BENITKARAN BALASINGH,MADURAI vs. ITO, CORP. WARD-1,, MADURAI

Briefly the facts of the case are that appellant is an Individual. The Return of Income under the provisions of section 139 of the Act for the Assessment Year 2015-16 was filed disclosing income of Rs.31,33,830/-. Against the said return of income, no scrutiny assessment was made. Subsequently, based on the information available from the profit and loss account, the Assessing Officer had come to know that the contribution of PF/ESI was remitted after the due date under the respective Act, therefore, the sum of Rs.6,55,330/- was required to be added under the provisions of section 36(1)(va) of the Act, accordingly formed an opinion that income got escaped assessment from tax, issued a notice 148 of the Act on 31.03.2021. In response to notice u/s.148, the appellant neither complied with notice u/s.148 nor the notice issued u/s.142(1) of the Act. In the circumstances, e- Assessment Unit of the Department-NFAC (hereinafter called ‘AO’) had proceeded with framing the best judgement assessment vide order dated 22.02.2022 passed u/s.147 r.w.s 144 r.w.s 144B of the Act at a total income of Rs.41,22,560/-. While doing so, the Assessing Officer made of disallowance of late payment of Employees Contribution to ESI/PF of Rs.6,55,330/- and also Assessing Officer made addition of Rs.3,33,400/- disbelieving the Agricultural Income by holding that the appellant had not shown any agricultural land as asset in the balance sheet.

Being aggrieved by the above assessment order, an appeal was filed before the ld.CIT(A) contending that the very initiation of the reassessment proceedings are bad in law in the absence of any reason to believe that there was escapement of income from assessment to tax and there was no fresh tangible material to show that income got escaped from assessment to tax and he further contended that the reassessment proceedings are bad in law as it is barred by the limitation and also contest the addition on merits. However, the ld.CIT(A) confirmed the action of the Assessing Officer.

Being aggrieved, the appellant is in appeal before us in the present appeal. The ld.Counsel submits that the period of four years from the end of the relevant assessment year ends on 31.03.2020. However, the notice u/s.148 was issued on 30.03.2021 it is clearly beyond four years. However, It is submitted that 4 years from the end of the A.Y.2015-16 ends on 31.03.2020 and the notice u/s 148 of the Act in the present case was issued on 30.03.2021, which is beyond four years. However, The Taxation and Other Laws (Relaxation and Amendment Of Certain Provisions) Act, 2020 (TOLA) extended the time limit to 31.03.2021, for various actions under the Income Tax Act, the limitation for which falls for completion between the 20.03.2020 and 30.03.2021. The relevant portions of section 3 of TOLA is extracted below, “3. (1) Where, any time-limit has been specified in, or prescribed or notified under, the specified Act which falls during the period from the 20th day of March, 2020 to the 31st day of December, 2020, or such other date after the 31st day of December, 2020, as the Central Government may, by notification, specify in this behalf, for the completion or compliance of such action as- (a) completion of any proceeding or passing of any order or issuance of any notice, intimation, notification, sanction or approval, or such other action, by whatever name called, by any authority, commission or tribunal, by whatever name called, under the provisions of the specified Act; or (b) filing of any appeal, reply or application or furnishing of any report, document, return or statement or such other record, by whatever name called, under the provisions of the specified Act, or and where completion or compliance of such action has not been made within such time, then, the time-limit for completion or compliance of such action shall, notwithstanding anything contained in the specified Act, stand extended to the 31st day of March, 2021, or such other date after the 31st day of March, 2021, as the Central Government may, by notification, specify in this behalf.

In this backdrop, the limitation of 4 years from the end of the A.Y 2015-16 falls on 31.03.2020, which falls between 20.03.2020 and 30.03.2021 [the TOLA period] Thus, though the notice in the Appellant's case was issued on 31.03.2021, beyond the period of 4 years, by application of TOLA, the four year limitation get extended to 31.03.2021, thus deeming the notice u/s. 148 of the Act dated 31.03.2021 as to have been issued within 4 years from the end of the relevant A.Y.2015-16. ITA No.3649/CHNY/2025 [A]

If the reopening has been done within' 4 years, the approval u/s. 151 of the Act as per the un-amended provisions, has to be obtained from the Joint Commissioner of Income Tax.

However, it is submitted that in the present case the approval envisaged under the provisions of section 151 of the Act was obtained from Principal Commissioner of Income Tax(PCIT) which is placed on page 52 to 54 of the paper book. Thus, the approval obtained is illegal, therefore, the assessment order passed is without jurisdiction.

Without prejudice to the above, it is further submitted that the Assessing Officer had merely reopened assessment based on the information already available in the return of income and there was no fresh tangible brought on record to indicating that income got escaped assessment to tax. It is further contended that there was no failure on the part of the assessee to disclose material facts fully and truly. Since the assessment was reopened beyond the period of four years from the end of relevant Assessment Year, the assessment order also bad in law.  K.P.Construction Vs. DCIT and ors in W.P.No.12627 of 2022  Prabhakar Nerulkar vs. PCIT [2025] 177 taxmann.com 580 (Bombay)

On the other hand, ld.Sr.DR opposed the above submission submits that the order of NFAC is a reasoned one and all the contentions raised by the assessee were dealt with by ld.CIT(A).

We heard rival submissions and perused the material available on record. The appellant had challenged the very validity of the reassessment proceedings on several counts. The challenge was laid inter alia the very reopening of the assessment proceedings on the ground that there was no fresh tangible material brought on record by the Assessing Officer suggesting escaping of assessment to tax, therefore, reassessment proceedings are bad in law. From the mere reading of the assessment order, it would reveal that the Assessing Officer had initiated the reassessment proceedings based on the information already available in the return of income and accompanying documents i.e. Profit and Loss Account and Balance Sheet and Audit Report etc. This information was very much available with the Assessing Officer also at the time of original assessment proceedings. Therefore, the ratio of the decision of Hon’ble Supreme Court Chennai; "दनांक / Dated : 28th April, 2026 SGR, Sr.PS आदेश क" ""त"ल"प अ"े"षत / Copy of the Order forwarded to : अपीलाथ" / The Appellant.