KUPPAKOUNDER THANGAVELU,SALEM V. ITO, WARD-1(8), SALEM

ITA 349/CHNY/2025

AI Insights

The case involves an appeal by Kuppakounder Thangavelu against the order of the Learned Commissioner of Income Tax (Appeals)/NFAC, Delhi, concerning the assessment year 2011-12. The primary legal issue was the timeliness of the assessment order issued by the Assessing Officer (AO). The assessee contended that the assessment was completed beyond the statutory deadline, as prescribed under section 153(2) of the Income Tax Act, 1961, which mandates that any order of assessment or reassessment under section 147 must be made within nine months from the end of the financial year in which the notice under section 148 was served. The Tribunal agreed with the assessee, noting that the assessment was completed after the deadline, and thus, the order was quashed.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 396956 (ITAT-CHENNAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-05-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2011-2012
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KEERTHI NARAYANAN
• Assessee Lawyers: T.S.LAKSHMI
• Section: 147; 148

Judgement Text

"आयकर अपीलीय अिधकरण, ‘ए’ \u0001यायपीठ, चे ई। IN THE INCOME TAX APPELLATE TRIBUNAL ‘A’ BENCH: CHENNAI \u0001ी एबी टी. वक , ाियक सद\u0011 एवं एवं एवं एवं \u0001ी एस. आर. रघुनाथा, लेखा सद क े सम\u001b BEFORE SHRI ABY T. VARKEY, JUDICIAL MEMBER AND SHRI S.R.RAGHUNATHA, ACCOUNTANT MEMBER आयकर अपील सं./ITA No.349/Chny/2025 िनधा\u000eरण वष\u000e/Assessment Year: 2011-12 Kuppakounder Thangavelu, No.31A, VOC Nagar, Omalur (Tk), Salem- 636 012. v. The ITO, Ward-1(8), Salem. [PAN: ANPPT 2456 D] (अपीलाथ\u0016/Appellant) (\u0017\u0018यथ\u0016/Respondent) अपीलाथ\u0016 क\u001a ओर से/ Appellant by : Mr.T.S.Lakshmi Venkatraman, FCA \u0017\u0018यथ\u0016 क\u001a ओर से /Respondent by : Mr.Keerthi Narayanan, JCIT सुनवाईक\u001aतारीख/Date of Hearing : 24.04.2025 घोषणाक\u001aतारीख /Date of Pronouncement : 26.05.2025 आदेश / O R D E R PER ABY T. VARKEY, JM: This is an appeal preferred by the assessee against the order of the Learned Commissioner of Income Tax (Appeals)/NFAC, (hereinafter referred to as “the Ld.CIT(A)”), Delhi, dated 18.06.2024 for the Assessment Year (hereinafter referred to as \"AY”) 2011-12. 2. At the outset, the Ld. Counsel for the assessee submitted that there is a delay of ‘156’ days in filing of this appeal and explained the reason for cause of delay. Having gone through the facts which led to the ITA No.349/Chny/2025 (AY 2011-12) Kuppakounder Thangavelu :: 2 :: delay, we find that there was sufficient cause for the cause of delay and hence, we condone the delay of ‘156’ days and proceed to adjudicate the appeal on merits. 3. The Ld.AR of the assessee first of all drew our attention to Ground No.4 of grounds of appeal and submitted that the assessment framed by the AO was barred by limitation and therefore, assessment order itself is non-est in the eyes of law. 4. The Ld.DR supported the action of the AO and doesn’t want us to interfere with the action of the Ld.CIT(A)/NFAC. 5. Having heard both the parties only on the legal issue that has been raised supra, it would be gainful to reproduce Ground No.4 which reads as under: 4. On the facts and circumstances of the case, the First Appellate authority not justified in sustaining the order of the lower authorities when the legal position is that the order passed by the AO dated 04.12.2019 is barred by limitations in terms of section 153(2) of the Act. For the notice issued u/s.148 dated 24.03.2018, the re- assessment should have been completed on or before 31.12.2018. In as much as the assessment was completed by order dated 04.12.2019 the same is barred by limitation. 6. From a perusal of the aforesaid grounds of appeal, the assessee urges that since notice u/s.148 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act‘) was issued by the AO on 24.03.2018, consequently, the AO ought to have completed the assessment on or before 31.12.2018 as per the time-line prescribed by limitation stipulated ITA No.349/Chny/2025 (AY 2011-12) Kuppakounder Thangavelu :: 3 :: u/s.153(2) of the Act. However, in this case, the assessment was undisputedly completed by order dated 04.12.2019 [i.e. more than a year later] so the assessment order was bad in law, because, it was barred by limitation. In order to adjudicate this issue, it would be gainful to refer to sec.153(2) of the Act, which reads as under: 153. Time limit for completion of assessment, reassessment and re-computation. …… ….. ….. …… ….. (2) No order of assessment, reassessment or re-computation shall be made under section 147 after the expiry of nine months from the end of the financial year in which the notice under section 148 was served: 7. From a plain reading of the aforesaid provision of law, it is clear that no order of assessment/re-assessment shall be made u/s.147 of the Act after the expiry of nine (9) months from the end of the Financial Year, in which notice u/s.148 was served. In the present case, notice u/s.148 of the Act was issued by the AO on 24.03.2018. Therefore, the AO had time of nine (9) months from the end of the Financial Year i.e. up to 31.12.2018 to frame the assessment/re-assessment u/s.147 of the Act. Sec.153(2) prohibits the AO to frame an assessment after 31.12.2018, unless the Revenue was able to show that despite the notice u/s.148 was issued on 24.03.2018, the same hadn’t been served on or before ITA No.349/Chny/2025 (AY 2011-12) Kuppakounder Thangavelu :: 4 :: 31.03.2018, and instead it was served upon the assessee only on or after 01.04.2018. But, in this case, the AO categorically recorded in the assessment order that “…………… notice u/s.148 of the Act was issued to the assessee on 24.03.2018 after recording reasons and after obtaining necessary approval from the Ld.PCIT, Salem, and the same was duly served on the assessee”. In the light of the factual assertion as made by AO of issue and serving of notice in March 2018, we are of the view that he was duty bound to frame the assessment on or before 31.12.2018 as per the time-line prescribed by limitation stipulated u/s.153(2) of the Act. In other words, the AO was barred from framing the assessment/reassessment after 31.12.2018 and therefore, the impugned assessment order dated 04.12.2019 [after a year] is certainly barred by limitation and therefore, the ibid legal issue raised by the assessee is allowed in its favour and the impugned assessment order dated 04.12.2019 is held to be non-est in the eyes of law and therefore, quashed. 8. In the result, appeal filed by the assessee is allowed. Order pronounced on the 26th day of May, 2025, in Chennai. Sd/- (एस. आर. रघुनाथा) (S.R.RAGHUNATHA) लेखा सद\u0003य/ACCOUNTANT MEMBER Sd/- (एबी टी. वक ) (ABY T. VARKEY) \u0005याियक सद\u0003य/JUDICIAL MEMBER ITA No.349/Chny/2025 (AY 2011-12) Kuppakounder Thangavelu :: 5 :: चे ई/Chennai, !दनांक/Dated: 26th May, 2025. TLN आदेश क\u001a \u0017ितिलिप अ$ेिषत/Copy to: 1. अपीलाथ /Appellant 2. \u000e\u000fथ /Respondent 3. आयकरआयु\u0015/CIT, Chennai / Madurai / Salem / Coimbatore. 4. िवभागीय\u000eितिनिध/DR 5. गाड फाईल/GF "