INCOME TAX OFFICER, CHENNAI vs. RAMACHANDRAN RADHIKA, CHENNAI

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ITA 869/CHNY/2026Status: DisposedITAT Chennai30 July 2026AY 2017-187 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal reversed the CIT(A)'s finding, stating that since the escaped income exceeded Rs. 50 lakhs, the reassessment proceedings were initiated within the six-year limitation period. The matter was restored to the CIT(A) for adjudication on merits.

What were the facts?

The Revenue appealed an order by the CIT(A) that quashed reassessment proceedings. The CIT(A) held the notice under Section 148 was invalid due to time bar, relying on Supreme Court decisions. The escaped income was over Rs. 50 lakhs.

What were the issues?

Whether the reassessment proceedings were validly initiated within the prescribed time limits, considering the amount of escaped income and the amended provisions of the Income Tax Act.

Which sections of the Income-tax Act were involved?

Section 148,Section 148A,Section 149,Section 147,Section 144B

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, CHENNAI

Before: HON’BLE SHRI INTURI RAMA RAO & HON’BLE SHRI SS VISWANETHRA RAVI

Pronounced: 30.07.2026

PER INTURI RAMA RAO, ACCOUNTANT MEMBER:

This appeal filed by the Revenue directed against the order of ld.Commissioner of Income Tax(Appeal)[NFAC], dated 30.09.2025 passed u/s.250 of the Income Tax Act, 1961 for the Assessment Year 2017-18. 2. The Revenue raised the following grounds of appeal :

“1) The order of the Ld. CIT(A) is contrary to the facts and circumstances of the case.

2) The Ld. CIT(A) erred in law and on facts in holding the notice issued under section 148 of the Income Tax Act, 1961 as invalid and consequently quashing the reassessment order, by relying on the decision of the Hon'ble Supreme Court in the case of Union of India vs. Rajeev Bansal [2024] 167 taxmann.com 70 (SC), without appreciating the merits of the case and the distinguishing facts.

3) The Ld. CIT(A) erred in law and on facts in not considering that in the relied- upon decision, the Revenue had conceded inapplicability of the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 (TOLA') for AY 2015-16 only in specific circumstances where notices were issued beyond the limitation under section 149(1) of the old regime, whereas in the present case, the income escaping assessment exceeds Rs.50 lakhs, and the proceedings were initiated validly under the amended provisions.

4) The Ld. CIT(A) erred in law and on facts in applying the ratio of the Hon'ble Supreme Court in Union of India vs. Rajeev Bansal (supra), without noting that TOLA's applicability is limited to actions or proceedings falling for completion between 20-03-2020 and 31-03-2021, which is not applicable to the present case where the notice under section 148 was issued on 30-07-2022 pursuant to proceedings initiated under the new regime effective from 01-04-2021. 5) The Ld. CIT(A) erred in law and on facts in not distinguishing the facts of the present case from those in Union of India vs. Rajeev Bansal (supra) and Ashish Agarwal vs. Union of India, where notices under the old regime were treated as show-cause notices under section 148A(b). In the present case, the Assessing Officer issued a notice under section 148A(b) on 30-05-2022 (within the six-year limitation ending on 31-03-2024), passed an order under section 148A(d) on 30- 07-2022, and issued the notice under section 148 on 30-07-2022, fully complying with the amended provisions effective from 01-04-2021. 6) The Ld. CIT(A) erred in law and on facts to quash the notice under section 148 and the reassessment order by holding that the notice was issued beyond the time limit without appreciating the fact that as per section 148A(d), time limit available with the Assessing Officer to pass an order u/s. 148A(d) and issue notice u/s. 148 within one month from the end of the month in which the reply u/s. 148A(c) is received by him, or where no such reply is furnished, within one month from the end of the month in which time or extended time allowed to furnish a reply as per clause (b) expires.

7) The Ld. CIT(A) erred in law and on facts to quash the notice under section 148 and the reassessment order by holding that the notice was issued beyond the time limit under the first proviso to section 149(1)(b) of the amended Act, ignoring the last two provisos to section 149(1) that the proceedings were validly initiated with the issuance of notice under section 148A(b) on 30-05-2022, prior to the expiry of the six-year limitation on 31-03-2024 and time has been deemed to have extended by virtue of provisions of section 149(1).

8) For these and other grounds that may be adduced at the time of hearing, it is prayed that the order of the Ld.CIT(A) be set aside and that of the Assessing Officer be restored.”

3.

