NARAYANASWAMY IYER VENGHATAKRISHNAN,CHENNAI vs. ITO NON CORP WARD 19(6), CHENNAI

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ITA 396/CHNY/2026Status: DisposedITAT Chennai18 September 2026AY 2010-117 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the reassessment notice was issued beyond the four-year period without any failure on the part of the assessee to disclose material facts. Therefore, the reassessment order was quashed as bad in law.

What were the facts?

The assessee's original assessment for AY 2010-11 was completed under Section 143(3). The AO reopened the assessment after four years by issuing a notice under Section 148, citing a difference between stamp duty value and sale consideration of a property. The assessee argued that no new material was available to reopen the concluded assessment.

What were the issues?

Whether the reassessment proceedings initiated after four years from the end of the assessment year are valid when the original assessment was under Section 143(3) and no new material was available to the AO.

Which sections of the Income-tax Act were involved?

Section 147,Section 143(3),Section 148,Section 139,Section 142(1)

AI-generated summary — verify with the full judgment below

Before: Shri S.S. Viswanethra Ravi & Shri S.R. Raghunatha

Hearing: 03.07.2026Pronounced: 18.09.2026

आयकर अपीलीय अिधकरण, ’सी’ �ायपीठ, चे�ई IN THE INCOME-TAX APPELLATE TRIBUNAL ‘C’ BENCH, CHENNAI �ी एस.एस. िव�ने� रिव, �ाियक सद� एवं �ी एस.आर. रगुनाथॎ, लेखा सद� के सम� Before Shri S.S. Viswanethra Ravi, Judicial Member & Shri S.R. Raghunatha, Accountant Member आयकर अपील सं./I.T.A. No.396/Chny/2026 िनधा�रण वष�/Assessment Year: 2010-11 Narayanaswamy lyer Vs. The ITO, Venghatakrishnan, Non Corporate Ward 19(6), Chennai. New No 29; Old No 14 Dwarakay Mayi, Thiruvengadam street, West Mambalam, Chennai - 600033 Tamil Nadu. [PAN: AABPV9378B] (अपीलाथ�/Appellant) (��थ�/Respondent) अपीलाथ� की ओर से / Appellant by : Mr. Y. Sridhar, F.C.A. ��थ� की ओर से/Respondent by : Mr. Pelli Prem Kumar, Sr. AR. सुनवाई की तारीख/ Date of hearing : 03.07.2026 घोषणा की तारीख /Date of Pronouncement : 18.09.2026 आदेश /O R D E R PER S.S. VISWANETHRA RAVI, JUDICIAL MEMBER:

This appeal filed by the assessee is directed against the order dated 09.12.2025 passed by the Ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre [NFAC], Delhi, for the assessment year 2017–18.

2.

The Ld. AR, Mr. Y. Sridhar, F.C.A., drew our attention to additional ground No. 1.1 and submitted that the Ld. CIT(A) failed to appreciate that

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the power of reassessment cannot be exercised after the expiry of four years from the end of the relevant assessment year in cases where the original assessment is made under Section 143(3) or Section 147, unless, in such cases, the income chargeable to tax has escaped assessment for such assessment year by reason of the failure of the assessee to make a return under Section 139 or in response to a notice under Section 142(1)/148, or by reason of the failure of the assessee to disclose fully and truly all material facts necessary for such assessment. He drew our attention to the reassessment order dated 02.12.2017 and submitted that the AO issued notice dated 30.03.2017, which is beyond four years from the end of the assessment year. He submitted that the assessee disclosed every material fact relevant for assessment in the return of income and also during the assessment proceedings. He submitted that the AO had no tangible material to reopen the concluded assessment. Further, he drew our attention to para No. 2 of the reassessment order dated 20.02.2017 and submitted that the AO reopened the case of the assessee only on the basis of the material available from the office record with reference to the difference between the stamp duty and registration fee with reference to the sale consideration of the property. He argued vehemently that there was no new material in the possession of the AO to reopen the already concluded assessment. Further, he drew our attention

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to the dates and events at page No. 11 of the paper book and submitted that the AO himself mentioned in para No. 4 of the assessment order that a notice under Section 142(1) was issued to the assessee on 08.09.2017 calling for details regarding the nature of business of the assessee, return of income for AY 2010-11, and details of land sold/purchased with documentary evidence, along with STCG and LTCG workings for AY 2009-10.

3.

