ITAT Chennai Expunges Direction To Reopen Assessments For Years Not Under Appeal

The Chennai Bench of the Income Tax Appellate Tribunal (ITAT) has expunged a direction issued by the Commissioner of Income Tax (Appeals) to reopen the earlier assessments of individual taxpayer Chandanmal Nagaraj, holding that such directions are beyond its powers.

The coram comprising Judicial Member Manu Kumar Giri and Accountant Member Inturi Rama Rao passed the order on April 30, 2026.

The case related to Assessment Year 2017–18. While granting relief for this year, the CIT(A) had also directed the Assessing Officer to reopen the individual taxpayer's assessments for AY 2015–16 and 2016–17.

The tribunal said, “When appeal relates to a particular assessment year, the findings and direction must necessarily be limited to that particular year. The ld.CIT(A) has no jurisdiction to give direction with regard to the proceedings of the earlier years. In other words, the ld.CIT(A) cannot travel outside the scope of appeal and purport to give a direction beyond the assessment year under consideration.”

An addition of Rs 7,73,82,188 (about Rs 7.73 crore) had been made as an unexplained expenditure under Section 69C.

The CIT(A) deleted the addition after accepting that the payments related to earlier years and were made through banking channels. However, it directed the Assessing Officer to reopen the individual taxpayer's assessments for AY 2015–16 and 2016–17 to verify those transactions.

The tribunal held that this direction was not valid because the appeal was only for AY 2017–18.

It therefore expunged this part of the order, stating, "The above direction of ld.CIT(A) are hereby stands expunged.”

The tribunal also said that it was not deciding whether the reopening of those earlier assessments would be valid in law.