RAMALINGAM KAMALAHASAN,TRICHY vs. ITO, WARD-1(1), TRICHY

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ITA 900/CHNY/2026Status: DisposedITAT Chennai10 September 2026AY 2015-1613 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the notice issued under Section 148 was barred by limitation, rendering the reassessment proceedings invalid. Consequently, the penalty order, being consequential to the invalid reassessment, could not be sustained.

What were the facts?

The assessee did not file an income tax return for AY 2015-16. The Assessing Officer (AO) reopened the assessment by issuing a notice under Section 148 on 20.04.2022, which was beyond the prescribed limitation period. The assessee filed a return in response, and the AO passed an assessment order, later initiating penalty proceedings under Section 271(1)(c).

What were the issues?

Whether a penalty order under Section 271(1)(c) can be sustained when the reassessment proceedings, initiated by a time-barred notice under Section 148, are invalid?

Which sections of the Income-tax Act were involved?

Section 147,Section 148,Section 149,Section 271(1)(c)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘A’ BENCH, CHENNAI

Before: SHRI ABY T VARKEY & SHRI S. R. RAGHUNATHA

Hearing: 29.07.2026Pronounced: 10.09.2026

आयकर अपीलीय अधिकरण, ‘ए’ न्यायपीठ, चेन्नई IN THE INCOME TAX APPELLATE TRIBUNAL ‘A’ BENCH, CHENNAI श्री एबी टी वर्की, न्याययर्क सदस्य एवं श्री एस. आर. रघुनाथा, लेखा सदस्य के समक्ष BEFORE SHRI ABY T VARKEY, JUDICIAL MEMBER AND SHRI S. R. RAGHUNATHA, ACCOUNTANT MEMBER आयकर अपील सं./ITA No.900/Chny/2026 ननिाारण वर्ा / Assessment Year: 2015-16 Ramalingam Kamalahasan The Income Tax Officer, 3 North Car Street vs. Ward – 1(1) Samayapuram Post Trichy. Tiruchirappalli – 621 112. (प्रत्यथी/Respondent) [PAN: DFBPK3435J] (अपीलाथी/Appellant)

अपीलाथी की ओर से/Appellant by : Shri. G.Tarun, Advocate प्रत्यथी की ओर से/Respondent by : Ms. Anshu Sharawat, Addl. CIT सुनवाई की तारीख/Date of Hearing : 29.07.2026 घोर्णा की तारीख/Date of Pronouncement : 10.09.2026 आदेश /O R D E R PER S. R. RAGHUNATHA, AM :

The present appeal is filed by the assessee against the order dated 16.01.2026 passed by the learned Commissioner of Income Tax (Appeals), NFAC, Delhi (hereinafter referred to as “ld.CIT(A)”), dismissing the appeal filed by the assessee against the penalty order dated 23.08.2024 passed u/s.271(1)(c) of the Income Tax Act, 1961 (hereinafter referred to as the “Act”), pertaining to Assessment Year (A.Y.) 2015-16.

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2.

The assessee has raised inter-alia a legal issue by of additional grounds stating that on the facts and circumstances of the case, the First Appellate Authority is not justified in sustaining the penalty order of the AO, where the order passed u/s.147 of the Act dated 13.02.2024 by issuing notice u/s.148 of the Act dated 20.04.2022 for the A.Y.2015-16 as the AO should have issued notice u/s.148 on or before 31.03.2022. Issuance of Notice u/s.148 dated 20.04.2022 is clear violation of provision and barred by limitation and assessment framed on the basis of such invalid, consequential the penalty order needs to be quashed.

3.

