ITAT set aside the reassessment order after holding that failure to grant the mandatory seven-day response period under Section 148A(b) invalidated the reopening proceedings.
Saloni Kumari | Dec 18, 2025 |
ITAT Quashes Reassessment for Violation of Mandatory 7-Day Notice Requirement u/s 148A(b)
The present appeal and stay application have been filed by Selvaraj Arokia Sagaya Raj before the ITAT Chennai, challenging an order passed by the CIT(A)/NFAC Delhi under section 250 of the Income Tax Act, 1961, on September 22, 2025. The case is related to the assessment year 2018-19.
The assessee had filed its income tax return (ITR) for the assessment year 2018-19. During scrutiny of the return, the assessing officer (AO) noted that the assessee had sold Bitcoin to the tune of Rs. 4,159,173 during the relevant assessment year but did not include the said transaction in its return. Hence, the reassessment proceedings were initiated against the assessee by issuing a notice dated March 30, 2022, passed under section 148A(b) of the Act. Thereafter, an order was issued on March 31, 2022, under Section 148A(d) of the Act.
As the assessee did not raise any objections against the notice passed under Section 148, the AO issued a notice dated March 31, 2022, announcing the reopening of the assessment. After considering the reply of the assessee on the notice, AO passed an order under Section 144B of the Act, making several additions to the income of the assessee totalling Rs. 11,68,270. When approached by the CIT(A), the CIT(A) confirmed all the additions after condoning the delay in filing the appeal. Thereafter, the assessee filed an appeal before the ITAT Chennai.
Before the tribunal, the assessee argued that the AO did not provide it the mandatory minimum time limit of seven days to the assessee while issuing notice under section 148A(b) of the Act; hence, the notice dated March 31, 2022, announcing the reopening of the assessment was invalid and hence should be quashed. The tribunal, after hearing the arguments of both sides and citing an earlier judgement titled ITO v. Venkatal Ayyappa Ranjanna based on the same issue, concluded that the AO did not provide the assessee the minimum period of seven days to respond to the notice passed under section 148A(b) of the Act. In conclusion, the order passed by the CIT(A)/NFAC Delhi under section 250 of the Income Tax Act, 1961, on September 22, 2025, was quashed.
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