RAMALINGAM KRISHNAKUMAR,COIMBATORE vs. ITO, NCW-1(4), COIMBATORE

आदेश / O R D E R PER ABY T. VARKEY, JM: This is an appeal preferred by the assessee against the order of the Learned Commissioner of Income Tax (Appeals)/NFAC, (hereinafter referred to as “the Ld.CIT(A)”), Delhi, dated 29.11.2025 for the Assessment Year (hereinafter referred to as "AY”) 2017-18.

ITA Nos.814/Chny/2026 (AY.2017-18) Ramalingam Krishnakumar. :: 2 :: find sufficient cause for the assessee not preferring an appeal before the Tribunal within the prescribed time. Hence, in the given facts of the case, we condone the delay of ‘11’ days in filing of the appeal before this Tribunal. Therefore, we proceed to hear the appeal on its own merits.

ITA Nos.814/Chny/2026 (AY.2017-18) Ramalingam Krishnakumar. :: 3 :: during the demonetization period, the assessee has deposited cash of ₹12,80,000/- in Karur Vyasa Bank. Hence, the AO reopened the assessment by issuing notice u/s.148 of the Act on 05.04.2021 [i.e. during the old regime] and subsequently, as per the directions of the Hon’ble Supreme Court in the case of Union of India v. Ashish Agarwal (Civil Appeal No. 3005/2022 dated 04.05.2022), the said notice was treated as show cause notice u/s.148A of the Act and pursuant thereto, the AO passed order u/s 148A(d) of the Act and issued impugned notice u/s.148 of on 21.07.2022; and thereafter is noted to have made an addition of ₹12,80,000/- as unexplained cash deposits u/s.69A of the Act the SBN deposited during demonetization. Aggrieved, the assessee preferred an appeal before the Ld.CIT(A) which was dismissed. Hence, the assessee is before us. In respect of the legal issue, we note that the time limit to issue notice of reopening u/s 148 of the Act is provided for u/s 149 of the Act. As per section 149, the impugned notice of reopening issued by AO u/s.148 of the Act is dated 21.07.2022, which is an event after three years from the end of the relevant assessment year, is barred by limitation, since the escaped income is less than Rs 50 lakhs. It would be gainful to refer to Section 149 under new regime which reads as under [w.e.f.01.04.2021]:

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

ITA Nos.814/Chny/2026 (AY.2017-18) Ramalingam Krishnakumar. :: 4 :: (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: 5. As per Section 149, no notice u/s.148 of the Act shall be issued by the AO if three (3) years have lapsed from the end of the relevant assessment year unless the AO has in his possession books of accounts or other documents or evidence which reveals income chargeable to tax represented in the form of an asset or expenditure in relation to an event or occasion or an entry in the books as escaped assessment amounting ₹50 lakhs or more. In other words, unless there is an escaped assessment of income of ₹50 lakhs or more, the AO after three (3) years is not empowered to issue notice u/s.148 of the Act. In the present case, it is undisputed that the escapement of income is less than ₹50 lakhs and the relevant AY is 2017-18, hence the AO ought to have issued notice on or before the end of the relevant assessment year i.e. 31.03.2021. Hence, as per section 149, the AO is not empowered to issue notice u/s.148 of the Act on or after 01.04.2021. Here, in this case, the AO has issued notice u/s.148 of the Act on 26.07.2022 which is clearly barred by limitation [refer decision of the Hon'ble Supreme Court in the case of UOI vs Rajeev Bansal [2024] 167 taxmann.com 70 (SC)]. Further, we note that the issue is no longer res-integra. Similar issue had come up before this Tribunal in the case of Sri Bannari Amman Fresh Fruit [in ITA No.3702/Chny/2025 order dated 27.02.2026] wherein the Tribunal had allowed the legal ground and quashed the notice issued after three (3) years by relying on the decision of the Hon'ble Supreme Court in the case of UOI vs Rajeev Bansal (supra), by holding as under:

