Income Tax Appellate Tribunal - Hyderabad
Muppi Satyam,Hyderabad vs Ito, Ward- 8(1), Hyderabad on 20 May, 2026
आयकर अपीलीय अिधकरण, है दराबाद पीठ
IN THE INCOME TAX APPELLATE TRIBUNAL
Hyderabad 'SM' Bench, Hyderabad
Before Shri Manjunatha G., Accountant Member
and
Shri Ravish Sood, Judicial Member
आ.अपी.सं /ITA No.2228/Hyd/2025
(िनधारण वष /Assessment Year:2017-18)
Muppi Satyam, Vs. Income Tax Officer,
Hyderabad. Ward-8(1),
PAN: AXWPM8545P Hyderabad.
(Appellant) (Respondent)
िनधा रती ारा /Assessee by: Shri V Muralidhar, Tax
Consultant
राज व ारा /Revenue by: Shri T Sunil Gowtham,
Sr.AR
सु न वाई की तारीख /Date of Hearing:14/05/2026
घोषणा की तारीख /Date of 20/05/2026
Pronouncement:
आदे श / ORDER
PER. RAVISH SOOD, J.M:
The present appeal filed by the assessee is directed against the order of the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi (for short, "CIT(A)"), dated 13/10/2025 which in turn arises from the order passed by the Assessing Officer (for short, "AO") under section 147 r.w.s 144B of the Income Tax Act, 1961 (for short, "the Act"), dated 25/02/2025. The assessee has assailed the impugned order of the CIT(A) on the following grounds of appeal:2
ITA No.2228/Hyd/2025
Muppi SatyamVs. ITO "1) Principal of natural Justice, Income Tax Act 1961 Sec 69A, Sec 148A, Sec 148 Sec 149(1):
I received Sec 148A show cause notice on 12.01.2024 and Sec 148 notice on 28.03.2024 for the financial year 2016-17. Sale of immovable property transactions 83,50,000:
This transaction related to financial year 2017-18 not financial year 2016-17.
Sale was executed on 11-10-2017 i.e., FY 2017-18 and I was one of the Joint Owners of sale of Immovable property on which I was holding 33.53% share i.e., amounts to 28,00,000 (among sale proceeds of 83,50,000).
As per the Act, Prior to September 1, 2024, the time limits for the Assessing Officer to issue a show-cause notice under section 148A and notice under Sec 148 were:
Normal Cases:
Three years from the end of the relevant assessment year for cases where escaped income was less than 50 lakh. Specific Cases:
10 years from the end of the relevant assessment year for cases where escaped income was ₹50 lakh or more.
In these cases, I covered under normal case category. As per the Income Tax Act, 1 received both time barred notices u/s 148A and Sec 148, here Principal of natural Justice violated please consider this hardship of mine
2) Income Tax Act 1961 Sec 69A, Sec 148A, Sec 148 Sec 149(1) 1 am not very educated and I rarely use email due to this hardship, I did not reply to the Sec 148A Notice and did not raise an objection against this time limit condition and during the sec 148, Sec 147 Assessment proceedings also I did not raise the time limit objections. Please consider this ignorance of mine.
Due to Tax consultant mistake, we quoted Sec 148A and Sec 148 amendment provisions which are applicable from Sep 1 2024 in 3 ITA No.2228/Hyd/2025 Muppi SatyamVs. ITO grounds of appeal filing but our case is related to before Sep 1 2024 period.
Due to misquoted provisions, my Appeal to commissioner got dismissed. Please consider this ignorance of mine.
3) other Ground. Any other ground at the time of hearing. Hence, I request you to kindly pass rectification order for the order ITBA/AST/S/147/2024-25/1073703549(1) Dated 25.02.2025 under Section 147 r.w.s 144 read with section 144B.
I am attaching respective supporting documents for your reference. Please consider those documents."
2. Succinctly stated, the AO based on information flagged as per Risk Management Strategy formulated by the CBDT through ITBA that the assessee during the subject year had carried our substantial financial transactions aggregating to Rs.86,34,744/-, viz., (i) Interest other than interest on securities (section 194A) of deposits with State Bank of India:
Rs.34,744/-; (ii) cash deposits in bank account during demonetization period, i.e., 09/11/2016 to 30/12/2016) with Canara Bank: Rs.2,50,000/- ; and (iii) sale of immovable property registered with Sub-Registrar Office, Shankarpally: Rs.83,50,000/- but had not filed his return of income, initiated proceedings under section 147 of the Act. Notice under section 148 of the Act, dated 28/03/2024 was issued and served upon the assessee calling upon him to file his return of income for the year under consideration.
3. Thereafter, the AO vide his order passed under section 147 r.w.s 144B of the Act, dated 25/02/2025 determined the income of the 4 ITA No.2228/Hyd/2025 Muppi SatyamVs. ITO assessee at Rs.5,98,810/- after treating the cash deposits of Rs.5,62,500/- made by the assessee in his bank accounts during the demonetization period, viz., (i) Canara Bank: Rs.3,94,000/-; and (ii) State Bank of India: Rs.1,68,500/- as the unexplained income of the assessee.
