C. MANIBARATHI,COIMBATORE vs. ITO, NCW-3(1), COIMBATORE

आयकर अपीलीय अधिकरण ‘बी’ न्यायपीठ, चेन्नई। IN THE INCOME TAX APPELLATE TRIBUNAL ‘B’ BENCH: CHENNAI माननीय श्री जॉजज जॉजज के.,उपाध्यक्ष एवं श्री गगन गोयल लेखा सदस्य के समक्ष BEFORE HONOURABLE GEORGE GEORGE K, VICE PRESIDENT AND SHRI GAGAN GOYAL, ACCOUNTANT MEMBER आयकर अपील सं./ITA No. 198/Chny/2026 ननिाारण वर्ा /Assessment Years: 2015-16 C. Manibarathi, v. Income Tax Officer, No.6/352-3, Therkku Thottam, Non-Corp Ward-3(1), Ganeshapuram, Sirumugai, Coimbatore. Coimbatore, Tamil Nadu-641 302. [PAN: BTZPM2856H] (अपीलार्थी/Appellant) (प्रत्यर्थी/Respondent) अपीलार्थी की ओर से/ Assessee by : Mr. R. Vijayaraghavan, Advocate, Ld. AR प्रत्यर्थी की ओर से /Revenue by : Mr. Beesam Narasing Rao, JCIT Ld. DR सुनवाईकीतारीख/Date of Hearing : 24.06.2026 घोषणाकीतारीख /Date of Pronouncement : 16.07.2026 आदेश / O R D E R PER GAGAN GOYAL, AM: This is an appeal preferred by the assessee against the order of the Ld. Commissioner of Income Tax (A) / NFAC (hereinafter referred as the ‘Ld.CIT(A)’), dated 18.11.2025 for the assessment year (hereinafter referred as the ‘AY’) 2015-16.

GROUNDS OF APPEAL (1) The order u/s 250 of the 1.T. Act, 1961 of Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi dated 18.11.2025 is opposed to law and unsustainable in the facts and circumstances of the case. (2) The learned CIT (A) having considered the written submission made by the appellant, ought to have allowed the appeal, in the facts and circumstances of the case. (3) The learned CIT (A) ought to have held that the notice issued u/s 148 of the 1.T. Act 1961 is not valid and ab initio void since the same was issued after the prescribed time limit.

ITA No.198/Chny/2026 (2015-16) C. Manibarathi (4) The learned CIT (A) ought to have held that even if any income had escaped assessment, the same is below the limit prescribed under the Income Tax Act 1961 for issuance of notice u/s 148 of the Act and therefore, the notice issued u/s 148 of the Act is barred by limitation. (5) For these and other additional grounds of appeal that may be adduced at the time of hearing, the order of the Commissions of Income Tax (Appeals), National Faceless Appeal Centre, Delhi is opposed to law and unsustainable in the facts and circumstances of the case. 2. The brief facts of the case are that the assessee individual was amongst the non-filers of return u/s. 139 of the Act. The Revenue was in possession of information about time deposits of Rs. 30 Lacs with Canara Bank and cash deposit of Rs. 44.66 Lacs again with the Canara Bank. Apart from this the assessee also earned interest of Rs. 76,021/-. Based on the information mentioned (supra) a notice u/s. 148 of the Act was issued on 25.04.2022. In response to the same the assessee filed a return on 07.05.2022 declaring total income at Rs. 76,021/- and agricultural income of Rs. 12.5 Lacs. However, the assessee never came forward to participate and replying the questionnaire issued by the AO. Ultimately, the case of the assessee was assessed u/s. 144 r.w.s. 147 and 144B of the Act by making addition on account of time deposit amounting to Rs. 30 Lacs u/s. 69 of the Act, cash deposit amounting to Rs. 44.6 Lacs u/s. 69A of the Act, unexplained investment amounting to Rs. 55 Lacs u/s. 69 of the Act and income from other sources amounting to Rs. 12.5 Lacs (Total additions were Rs. 1, 41, 96,000/-). The assessee being aggrieved with the same preferred an appeal before the Ld. CIT (A), who partly allowed the appeal of the assessee for statistical purposes and restored the matter back to the file of the AO. The assessee still aggrieved with the order of the Ld. CIT (A) preferred the present appeal before us.

