Mahesh Chand vs. Deputy Commissioner of Income Tax,
What did the High Court hold?
The High Court allowed the appellant to raise the additional substantial question of law concerning the issuance and service of notice under Section 143(2) of the Income Tax Act, citing Section 260A(4). The Court referred to its own recent decision in a batch of appeals pertaining to other family members of the appellant (ITTA Nos. 252 of 2008 and batch, decided on 30.01.2026). In those connected appeals, the High Court had held that the statute requires not just the issuance but also the effective service of the notice under Section 143(2) upon the parties. Applying the same reasoning, the High Court allowed the present appeal. The notice under Section 143(2), issued on 29.01.2002 and served on 04.02.2002, was held to be barred by limitation. The material dates in this appeal were identical to the connected appeals. Consequently, the appeal was allowed, and other substantial questions of law were left unanswered.
What were the facts?
The appeal was filed in 2010 against an order dated 29-05-2009 passed by the Income Tax Appellate Tribunal, Hyderabad Bench 'B'. The assessment years under challenge are 1991-92 to 2000-01 and the broken period 01-04-2000 to 04-08-2000. The appellant is Trilok Chand, represented by his LR, and the respondent is the Deputy Commissioner of Income Tax, Central Circle - 4, Hyderabad. The appeal was admitted on various grounds. During the hearing, the appellant sought to raise an additional substantial question of law regarding the service of notice under Section 143(2) of the Income Tax Act.
What were the issues?
1. Whether the notice under Section 143(2) of the Income Tax Act is required to be served or issued within the prescribed period reckoned from the last day of the month in which the return of income is filed by the assessee? (Question of law) Assessee's contention: The assessee argued that a crucial substantial question of law regarding the service of notice under Section 143(2) needed to be considered. The assessee formulated this question as whether the notice under Section 143(2) is required to be served or issued within the prescribed period from the last day of the month in which the return of income is filed. Revenue's contention: The revenue opposed the request to raise this new ground at a later stage, given the appeal's filing year of 2010. However, the court considered the provisions of Section 260A(4) which allow for framing of legal grounds at a later stage.
Which sections of the Income-tax Act were involved?
AI-generated summary — verify with the full judgment below
Cause title — parties, addresses and appearances
The Court delivered the following: Judgment ii I il
IN TIIE HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD THIi HONOURABLE SRI JUSTICE P.SAM KOSHY AND TH[] HONOURABLE SRI JUSTICE NARSING RAO NANDIKONDA I.T.T.A.No.l of 2010 Dated: 09.02,2026 Between: Mr.Trilol: Chand ...Appellant AND Deputy Commissioner of Income Tax, Central C ircle - 4, H1'derabad. ...Respondent JUDG ENT (per I'lon'ble Sri Jttstice ['.Sunt Koshl) Heard Mr.A.Naren Rudra, learned counsel representing Mr.D.Jagan Mohan Reddy, learned cottnsel for the petitioner and Ms.B.SaJtna Reddy, learned senior standing counsel for Income Tax appearin5,, on behalf of the respondent. Perused the record.
Ihe instant appeal is the one which was filed in the year 2OlO anrl which stood admitted vide order dated 29.06.2010. Though initially appeal was admitted on various other grounds that which is reflected in the memo itself, however, today, when the matter is taken up for hearing, learned counsel for the appellant \ \ \
2 submits that in addition to the grounds of appeal already raised, one more crucial substantial question of law which needs to be considered and which the learned counsel for the appellant fonnulates is: "whether the notice under section t43(2) of the Income Tax Act is required to be served or issued within the prescribed period reckonedfroo, ih" last day of the month in which the return of income is filed by the assessee? "
Ms.B.Sapna Reddy, learned Senior Standing counsel for the Department who opposes such a request being made at this juncture particularly when the appeal is of the year 2010, however, considering the fact that provisions of Section 260-4(4) provides for the court to frame any legal grounds which crops up for hearing at a later stage or at the time of hearing strengthens the claim of the appellant so far as raising the aforesaid substantial question of law. We, accordingly allow the same.
As regards the said issue i.e., the substantial question of law raised by the appellant today so far as whether the notice under Section 143(2) has infact to be issued or it requires to be served
3 ) \ within the period of limitation prescribed under the Act, this High Court v€ry recently in a batch of ITTAs pertaining to the other famity members of the appellant herein i.e., [TTA Nos.252 of 2008 and batch which stood decided on 30.01.2026 and wherein the High Corrrt has taken a stand that the notice under Section 1a3(2) is not just lo be issued but also has to be effectively served upon the pafties is what the statute requires.
Since this High Court has already taken a categorical stand on the said substantial question of law in the connected appeals of the family members of the appellant herein, we are inclined lo take the same stand and allow the present appeal also by answering the substantial question of law raised today in favour of the appel lant/assessee and against the revenue/respondent.
As a consequence, the notice under Section 143(2) issued I on 29.01.2002 and which was served on 04.02.2002 is barred by limitation. The material dates in the instant appeal are also identical so far as the other connected appeals which are being decided by \ \ \
4 this Court, which forces us to draw the same analogy and allow the appeal
Since we allow the appeal on the instant substantial question of law, the other substantial questions of law stand unanswered and are left open to .be considered in an appropriate case
The appeal is accordingly allowed. Consequently, miscellaneous petitions pending, if any, shall stand closed. There shall be no order as to costs. M.VIJAYA BHASKER JOINT REGISTRAR //// ECTION OFFICER
The lncome Tax Appellate Tribunal, Hyderabad Bench 'B', Hyderabad
The Deputy Commissioner of lncome Tax, Central Circle - 4, Hyderabad.
One CC to SRl. D JAGAN MOHAN REDDY, Advocate IOPUC]
One CC to SRl. BOKARO SAPNA REDDY (SENIOR SC INCOME TAX) Advocate TOPUCI
Two CD Copies / To, ADK/PSL+p
HIGH COIJRT DATED: 0,9/0212026 JUDGMEI{T lTTA.No.1 of 2010 ALLOWIN{G THE ITTTA WITHOUTCOSTS 1 9 ,() (-r A 7 "ri8 )t)ti * a\\ a sb )
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