Briefly, the facts of the case are that the Respondent is an Individual. The Return of Income for the Assessment Year 2017-18 was filed on 20.12.2017 disclosing total income at Rs.2,73,050/-. Against the said Return of Income, no regular assessment was made.

4.

Subsequently, based on the information that the appellant received a remuneration of Rs.2,98,29,315/- from a partnership firm namely M/s.CRCL LLP of which he was a partner and but not offered to tax, the Assessing Officer formed an opinion that the income got escaped assessment from tax. Accordingly, a nice u/s.148 of the Act was issued on 30.06.2021. Following the dictum laid down by the Hon’ble Supreme Court in the case of Union of India Vs. Ashish Agrawal, a notice u/s.148A(b) of the Act was issued to the Respondent on 30.05.2022 and finally after complying with the procedure laid down u/s.148A of the Act notice u/s.148 was issued to the Respondent on 30.07.2022. In response to notice u/s.148, the respondent filed the Return of Income on 29.08.2022 disclosing a total income of Rs.2,73,050/-. Against the said Return of Income, the assessment was completed by e-Assessment Unit of the Department(hereinafter called ‘AO’) vide order dated 02.05.2023 passed u/s.147 r.w.s 144B of the Act at a total income of Rs.3,01,02,365/-. While doing so, the Assessing Officer made addition of remuneration from the partnership firm i.e. CRCL LLP of which the respondent is a Partner.

5.

Being aggrieved by the above addition, an appeal was filed before the ld.CIT(A). The ld.CIT(A) had held that reassessment proceedings are invalid in law as the notice u/s.148 of the Act was issued on 30.07.2022 as the Limitation Period ended on 21.06.2022. The relevant paragraph 6.12 is reproduced as under: “6.12 In the present case of the appellant, since primary/initial notice u/s 148 of the Act was issued on 30.06.2021, the surviving period available is 01 day (30.06.2021 to 30.06.2021). In this case, the notice u/s 148A(b) was issued on 30.05.2022 to furnish the reply on or before 14.06.2022. The seven days minimum period mentioned in 4th proviso to amended sec 149(1) is to be considered to pass order u/s 148A(d) and consequent issue of notice u/s 148 as the time available to pass order is less than 7 days. Thus, in this case, the AO can pass order u/s 148A(d) & consequently issue notice u/s 148 on or before 21.06.2022 (reply to be filed by 14.06.2022 + 7 days, as per 4thproviso). The order u/s 148A(d) was passed on 30.07.2022 and consequent notice u/s 148 was issued on 30.07.2022, therefore, falls beyond the period of limitation i.e., 21.06.2022 by following the decision of Hon'ble Supreme Court in the case of Rajeev Bansal (supra), the decision of Hon'ble Delhi High Court in the case of Ram Balram Buildhome (P.) Ltd (supra) and the decision of Hon'ble Gujrat High Court in the case of Dhanraj Govindram Kella (supra).”

6.

Being aggrieved, the Revenue is in appeal before this Tribunal in the present appeal.

7.

At the outset of hearing, no one appeared for the hearing on behalf of the respondent assessee.

8.

We heard learned Sr.DR and perused the material on record. We find that the findings of the ld.CIT(A) were on premise that the income escaped assessment to tax is less than Rs.50 lakhs whereas, in the present case, the income alleged to have been escaped assessment from tax is more than Rs.50 lakhs. Therefore, the time limit available for initiating reassessment proceedings u/s.148 of the Act is within the period of six years from the end of relevant assessment year i.e. 31.03.2024. Therefore, we reverse the finding of the ld.CIT(A) and restore the matter back to the file of ld.CIT(A) to adjudicate the issues in appeal on merits after affording an opportunity of being heard to the appellant.

9.

In the result, appeal filed by the Revenue is partly allowed for statistical purpose. Order pronounced in the open Court on 30th July, 2026. (SS VISWANETHRA RAVI) (INTURI RAMA RAO) JUDICIAL MEMBER ACCOUNTANT MEMBER Chennai; िदनांक / Dated : 30th July, 2026 SGR, Sr.PS आदेश क" "ितिलिप अ"ेिषत / Copy of the Order forwarded to : अपीलाथ" / The Appellant.

1.

""यथ" / The Respondent.

2.3.

The CIT Chennai/Madurai/Coimbatore/Salem. 4. िवभागीय "ितिनिध, आयकर अपीलीय अिधकरण, “ए” ब"च, चे"नई / DR, ITAT Chennai. 5. गाड" फ़ाइल / Guard File. GANGADHARA RAO SALEELA Date: 2026.08.04 10:05:43 +05'30'

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