MANIANOOR RATHNAM PALANIAPPAN,TIRUCHENGODE vs. INCOME TAX OFFICER, WARD - 1, TIRUCHENGODE

ITA 1520/CHNY/2026Status: DisposedITAT Chennai05 October 2026AY 2015-1618 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that Ground No. 2, concerning the validity of the reassessment proceedings, was decisive. The Tribunal found that the notice under Section 148 dated 31.03.2021 was issued after obtaining approval from the Principal Commissioner of Income Tax. However, in light of the period covered by TOLA and the Supreme Court's decision in Union of India v. Rajeev Bansal, the competent authority for granting sanction for a notice issued on 31.03.2021 for AY 2015-16 (where the four-year period ended on 31.03.2020) should have been the Joint Commissioner as per Section 151(2) of the old regime. The Tribunal relied on the judgments of the Bombay High Court in Prabhakar Nerulkar and Ghanshyam K. Khabrani, and the Delhi High Court in CIT v. SPL's Siddhartha Ltd., which emphasized that statutory powers must be exercised by the specified authority. Since the approval was granted by the Principal Commissioner, a superior authority, and not the Joint Commissioner, the statutory requirement of Section 151(2) was not complied with. Consequently, the notice under Section 148 was held to be invalid, and the reassessment proceedings initiated pursuant thereto were quashed. As a result, the reassessment order passed under Section 147 was also set aside. The Tribunal left the other grounds relating to the merits of the addition under Section 50C and the procedural objection under Section 144B undecided as they became academic.

What were the facts?

The assessee, Manianoor Rathnam Palaniappan, filed an appeal against the order of the CIT(A) for Assessment Year 2015-16. The assessee had sold an immovable property on 10.04.2014 for Rs. 55,50,000, which was disclosed in the return. The Stamp Valuation Authority adopted a value of Rs. 1,06,94,000. The Assessing Officer initiated reassessment proceedings under Section 147 by issuing a notice under Section 148 on 31.03.2021, after obtaining approval from the Principal Commissioner of Income Tax. The assessee disputed the stamp duty value and requested a reference to the Departmental Valuation Officer (DVO) under Section 50C(2). However, the reassessment was completed by adopting the stamp duty value without referring the matter to the DVO. The assessee also contended that a draft assessment order or show-cause notice was not issued as per Section 144B. The CIT(A) upheld the Assessing Officer's action, leading to the present appeal.

What were the issues?

1. Whether the reassessment proceedings initiated under Section 147 of the Income Tax Act, 1961, are bad in law because the notice issued under Section 148 on 31.03.2021 was approved by the Principal Commissioner of Income Tax instead of the Joint Commissioner, as prescribed under Section 151(2) of the Act, considering the period covered by the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 (TOLA). - Assessee's contention: The notice was invalid as the approval was obtained from the Principal Commissioner instead of the Joint Commissioner, citing the Bombay High Court judgment in Prabhakar Nerulkar v. Principal Commissioner of Income-tax and the Supreme Court decision in Union of India v. Rajeev Bansal. The assessee argued that TOLA extended the time for sanction and, in this case, the Joint Commissioner was the competent authority. - Revenue's contention: Not recorded in the judgment. 2. Whether the assessment order passed under Section 147 read with Section 144B of the Act is invalid for not issuing a show-cause notice or draft assessment order proposing the variation as contemplated under Section 144B. - Assessee's contention: The final assessment order was passed without the mandatory show-cause notice or draft assessment order. - Revenue's contention: Not recorded in the judgment. 3. Whether the Commissioner of Income Tax (Appeals) erred in sustaining the addition made under Section 50C of the Act without referring the matter to the Departmental Valuation Officer (DVO) under Section 50C(2), despite the assessee disputing the stamp duty value and furnishing a valuation report. - Assessee's contention: The CIT(A) erred in not directing a reference to the DVO and not exercising co-terminus powers, especially when a valuation report was submitted. The assessee also argued that not challenging the guideline value before stamp authorities does not preclude a reference to the DVO. - Revenue's contention: Not recorded in the judgment.

Which sections of the Income-tax Act were involved?

Section 147,Section 148,Section 151(2),Section 144B,Section 50C,Section 50C(2),Section 250,Section 264

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘B’ BENCH: CHENNAI

Before: SHRI MANU KUMAR GIRI & SHRI S.R.RAGHUNATHA

Hearing: 13.07.2026

PER MANU KUMAR GIRI, JM:

This appeal by the assessee is directed against the order dated 20.01.2026 passed by the ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre [“ld. CIT(A)”], u/s. 250 of the Income Tax Act, 1961 (“the Act”), for the Assessment Year 2015-16. Manianoor Rathnam Palaniappan VS ITO W-1 :: - 2 - ::

2.

The assessee has raised the following grounds of appeal:

1.

Ground 1: The order of the Commis

The order continues below.

Read the full judgment

A free account opens 10 full judgments a month. Re-reading one you have already opened does not count again.

Create a free accountSign in

See plans and prices

The summary, the parties, the sections and the citations above are open to everyone and always will be. Only the text of the order and the PDF are metered.

More judgments on Section 147

All 49,210 judgments and leading authorities on Section 147 →

Recent GST High Court judgments

Search GST case law →