4. Aggrieved, the assessee carried the matter in appeal before the CIT(A) but without success.
5. The assessee, aggrieved with the order of the CIT(A) has carried the matter in appeal before us.
6. Shri V Muralidhar, Tax Consultant, the Learned Authorized Representative (for short, "Ld. AR") for the assessee, at the threshold of hearing of the appeal, submitted that the AO had grossly erred in law and facts of the case in assuming the jurisdiction and framing the assessment vide his order passed under section 147 r.w.s 144B of the Act, dated 25/02/2025. Elaborating on his contention, the Ld. AR submitted that the notice issued by the AO under section 148 of the Act, dated 28/03/2024 read in the backdrop of section 149(1) of the Act (as was then available on the statute prior to its amendment made available vide Finance Act, 2023, w.e.f. 01/04/2023) has barred by limitation. It was submitted that thought the AO had vide his notice issued under section 148A(b) of the Act, dated 12/01/2024 sought to reopen the case of the assessee for the reason that his income to the tune of 5 ITA No.2228/Hyd/2025 Muppi SatyamVs. ITO Rs.86,34,744/- has escaped assessment, viz., (i) interest income on deposits with SBI: Rs.34,744/-; (ii) cash deposits in bank account with Canara Bank: Rs.2,50,000/-; and (iii) sale of immovable property registered with Sub-Registrar Office, Shankarpally: Rs.83,50,000/-, but the said observation which in itself glaringly fallacious and wrong. Elaborating on his contention, the Ld.AR submitted that though the AO had observed that the assessee had during the subject year sold immovable property (Form 60/61) registered with Sub-Registrar Office, Shankarpally for a consideration of Rs.83.50 lakhs, but a bare perusal of the said registered sale deed, dated 11/10/2017, as was referred to by the AO itself revealed that the assessee was one of the co-owners along with his two brothers, viz., Sri Muppi Ramdas and Sri Muppi Dayand, S/sons of Late Sri Rangaiah, wherein each of them had equal 1/3rd share, Pages 66 to 82 of APB. The Ld. AR to fortify his contention had taken us through the aforementioned copies of the sale deed, dated 11/10/2017, which revealed that the share of the assessee in the sale proceeds of the subject property was Rs.28,00,000/- (out of Rs.83.50 lakhs). In fact, a bare perusal of the aforesaid registered sale deed, dated 11/10/2017 revealed that the other two co-owners, i.e., assessee's brothers viz., Sri Muppi Ramdas and Sri Muppi Dayand had equal 1/3rd share in the sale proceeds of the subject property. The Ld. AR based on 6 ITA No.2228/Hyd/2025 Muppi SatyamVs. ITO his aforesaid contention submitted that considering the abovementioned factual position, the impugned income of the assessee that had escaped assessment aggregated to an amount of Rs.30,84,744/-. Carrying his contention further, the Ld. AR submitted that as the impugned income of the assessee chargeable to tax as per the information with the AO amounted to less than Rs.50 lakhs, therefore, as per section 149(1) of the Act, he could not have issued notice under section 148 of the Act for the subject year, i.e., AY 2017-18 beyond three years from the end of the relevant assessment year, i.e., after 31/03/2021. The Ld. AR submitted that as the AO had issued the notice under section 148 of the Act, dated 28/03/2023, the same not being as per the mandate of law as was then available on statute was barred by limitation.
7. Per contra, Shri T Sunil Gowtham, Learned Senior Departmental Representative (for short, "Ld. Sr-DR") vehemently objected to the contention advanced by the Learned AR. It was submitted that as the information available with the AO at the stage of initiating proceedings under section 148 of the Act revealed that the income of the assessee chargeable to tax that had escaped assessment amounted to Rs.86.34 lakhs (approx.) i.e., in excess of Rs.50 lakhs, the AO as per the clear mandate of section 149(1)(b) of the Act (as was then available on the statute) validly issued notice under section 148 of the Act, dated 7 ITA No.2228/Hyd/2025 Muppi SatyamVs. ITO 28/03/2024, i.e., beyond three years but nor more than 10 years from the end of the relevant assessment year.
8. We have heard the Learned Authorized Representatives of both parties, perused the orders of the lower authorities and the material available on record.
9. Admittedly, it is a matter of fact discernible from the record that the AO had issued notice under section 148 of the Act, dated 28/03/2024 for the subject year, i.e., AY 2017-18. Ostensibly, as per the assessment record, the AO at the stage of issuing notice under section 148A(b) of the Act claims to be in possession of information which revealed that the income of the assessee chargeable to tax that had escaped assessment amounting to Rs.86,34,744/-, i.e., (i) interest income on deposits with SBI: Rs.34,744/-; (ii) cash deposits in bank account with Canara Bank:
Rs.2,50,000/-; and (iii) sale of immovable property registered with Sub- Registrar Office, Shankarpally: Rs.83,50,000/-.
