RAJESWARI ,CHENNAI V. ITO, WARD-4(1), CHENNAI

ITA 2826/CHNY/2025

AI Insights

The case involves an appeal by Rajeswari against the order of the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, for the assessment year 2020-21. The primary legal challenge was the reopening of the assessment by the Jurisdictional Assessing Officer under section 148 of the Income Tax Act, 1961, which the assessee argued was barred by limitation and issued without jurisdiction. The Tribunal also considered the procedural validity of the assessment order passed by the NFAC, which was contested based on a precedent set by the Madras High Court in the case of TVS Credit Services Ltd. v. DCIT.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 824487 (ITAT-CHENNAI)
• Duration Of Justice: 2 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-12-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2020-2021
• Appeal Filed On: 14-10-2025
• Other Referred Cases: TVS Credit Services Ltd. v. DCIT, Hexaware Technologies Ltd. V. ACIT
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: LATCHANA
• Assessee Lawyers: S. VELPANDIAR
• Keywords: Business income; Reopening of assessment
• Section: 147; 148

Judgement Text

"आयकर अपीलीय अिधकरण, ’ए’ Ɋायपीठ, चेɄई IN THE INCOME-TAX APPELLATE TRIBUNAL ‘A’ BENCH, CHENNAI ŵी एस.एस. िवʷनेũ रिव, Ɋाियक सद˟ एवं सुŵी एस.पȧावती,, लेखा सद˟ क े समƗ Before Shri S.S. Viswanethra Ravi, Judicial Member & Ms. S. Padmavathy, Accountant Member आयकर अपील सं./I.T.A. No.2826/Chny/2025 िनधाŊरण वषŊ/Assessment Year: 2020-21 Rajeswari, 60 (Old No. 34/1), Selva Vinayagar Koil Street, Old Washermanpet, Chennai 600 021. [PAN: AFHPJ9175P] Vs. The Income Tax Officer, Ward 4(1), Chennai. (अपीलाथŎ/Appellant) (ŮȑथŎ/Respondent) अपीलाथŎ की ओर से / Appellant by : Shri S. Velpandiar, Advocate ŮȑथŎ की ओर से/Respondent by : Ms. Latchana, JCIT सुनवाई की तारीख/ Date of hearing : 17.12.2025 घोषणा की तारीख /Date of Pronouncement : 31.12.2025 आदेश /O R D E R PER S.S. VISWANETHRA RAVI, JUDICIAL MEMBER: This appeal filed by the assessee is directed against the order dated 22.09.2025 passed by the ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre [NFAC], Delhi for the assessment year 2020-21. 2. In ground Nos. 1.1 & 1.2, the assessee raised legal ground challenging the reopening of assessment is barred by limitation by issuing notice under section 148 of the Act without jurisdiction. Printed from counselvise.com I.T.A. No.2826/Chny/25 2 3. The Assessing Officer noted that against the assessee’s PAN, the total sales reported under GSTR-3B is at ₹.2,21,23,000/-. Since, no return of income filed, the Jurisdictional Assessing Officer issued notice under section 148 of the Income Tax Act, 1961 [“Act” in short] dated 31.03.2024. Against the show-cause notice, the reply filed by the assessee is reproduced at pages 7 & 8 of the assessment order. After considering the submissions of the assessee, the Assessing Officer treated 8% of the sales receipts of ₹.2,21,23,031/- as business income at ₹.17,69,842/- and added to the total income of the assessee. The ld. CIT(A) dismissed the appeal for want of prosecution. 4. The ld. AR Shri S. Velpandiar, Advocate drew our attention to pages 4, 8 & 9 of the paper book and submits that the Jurisdictional Assessing Officer issued notice under section 148A(b) of the Act dated 28.02.2024, passed order under section 148A(d) of the Act and issued notice under section 148 of the Act dated 31.03.2024. Further, he drew our attention to the assessment order dated 31.01.2025 passed under section 147 r.w.s. 144B of the Act by the Faceless Assessing Officer. The ld. AR vehemently argued that the assessment order passed by the Faceless mechanism [Assessing Officer] is bad in law in terms of Printed from counselvise.com I.T.A. No.2826/Chny/25 3 the decision of the Hon’ble High Court of Madras in the case of TVS Credit Services Ltd. v. DCIT in W.P. No. 22402 of 2024 & WMP No. 13336 of 2023 dated 24.06.2025 placed on record and prayed to quash the assessment order passed by the NFAC without issuing notice under section 148A(b) of the Act. 5. The ld. DR supported the order passed the Assessing Officer. 6. We have heard both the parties and perused the material available on record. In this case, we note that the assessment order under section 147 r.w.s. 144B of the Act was passed by the assessment unit of NFAC. Further, we note that the notice under section 148 of the Act was issued by the Jurisdictional Assessing Officer and also passed order under section 148A(d) of the Act. On perusal of the decision of the Hon’ble High Court of Madras in the case of TVS Credit Services Ltd. v. DCIT (supra), we note that the Hon’ble High Court was pleased to hold that the assessment made by the assessment unit of NFAC is not valid if the order and notice under section 148A(d)/148 of the Act issued by the Jurisdictional Assessing Officer, but, however, liberty was given to the Revenue to re-ignite the notice in case the Hon’ble Supreme Court interferes with the order of Printed from counselvise.com I.T.A. No.2826/Chny/25 4 the Hon’ble High Court of Bombay in the case of Hexaware Technologies Ltd. V. ACIT 464 ITR 430 (Bombay). Accordingly, we hold that the assessment order dated 31.01.2025 passed by the assessment unit of NFAC is bad in law and it is quashed. Accordingly, the ground Nos. 1.1 & 1.2 raised by the assessee are allowed and remaining ground Nos. 2.1 to 4 become infructuous. 7. In the result, the appeal filed by the assessee is allowed. Order pronounced on 31st December, 2025 at Chennai. Sd/- Sd/- (S. PADMAVATHY) ACCOUNTANT MEMBER (S.S. VISWANETHRA RAVI) JUDICIAL MEMBER Chennai, Dated, 31.12.2025 Vm/- आदेश की Ůितिलिप अŤेिषत/Copy to: 1. अपीलाथŎ/Appellant, 2.ŮȑथŎ/ Respondent, 3. आयकर आयुƅ/CIT, Chennai/Madurai/Coimbatore/Salem 4. िवभागीय Ůितिनिध/DR & 5. गाडŊ फाईल/GF. Printed from counselvise.com "