According to the Ld.AR, the AO erred in issuing notice u/s.148 of the Act dated 20.04.2022 for reopening the assessment for AY 2015-16, since six (6) years has passed from the end of the relevant assessment year and hence, it is barred by limitation, and therefore statutory notice u/s.148 of the Act is bad in law. In support of his arguments, the ld.AR relied on several case laws, particularly of the Hon’ble Apex Court in the case of UoI v. Rajiv Bansal 469 ITR 46 (SC) as well as the orders of this Tribunal. Since we find that the aforesaid ground raised by the assessee is purely on legal issue which if found to be valid goes to the root of the power to reopen the assessment itself, admit the same by relying on the decision of the Hon’ble Supreme Court in the case of National Thermal Power Co. Ltd. v. CIT [1998] 229 ITR 383 (SC).

4.

Coming to the legal issue raised by the assessee that the impugned notice issued by the AO u/s.148 of the Act for AY 2015-16 on 20.04.2022 is barred by limitation. The facts emanating from the records are that the assessee is an individual who didn’t file return of income (RoI/ITR) for the year under consideration and based on specific information that the assessee had sold an immovable property for consideration of Rs.77,92,375/- and had not shown any long term capital gain (LTCG) by filing ITR in the relevant year. Hence, the AO reopened the assessment, and issued inter alia notice u/s.148 of the Act on 20.04.2022 and noted that in response, the assessee filed ITR on 09.07.2022

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showing income of Rs.36,05,280/- along with the agricultural income of Rs.44,200/-, which was processed and accepted u/s.143(1) of the Act. During the reassessment proceedings, the assessee filed the details and documents as and when called for. The AO thereafter, passed the assessment order on 13.02.2024 by accepting the return of income filed in response to notice u/s.148 of the Act. However, the Assessing Officer initiated the penalty proceedings u/s.271(1)(c) of the Act for concealment of particular income of Rs.36,05,280/- which has been declared by the assessee in his return of income in response to notice issued u/s.148 of the Act. Later the AO, after issuing the statutory notices to the assessee and on perusal of the submissions made by the assessee passed a penalty order u/s.271(1)(c) of the Act dated 23.08.2024 by levying a minimum penalty of Rs.9,33,782/- for concealment of income. On appeal filed by the assessee, the same has been confirmed by the Ld.CIT(A)/NFAC by passing the impugned order dated 16.01.2026. Aggrieved by the order of the ld.CIT(A), the assessee is in appeal before us.

5.

The ld.AR for the assessee submitted that a legal issue can be raised even during the collateral proceedings of the impugned order. The ld.AR stated that the return of income filed in response to notice issued u/s.148 of the Act was accepted in the reassessment proceedings and hence there was no grievance to the assessee by the reassessment order dated 13.02.2024 passed u/s.147 of the Act. In support of the above arguments he relied on the following judicial precedents, whether the assessee can challenge the validity of an assessment proceedings in the appeal emanating from the penalty proceedings in terms of Section 271(1)(c) of the Act / collateral proceeding, by drawing our attention to the following decisions rendered by the co-ordinate benches of the Tribunal as well as the Hon’ble High Courts:

1) M/s. Classic Flour & Food Processing Pvt. Ltd. Kolkata v; C.I.T., Kol- IV, Kolkata - ITA Nos..764 to 766/Kol/2014 dated 05.04.2017 2) Mikado Realtors P. Ltd v. Pr. CIT(Central) Gurugram. - I.T.A. No.50/DEL/2021 dated 20.04.2021

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3) Krishan Kumar Saraf v. Commissioner of Income-tax, Hissar. - ITA no. 4562/Del/2011 dated 24.09.2015. 4) Concord Infra Projects (P) Ltd. vs. Principal Commissioner Of Income Tax - ITA No. 174/Kol/2021 dated 13.10.2021 5) M/s Westlife Development Ltd (Successor to Wespoint Leisureparks Income Ltd) v. Vs Principal Commissioner of Income-tax-5 Mumbai - ITA No.688 /Mum/2016 dated 24.06.2016 6) Principal Commissioner Of Income Tax vs. Badal Prakash Jindal (HUF) & Ors - IT Appeal Nos. 7 to 10 of 2023 dated 02.03.2023 - Orissa High Court 7) CIT Central-I, Vs. Escorts Farms Pvt. Ltd – Delhi High Court - 180 ITR 280

6.

