ACIT, DELHI vs. CREAMY FOODS LTD, NOIDA

IN THE INCOME TAX APPELATE TRIBUNAL DELHI BENCH “A”: NEW DELHI BEFORE SHRI MAHAVIR SINGH, HON’BLE VICE PRESIDENT AND SHRI M. BALAGANESH, HON’BLE ACCOUNTANT MEMBER ITA Nos. 3334, 3335 & 3336/DEL/2026 A.YRS. : 2014-15, 2015-16 & 2016-17 ACIT, Vs. CREAMY FOODS LTD., ROOM NO. 332-A, A-15, SMC HOUSE, 3RD FLOOR, ARA CENTRE, JHANDEWALAN SECTOR-136, NEAR PANCHSHEEL EXTENSION, NEW DELHI- 110 055 COLLAGE, GREATER NOIDA, EXPRESS WAY, GREATER NOIDA UTTAR PRADESH-201301 [PAN: AABCC7375A) (Appellant) (Respondent) Assessee by : Sh. Salil Agarwal, Sr. Adv. & Sh. Shailesh Gupta, CA & Sh. Madhur Agarwal, Adv. Department by : Sh. Zafarul Haque Tanweer, CIT(DR) Date of Hearing 03.09.2026 Date of Pronouncement 10.09.2026 O R D E R PER MAHAVIR SINGH, VP: These 03 appeals by the Revenue are emanating from the separate orders of the Ld. Commissioner of Income Tax (Appeals-23), New Delhi. Assessments were framed by the ACIT-CC-4, Delhi vide his respective orders passed u/s 143(3) of the Income Tax Act, 1961 (hereinafter referred as “Act”) relevant to assessment years 2014-15, 2015-16 & 2016-17 respectively. 2. The common issue in these appeals of the Revenue is as regards to the order of the CIT(A) quashing the reopening u/s. 148 of the Act as time barred by limitation. For this, the Revenue has raised the following common grounds in all the captioned appeals 1

however, for the sake of convenience, we are taking the assessment year 2014-15 as lead case. 1. That Ld. CIT(A) erred in holding that the reassessment proceedings u/s. 147 of the Act were invalid despite the fact that the AO had validly initiated action based on Explanation 2 to Section 148 post search operation. 2. The ld. CIT(A) erred in holding that the escapement income was not represented in the form of an “asset” as contemplated u/s. 149(1)(b) and the fourth proviso to Sec. 153A. However, unsecured loans received by the assessee squarely falls within the definition of asset as per Explanation 2 to Section 153A. 3. The Ld. CIT(A) wrongly misplaced the reliance on the Hon’ble Supreme Court’s judgement in the case of Union of India vs. Rajeev Bansal [2024]. However, the conditions for invoking extended limitation stood fully satisfied in this case as the escaped income exceeds Rs. 50 lakh and were represented in the form of financial ‘assets’. 4. The Ld. CIT(A) failed in appreciating that the amended provisions of the Act introduced by the Finance Act, 2021 expressly permit reopening up to ten years where income represented in the form of assets has escaped assessment. 3. We have heard the rival contentions and gone through the facts and circumstances of the case. Before us, ld. Counsel for the assessee pointed out that the assessment for this year cannot be reopened for the reasons that the AO has in his possession documents which reveals that income represented in the form of assets which has escaped amounts or likely to amounting to Rs. 50 lacs or more. The criteria for reopening on the basis of entry / expenditure/ sale is not applicable for years beyond these years and the documents on the basis of reopening has been initiated in the form of assets. Ld. Counsel for the assessee relied upon the provisions of section 149 and 153A to explain this. Ld. Counsel for the assessee drew our attention towards reasons recorded and argued that the reasons for the belief that the income has escaped and reopened u/s. 148 are particularly given in para 4.3 as under:

“4.3 As per information available with this office, the assessee has undertaken the following transactions: Sr. No. Particulars of the Amount (In Income transactions Rs.) chargeable to undertaken by tax, the assessee represented in the form of 1. Accommodation 4,50,00,000/- Entry in the entries in the books of form of account unsecured loan Total 4,50,00,000/-

