ITAT Visakhapatnam: Reassessment Notices under Section 148 Set Aside for Wrong Sanctioning Authority

1. Background and Parties Involved

The Visakhapatnam Bench of the Income Tax Appellate Tribunal (ITAT) dealt with a batch of five appeals arising out of reassessment proceedings for AY 2018-19. All appeals challenged orders passed by the CIT(A)-National Faceless Assessment Centre (NFAC), Delhi, affirming reassessment orders framed under Section 147 read with Section 144B of the Income Tax Act 1961.

The lead matter was:

  • Konkuduru Primary Agricultural Cooperative Credit Society Limited Vs ITO

The remaining four appeals involved:

  • Karempudipadu Primary Agriculture Cooperative Society Ltd.
  • Sai Sitaram Polavarapu
  • Naredla Jalareddy
  • Venkata Ratnam Nargam

While there were substantive grounds on the merits of additions and deduction claims, the Tribunal ultimately resolved all five appeals on a pure jurisdictional issue concerning approval under Section 151, thereby rendering all other grounds academic.

2. Nature of Disputes and Key Grounds

2.1 Lead Appeal – Konkuduru Primary Agricultural Cooperative Credit Society Limited

In the lead appeal, the assessee questioned:

  • The validity of the reassessment order dated 28.12.2023 passed under Section 147 r.w.s. 144B, which had been affirmed by the NFAC under Section 250 vide order dated **13.03.2025`.
  • The denial of deduction claimed under Section 80P(2)(a)(i).
  • The application of Section 80AC to disallow the deduction on the ground that the assessee had not filed a return under Section 139(1) but had made the claim in a return filed in response to notice under Section 148.

However, the Tribunal did not ultimately adjudicate these merit-based grounds, as the appeals were disposed of on the preliminary jurisdictional challenge relating to sanction under Section 151.

2.2 Common Additional Ground – Challenge to Approval under Section 151

All assessees raised a common additional legal ground to the effect that:

“The notice u/s 148 was issued without obtaining prior approval from the specified authority as required under section 151, rendering the proceedings invalid and unsustainable in law.”

The crux of the argument was that where a notice under Section 148 is issued after three years from the end of the relevant assessment year, the specified authority under Section 151(ii) must be the Principal Chief Commissioner, Principal Director General, Chief Commissioner or Director General, and not the Principal Commissioner. As the approvals in these cases were obtained from the PCIT, the assessees contended that the notices and consequent reassessments were void.

3. Delay in Filing Appeals and Condonation

Two assessees had filed their appeals belatedly and sought condonation of delay.

3.1 Delay of 95 Days – Karempudipadu Primary Agriculture Cooperative Society Ltd. (ITA No. 535/Viz./2025)

  • There was a delay of 95 days in filing the appeal.
  • The assessee explained through an affidavit that in Form 35 filed before the CIT(A), the email ID of its counsel was given.
  • Due to this, the assessee claimed it was unaware of the appellate proceedings and became aware of the outstanding demand only when contacted by the department in March 2025.
  • The assessee then consulted a senior counsel and, in the process of preparing and filing the appeal, the delay occurred.
  • It was pleaded that the delay was neither deliberate nor due to negligence and that the assessee had a strong case on merits.

3.2 Delay of 68 Days – Sai Sitaram Polavarapu (ITA No. 17/Viz./2026)

  • There was a delay of 68 days in filing the appeal.
  • The assessee, through an affidavit, explained that he had suffered from dengue fever in the first week of November 2025 and had been advised rest at home for three weeks.
  • During this period, execution of the appeal papers slipped from his attention.
  • He was reminded by a call from his counsel’s office on 28.12.2025, after which he proceeded to file the appeal, resulting in the delay.
  • The assessee submitted that the delay was due to reasons beyond his control.

3.3 Revenue’s Objection

The Departmental Representative (DR) opposed condonation in both matters, asserting:

  • The assessees had not demonstrated “sufficient cause” for the delays.
  • There was alleged negligence in not filing appeals in time.

3.4 Tribunal’s View on Condonation

The Tribunal:

  • Considered the explanations as bona fide and found that the assessees were prevented by circumstances beyond their control.
  • Applied the principles laid down by the Supreme Court in Collector, Land Acquisition vs., MST Katiji [1987] 167 ITR 471 (SC).
  • Condoned the delays of 95 days and 68 days, respectively, and admitted all appeals for adjudication.

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