In view of the above, the ld.AR prayed for quashing the order of the penalty as the notice issued u/s.148 of the Act for reassessment itself is invalid by contended that when the foundation removed, the structure falls.

7.

Per contra, the ld.DR opposed to accept the proposal of legal issue of invalid notice issued u/s.148 of the Act, in the impugned penalty proceedings and prayed for dismissing the same.

8.

We have heard both parties perused the material on record and gone through the orders of the authorities along with the paper book and judicial precedents relied on. The legal issue raised before us is that the impugned notice dated 20.04.2022 u/s.148 of the Act for reopening the assessment for AY 2015-16 is barred by limitation, since six (6) years have elapsed from the end of the relevant assessment year and hence the consequential penalty order u/s.271(1)(c) of the Act cannot survive independently. In order to adjudicate the aforesaid jurisdictional issue, it is necessary to examine the limitation prescribed u/s.149 of the Act for issuance of a notice u/s.148. Section 149, as substituted by the Finance Act, 2021 with effect from 01.04.2021 and forming part of the new reassessment regime, prescribes the time limits within which a notice u/s.148 can validly be issued. The relevant provisions of section 149, as applicable to the controversy before us, read as under:—

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149 - Time limit for notice. (1) No notice under section 148 shall be issued for the relevant assessment year,— (a) if three years have elapsed from the end of the relevant assessment year, unless the case falls under clause (b); (b) if three years, but not more than ten years, have elapsed from the end of the relevant assessment year unless the Assessing Officer has in his possession books of account or other documents or evidence which reveal that the income chargeable to tax, represented in the form of— (i) an asset; (ii) expenditure in respect of a transaction or in relation to an event or occasion; or (iii) an entry or entries in the books of account, which has escaped assessment amounts to or is likely to amount to fifty lakh rupees or more: Provided that no notice under section 148 shall be issued at any time in a case for the relevant assessment year beginning on or before 1st day of April, 2021, if a notice under section 148 or section 153A or section 153C could not have been issued at that time on account of being beyond the time limit specified under the provisions of clause (b) of sub-section (1) of this section or section 153A or section 153C, as the case may be], as they stood immediately before the commencement of the Finance Act, 2021 Provided further that the provisions of this sub-section shall not apply in a case, where a notice under section 153A, or section 153C 153A read with section, is required to be issued in relation to a search initiated under section 132 or books of account, other documents or any assets requisitioned under section 132A, on or before the 31st day of March, 2021: Provided also that for the purposes of computing the period of limitation as per this section, the time or extended time allowed to the assessee, as per show-cause notice issued under clause (b) of section 148A during which the proceeding under section 148A or the period is stayed by an order or injunction of any court, shall be excluded: Provided also that where immediately after the exclusion of the period referred to in the immediately preceding proviso, the period of limitation available to the Assessing Officer for passing an order under clause (d) of section 148A is less than seven days, such remaining period shall be extended to seven days and the period of limitation under this sub-section shall be deemed to be extended accordingly. Explanation.—For the purposes of clause (b) of this sub-section, "asset" shall include immovable property, being land or building or both, shares and securities, loans and advances, deposits in bank account. (2) The provisions of sub-section (1) as to the issue of notice shall be subject to the provisions of section 151 [emphasis given by us]

9.

As noted, the time limits for issue of notice u/s.148 of the Act were amended as above w.e.f. 01.04.2021. In order to appreciate the effect of proviso to sub-section (1) of section 149 supra, it would be gainful to reproduce relevant provisions of section 149(1) of the Act as it was prior to the amendment i.e, old regime, which reads as under –

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149 - Time limit for notice. (1) No notice under section 148 shall be issued for the relevant assessment year,— (a) if four years have elapsed from the end of the relevant assessment year, unless the case falls under clause (b) or clause (c); (b) if four years, but not more than six years, have elapsed from the end of the relevant assessment year unless the income chargeable to tax which has escaped assessment amounts to or is likely to amount to one lakh rupees or more for that year; (c) **** Explanation.—In determining income chargeable to tax which has escaped assessment for the purposes of this sub-section, the provisions of Explanation 2 of section 147 shall apply as they apply for the purposes of that section. (2) & (3) ****

10.

