NADUPATTY VENKATACHALAM JAYARAMAN,SALEM vs. ITO, WARD-1(6), SALEM

ITA 3417/CHNY/2026Status: DisposedITAT Chennai08 October 2026AY 2015-1612 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the notice dated 11.04.2022 issued under Section 148 of the Act for AY 2015-16 is barred by limitation under the first proviso to Section 149 of the Act. The Tribunal noted that the validity of a Section 148 notice issued after 31.03.2022 for AY 2015-16 has been consistently held as invalid by various courts and coordinate benches. While acknowledging the revenue's reliance on the Madras High Court's decision in Ravi Constructions and the fifth and sixth provisos to Section 149, the Tribunal referred to the jurisdictional High Court's decision in Appenell Holdings Ltd vs DCIT, which placed reliance on Ravi Constructions. However, the Tribunal then referred to a subsequent division bench decision of the Madras High Court in Shanmugha Arts, Science Technology and Research Academy v. ACIT, which reversed the earlier view. This division bench, relying on the Supreme Court's decision in Rajeev Bansal, held that 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. The Tribunal found that the time limit for issuing notice under the old regime of Section 149 for AY 2015-16 expired on 31.03.2022, and the notice was issued on 11.04.2022, thus being beyond the six-year period. The Tribunal concluded that the first proviso to Section 149 must be tested independently of the fifth and sixth provisos for AY 2015-16, as the six-year period did not fall within the TOLA relaxation period. Consequently, the notice and the consequent reassessment proceedings were quashed. As the legal contention was allowed, the grounds on merits became academic.

What were the facts?

The assessee, an individual, failed to file an income tax return for Assessment Year (AY) 2015-16. The Assessing Officer (AO) received information about substantial financial transactions in the assessee's bank accounts. The AO reopened the assessment by issuing a notice under Section 148 of the Income Tax Act, 1961, after passing an order under Section 148A(d) on 08.04.2022. In response, the assessee filed a return declaring a total income of Rs. 2,47,653/-. The AO treated Rs. 47,91,000/- as unexplained money under Section 69A. The Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre (NFAC) upheld the AO's addition, dismissing the assessee's legal contention that the Section 148 notice was time-barred. The assessee appealed to the Income Tax Appellate Tribunal (ITAT).

What were the issues?

1. Whether the notice issued under Section 148 of the Income Tax Act, 1961, for AY 2015-16, dated 11.04.2022, is barred by limitation, as per the first proviso to the un-amended provisions of Section 149(1) of the Act? Assessee's Contention: The assessee argued that the notice dated 11.04.2022 for AY 2015-16 is beyond the six-year time limit and thus barred by limitation, relying on the Supreme Court's decision in Rajeev Bansal. The assessee also submitted that coordinate benches have consistently held such notices issued beyond six years to be invalid. Revenue's Contention: The revenue argued that the Supreme Court's decision in Rajeev Bansal was misquoted and did not qualify any notice on limitation solely on procedure. The revenue relied on the Madras High Court's decision in Ravi Constructions vs. ACIT, submitting that the notice is saved by the fifth and sixth provisos to Section 149, which exclude certain periods in computing the time limit for issuing a notice.

Which sections of the Income-tax Act were involved?

Section 148,Section 148A(d),Section 149,Section 69A,Section 250

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘A’ BENCH: CHENNAI

Before: SHRI SS VISWANETHRA RAVI & MS. PADMAVATHY.S

For Respondent: Ms. Anshu Sharatwat, Addl. CIT

PER PADMAVATHY.S, A.M: This appeal by the assessee is against the order of the Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre (NFAC), Delhi, (in short "CIT(A)") passed u/s. 250 of the Income Tax Act, 1961 (in short "the Act") dated 30.04.2026 for Assessment Year (AY) 2015-16. 2. The assessee is an individual and did not file the return of income for the year under consideration. The AO received information that the assesse

The order continues below.

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