10. At the first blush, we were of the view that as the AO at the stage of issuing notice under section 148A(b) of the Act, dated 12/01/2024 was in possession of information which revealed that the income of the assessee chargeable to tax amounting to Rs.86.34 lakhs (supra), i.e., in excess of the threshold limit of Rs.50 lakhs had escaped assessment, which, thus as per section 149(1)(b) of the Act vested jurisdiction with 8 ITA No.2228/Hyd/2025 Muppi SatyamVs. ITO him to validly initiate proceedings under section 147 of the Act in the case of the assessee beyond a period of three years from the end of the relevant assessment year. However, a careful perusal of the information available with the AO, which had formed the genesis for initiating proceedings under section 147 of the Act, reveals that the same, inter alia, was comprised of the information that the assessee had sold immovable property (Form 60/61) registered with the Sub-Registrar Office, Shankarpally for a consideration of Rs.83.50 lakhs. We find on a perusal of the registered sale deed, dated 11/10/2017 that the assessee along with the two brothers, viz., Sri Muppi Ramdas and Sri Muppi Dayand, each having equal 1/3rd share had jointly sold the subject property for a consideration of Rs.83.50 lakhs. As is discernible from the sale deed, the share of the assessee, viz., Sri Muppi Satyanarayana alias Satyam (Vendor-2) in the sale consideration amounted to Rs.28 lakhs only. In the backdrop of the aforesaid facts, we are of firm conviction that now when the AO was seized with the information that the assessee had sold the immovable property (Form 60/61) vide a sale deed registered with Sub-Registrar Office, Shankarpally for a consideration of Rs.83.50 lakhs, then it was incumbent and obligatory upon him to have looked into the contents of the said sale deed, which, we find had not been done by him. We though find on a perusal of the 9 ITA No.2228/Hyd/2025 Muppi SatyamVs. ITO order passed by the AO under section 148A(d) of the Act, dated 26/03/2024 that the assessee had failed to reply to the notice issued under section 148A(b) of the Act, dated 12/01/2024, but the same in our view will not lead to any material difference. We say so, for the reason that now when the AO was seized of the fact that the assessee had vide a sale deed registered with Sub-Registrar Office, Shankarpally sold an immovable property (Form 60/61) for a consideration of Rs.83.50 lakhs, then the bare minimum that was expected on his part was to call for a copy of the sale deed before proceeding with and passing the order under section 148A(d) of the Act, dated 26/03/2024.
11. Be that as it may, we are of firm conviction that as the 1/3rd share of the assessee in the sale of the subject property amounts to Rs.28 lakhs, a fact which is glaringly mentioned in the registered sale deed, dated 11/10/2017, therefore, the aggregate income of the assessee as per the information available with the AO which had escaped assessment amounted to Rs.30,84,744/-, i.e., less than the threshold limit of Rs.50 lakhs required for vesting jurisdiction with him for issuing notice under section 148 of the Act to the assessee beyond a period of three years from the end of the relevant assessment year. As the AO in the case before us had issued notice under section 148 of the Act, dated 28/03/2024, i.e., beyond the period of three years from the end of the 10 ITA No.2228/Hyd/2025 Muppi SatyamVs. ITO relevant assessment year, i.e., AY 2017-18, which expired on 31/03/2021, we concur with the Ld.AR that the impugned notice forming the very foundation for framing the assessment vide his order passed under section 147 r.w.s 144B of the Act, dated 25/02/2025 is barred by limitation and had been issued by the AO by traversing beyond the scope of the jurisdiction vested with him under section 149(1) of the Act (as was then available on the statute).
12. We thus, in terms of our aforesaid observations, quash the assessment order passed by the AO under section 147 r.w.s 144B of the Act, dated 25/02/2025 as having been passed in absence of valid assumption of jurisdiction.
13. As we have quashed the assessment for want of valid assumption of jurisdiction by the AO, therefore, we refrain from adverting to and adjudicating the other grounds, which, thus, are left open.
14. In the result, appeal filed by the assessee is allowed in terms of our aforesaid observations.
Order pronounced in the open court on 20th May, 2026.
Sd/- Sd/-
(MANJUNATHA G.) (RAVISH SOOD)
ACCOUNTANT MEMBER JUDICIAL MEMBER
Hyderabad,
Dated 20th May, 2026.
11
ITA No.2228/Hyd/2025
Muppi SatyamVs. ITO
OKK / SPS
Copy to:
S.No Addresses
1 MUPPI SATYAM
H.No.3-79, Gangaram, Tirumala Giri. Chandanagar, Hyderabad, Telangana-500050. Hyderabad, Telangana- 500050.
2 Income Tax Officer, WARD 8(1), HYDERABAD.
Signature Towers, Sy.No.6(P) of Kondapur, Sy.37(P) of Kothaguda,, Opp. Botanical Gardens. Serlingampally (M), R.R. District, HYDERABAD, Hyderabad, Telangana- 500084.
3 The Pr.CIT, Hyderabad
4 The DR, ITAT Hyderabad Benches
5 Guard File
By Order
Digitally signed by KAMALA
KAMALA KUMAR KUMAR ORUGANTI
ORUGANTI Date: 2026.05.21 13:29:30
+05'30'
Sr. Private Secretary,
ITAT, Hyderabad.