Selvaraj Arokia Sagaya Raj Vs DCIT (ITAT Chennai)
One-day notice vitiates reassessment: failure to grant 7 clear days u/s 148A(b) renders proceedings non-est — ITAT Chennai
Chennai Tribunal allowed Assessee’s appeal & quashed entire reassessment on jurisdictional ground. Tribunal noted that AO issued notice u/s 148A(b) on 30-03-2022 requiring reply by 31-03-2022, thereby granting only one day to respond. Relying on binding ratio of Karnataka HC in Bevinakuppe Ningegowda Ramalingegowda and Division Bench ruling in ITO vs Venkatal Ayyappa Ranjanna, Tribunal held that minimum 7 clear days’ opportunity is mandatory, not directory. Non-compliance strikes at the root of jurisdiction and renders 148A(b) notice, 148A(d) order, 148 notice and reassessment u/s 147 r.w.s. 144B void ab initio. Since legal issue succeeded, Tribunal left all additions (including Bitcoin sale related additions) open as academic. Stay application was dismissed as infructuous. Appeal was allowed in full
FULL TEXT OF THE ORDER OF ITAT CHENNAI
This appeal and Stay Application by the assessee is against the order of the Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre (NFAC), Delhi, (in short “CIT(A)”) passed u/s. 250 of the Income Tax Act, 1961 ( in short “the Act”) dated 22.09.2025 for Assessment Year (AY) 2018-19.
2. The assessee is an individual. As per information flagged in accordance with the risk management strategy formulated by CBDT information is received by the A.O that the assessee has sold Bitcoin to the tune of Rs.41,59,173/- during the financial year relevant to the year under consideration. The A.O noticed that in the return of income filed for A.Y 2018-19 which is filed on 02.08.2018 the assessee has not included the above mentioned transaction and accordingly had reason to believe that the income chargeable to tax as escaped assessment. The A.O initiated the re-assessment proceedings by issue of notice u/s. 148A(b) of the Act dated 30.03.2022. The A.O in the said notice called on the assessee to submit the supporting documents etc. by 31.03.2022. The A.O subsequently passed an order u/s. 148A(d) of the Act on 31.03.2022 stating that since the assessee did not reply and therefore, constrained to conclude that the assessee does not have any objection against issuing of notice u/s. 148 of the Act. The A.O also issued a notice u/s. 148 on 31.03.2022 reopening the assessment. After considering the response filed by the assessee, the A.O passed an order u/s. 147 r.w.s 144B of the Act, whereby he made various additions to the tune of Rs. 11,68,270/-. On further appeal, the CIT(A) confirmed the additions without condoning the delay in filing the appeal before him. The assessee is in appeal before the Tribunal against the order of CIT(A).
