NATARAJAN RAJESWARI,CHENNAI vs. ITO, NCW-8(1), CHENNAI

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ITA 1823/CHNY/2026Status: DisposedITAT Chennai14 October 2026AY 2017-185 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal noted that the Ld. CIT(A) had dismissed the assessee's grounds, stating that the assessee had not furnished evidence of non-compliance and that the assessment order recorded that formalities were followed. However, the Tribunal observed that the Ld. CIT(A) had failed to examine and adjudicate the specific contention regarding the limitation period for passing the order under Section 148A(d) and issuing the consequential notice under Section 148, especially in light of the dates and applicable provisions. Therefore, the Tribunal held that the issue requires a fresh examination with reference to the complete assessment records, relevant dates, applicable limitation provisions, and the Supreme Court judgments relied upon by the assessee. The matter was set aside to the file of the Ld. CIT(A) for fresh adjudication after duly considering the assessee's contention regarding limitation and affording a reasonable opportunity of being heard. No opinion was expressed on the merits of the issue. The ratio decidendi is that the appellate authority must adjudicate specific contentions regarding procedural validity and limitation periods in reassessment proceedings, especially when statutory timelines are in question.

What were the facts?

The assessee, Natarajan Rajeswari, filed an appeal against the order of the learned Commissioner of Income Tax (Appeals) [CIT(A)] dated 21.01.2026. The CIT(A) had confirmed the assessment order passed under Section 147 of the Income Tax Act, 1961, for Assessment Year 2017-18. The original assessment order was dated 12.05.2023. The assessee's return for AY 2017-18 was filed on 29.03.2018, declaring a gross total income of Rs. 2,16,200/-. The assessee and her spouse jointly purchased an immovable property for Rs. 33,30,000/-. The reassessment proceedings were initiated, and a notice under Section 148 was initially issued on 29.06.2021 under the old regime. Following the Supreme Court's judgment in Ashish Agarwal, a notice under Section 148A(b) was issued on 30.05.2022.

What were the issues?

1. Whether the reassessment proceedings initiated for AY 2017-18 are procedurally invalid, specifically concerning the issuance of notice under Section 148 after 01.04.2021, when Sections 147 to 151 were substituted by the Finance Act, 2021? (Question of law) 2. Whether the order passed under Section 148A(d) and the consequential notice under Section 148 were issued beyond the permissible limitation period, rendering the proceedings invalid? (Question of mixed law and fact) Assessee's contentions: The assessee argued that the initial notice under Section 148 dated 29.06.2021 was issued under the old regime after the substitution of Sections 147 to 151 by the Finance Act, 2021. Following the Ashish Agarwal judgment, a notice under Section 148A(b) was issued on 30.05.2022, granting 14 days for a reply, which expired on 13.06.2022. The assessee contended that the reply period should be excluded from the limitation period. Even with the statutory extension of limitation to seven days, the last permissible date for passing the order under Section 148A(d) was 20.06.2022. However, the order under Section 148A(d) and the notice under Section 148 were issued only on 29.07.2022, beyond the extended limitation period. The assessee relied on Union of India v. Rajeev Bansal and Union of India v. Ashish Agarwal. Revenue's contentions: The judgment records no specific arguments from the revenue regarding the limitation issue.

Which sections of the Income-tax Act were involved?

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

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: 11.08.2026

आयकरअपील�यअ�धकरण ’बी’ �यायपीठ,चे�नई। IN THE INCOME TAX APPELLATE TRIBUNAL ‘B’ BENCH: CHENNAI �ी मनुकुमारिग�र, �ाियक सद� एवं �ी एस. आर. रघुनाथा लेखासद� BEFORE SHRI MANU KUMAR GIRI, JUDICIAL MEMBER AND SHRI S.R.RAGHUNATHA, ACCOUNTANT MEMBER

आयकर अपील सं./ITA No. 1823/Chny/2026 �नधा�रण वष�/Assessment Years: 2017-18 Natarajan Rajeswari v. The Income Tax Officer, New No.175/35, Old NO.26-A, Non Corporate Ward-8(1), B-11, Giri Appartments, Arcot Chennai-600 034 Road, Virugambakkam, Chennai-600092 [PAN:ANLPR 9547 H] (अपीलाथ�\Appellant) (��यथ�\Respondent)

अपीलाथ� क ओर से/ Appellant by : Mr. A.G. Sathyanarayana, Advocate ��यथ� क ओर से /Respondent by : Mr. E. Elango, JCIT सुनवाई क तार�ख/Date of Hearing : 11.08.2026 घोषणा क तार�ख /Date of : 14.10.2026 Pronouncement आदेश / O R D E R PER MANU KUMAR GIRI, JM:

The captioned appeal filed by the Assessee is directed against the order passed by the Ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as "the Ld. CIT(A)"], dated 21.01.2026, confirming the assessment order passed u/s. 147 of the Income Tax Act, 1961 ("the Act"), for the Assessment Year ("AY") 2017-18.

ITA No. 1823/Chny/2026 (AY 2017-18) Natarajan Rajeswari Vs ITO NCW 8(1) :: 2 :: 2. The assessee has raised the following grounds of appeal as under: - 1. The appellant submits that the reassessment proceedings initiated for AY 2017-18 are invalid procedurally. The notice dated 29.06.2021 was issued u/s. 148 of the old regime after 01.04.2021, when the Finance Act, 2021 had already substituted Sections 147 to 151. Sr. Date Particulars 1 29.06.2021 Notice u/s 148 under the old regime 2 04.05.2022 Judgment of the Hon'ble Supreme Court in Ashish Agarwal 3 30.05.2022 Issuance of Notice u/s 148A(b) pursuant to the judgment in Ashish Agarwal and providing a period of two weeks to the Petitioner to respond 4 13.05.2022 The two weeks' time granted elapsed. 5 20.06.2022 Proceedings u/s 148A(d) and Notice u/s 148 should have been issued after the period of limitation (14days) and the survival period (7day). 6 29.07.2022 Proceedings u/s 148A(d) and Notice u/s 148 was issued

2.

