Reassessment Notice Beyond Limitation under Section 149 Held Invalid: ITAT Cochin in Binu Joy Kondody Vs ITO

Background of the Dispute

The Income Tax Appellate Tribunal, Cochin Bench, in the case of Binu Joy Kondody Vs ITO, examined the legality of a reassessment initiated under Section 147/Section 148 for AY 2015-16. The impugned order was that of the CIT(A)/NFAC dated **14.10.2025`, which had upheld the reassessment.

The central controversy before the Tribunal was whether the notice under Section 148 dated 06.05.2022 was issued within the time limit prescribed by the newly substituted Section 149 (as amended by the Finance Act, 2021), read with its provisos. If the notice itself was time-barred, the entire reassessment would collapse for lack of jurisdiction.

Alongside this primary legal ground, the assessee had also questioned:

  • The invocation of extended limitation based on alleged escaped income represented in the form of “asset” exceeding ₹50 lakh
  • The denial of adequate opportunity
  • Non-consideration of his Non-Resident status up to September 2014
  • Additions made on merits, including unexplained investments and interest income

However, as the Tribunal ultimately allowed the appeal on the preliminary legal issue of limitation, these additional grounds were rendered academic.

Facts Leading to Reopening

Information with the Assessing Officer

According to the reassessment order, the Assessing Officer (AO) received information that:

  • The assessee had not filed a return of income for AY 2015-16; and
  • During FY 2014-15, there were cash deposits exceeding ₹50 lakh in his bank account(s).

Treating these cash deposits as possible unexplained income, the AO initiated proceedings under the new reassessment regime introduced by the Finance Act, 2021.

Initiation under Section 148A and Reassessment

  1. Show Cause Notice under Section 148A(b)

    • Issued on 28.03.2022
    • The assessee was granted time up to 06.04.2022 to submit a reply.

  2. Assessee’s Response (Pre-148 proceedings)
    In response at the assessment stage, the assessee broadly contended that:

    • He was a Non-Resident up to September 2014.
    • The deposits were sourced from closure of NRE deposits and accumulated savings.
    • Funds were routed to his Catholic Syrian Bank account to meet living expenses, and therefore did not constitute taxable income.

    However, the AO recorded that no supporting documentary evidence was filed and that the assessee did not file the return of income even after notices.

  3. Order under Section 148A(d) and Notice under Section 148

    • Order under Section 148A(d) passed on 06.05.2022.
    • Notice under Section 148 also issued on 06.05.2022 for AY 2015-16.