From a con-joint reading of the provisions of section 149, it is clear that the time limit for issue of notice u/s.148 of the Act was revised with effect from 01.04.2021 and the Parliament in order to make the amendment prospective introduced the first proviso to section 149(1). The intent of the first proviso is that the revenue does not get the extended time of ten years where the notices were not issued within a period of six years for AYs prior to 2021-22. The said legislative intent has been clearly explained by the Hon'ble Supreme Court in the case of Rajiv Bansal (supra). The relevant observations of the Apex Court is extracted below-

“– 46. The ingredients of the proviso could be broken down for analysis as follows: (i) no notice under section 148 of the new regime can be issued at any time for an assessment year beginning on or before 1 April 2021; (ii) if it is barred at the time when the notice is sought to be issued because of the "time limits specified under the provisions of" 149(1)(b) of the old regime. Thus, a notice could be issued under section 148 of the new regime for assessment year 2021-2022 and before only if the time limit for issuance of such notice continued to exist under section 149(1)(b) of the old regime. 47. **** 48. Notices have to be judged according to the law existing on the date the notice is issued. Section 149 of the old regime primarily provided two time limits: (i) four years for all situations and (ii) beyond four years and within six years if the income chargeable to tax which escaped assessment amounted to Rupees one lakh or more. After 1 April 2021, the time limits prescribed under the new regime came into force. The ordinary time limit of four years was reduced to three years. Therefore, in all situations, reassessment notices could be issued under the new regime if not more than three years have elapsed from the end of the relevant assessment year.

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For example, for assessment year 2018-2019, the four year period would have expired on 31 March 2023 under the old regime. However, if the notice is issued after 1 April 2021, the three year time limit prescribed under the new regime will be applicable. The three year time limit will expire on 31 March 2022. 49. The first proviso to Section 149(1)(b) requires the determination of whether the time limit prescribed under section 149(1)(b) of the old regime continues to exist for the assessment year 2021-2022 and before. Resultantly, a notice under Section 148 of the new regime cannot be issued if the periodof six years from the end of the relevant assessment year has expired at the time of issuance of the notice. This also ensures that the new time limit of ten years prescribed under section 149(1)(b) of the new regime applies prospectively. For example, for the assessment year 2012-2013, the ten year period would have expired on 31 March 2023, while the six year period expired on 31 March 2019. Without the proviso to Section 149(1)(b) of the new regime, the Revenue could have had the power to reopen assessments for the year 2012-2013 if the escaped assessment amounted to Rupees fifty lakhs or more. The proviso limits the retrospective operation of Section 149(1)(b) to protect the interests of the assesses. 50. to 52. *** 53. The position of law which can be derived based on the above discussion may be summarized thus: (i) Section 149(1) of the new regime is not prospective. It also applies to past assessment years; (ii) The time limit of four years is now reduced to three years for all situations. The Revenue can issue notices under section 148 of the new regime only if three years or less have elapsed from the end of the relevant assessment year; (iii) the proviso to Section 149(1)(b) of the new regime stipulates that the Revenue can issue reassessment notices for past assessment years only if the time limit survives according to Section 149(1)(b) of the old regime, that is, six years from the end of the relevant assessment year; and (iv) all notices issued invoking the time limit under section 149(1)(b) of the old regime will have to be dropped if the income chargeable to tax which has escaped assessment is less than Rupees fifty lakhs.” 11. From perusal of the legislative intent of the first proviso to section 149(1) of the Act as interpreted by the Hon'ble Supreme Court it is clear that Revenue cannot issue notice u/s.148 of the Act for assessment years prior to AY 2021- 22, if six years from the end of the relevant assessment year has expired on the date of issue of such notice.

12.

