvt. Ltd. vs. ACIT, Hexaware Technology Ltd. vs. Department
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: A SRINIVAS
• Keywords: Set aside
• Section: 148

Judgement Text

" 1 ITA.No.618/Hyd./2025 आयकर अपीलȣय अͬधकरण, हैदराबाद पीठ IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD “SM-B” BENCH, HYDERABAD BEFORE : SHRI VIJAY PAL RAO, VICE PRESIDENT AND SHRI MADHUSUDAN SAWDIA, ACCOUNTANT MEMBER आ.अपी.सं /ITA No.618/Hyd./2025 िनधाŊरण वषŊ/Assessment Year 2016-2017 Vijay Kumar Kamdar, ADILABAD - 504 001. Telangana. PAN AJMPK2305D vs. The Income Tax Officer, Ward-1, ADILABAD - 504 001. Telangana. (Appellant) (Respondent) िनधाŊįरती Ȫारा/Assessee by: CA A Srinivas राज̾ व Ȫारा/Revenue by:: Sri Sankar Pandi P, Sr. AR सुनवाई की तारीख/Date of hearing: 09.09.2025 घोषणा की तारीख/Pronouncement: 08.10.2025 आदेश/ORDER PER VIJAY PAL RAO, VICE PRESIDENT : This appeal by the assessee is directed against the Order dated 12.03.2025 of the learned CIT(A)-National Faceless Appeal Centre [in short “NFAC], Delhi, relating to the assessment year 2016-2017. 2. The assessee has raised the following grounds in the instant appeal : Printed from counselvise.com 2 ITA.No.618/Hyd./2025 1. “The order of the Appellate Commissioner is contrary to low, facts and circumstances of the case 2. The Appellate Commissioner erred in confirming the order passed us.147 rws 144B is bad in law and deserves to be quashed 3. The Appellate Commissioner erred in confirming the notice u/s.148A(b) issued on 03/03/2023, as on the day of issue of notice, the AG. did not have any information and the information was gathered subsequent to the issue of notice 4. The Appellate Commissioner erred in confirming the issue of notice u/sec.148A(b) issued on 03.03.2023 as it is without jurisdiction, as it has been issued by the Jurisdictional A.O Ward-1, Adilabad, Telangana 5. The Appellate Commissioner ought to have seen that the Jurisdictional A.O. Ward-1, Adilabad, Telangana, has no jurisdiction to issue a notice u/s. 148A(d), after the introduction of \"Faceless Jurisdiction of the income Tax Authority Scheme 2022 and as such the notice issued by the JAO needs to be quashed 6. The Appellate Commissioner erred in confirming the notice u/s 148 was issued on the presumption that no return was filed by the Assessee, and such presumption is wrong as the Assessee has filed his return of income on 27th of August, 2016. As the presumption itself is wrong the notice u/s.148 is void ab initio and needs to be struck down 7. The amount escaping of income, prescribed for reopening the assessment, under the new regime is more than Rs.50,00,000/-, if the assessment is beyond 3 years. In this case the assessment year is 2015-16 and was completed on a total income of Rs.15,84,838/- which is far below the amount of Rs.50,00,000/-. As such the notice is without jurisdiction and the Appellate Commissioner has erred in confirming the assessment order passed. Printed from counselvise.com 3 ITA.No.618/Hyd./2025 8. Without prejudice to the above grounds, the Appellate Commissioner erred in confirming the addition of an amount of Rs.15,84,838/- as commission income 9. Any other grounds which the Assessee may urge either before or at the time of the hearing 3. Grounds of appeal No.1 is general in nature and does not require any specific adjudication. 4. Grounds of appeal Nos.2 to 6 are regarding validity of the notice issued u/sec.148 of the Income Tax Act, 1961 [in short “the Act”] by the Jurisdictional Assessing Officer [in short “JAO”] and consequently, vitiates the re-assessment order passed by the Assessing Officer. 5. Learned Authorised Representative for the Assessee CA A Srinivas has submitted that the Assessing Officer has issued notice u/sec.148A(b) of the Act on 03.03.2023. He has referred to the said notice and submitted that the JAO has issued the impugned notice u/sec.148A(b) of the Act instead of Faceless Assessing Officer and, therefore, the notice issued by the JAO is invalid as the JAO was not Printed from counselvise.com 4 ITA.No.618/Hyd./2025 having jurisdiction to issue notice either u/sec.148A(b) or u/sec.148A(d) of the Act after Scheme of Faceless Assessment Proceedings. He has then referred to the Order dated 22.03.2023 passed u/sec.148A(d) of the Act by the JAO and thereafter, notice issued u/sec.148 of the Act dated 23.03.2023 and submitted that all these notices were issued by the JAO without having jurisdiction as it is in violation of the provisions