JEYARAMAN JOHNSON KUMAR,TRICHY vs. ITO, WARD-1(1), TRICHY

ITA 1568/CHNY/2026Status: DisposedITAT Chennai05 October 2026AY 2016-1714 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal allowed the appeals on legal grounds. The primary issue was the validity of the notice issued under section 148A(b) of the Income Tax Act, 1961. The Tribunal noted that the notice dated March 1, 2023, required the assessee to respond by March 8, 2023. Even after excluding the date of issuance and the last date for response, the assessee was provided with only five clear days, which is less than the mandatory minimum of seven clear days stipulated in section 148A(b). The Tribunal relied on judicial precedents, including the Supreme Court's decision in Pioneer Motors (Private) Ltd. and decisions of co-ordinate benches, which held that 'not less than seven days' implies a minimum of seven clear days, excluding both the date of issuance and the date of compliance. Therefore, the notice issued under section 148A(b) was found to be contrary to the mandatory requirements of the Act. Consequently, the reassessment proceedings initiated pursuant to this defective notice were quashed as they could not survive. The penalty proceedings and the impugned orders arising therefrom were also quashed as a consequential step. The additional grounds raised by the assessee were allowed.

What were the facts?

The assessee, Jeyaraman Johnson Kumar, filed appeals against the orders of the Commissioner of Income Tax (Appeals) for Assessment Year 2016-17. The appeals challenge the reassessment order passed under section 147 r.w.s 144 and a penalty order under section 271(1)(c) of the Income Tax Act, 1961. The original assessment year is 2016-17. The assessee did not file a return of income for AY 2016-17. Proceedings under section 148A were initiated based on information regarding substantial credits/deposits in the assessee's bank accounts. A notice under section 148A(b) was issued on March 1, 2023, followed by an order under section 148A(d) and a notice under section 148 on March 29, 2023. The assessee did not file a return in response. The Assessing Officer treated cash deposits of Rs. 1,49,87,000/- and other credits of Rs. 1,57,87,808/-, totaling Rs. 3,07,74,808/-, as unexplained money under section 69A, and added interest income of Rs. 5,82,442/-. The assessment was completed at a total income of Rs. 3,13,57,250/-. The CIT(A) upheld the assessment and dismissed the appeal.

What were the issues?

1. Whether the reassessment proceedings are bad in law and void ab initio due to the notice under section 148A(b) not providing the requisite clear seven days' time as contemplated under the Income Tax Act, 1961, thereby making subsequent notices and the assessment order liable to be quashed (Question of law, turning on Section 148A(b)). Assessee's Contentions: - The reassessment proceedings are bad in law and void ab initio because the notice under section 148A(b) did not provide the mandatory seven clear days for compliance, violating the provisions of the Act. Reliance was placed on the Supreme Court's decision in Pioneer Motors (Private) Ltd. vs. Municipal Council, Nagercoil and decisions of co-ordinate benches. - Consequently, the notices under sections 148A(b) and 148, along with the assessment order, should be quashed. Revenue's Contentions: - The revenue argued that there was nothing wrong with the issuance of the notice under section 148A(b) and that the first and last days of the notice period are not liable to be excluded as per the provisions of the Act.

Which sections of the Income-tax Act were involved?

Section 147,Section 144,Section 271(1)(c),Section 139(1),Section 148A,Section 148,Section 142(1),Section 133(6),Section 69A,Section 115BBE,Section 250,Section 254(1)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, ‘B’ BENCH: CHENNAI

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

Hearing: 05.10.2026

PER MANU KUMAR GIRI, JM:

These appeals are directed against the orders of the Commissioner of Income Tax (Appeals), (NFAC) Delhi dated 27.10.2025 passed u/s. 250 of the Income Tax Act, 1961, arising out of the assessment order u/s.147 r.w.s 144 and penalty order u/s. 271(1)(c) of the Income Tax Act, 1961 [‘Act’] respectively for AY 2016-17. ITA Nos. 1567 & 1568/Chny/2026 (AY 2016-17) Jeyaraman Johnson Kumar Vs ITO-1(1) ITA No.1567/Chny/2026 (Quantum Appe

The order continues below.

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