In light of the above position of law, we will examine the relevant facts necessary for adjudication of the legal issue in present case. The year under consideration here is AY 2015-16. For assessment year 2015-16, the time limit as per the old regime, for issue of notice for AY 2015-16 u/s.148 of the Act is six years from the end of the relevant assessment year. i.e. 31.03.2022. Applying the ratio supra, notice could be issued u/s.148 of the Act of the new regime for

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assessment year 2015-16 only if the time limit for issuance of such notice continued to exist u/s.149(1)(b) of the Act of the old regime. The first proviso to Section 149(1)(b) of the Act requires the determination of whether the time limit prescribed u/s.149(1)(b) of the Act of the old regime continues to exist for the assessment year 2015-16. Resultantly, a notice u/s.148 of the Act of the new regime cannot be issued if the period of six years from the end of the relevant assessment year has expired at the time of issuance of the notice. On 31.03.2022, six years has undisputedly elapsed from the end of the relevant assessment year 2015-16. Consequently, in the present case, the AO couldn’t have issued a notice on 20.04.2022 u/s.148 of the Act of the new regime for reopening assessment for AY 2015-16. This legal issue is found to be no longer res-integra. In this regard, it will be gainful to look at the following relevant observations of the Hon'ble Supreme Court in the case of Rajeev Bansal (supra) wherein their Lordship’s have made the following observation regarding validity of notice u/s.148 of the Act for AY 2015-16, by observing as under: –

19.

Mr N Venkataraman, learned Additional Solicitor General of India, made the following submissions on behalf of the Revenue: (a) to (e)**** (f). The Revenue concedes that for the assessment year 2015-16, all notices issued on or after 1 April 2021 will have to be dropped as they will not fall for completion during the period prescribed under TOLA; ****** 46. The ingredients of the proviso could be broken down for analysis as follows: (i) no notice under section 148 of the new regime can be issued at any time for an assessment year beginning on or before 1 April 2021; (ii) if it is barred at the time when the notice is sought to be issued because of the "time limits specified under the provisions of" 149(1)(b) of the old regime. Thus, a notice could be issued under section 148 of the new regime for assessment year 2021-2022 and before only if the time limit for issuance of such notice continued to exist under section 149(1)(b) of the old regime. 49. The first proviso to Section 149(1)(b) requires the determination of whether the time limit prescribed under section 149(1)(b) of the old regime continues to exist for the assessment year 2021-2022 and before. Resultantly, a notice under Section 148 of the new regime cannot be issued if the period of six years from the end of the relevant assessment year has expired at the time of issuance of the notice. This also ensures that the new time limit of ten years prescribed under section 149(1)(b) of the new regime applies prospectively. For example, for the assessment year 2012-2013, the ten-year period would have expired on 31 March 2023, while the six-year period expired on 31 March 2019.

:-9-: ITA. No:900/Chny/2026.

Without the proviso to Section 149(1)(b) of the new regime, the Revenue could have had the power to reopen assessments for the year 2012-2013 if the escaped assessment amounted to Rupees fifty lakhs or more. The proviso limits the retrospective operation of Section 149(1)(b) to protect the interests of the assesses.” [emphasis given by us]

13.

Further, it is noted that the Hon'ble Supreme Court while dismissing the SLP filed by Revenue in the case of ACIT vs. Nehal Ashit Shah in SLP (Civil) Diary No(s). 57209/2024, dated 04.04.2025 held that notice issued u/s.148 of the Act after six years from the end of assessment year i.e on or after 31.03.2022 does not survive. While holding so, Hon'ble Apex Court noted at para 5 as under:

"5. In this regard, reference could also be made to paragraph 19(e) and (f) in the case of Union of India vs. Rajeev Bansal, Civil Appeal No.8629 of 2024 on 03.10.2024 (2024 SCC ONLINE 754) under which the learned Additional Solicitor General for India has made a concession insofar as the assessment year 2015-16 is concerned." 14. The above view is noted to have been again reiterated by the Hon’ble Supreme Court in Deepak Steel and Power Ltd. vs. CBDT [2025] 476 ITR 369 (SC) by stating as under;