In view of the aforesaid factual and legal position and since the issue is a purely legal issue and the matter does not require any verification of facts but can be decided on the basis of materials already available on record and it goes to the root of the matter concerning the validity of the assessment itself, your Petitioner most humbly prays that the following additional ground of Appeal be admitted for adjudication. "The impugned Assessment Order passed u/s 147 read with sec 1448 for AY 2017-18 dated 12-05-2023 is not valid in law for the reasons that:

ITA No. 1823/Chny/2026 (AY 2017-18) Natarajan Rajeswari Vs ITO NCW 8(1) :: 3 :: (a) The Notice u/s 148 was issued on 29.07.2022, which is beyond the limitation date of 20.06.2022. 3. In the present case, the assessee was issued a show-cause notice u/s. 148A(b) on 30.05.2022, granting 14 days' time to reply, i.e., up to 13.06.2022. As per the proviso to Section 149, this reply period stood excluded from the computation of limitation. After such exclusion, the Assessing Officer was left with only one surviving day to pass an order u/s. 148A(d). Since this period was less than seven days, the statute itself extended the limitation to seven days, thereby making the last permissible date for passing the order 20.06.2022. However, in disregard of this statutory mandate, the Assessing Officer passed the order u/s. 148A(d) and issued a fresh notice u/s. 148 only on 29.07.2022, well beyond the extended limitation period. Consequently, the impugned proceedings are barred by limitation and rendered procedurally invalid, as the Assessing Officer acted without jurisdiction once the statutory time frame had expired. 4. The appellant places reliance on the judgments of the Hon'ble Supreme Court in Union of India v. Rajeev Bansal [2024] 167 taxmann.com 70 (SC) and Union of India v. Ashish Agarwal [2022] 138 taxmann.com 64 (SC), which reinforce the principle that reassessment proceedings must strictly adhere to statutory timelines and procedural safeguards. In light of the above, the reassessment proceedings and the consequent assessment order are liable to be quashed as being barred by limitation and without jurisdiction. 3. Brief facts: The assessee, an individual, filed her return of income for AY 2017-18 on 29.03.2018, declaring a gross total income of Rs.2,16,200/-. The assessee, along with her spouse, jointly

ITA No. 1823/Chny/2026 (AY 2017-18) Natarajan Rajeswari Vs ITO NCW 8(1) :: 4 :: purchased an immovable property for Rs.33,30,000/-. The reassessment proceedings culminated in an assessment order dated 12.05.2023 passed u/s. 147 of the Income Tax Act, 1961. The assessee challenged the validity of the reassessment proceedings, contending that the notice u/s. 148 was initially issued on 29.06.2021 under the erstwhile reassessment regime and that, in view of the judgment of the Hon’ble Supreme Court in Union of India v. Ashish Agarwal [2022] 138 taxmann.com 64 (SC), the procedure prescribed u/s. 148A was required to be followed. Pursuant thereto, a notice u/s. 148A(b) was issued on 30.05.2022, granting time to respond. The assessee contended that the order u/s. 148A(d) and the consequential notice u/s. 148 were issued only on 29.07.2022, beyond the permissible limitation period, which, according to the assessee, expired on 20.06.2022. Reliance was also placed on the judgment of the Hon’ble Supreme Court in Union of India v. Rajeev Bansal [2024] 167 taxmann.com 70 (SC). 4. The Ld. CIT(A) dismissed the assessee’s grounds, observing that the assessee had not furnished evidence to establish non- compliance with the prescribed procedure and that the assessment order recorded that the requisite formalities had been followed. However, the Ld. CIT(A) did not examine and adjudicate the specific contention regarding the limitation period for passing the order u/s. 148A(d) and issuing the consequential notice u/s. 148, particularly in light of the dates involved and the applicable statutory provisions and judicial precedents. 5. In view of the above, the issue requires fresh examination with reference to the complete assessment records, the relevant dates, the applicable provisions governing limitation, and the judgments of

ITA No. 1823/Chny/2026 (AY 2017-18) Natarajan Rajeswari Vs ITO NCW 8(1) :: 5 :: the Hon’ble Supreme Court relied upon by the assessee. Accordingly, the matter is set aside to the file of the Ld. CIT(A) for fresh adjudication in accordance with law, after duly considering the assessee’s contention regarding limitation and affording a reasonable opportunity of being heard. No opinion is expressed on the merits of the issue. 6. In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open court on the 14th day of October, 2026 in Chennai.

Sd/- Sd/- (एस. आर. रघुनाथा) (मनु कुमार िग�र) (S.R.RAGHUNATHA) (MANU KUMAR GIRI) लेखा सद*य/ACCOUNTANT MEMBER �या�यक सद*य/JUDICIAL MEMBER चे�नई/Chennai, Digitally signed +दनांक/Dated: 14th October 2026 SANDEE by SANDEEP SNDP, Sr. PS KUMAR P KUMAR आदेश क ��त,ल-प अ.े-षत/Copy to: Date: 2026.10.16 1. अपीलाथ�/Appellant 11:26:30 +05'30' 2. ��थ�/Respondent 3. आयकरआयु�/CIT, Chennai / Madurai / Salem / Coimbatore. 4. िवभागीय�ितिनिध/DR 5. गाड�फाईल/GF

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