PONNURANGAM GUNASEKARAN,CHENNAI vs. ITO NON CORP WARD-11(1), CHENNAI

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ITA 1731/CHNY/2026Status: DisposedITAT Chennai15 May 2026AY 2015-165 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the notice issued under Section 148 on 06.04.2022 was beyond the time limit prescribed by Section 149 of the Act, as the six-year period would have expired on 31.03.2022. Consequently, the reassessment proceedings were quashed.

What were the facts?

The assessee's appeal concerns the assessment year 2015-16. The primary issue is whether the notice issued under Section 148 of the Income Tax Act for reopening the assessment was barred by limitation.

What were the issues?

The key legal issue was whether the notice for reassessment was issued within the statutory time limits, considering the amendments and transitional provisions applicable to the assessment year 2015-16.

Which sections of the Income-tax Act were involved?

Section 148,Section 149,Section 147,Section 144B,Section 69A

AI-generated summary — verify with the full judgment below

Before: Shri Inturi Rama Rao & Shri S.S. Viswanethra Ravi

Hearing: 13.05.2026Pronounced: 15.05.2026

आयकर अपीलीय अिधकरण, ’डी’ �ायपीठ, चे�ई IN THE INCOME-TAX APPELLATE TRIBUNAL ‘D’ BENCH, CHENNAI �ी इंटूरी रामाराव, लेखा सद एवं �ी एस.एस. िव#ने% रिव, �ाियक सद के सम& । Before Shri Inturi Rama Rao, Accountant Member & Shri S.S. Viswanethra Ravi, Judicial Member आयकर अपील सं./I.T.A. No. 1731/Chny/2026 िनधा(रण वष(/Assessment Year: 2015-16 Ponnurangam Gunasekaran, Vs. Income Tax Officer, No. 29, D-3 Flat, Non- Corporate Ward-11(1), II Street, Balaji Nagar, Chennai. Royapettah, Chennai – 600 014. [PAN: AEYPG-6259-F] (अपीलाथ+/Appellant) (,-थ+/Respondent) अपीलाथ+ की ओर से / Appellant by : Mr. H. Yeshwant Kumar, Advocate ,-थ+ की ओर से/Respondent by Ms. T. Mythili, JCIT : सुनवाई की तारीख/ Date of hearing : 13.05.2026 घोषणा की तारीख /Date of Pronouncement 15.05.2026 : आदेश /O R D E R PER S.S. VISWANETHRA RAVI, JUDICIAL MEMBER: This appeal by the assessee is against the order dated 29.01.2026 passed by the Learned Commissioner of Income Tax [herein after “CIT(A), National Faceless Appeal Center[NFAC], Delhi, for the assessment years 2015-16.

2.

The Ld.AR Mr. H. Yeshwant Kumar, Advocate, drew our attention to the additional ground nos. 3 to 10 and argued that the reopening is barred by limitation for Assessment Year 2015-16 and

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prayed to take up the ground nos.3 to 10 as preliminary issue as it

goes to the root of the matter. He argued that the notice u/s 148 of

the act was issued beyond the specified date which is beyond six

years. He placed on record the order of this tribunal in the case of

Natarajan Sangeetha in ITA No.3280/Chny/2025 for AY-2015-16 and

argued that the issue of notice for AY 2015-16 u/s. 148 of the act is

four years from the end of the relevant assessment year. Further,

notice u/s. 148 of the act was issued on 06.04.2022 which is beyond

the time limit as specified u/s. 149 of the act. The Ld.AR argued that

the notice issued on 06.04.2022 is barred by limitation and resultantly

the re-assessment is thereon is liable to be quashed.

3.