"5. As the revenue made a concession in the aforesaid decision that is for the assessment year 2015-2016, all notices issued on or after 1st April, 2021 will have to be dropped as they would not fall for completion during the period prescribed under the taxation and other laws (Relaxation and Amendment of certain Provisions Act, 2020). Nothing further is required to be adjudicated in this matter as the notices so far as the present litigation is concerned is dated 25.6.2021". 15. Therefore, in our considered view, the issue of validity of notice u/s.148 of the Act issued after 31.03.2022 is no longer res-integra and accordingly we are unable to appreciate the contention of the Ld.DR that the impugned notice issued on 20.04.2022 is valid, which stand is contrary to the consistent stand taken by the Revenue before Hon’ble Supreme Court as noted supra. In view of the foregoing discussion on law and the judicial precedents, we hold that notice for A.Y. 2015-16 issued on 20.04.2022 u/s.148 of Act is barred by limitation.

16.

In regard to the objection of the ld.DR that the assessee cannot challenge the validity of the reassessment proceedings in an appeal arising out of penalty

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proceedings also does not persuade us. The penalty imposed u/s.271(1)(c) of the Act is a consequential proceeding arising from the assessment proceedings. Where the very assessment/reassessment order, which constitutes the foundation for initiation of penalty proceedings, is found to be without valid jurisdiction, the consequential penalty cannot independently survive. The issue before us is whether a penalty can be sustained when the very jurisdictional foundation upon which the assessment proceedings and the consequential penalty proceedings rest is held to be invalid. In our considered view, the answer has to be in the negative.

17.

The principle is aptly expressed by the maxim “sublato fundamento, cadit opus”, namely, when the foundation is removed, the superstructure falls. The penalty proceedings u/s.271(1)(c) of the Act are founded upon the assessment / reassessment proceedings. If the assumption of jurisdiction for making such reassessment itself fails on account of an invalid and time-barred notice u/s.148 of the Act, the consequential penalty proceedings cannot be sustained independently of such reassessment.

18.

We find that the objection raised by the assessee is not a mere irregularity in the reassessment proceedings. If the notice u/s.148 of the Act itself is beyond the period prescribed by the statute, the AO lacks jurisdiction to assume reassessment jurisdiction. The subsequent participation of the assessee in the proceedings or filing of a return in response to such notice cannot, in our considered view, confer jurisdiction where the statute itself has prescribed a limitation for exercise of such power. In this context, the principle emanating from the judgment of the Hon'ble Supreme Court in Distributors (Baroda) P. Ltd. v. Union of India [1985] 155 ITR 120 (SC) assumes significance. The Hon'ble Supreme Court, while reconsidering the earlier legal position, recognised that the law declared by the Court represents the correct interpretation of the statutory provision and that an erroneous legal position cannot be perpetuated merely because it had been followed earlier. The decision underscores the fundamental proposition that the correct legal position has to prevail over an

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erroneous understanding of law. The Hon'ble Supreme Court, while considering the doctrine of precedent and the necessity of correcting an erroneous legal position, observed that “to perpetuate an error is no heroism. To rectify it is the compulsion of judicial conscience.” The said principle embodies a fundamental judicial discipline that an erroneous legal position cannot be allowed to continue merely on the ground that it has already been acted upon or followed.

19.

Applying the aforesaid principle to the facts before us, the validity of the notice u/s.148 of the Act has to be tested on the basis of the statutory limitation applicable to the relevant assessment year and the law declared by the competent judicial authorities. The Revenue cannot derive jurisdiction from a notice which, on a proper application of the law, was issued beyond the permissible period.

20.

