Vaka Ghanta Nageswararao Vs ITO (ITAT Visakhapatnam)
The Income Tax Appellate Tribunal (ITAT), Visakhapatnam, in Vaka Ghanta Nageswararao vs ITO, quashed reassessment proceedings for Assessment Year (AY) 2015-16 on the ground that the notice issued under Section 148 of the Income Tax Act, 1961, was time-barred and void ab initio.
The assessee, an individual, had not filed a return of income for AY 2015-16. Based on information regarding cash deposits of ₹80.01 lakh and time deposits of ₹20 lakh in FY 2014-15, the Assessing Officer (AO) initiated proceedings under Section 148A(b), seeking an explanation. After considering the reply, an order under Section 148A(d) was passed on 07.04.2022, deeming it fit to issue a notice under Section 148 for reassessment. Subsequently, the assessee filed a return declaring an income of ₹2,67,690 on 05.05.2022.
During reassessment, the AO proposed an addition of ₹40 lakh as unexplained money under Section 69A and disallowed ₹1,85,500 claimed as deductions. The order was upheld by the Commissioner of Income Tax (Appeals) [CIT(A)], prompting the assessee to approach the ITAT.
The primary issue raised was whether the reassessment notice under Section 148, issued on 07.04.2022, was valid in light of the amended provisions of Section 149(1)(b). The assessee contended that the six-year limitation period to issue notice expired on 31.03.2022, making the notice time-barred.
The assessee relied on multiple judicial precedents. In S.S. Gadgil v. Lal & Co. [1964] 53 ITR 231 (SC), the Supreme Court held that amended provisions cannot revive jurisdiction to reassess returns already time-barred under existing provisions. Similarly, CIT v. Pushpak Enterprises [2002] 254 ITR 193 (Del.) ruled that no fresh jurisdiction arises unless explicitly conferred by law.
Further, the assessee argued procedural lapses:
