Shanmugha Arts Vs ACIT (Exemptions) (Madras High Court)
Summary: The appeal concerned the validity of reassessment proceedings for Assessment Year 2015-2016. Shanmugha Arts, Science Technology and Research Academy challenged the order dated 3.6.2026 of the learned Single Judge in W.P.No.29752 of 2023, by which the challenge to the reassessment notices and consequential order under the Income Tax Act, 1961 had been dismissed on the view that the proceedings were initiated within the period of limitation.
The Division Bench identified the issue as whether the reassessment notices issued for AY 2015-2016 were barred by time. Before the Bench, the Additional Solicitor General relied on the Supreme Court decision in Union of India v. Rajeev Bansal, reported as 2024 SCC Online SC 2693. Particular reliance was placed on paragraph 19(f), in which the Revenue’s position regarding the timeline applicable to AY 2015-2016 had been recorded. The Revenue acknowledged that, for AY 2015-2016, any notice issued on or after 1.4.2021 must be dropped because such action would not fall for completion within the period prescribed under the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 (TOLA).
The Additional Solicitor General fairly conceded that the controversy was squarely governed by Rajeev Bansal. It was admitted that the dispute related to AY 2015-2016 and that all the notices had been issued after 1.4.2021. Accordingly, the proceedings could not survive the test of limitation and had to be dropped.
