Brijesh Chandwani v DCIT: ITAT Hyderabad on Time-Barred Section 148 Notice

In Brijesh Chandwani, Hyderabad v DCIT, Circle -6(1), Hyderabad, the ITAT Hyderabad decided two appeals against orders of the CIT(A)–NFAC, for AY 2016-2017 and AY 2020-2021. For AY 2016-2017, the assessee's main legal challenge was that the notice under section 148 was barred by limitation. It argued that the notice fell outside the "surviving period" laid down by the Supreme Court for reassessment notices that began under the old regime and were completed under the new section 148A procedure. That makes the order relevant for researchers working on the timeline of section 148A reassessments.

This page is a research summary of one specific Indian tax judgment, NOT legal advice. Always verify against the full judgment and consult a professional for case-specific guidance.

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The case at a glance

• Parties: Brijesh Chandwani,Hyderabad vs DCIT., Circle -6(1), Hyderabad
• Bench: Income Tax Appellate Tribunal - Hyderabad
• Date: 28 November 2025
• Court level: Tribunal (ITAT)
• Sections engaged: 147, 148, 148A
• Outcome: Taxpayer succeeded

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Facts of the case

The two appeals (ITA Nos. 1527 & 1528/Hyd/2025) were filed by the assessee, an individual, against separate orders of the CIT(A)–National Faceless Appeal Centre, both dated 22.09.2025. They relate to assessment years 2016-2017 and 2020-2021 respectively.

For AY 2016-2017, the assessee filed his return on 20.07.2016, admitting total income of Rs.12,74,95,910. The return was processed, and the case was then selected for scrutiny, with the scrutiny assessment completed on 19.12.2018. The Assessing Officer first issued a notice under section 148 dated 30.06.2021. After the Supreme Court's judgment in Union of India v. Ashish Agarwal [2022] 444 ITR 1 (SC), he issued a show cause notice under section 148A on 25.05.2022. The assessee filed no reply. The Assessing Officer passed the order under section 148A on 29.07.2022 and issued a notice under section 148 dated the same day.

The grounds of appeal for AY 2016-2017 also challenged the reopening under section 147 as based on external information, and the reliance on third-party statements recorded in a survey of JM Financial Asset Management Limited. They further contested the addition of Rs.48,14,31,240 against returned income of Rs.12,74,95,910, including the disallowance of a short term capital loss of Rs.35,39,35,330. The assessee, however, raised ground no. 4 as a legal issue, challenging the notice under section 148 as barred by limitation beyond the surviving period.

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Issues raised

• Whether the notice under section 148 dated 29.07.2022 for AY 2016-2017 was barred by limitation, having been issued beyond the surviving period.
• How the surviving period is computed where the original notice was issued on 30.06.2021, the last day of the TOLA-extended limitation, so that the assessee says zero days remained.
• Whether the reassessment order must be quashed if the underlying section 148 notice is invalid.
• For AY 2020-2021, whether the CIT(A) was right to decide the appeal without considering the supporting evidence the assessee had filed.

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What the court held

The order's closing paragraphs state that ITA No. 1527/Hyd./2025 (AY 2016-2017) is allowed. ITA No. 1528/Hyd./2025 (AY 2020-2021) is allowed for statistical purposes. The Tribunal's outcome reasoning notes that the judgment refers to a High Court setting aside a notice issued under section 148, and to the Delhi High Court deciding an identical case in the assessee's favour.

On AY 2016-2017, the assessee's argument rested on Union of India v. Rajeev Bansal [2024] 469 ITR 46 (SC). He relied on para 108, under which the surviving period is the number of days between the deemed notice and the TOLA-extended limitation date of 30.06.2021. Because the original notice was itself issued on 30.06.2021, the surviving period was zero. He argued that the minimum period available under Ashish Agarwal ran only up to 07.06.2022. He tabulated the last date for a notice under section 148 as 14.06.2022, against an actual issue date of 29.07.2022, which he put at 45 days late. He also relied on paras 113 and 114 of Rajeev Bansal, under which notices beyond the surviving period were set aside. In support he cited the Madras High Court's decision in Thulasidass Prabhavati v. ITO [2025] 174 taxmann.com.

For AY 2020-2021, the Tribunal held that the CIT(A)'s order, passed without considering the relevant supporting evidence filed by the assessee, was not sustainable and was set aside. It referred to an acknowledgment dated 15.03.2024 among the documents. Because the record and documentary evidence needed verification and examination, the matter was remanded to the Assessing Officer for fresh adjudication, with an adequate opportunity of being heard to be given to the assessee. This is why that appeal was allowed "for statistical purposes".

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Strategy observations

1. For AY 2016-2017, the assessee raised the limitation point as a legal ground (ground no. 4) alongside the merits grounds.
2. The assessee's authorised representative supported the limitation argument with a date-wise table covering the original notice, the TOLA last date, the response date to the show cause notice, the two-week deemed stay, the last date for notice and the actual date of issue.
3. The argument was anchored on specific paragraphs of Rajeev Bansal (paras 108, 113 and 114) and on Ashish Agarwal, together with a High Court authority (Thulasidass Prabhavati).
4. The assessee did not reply to the show cause notice under section 148A. His limitation argument was built on the computation of the surviving period rather than on a reply on merits.
5. For AY 2020-2021, the assessee's filed documentary evidence and acknowledgment became the basis on which the CIT(A)'s order was set aside and the matter remanded.

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Why this case matters

The order illustrates how the surviving-period framework from Rajeev Bansal is applied to a reassessment where the first section 148 notice was issued on the last day of the TOLA-extended period. In that situation the argument is that no days survive, and that the section 148A process and the fresh notice must fit within the minimum period recognised in Ashish Agarwal. The order also shows two distinct outcomes in a common order. One appeal was allowed on a jurisdictional footing and the other was remanded for evidence verification.

For researchers tracking section 148A and section 148 limitation disputes, the order is a recent Tribunal-level instance in which the assessee's limitation challenge, supported by Supreme Court and High Court authority, resulted in the appeal being allowed.

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Source

This case is drawn from the TaxNoticeAI structured legal corpus (16,101 Indian tax judgments, CBIC circulars, ITAT rulings, AAR rulings, GSTAT rulings), sourced from indiankanoon.org and official court portals.

Original document: https://indiankanoon.org/doc/155467761/