The Ld.DR Ms. T. Mythili, JCIT submits that the reassessment

was initiated vide notice u/s 148 of the act dated 06.04.2022 based

on NMS – flagged cash deposits treated as unexplained money u/s

69A of the act. The argument of Ld.AR that all the notices issued

u/s 148 of the act post 01.04.2021 for AY 2015-16 are invalid in

terms of decision in the case of Rajiv Bansal is a gross misreading

and does not invalidate notices wholesale, it upholds them where

compliant with extended timelines under TOLA 2020 and exclusions

under the third proviso to section 149(1) of the act. Further, she

argued that the Hon’ble Supreme Court in the case of Ashis Agarwal

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addressed notices issued u/s 148 old regime (pre 01.04.2021)

between 01.04.2021 and 30.06.2021 deeming them as show cause

notices u/s 148A(b) of the new regime w.e.f. 01.04.2021. She

argued vehemently that this a curative measure under article 142 to

balance revenue and assessee’s interest amid Covid-19

disturbances and legislative amendments via Finance Act 2021.

4.

Further, she submits that the deeming fiction revived notices

valid under the old regime extended six year limit (old section

149(1)(b) r.w. proviso old section 147 expiring 31.03.2022 for AY

2015-16 in cases of escaped income more than one lakh. She

submits it prevented still born proceedings and allowed continuation

under the new regime subject to timelines. She argued vehemently

that the notice dated 06.04.2022 issued u/s 148 of the act falls within

this transitional frame work, post Ashis Agarwal implementation via

CBDT instruction no.1/2022 dated 11.05.2022. Further, she argued

that contradictory to the assessee’s claim, Rajiv Bansal decision

does not invalidate section 148 notices as it clarifies and upholds

them for AYs like 2015-16 when issued within surviving timelines.

The court examined interplay of old / new regimes, TOLA extensions

from 20.03.2020 – 31.03.2021 to 30.06.2021 exclusions under the

third proviso to section 149(1) of the act. She prayed to dismiss the

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ground nos. 3 to 10 raised by the assessee.

5.

Heard both the parties and perused the material available on

record. We note that this Tribunal in the case of Natarajan

Sangeetha (Supra), in order to find out as to whether the notice

issued u/s 148 is time barred or not, examined the relevant

provisions of the act and legal position as per judicial proceedings

vide para-4 of the order dated 04.02.2026. We note that the

Tribunal examined the provisions u/s 149 as on 01.04.2022 and prior

to the amendment in paras-4 & 5 respectively. Considering the same

and also based on the decision of Hon’ble Supreme Court in the case

of Rajiv Bansal reported in 469 ITR 430(SC) held that the 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

is expired on the date of issue of such notice. Accordingly, held the

notice therein dated 07.04.2022 was issued beyond the time limit

hence not valid. Further, the Tribunal held the arguments of Ld.DR is

not acceptable for the reason, for the purpose of applying exclusion

period, the notice should first survive the test of being issued either

under sections 149(1)(a) or 149(1)(b) under the new regime.

Accordingly, held the question of applying on the third proviso for

calculating time limit does not arise. On plain reading of the said

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order, we find facts and circumstances of the present case are similar

in respect of issue of notice u/s. 148 dated 06.04.2022 is barred by

limitation as the six years period would expire as on 31.03.2022.

Therefore, we hold that the notice dated 06.04.2022 issued u/s. 148

of the act is barred by limitation, resultantly the reassessment dated

20.03.2024 u/s 147 r.w.s 144B of the act is invalid and accordingly

quashed. Thus, ground nos. 3 to 10 raised by the assessee is

allowed.

6.

In view of our decision in ground nos. 3 to 10, all other grounds

raised in the form-36 become academic and requiring no

adjudication.

7.

In the result, the appeal of the assessee is allowed. Order pronounced on 15th May, 2026 at Chennai.

Sd/- Sd/- (INTURI RAMA RAO) (S.S. VISWANETHRA RAVI) ACCOUNTANT MEMBER JUDICIAL MEMBER Chennai, Dated: 15.05.2026

JPV आदेश की ,ितिलिप अ4ेिषत/Copy to: 1. अपीलाथ+/Appellant, 2.,-थ+/ Respondent, 3. आयकर आयु5/CIT, Chennai/Madurai/Coimbatore/Salem 4. िवभागीय ,ितिनिध/DR & 5. गाड( फाईल/GF.

PRASANNA Digitally signed by PRASANNA VANI JETTY VANI JETTY Date: 2026.05.19 16:16:49 +05'30'

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