We also find support for the aforesaid proposition from the judicial precedents relied upon by the ld.AR, including the decisions in M/s. Classic Flour & Food Processing Pvt. Ltd. v. CIT, Mikado Realtors P. Ltd. v. Pr. CIT, Krishan Kumar Saraf v. CIT, Concord Infra Projects (P) Ltd. v. Pr. CIT, M/s.Westlife Development Ltd. v. Pr. CIT and the judgment of the Hon'ble Orissa High Court in Pr. CIT v. Badal Prakash Jindal (HUF) & Ors., as well as the judgment of the Hon'ble Delhi High Court in CIT, Central-I v. Escorts Farms Pvt. Ltd. The consistent principle emerging from these decisions is that where the foundational assessment itself does not legally survive, the consequential proceedings founded thereon cannot be independently sustained.

21.

Coming to the facts of the present case, the position assumes greater significance inasmuch as the AO, while passing the reassessment order dated 13.02.2024, accepted the income returned by the assessee in response to the notice issued u/s.148 of the Act and did not make any further addition or disallowance. Despite the same, penalty proceedings u/s.271(1)(c) of the Act were initiated in respect of the income disclosed by the assessee in the return furnished pursuant to the notice u/s.148 of the Act. Subsequently, vide penalty

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order dated 23.08.2024, the AO levied a penalty of Rs.9,33,782/- alleging concealment of income. In these circumstances, the penalty proceedings cannot be sustained by perpetuating the jurisdictional error committed in the earlier quantum proceedings. As held by the Hon’ble Supreme Court in the case of Baroda Distributors (supra), an erroneous view or decision cannot be perpetuated merely because it had been adopted in an earlier proceeding. We, therefore, cannot permit the perpetuation of the error which had crept into the earlier quantum proceedings of the assessee. In accordance with the mandate of the Hon’ble Supreme Court, we are duty-bound to rectify the jurisdictional legal infirmity and decide the matter in accordance with law.

22.

Once we hold that the notice dated 20.04.2022 issued u/s.148 of the Act for A.Y. 2015-16 was barred by limitation and, consequently, the reassessment proceedings initiated pursuant thereto were without valid jurisdiction, the reassessment order dated 13.02.2024 cannot constitute a valid foundation for the impugned penalty proceedings. The subsequent penalty order dated 23.08.2024, being consequential to such reassessment proceedings, therefore cannot be sustained in law. In view of the above finding, we do not consider it necessary to adjudicate the other grounds raised by the assessee on the merits of the levy of penalty u/s.271(1)(c) of the Act. Once the jurisdictional foundation itself is held to be invalid, examination of the sustainability of the consequential penalty on merits would be academic. Accordingly, we hold that the notice issued u/s.148 of the Act on 20.04.2022 for A.Y. 2015-16 was barred by limitation and the reassessment proceedings initiated pursuant thereto were invalid in law. Consequently, the assessment/reassessment order dated 13.02.2024 cannot sustain the impugned penalty proceedings. The penalty order passed u/s.271(1)(c) of the Act dated 23.08.2024 and sustained by the ld.CIT(A) vide order dated 16.01.2026 are accordingly quashed.

23.

In the result, the appeal of the assessee is allowed on the legal ground. The remaining grounds, being rendered academic, are not adjudicated upon.

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24.

In result, the appeal of the assessee is allowed.

Order pronounced in the open court on 10th September, 2026 at Chennai. Sd/- Sd/- (एबी टी वर्की ) (एस. आर. रघुनाथा) (ABY T VARKEY) (S.R.RAGHUNATHA) न्याययर्क सदस्य/Judicial Member लेखासदस्य/Accountant Member चेन्नई/Chennai, दिन ांक/Dated, the 10th September 2026 Devadas आदेश की प्रतिलिपि अग्रेपिि/Copy to: 1. अपीलाथी/Appellant 2. प्रत्यथी/Respondent 3.आयकर आयुक्त/CIT– Chennai/Coimbatore/Madurai/Salem 4. ववभागीय प्रनतननधि/DR 5. गार्ा फाईल/GF DEVADAS Digitally signed by DEVADAS GOPALANACHARY GOPALANACHARY Date: 2026.09.18 11:32:36 +05'30'

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