The assessee replied to the said notice vide letter dated 06.10.2016, stating that, on the same issue, an assessment order had already been passed on 30.12.2014 by the DCIT, NCC-2, considering the same issue, wherein the assessee had received a refund. He argued vehemently that the findings of the AO in the reassessment proceedings clearly show that no material had come into the possession of the AO to reopen the already concluded assessment on the same issue. Therefore, the reassessment is bad in law when there is no failure on the part of the assessee to disclose fully and truly all relevant material for the purpose of assessment. He prayed to allow the additional ground No. 1.1 and quash the assessment order dated 20.02.2017.

4.

The ld. DR, Mr. Pelli Prem Kumar, Sr. AR, referred to para No. 2 of the reassessment order and submitted that the AO found a difference in

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the value of the property sold and the sale consideration reflected in the sale deed. He relied on the order of the ld. CIT(A).

5.

Having heard both the parties and on perusal of the material available on record, we note that the end of the assessment year is 31.03.2011 (AY 2010-11) and, admittedly, the AO issued notice under Section 148 of the Act on 30.03.2017, which is beyond four years. Admittedly, in the present case, the AO completed the original assessment under Section 143(3) of the Act, which is clear from para Nos. 3 and 4 of the reassessment order dated 22.12.2017. Therefore, when the original assessment was concluded under Section 143(3) of the Act with a refund to the assessee, and the AO must have reason to believe that any income chargeable to tax has escaped assessment for any assessment year, he may, subject to the provisions of Sections 148 to 153, assess or reassess such income and also any other income chargeable to tax which has escaped assessment and which comes to his notice subsequently in the course of the proceedings.

6.

As discussed above, there was no new tangible material in the possession of the AO to reopen the already concluded assessment under Section 143(3) of the Act, which is clear from para No. 2 of the reassessment order dated 22.12.2017, wherein the AO clearly stated that

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“this case was reopened u/s. 147 for the following reason that 'as per materials available from this Office record it is seen that the sale consideration of the property as per sale deed dt. 4.6.2009 was Rs. 22,99,000. However, from page No. 5 of the same sale deed, it is seen that the difference in stamp value of Rs. 4,99,904 and difference in registration fee of Rs. 62,490 has been collected by the SRO Valangaiman from the assessee'”. This clearly shows that no new information had reached the desk of the AO to reopen the already concluded assessment, but, based only on the same material which formed part of the original assessment, the AO reopened the already concluded assessment, which, in our opinion, is not justified.

7.

Further, the proviso to Section 147 of the Act clearly explains that where an assessment under sub-section (3) of Section 143, or assessment under this Section, has been made for the relevant assessment year, no action shall be taken under this Section after the expiry of four years from the end of the relevant assessment year, unless any income chargeable to tax has escaped assessment for such assessment year by reason of the failure on the part of the assessee to make a return under Section 139 or in response to a notice under sub-

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section (1) of Section 142 or Section 148, or to disclose fully and truly all material facts necessary for his assessment for that assessment year.

8.

As discussed above, on perusal of the dates and events chart at page No. 11 of the paper book, it clearly shows that the assessee filed the return of income on 24.01.2011, wherein the intimation under Section 143(1) was passed on 08.04.2011. Thereafter, the assessment proceedings under Section 143(3) were completed vide order dated 31.12.2014, which is reflected in para Nos. 3 and 4 of the reassessment order dated 22.12.2017. Therefore, there was no failure on the part of the assessee to make a return, and no failure to respond to the notice under Section 142(1) of the Act, and also no failure in responding to the notice under Section 148 of the Act. Therefore, we hold that there was no failure on the part of the assessee to disclose fully and truly all material facts necessary for his assessment for the year under consideration. Therefore, the notice dated 30.03.2017 issued under Section 148 of the Act is bad in law and, consequently, the reassessment made thereon dated 22.12.2017 is invalid and is quashed. Thus, additional ground No. 1.1 raised by the assessee is allowed.

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9.

In view of our decision in quashing the re-assessment order dated 22.12.2017 invalid, the remaining grounds become infructuous, requiring no adjudication.

10.

In the result, appeal of the assessee is allowed.

Order pronounced in the open Court on 18th September, 2026 at Chennai.

Sd/- Sd/- (S.R. RAGHUNATHA) (S.S. VISWANETHRA RAVI) ACCOUNTANT MEMBER JUDICIAL MEMBER Chennai, Dated, 18.09.2026 MM/- आदेश की �ितिलिप अ�ेिषत/Copy to: 1. अपीलाथ�/Appellant, 2.��थ�/ Respondent, 3. आयकर आयु�/CIT, Chennai/Madurai/Coimbatore/Salem 4. िवभागीय �ितिनिध/DR & 5. गाड� फाईल/GF.

MANISH Digitally signed by MANISH MISHRA MISHRA Date: 2026.09.23 15:12:54 +05'30'

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