RAMANAIKKAN PA COOP BANK LTD. S-202,NAMAKKAL V. ITO, WARD-2, NAMAKKAL

ITA 3551/CHNY/2025

AI Insights

The case involves Ramanaikkan PA Co-op Bank Ltd., the appellant, contesting an assessment order issued by the Income Tax Officer, Ward 2, Namakkal, under the faceless assessment scheme. The primary legal contention raised was the improper assumption of jurisdiction and the procedural lapses in issuing the assessment order under sections 147 and 144B of the Income Tax Act, 1961. The Tribunal considered precedents from the Supreme Court and the High Court of Madras, which supported the appellant's position that legal grounds regarding jurisdiction can be raised at any stage of the proceedings, including before the Tribunal.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 834172 (ITAT-CHENNAI)
• Duration Of Justice: 2 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-02-2026
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2018-2019
• Appeal Filed On: 28-11-2025
• Other Referred Cases: National Thermal Power Company Ltd. v. 223 ITR 383 (SC), TVS Credit Services Limited v. DCIT in WP No. 22402 of 2024, Hexaware Technologies Ltd. v. ACIT 464 ITR 430 (Bombay)
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SBR KUMAR LAGHIMSETTI
• Assessee Lawyers: A. TAMILAMUDHAN
• Keywords: Condonation of delay
• Section: 147; 148

Judgement Text

"आयकर अपीलीय अिधकरण, ’डी’ Ɋायपीठ, चेɄई IN THE INCOME-TAX APPELLATE TRIBUNAL ‘D’ BENCH, CHENNAI ŵी इंट ूरी रामाराव, लेखा सद˟ एवं ŵी एस.एस. िवʷनेũ रिव, Ɋाियक सद˟ क े समƗ । Before Shri Inturi Rama Rao, Accountant Member & Shri S.S. Viswanethra Ravi, Judicial Member आयकर अपील सं./I.T.A. No.3551/Chny/2025 िनधाŊरण वषŊ/Assessment Year: 2018-19 Ramanaikkan PA Co-op Bank Ltd. S- 262, Pachal, Elur B.O., Musiri, Namakkal 637 018. [PAN: AAAAR2036C] Vs. The Income Tax Officer, Ward 2, Namakkal. (अपीलाथŎ/Appellant) (ŮȑथŎ/Respondent) अपीलाथŎ की ओर से / Appellant by : Shri A. Tamilamudhan, CA ŮȑथŎ की ओर से/Respondent by : Shri SBR Kumar Laghimsetti, Addl. CIT सुनवाई की तारीख/ Date of hearing : 21.01.2026 घोषणा की तारीख /Date of Pronouncement : 02.02.2026 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 04.08.2025 passed by the ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre [NFAC], Delhi for the assessment year 2020-21. 2. We find that this appeal is filed with a delay of 28 days. The assessee filed an affidavit for condonation of delay stating the reasons. Upon hearing both the parties and on examination of the said affidavit, in Printed from counselvise.com I.T.A. No.3551/Chny/25 2 the interest of justice, we condone the delay and admit the appeal for adjudication. 3. When the appeal was taken up for hearing, the ld. AR Shri A. Tamilamudhan, CA drew our attention to ground No. 3 raised in the grounds of appeal and submits that the assessee challenged assumption of jurisdiction under section 147 of the Income Tax Act, 1961 [“Act” in short] and the assessment order passed under section 147 r.w.s. 144B of the Act by the Assessing Officer NFAC is not in accordance with the provisions of law, which goes to the root of the case, raised for the first time before the Tribunal. He argued that the said legal ground can be raised at any stage of the proceedings including this Tribunal and placed reliance on the decision of the Hon’ble Supreme Court in the case of National Thermal Power Company Ltd. Reported in 223 ITR 383 (SC). He prayed to adjudicate the legal ground as preliminary ground. 4. The ld. DR Shri SBR Kumar Laghimsetti, Addl. CIT submits that having participated before the Assessing Officer and the ld. CIT(A) the assessee did not raise the same before the said authorities. He argued that it requires examination of the facts and prayed to dismiss the said ground. Printed from counselvise.com I.T.A. No.3551/Chny/25 3 5. Having heard both the parties, we note that the Hon’ble Supreme Court in the case of National Thermal Power Company Ltd. (supra) was pleased to hold that the legal ground can be raised at any stage of the proceedings including this Tribunal. The ld. DR did not dispute the decision of the Hon’ble Supreme Court and we find no new facts are required to be examined and therefore, we proceed to admit ground for adjudication. 6. As per information available with the revenue, the Assessing Officer noted that the assessee made cash deposits of ₹.1,11,24,233/- during the FY 2017-18. We note that the Jurisdictional Assessing Officer issued notice under section 148 of the Income Tax Act, 1961 [“Act” in short] and order under section 148A(d) of the Act both dated 11.04.2022. As per para 4.3 of the assessment order, the assessee filed his return of income under section 148 of the Act declaring NIL income after claiming deduction under section 80P(2)(d) of the Act at ₹.13,75,594/-. Against the show-cause notice dated 06.03.2024, the assessee filed his response dated 11.03.2024 and the submissions of the assessee are reproduced at page 5 of the assessment order. After considering the submissions of the assessee, the Assessing Officer, NFAC completed the assessment under section 147 r.w.s. 144B of the Act dated 15.03.2024, inter alia, made Printed from counselvise.com I.T.A. No.3551/Chny/25 4 addition towards disallowance of deduction claimed under section 80P of the Act at ₹.13,75,594/-. The ld. CIT(A) confirmed the order of the Assessing Officer. 7. The ld. AR drew our attention to page 2 of the assessment order that the notice dated 11.04.2022 issued by the jurisdiction Assessing Officer under section 148 of the Act. The ld. AR vehemently argued that the assessment order passed by the Faceless mechanism [Assessing Officer] is bad in law in terms of the decision of the Hon’ble High Court of Madras in the case of TVS Credit Services Limited v. DCIT in WP No. 22402 of 2024 dated 24.06.2025 and prayed to quash the assessment order passed by the NFAC without issuing notice under section 148A(d) of the Act. 8. The ld. DR supported the order passed by the Assessing Officer. 9. Heard both the parties and perused the material on record. In the present case, we note that the notice under section 148 of the Act was issued by the Jurisdictional Assessing Officer i.e., ITO, Ward-2, Namakkal and the assessment is concluded by the FAU. On perusal of the decision of the Hon’ble High Court of Madras in the case of TVS Credit Services Limited v. DCIT (supra), we note that the Hon’ble High Court was pleased Printed from counselvise.com I.T.A. No.3551/Chny/25 5 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 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 15.03.2024 passed by the assessment unit of NFAC is bad in law and it is quashed. The ld. AR prayed to keep open grounds of appeal filed along with Form 36 for the assessee in case the Hon’ble Supreme Court interferes with the decision of the Hon’ble High Court of Bombay in the case of Hexaware Technologies Ltd. V. ACIT (supra). Accordingly, the ground No. 3 raised by the assessee on assumption jurisdiction is allowed and other grounds raised under Form 36 are kept open. 10. In the result, the appeal filed by the assessee is allowed. Order pronounced on 02nd February, 2026 at Chennai. Sd/- Sd/- (INTURI RAMA RAO) ACCOUNTANT MEMBER (S.S. VISWANETHRA RAVI) JUDICIAL MEMBER Chennai, Dated, 02.02.2026 Printed from counselvise.com I.T.A. No.3551/Chny/25 6 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 "