of Income Tax Act by the Finance Act, 2021 which requires a notice be issued in the Faceless manner. The learned AR in support of his contentions relied upon the Judgment of Hon’ble jurisdictional High Court for the State of Telangana in the case of Kotha Kantaiah for the assessment year 2016-2017 in W.P.No.344 of 2025 vide Order dated 24.04.2025 and submitted that the Hon’ble jurisdictional High Court after considering various Judgments of Hon’ble High Court of Bombay, Hon’ble High Court of Gauhati, Hon’ble High Court of Punjab and Haryana as well as Judgment of jurisdictional High Court for the State of Printed from counselvise.com 5 ITA.No.618/Hyd./2025 Telangana in the case of Kanakala Ravindra Reddy vs., ITO 156 taxmann.com 478 has held that the notice issued u/sec.148A(b) as well as notice u/sec.148 of the Act by the JAO is invalid and liable to be quashed. The learned AR has also relied upon Judgment of Hon’ble Jharkhand High Court in the case of Sevensea Vincom (P.) Ltd., vs., Pr. CIT [2024] 465 ITR 331 (Jharkhand) and submitted that even otherwise, the notice issued u/sec.148 by the Assessing Officer on 23.03.2023 is barred by limitation when the income escaped assessment is not more than Rs.50 lakhs. He accordingly pleaded that since the notice issued by JAO is invalid and consequential assessment proceedings are bad in law and liable to be quashed. 6. The Learned DR for the Revenue, on the other hand, has submitted that this issue is pending adjudication before the Hon’ble Supreme Court of India in the case of Hexaware Technology Ltd., in the SLP filed by the Department against the Judgment of Hon’ble High Court of Bombay. Therefore, this issue Printed from counselvise.com 6 ITA.No.618/Hyd./2025 may be kept open till the outcome of the SLP pending before the Hon’ble Supreme Court. He has relied upon the Orders of the authorities below. 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 : Printed from counselvise.com 7 ITA.No.618/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: Printed from counselvise.com 8 ITA.No.618/Hyd./2025 Printed from counselvise.com 9 ITA.No.618/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 : Printed from counselvise.com 10 ITA.No.618/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 : Printed from counselvise.com 11 ITA.No.618/Hyd./2025 “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 21.02.2023 by JAO. For ready reference, the same is reproduced as under : 10. 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 : Printed from counselvise.com 12 ITA.No.618/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 : Printed from counselvise.com 13 ITA.No.618/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 : Printed from counselvise.com 14 ITA.No.618/Hyd./2025 13. 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 : Printed from counselvise.com 15 ITA.No.618/Hyd./2025 Printed from counselvise.com 16 ITA.No.618/Hyd./2025 Printed from counselvise.com 17 ITA.No.618/Hyd./2025 Printed from counselvise.com 18 ITA.No.618/Hyd./2025 Printed from counselvise.com 19 ITA.No.618/Hyd./2025 Printed from counselvise.com 20 ITA.No.618/Hyd./2025 Printed from counselvise.com 21 ITA.No.618/Hyd./2025 Printed from counselvise.com 22 ITA.No.618/Hyd./2025 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 : Printed from counselvise.com 23 ITA.No.618/Hyd./2025 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. 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 Printed from counselvise.com 24 ITA.No.618/Hyd./2025 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 the Judgment of Hon’ble Jurisdictional High Court for the State of Printed from counselvise.com 25 ITA.No.618/Hyd./2025 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. 8. 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 Printed from counselvise.com 26 ITA.No.618/Hyd./2025 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. 10. In the result, appeal of the Assessee allowed. Order pronounced in the Open Court on 08th October, 2025. Sd/- Sd/- [MADHUSUDAN SAWDIA] [VIJAY PAL RAO] ACCOUNTANT MEMBER VICE PRESIDENT Hyderabad, Dated 08th October, 2025 VBP Copy to : 1 Vijay Kumar Kamdar, Vijay Oil Industries, ADILABAD. PIN – 504 001. Telangana. 2 The Income Tax Officer, Ward-1, MG5FHGV Tirumala Pump, Teachers Colony, ADILABAD – 504 001. Telangana 3 Pr. CIT – Hyderabad 4 DR, ITAT Hyderabad “SM-B’ Bench, Hyderabad 5 Guard File //By Order// //True Copy// Printed from counselvise.com "