ITA Nos.814/Chny/2026 (AY.2017-18) Ramalingam Krishnakumar. :: 5 :: (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: 6. From the plain reading of the above provisions, it is clear that the notice under section 148 cannot be issued beyond 3 years were the income escaping assessment is less than Rs.50 lakhs. In other words the statutory requirement under section 149 is explicit and unambiguous, and reassessment beyond three years cannot be initiated unless the escaped income for the relevant assessment year exceeds Rs.50 lakhs. In this regard, it is also relevant to consider the following observations of the Hon'ble Supreme Court in the case of UOI vs Rajeev Bansal [2024] 167 taxmann.com 70 (SC) where it is observed that – 51. 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 Rupees fifty 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. 52. In Ashish Agarwal (supra), this Court held that the benefit of the new regime must be provided for the reassessment conducted for the past periods. The increase of the monetary threshold from Rupees one lakh to Rupees fifty lakh is beneficial for the assesses. Mr Venkataraman has also conceded on behalf of the Revenue that all notices issued under the new regime by invoking the six year time limit prescribed 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. 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

ITA Nos.814/Chny/2026 (AY.2017-18) Ramalingam Krishnakumar. :: 6 :: regime will have to be dropped if the income chargeable to tax which has escaped assessment is less than Rupees fifty lakhs. 7. In the present case, the notice under section 148 was issued under the old regime and subsequently as per the directions of the Hon'ble Supreme Court in the case of Union of India v. Ashish Agarwal (Civil Appeal No. 3005/2022 dated 04.05.2022) the said notice was treated as show-cause notice u/s. 148A of the Act. The AO passed an order u/s. 148A(d) on 30.07.2022 and issued a notice u/s. 148 on the same date. It is an undisputed fact that in assessee's case the income escaping assessment is less than Rs.50 lakhs. A combined perusal of the provisions of section 149 and the above observations of the Hon'ble Supreme Court, we are of the view that the notice under section 148 dated 30.07.2022 which is beyond 3 years is invalid and the consequent proceedings are liable to be quashed as bad in law. 8. Since, we have allowed the legal contention of notice under section 148 barred by limitation, the other legal contention regarding notice issued without obtaining approval from appropriate authority is left open. Further, the grounds raised on merits have become academic not warranting any separate adjudication. 9. In result, the appeal of the assessee is allowed. 6. Respectfully following the decision of the Hon’ble Supreme Court in the case of UoI v. Rajeev Bansal (supra) and the decision of the Tribunal in the case of Sri Bannari Amman Fresh Fruit (supra), wherein facts are similar, and finding no change in facts or law, we allow the legal issue raised by the assessee and hold that notice u/s.148 of the Act dated 21.07.2022 is invalid and hence, consequent proceedings are held to be null in the eyes of law. Hence assessee succeeds on the legal issue since the impugned notice u/s 148 is barred by limitation as held supra. Other legal issue raised regarding approval is left open. 7. In the result, appeal filed by the assessee is allowed.

Order pronounced on the 07th day of July, 2026, in Chennai. Sd/- Sd/- (एस. आर. रघुनाथा) (एबी टी. वक�) (S.R.RAGHUNATHA) (ABY T. VARKEY) लेखा सद�/ACCOUNTANT MEMBER �या�यक सद�य/JUDICIAL MEMBER चे�नई/Chennai, �दनांक/Dated: 07th July, 2026. YS

YASHVIR Digitally signed by YASHVIR SINGH SINGH Date: 2026.07.10 12:01:58 +05'30'

ITA Nos.814/Chny/2026 (AY.2017-18) Ramalingam Krishnakumar. :: 7 ::

आदेश क� ��त�ल�प अ�े�षत/Copy to: 1. अपीलाथ�/Appellant 2. ��थ�/Respondent 3. आयकरआयु�/CIT, Chennai / Madurai / Salem / Coimbatore. 4. िवभागीय�ितिनिध/DR 5. गाड�फाईल/GF