Quick Summary: The Madurai Bench of the Madras High Court has ruled in favor of the Income Tax Department, allowing them to review City Union Bank's tax returns from 2011-2012 again. The court overturned a previous decision that had canceled the notice for this review.
The case involves officials from the Income Tax Department in Tiruchirapalli and City Union Bank Ltd., which is based in Kumbakonam, Tamil Nadu.
City Union Bank submitted its tax return on September 30, 2011, for the year 2011-2012, reporting an income of ₹190.30 crore. The initial review increased the total income to ₹268.45 crore, which City Union Bank disputed.
On March 26, 2015, a notice was sent to the bank to review their tax return again, leading to a series of objections and appeals from City Union Bank. The bank argued that the notice was sent too late, beyond the four-year limit from the end of the assessment year, making it invalid.
Judge's Ruling: Justices C.V. Karthikeyan and R. Vijayakumar decided on November 27, 2025, that the notice was valid. They pointed out that City Union Bank had not shared all important information needed for the review, which made the reassessment justified under the law.
"The law requires every taxpayer to fully and honestly share all important facts for their assessment."
The court found that City Union Bank did not share all necessary information during the original review. Because of this, the tax authorities were allowed to issue a new review notice even after the four-year period.
The court's decision allows the Income Tax Department to move forward with reviewing City Union Bank's 2011-2012 tax returns again. The bank might still have options to challenge this, but for now, the tax authorities can continue their review.
