ACIT, NEW DELHI vs. M/S. THAPAR HOMES LTD., NEW DELHI

ITA 1141/DEL/2017Status: DisposedITAT Delhi19 August 2025AY 2007-0823 pages
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What did the Tribunal hold?

The Tribunal held that for AY 2006-07, the additions made by the AO were unsustainable. The Tribunal noted that the search was conducted on October 20, 2008, and the assessment year 2006-07 was an unabated assessment year. In such cases, additions can only be made if there is incriminating material found during the search. The AO's reasons for the additions did not refer to any such material. The Tribunal relied on the Supreme Court's decision in PCIT vs. Abhisar Buildwell P. Ltd. to support this view. Therefore, the CIT(A)'s deletion of all additions was upheld. For AY 2009-10, the Tribunal found that the notice u/s 143(2) was indeed issued beyond the statutory time limit. The assessment records confirmed that the notice was dated October 22, 2010, whereas the limitation period expired on September 30, 2010. The Tribunal held that the mandatory requirement of issuing a notice u/s 143(2) within the stipulated time was not met. Relying on the decisions in Alpine Electronics Asia Pte. Ltd. and CIT v. Laxman Das Khandelwal, the Tribunal concluded that the AO had wrongly assumed jurisdiction. Consequently, the assessment order for AY 2009-10 was quashed. As a result, the penalty levied u/s 271AAA for AY 2009-10 was also held to be unsustainable, as the substratum for the penalty had eroded. The appeals by the Revenue were dismissed, and the appeals by the assessee were allowed.

What were the facts?

These appeals by the assessee and the Revenue pertain to assessment years (AYs) 2006-07, 2007-08, and 2009-10. The matters arise from a search conducted at the assessee's premises on October 20, 2008. For AY 2006-07, the Revenue is challenging the CIT(A)'s deletion of additions amounting to Rs. 3,00,00,000/- (unexplained cash credit u/s 68), Rs. 13,00,000/- (unaccounted expenses u/s 69C), Rs. 6,35,000/- (income from unexplained sources), Rs. 2,15,00,000/- (unexplained cash credit u/s 68), Rs. 15,639/- (unexplained expenses), and Rs. 7,26,250/- (unexplained credit u/s 68). The assessee's appeals relate to the validity of assessment proceedings and penalty levies. For AY 2009-10, the assessee's appeal challenges the confirmation of penalty u/s 271AAA.

What were the issues?

1. Whether the additions made by the Assessing Officer (AO) for AY 2006-07, including unexplained cash credits and expenses, are sustainable, especially in a year of unabated assessment where no incriminating material was found during the search. - Assessee's contention: No addition can be made in an unabated assessment year without incriminating material, relying on PCIT vs. Abhisar Buildwell P. Ltd. (SC). - Revenue's contention: The assessment order should be upheld, and the CIT(A)'s deletions reversed. 2. Whether the assessment order for AY 2009-10 is liable to be quashed due to the issuance of a time-barred notice u/s 143(2) of the Income Tax Act, 1961. - Assessee's contention: The notice u/s 143(2) was issued beyond the statutory limitation period, rendering the AO's assumption of jurisdiction invalid, relying on ACIT vs. Hotel Blue Moon (SC), CIT v. Laxman Das Khandelwal (SC), and Alpine Electronics Asia Pte. Ltd. vs. Director General of Income Tax (Delhi). - Revenue's contention: The notice u/s 143(2) was issued within the limitation period, and the CIT(A)'s findings should be upheld. 3. Whether the penalty levied u/s 271AAA for AY 2009-10 is sustainable if the assessment order is quashed.

Which sections of the Income-tax Act were involved?

Section 68,Section 69C,Section 153A,Section 143(3),Section 271(1)(c),Section 271AAA,Section 143(2),Section 292BB

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Cases cited in this judgment(3)Show list

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आयकर अपीलीय अधिकरण दिल्ली पीठ "जी", दिल्ली श्री विकास अवस्थी, न्यायिक सदस्य एवं श्री एम. बालगणेश, लेखाकार सदस्य के समक्ष IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “G”, DELHI BEFORE SHRI VIKAS AWASTHY, JUDICIAL MEMBER & SHRI M. BALAGANESH, ACCOUNTANT MEMBER आअसं. 570, 571 & 41 /दिल्ली/2017 (नि.व. 2006-07, 2007-08 & 2009-10) ITA Nos.570, 571 & 41 /DEL/2017 (A.Ys.2006-07, 2007-08 & 2009-10) आअसं. 1054 /दिल्ली/2020 (नि.व. 2009-10)

Thapar Homes Ltd., C/O Bhupesh K. Dhingra & Co.

Chartered Accountants, 604, Padma Tower-II, Rajendra Place, New Delhi 110008 PAN NO: AACCT-3106-F ....... अपीलार्थी/Appellant बनाम Vs.

Assistant Commissioner of Income Tax, Central Circle-15, Jhandewalan Extension, New Delhi 110055 प्रतिवादी/Respondent आअसं. 1142, 1141 & 548 /दिल्ली/2017 (नि.व. 2006-07, 2007-08 & 2009-10) ITA Nos.1142, 1141 & 548 /DEL/2017 (A.Ys.2006-07, 2007-08 & 2009-10)

Assistant Commissioner of Income Tax, Central Circle-15, Jhandewalan Extension, New Delhi 110055 ....... अपीलार्थी/Appellant बनाम Vs.

Thapar Homes Ltd., C/O Bhupesh K. Dhingra & Co.

Chartered Accountants, 604, Padma Tower-II, Rajendra Place, New Delhi 110008 PAN NO: AACCT-3106-F प्रत

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