Smt. Lakshmi Narasimhan Santhi Vs ACIT (ITAT Chennai)
In a significant ruling dated 3rd July 2025, the Chennai Bench of the Income Tax Appellate Tribunal (ITAT) allowed the appeal filed by Smt. Lakshmi Narasimhan Santhi against the reassessment order issued under Section 147 of the Income Tax Act for the Assessment Year (AY) 2013–14. The ITAT held that the reassessment notice issued on 28th July 2022 was beyond the permissible time limit laid down by the Supreme Court in Union of India v. Rajeev Bansal (469 ITR 46) and therefore void ab initio.
Background and Timeline of Events
The assessee, an individual taxpayer, had filed her return for AY 2013–14 on 26th March 2024, declaring an income of ₹14.19 lakhs. The reassessment proceedings were initiated after the Assessing Officer (AO) noted that the assessee, along with co-owners, had sold an immovable property during the year, and alleged that capital gains income had escaped assessment.
Initially, a notice under Section 148 was issued on 30th June 2021 under the old regime of reassessment provisions. The extended deadline was in line with the Taxation and Other Laws (Relaxation of Certain Provisions) Ordinance, 2020 (TOLA), issued due to COVID-19 disruptions.
However, the legal framework shifted significantly with the enactment of the Finance Act, 2021, which revamped Sections 147–151 of the Act, effective from 1st April 2021. This gave rise to legal ambiguity around the validity of notices issued during the transitional period from 1st April to 30th June 2021.
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