Chennai ITAT Applies ‘Surviving Period’ Rule for First Time, quashes Income Tax Reassessment Notice [Read Order]
The Chennai ITAT held that a reassessment notice under the new regime is invalid if issued beyond the “surviving period” under Section 149, quashing the notice for being time-barred.
![Chennai ITAT Applies ‘Surviving Period’ Rule for First Time, quashes Income Tax Reassessment Notice [Read Order]](https://images.taxscan.in/h-upload/2025/07/09/2061962-itat-chennai-itat-income-tax-reassessment-notice-taxscan.webp "Chennai ITAT Applies ‘Surviving Period’ Rule for First Time, quashes Income Tax Reassessment Notice [Read Order]")
The Chennai bench of the Income Tax Appellate Tribunal (ITAT) quashed a reassessment notice holding that the Income Tax Department cannot issue reassessment notices under the new regime beyond the “surviving period” prescribed under Section 149 of the Income Tax Act. Lakshmi Narasimhan Santhi, an individual taxpayer, had filed her return for the assessment year 2013-14 declaring...
The Chennai bench of the Income Tax Appellate Tribunal (ITAT) quashed a reassessment notice holding that the Income Tax Department cannot issue reassessment notices under the new regime beyond the “surviving period” prescribed under Section 149 of the Income Tax Act.
Lakshmi Narasimhan Santhi, an individual taxpayer, had filed her return for the assessment year 2013-14 declaring an income of Rs. 14,19,860. The department issued a reassessment notice dated 28.07.2022 under the new regime, alleging escapement of long-term capital gains from the sale of immovable property during the relevant year.
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The assessee’s counsel argued that the notice was issued beyond the “surviving period” computed under the Supreme Court’s judgment in Rajeev Bansal, which clarified that reassessment notices under the new regime post Ashish Agarwal must be issued within the balance period available under law, excluding the period from 20 March 2020 to 30 June 2021.
The counsel argued that in this case, the limitation expired on 23 June 2022, while the notice was issued only on 28 July 2022, making it time-barred.
The department’s counsel argued that the notice was issued within the permissible time as per Section 148A(d), claiming that the notice was served within one month from the end of the month in which the assessee’s reply was received.
The two-member bench comprising George George K (Vice President) and S.R. Raghunatha (Accountant Member) observed that the Supreme Court in Rajeev Bansal had held that reassessment notices under the new regime must be issued within the “surviving period” available under law, which is computed conservatively from the date of the assessee’s reply.
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It was observed that this timeline overrules the extended period claimed under Section 148A(d) if it goes beyond the “surviving period.”
The tribunal found that the notice issued on 28 July 2022 was beyond the permissible date of 23 June 2022 and was therefore invalid. The tribunal held that the reassessment notice issued under the new regime after the expiry of the “surviving period” is without jurisdiction.
The tribunal quashed the reassessment notice and allowed the appeal in favour of the assessee.
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