ITA No.198/Chny/2026 (2015-16) C. Manibarathi 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 read with section 153A, 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 cases referred to in clauses (i), (iii) and (iv) of Explanation 2 to section 148, where, —

(a) a search is initiated under section 132; or

(b) a search under section 132 for which the last of authorisations is executed; or

(c) requisition is made under section 132A,

after the 15th day of March of any financial year and the period for issue of notice under section 148 expires on the 31st day of March of such financial year, a period of fifteen days shall be excluded for the purpose of computing the period of limitation as per this section and the notice issued

ITA No.198/Chny/2026 (2015-16) C. Manibarathi under section 148 in such case shall be deemed to have been issued on the 31st day of March of such financial year: Provided also that where the information as referred to in Explanation 1 to section 148 emanates from a statement recorded or documents impounded under section 131 or section 133A, as the case may be, on or before the 31st day of March of a financial year, in consequence of, ––

(a) a search under section 132 which is initiated; or

(b) a search under section 132 for which the last of authorisations is executed; or

(c) a requisition made under section 132A,

after the 15th day of March of such financial year, a period of fifteen days shall be excluded for the purpose of computing the period of limitation as per this section and the notice issued under clause (b) of section 148A in such case shall be deemed to have been issued on the 31st day of March of such financial year: 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 or the period during which the proceeding under section 148A 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 does not exceed 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 subsection, “asset” shall include immovable property, being land or building or both, shares and securities, loans and advances, deposits in bank account. (1A) Notwithstanding anything contained in sub-section (1), where the income chargeable to tax represented in the form of an asset or expenditure in relation to an event or occasion of the value referred to in clause (b) of sub-section (1), has escaped the assessment and the investment in such asset or expenditure in relation to such event or occasion has been made or incurred, in more than one previous years relevant to the assessment years within the period referred to in clause (b) of sub- section (1), a notice under section 148 shall be issued for every such assessment year for assessment, reassessment or recomputation, as the case may be. (2) The provisions of sub-section (1) as to the issue of notice shall be subject to the provisions of section 151.’ 4. In view of the above provisions, certainly we need to analyse the provisions of section 149 of the Act as they stood prior to 01.04.2021, as under:

ITA No.198/Chny/2026 (2015-16) C. Manibarathi 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.

Clause (c) and sub-sections 2 & 3 omitted earlier.

Moreover, we further relied upon and respectfully followed the decisions of the Hon’ble Apex Court in the case of [2024] 167 taxmann.com 70 (SC) Union of India v. Rajeev Bansal, wherein it was held by the Hon’ble Apex Court as under:

The ingredients of the first proviso to section 149(1)(b) 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 1-4-2021;

(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" section 149(1) (b) of the old regime.

Thus, a notice could be issued under section 148 of the new regime for assessment year 2021-22 and before only if the time limit for issuance of such notice continued to exist under section 149(1) (b) of the old regime. [Para 46] 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 2021-22 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. 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 2012-13 if the escaped assessment amounted to Rs. 50 lakhs or more. The proviso limits the retrospective operation of section 149(1) (b) to protect the interests of the assessees. [Para 49] Given section 149(1) (b) of the new regime, reassessment notices could be issued after three years only if the income chargeable to tax which escaped assessment is more than Rs. 50 lakhs. The proviso to section 149(1)(b) limits the retrospectivity of that provision with respect to the time limits specified under section 149(1)(b) of the old regime. [Para 51].

ITA No.198/Chny/2026 (2015-16) C. Manibarathi 5. In view of the above discussion, based on the provisions of section 149 of the Act (pre amendment and post amendment) and the decision of the Hon’ble Apex Court in the case of Rajeev Bansal (supra), we do not have an iota of doubt or confusion that the notice issued in this case was time barred, hence all the consequential actions are also without authority of law and not sustainable. Resultantly, Ground No. 3 raised by the assessee is allowed and proceedings declared to be null and void.

Order pronounced on the 16th day of July, 2026, in Chennai.

Sd/- Sd/- (जॉजज जॉजज के.) (गगन गोयल) (GEORGE GEORGE K.) (GAGAN GOYAL) उपाध्यक्ष /VICE PRESIDENT लेखा सदस्य/ACCOUNTANT MEMBER चेन्नई/Chennai, ददनाांक/Dated: 16th July, 2026. KB आदेश की प्रततललपप अग्रेपषत/Copy to: 1. अपीलार्थी/Appellant 2. प्रत्यर्थी/Respondent 3. आयकर आयुक्त/CIT, Chennai /Madurai/Coimbatore/Salem 4. पवभागीय प्रतततनधि/DR Digitally signed 5. गार्ड फाईल/GF K BABU by K BABU Date: 2026.07.27 10:28:10 +05'30'