3.1 Similarly, Ld. Counsel for the assessee further drew our attention to para no. 4.5 which reads as under:- “4.5 The above information clearly reveals that the income chargeable to tax has escaped assessment. Thus, income, as mentioned in para 4.3, represented in the form of entries in the books of account as gathered from the seized material, amounting to or is likely to amount to fifty lakh rupees or more has escaped assessment.” 4. Ld. Counsel for the assessee stated that reopening in this case represented in the form of entries in the books of accounts as gathered from the seized material. Ld. Counsel for the assessee in view of the provisions of section 149 and 153A relied on the decision of the Hon’ble Supreme Court in the case of Union of India & Ors Vs. Rajeev Bansal [2024] 167 Taxmann.com 70 (SC) wherein, it has been held as under:-

“49. The first proviso to Section 149(1)(b) requires the determination of whether the time limit prescribed under Section 149(1)(b) of the old regime continues to exist for the assessment year 2021-2022 and before. Resultantly, a notice under Section 148 of the new regime cannot be issued if the period of six years from the end of the relevant assessment year has expired at the time of issuance of the notice. This also ensures that the new time limit of ten years prescribed under Section 149(1)(b) of the new regime applies prospectively. For example, for the assessment year 2012- 2013, the ten year period would have expired on 31 March 2023, while the 3

six year period expired on 31 March 2019. Without the proviso to Section 149(1)(b) of the new regime, the Revenue could have had the power to reopen assessments for the year 2012- 2013 if the escaped assessment amounted to Rupees fifty lakhs or more. The proviso limits the retrospective operation of Section 149(1)(b) to protect the interests of the assesses. 54. The proviso to Section 149(1)(b) of the new regime uses the expression “beyond the time limit specified under the provisions of clause (b) of sub- section (1) of this section, as they stood immediately before the commencement of the Finance Act, 2021.” Thus, the proviso specifically refers to the time limits specified under Section 149(1)(b) of the old regime. The Revenue accepts that without application of TOLA, the time limit for issuance of reassessment notices after 1 April 2021 expires for assessment years 2013-2014, 2014-2015, 2015-2016, 2016-2017, and 2017-2018 in the following manner: For the assessment years 2013-2014 and 2014-2015, the six year period expires on 31 March 2020 and 31 March 2021 respectively; and (ii) for the assessment years 2016-2017 and 2017-2018, the three year period expires on 31 March 2020 and 31 March 2021 respectively.” 5. Ld. Counsel for the assessee relied on decision of the Hon’ble Delhi High Court exactly on identical facts in the case of Smart Chip Private Ltd. vs. ACIT reported in 47 ITR 389 (Del) wherein, it has been held as under:-

reveals that the petitioner's income that is represented in the form of an asset has escaped assessment. 18. In terms of Explanation 2 to Section 153A(1) of the Act, the term 'asset' is defined to include immovable property being land or building or both, shares and securities, loans and advances, deposits in bank accounts. 19. The AO seeks to disallow expenses on account of doubting the genuineness for the reason that the same were not incurred wholly or exclusively for the purpose of the petitioner's business. Absent any further material to establish that such expenses had resulted in the acquisition of any asset, the conditions stipulated in the fourth proviso to Section 153A(1) of the Act would remain unsatisfied. 20. In the aforesaid view the period of limitation for issuing a notice under Section 153A of the Act, in the given facts of this case, would necessarily have to be confined to a period of six assessment years immediately preceding the assessment year relevant to the previous year in which the search under Section 132 of the Act was conducted. 21. The search in question was conducted in financial year 2022-23; thus, the relevant block of six assessment years would be the six assessment years preceding AY 2023-24, being the assessment year relevant to the previous year in which the search was conducted. Accordingly, AY 2016-17 falls beyond the block of six years. 6. Ld. Counsel for the assessee stated that AO has failed to establish that income which has escaped assessment was represented in the form of assets and therefore, the conditions stipulated in clause (a) of the fourth proviso to Section 153A(1) of the Act shall not satisfy. He further argued that in terms of Explanation 2 to Section 153A(1) of the Act, the term ‘asset’ is defined to include immovable property being land or building or both, shares securities, loans and advances, deposits in bank accounts. Hence, he computed from the date of notice u/s. 148 i.e. 20.7.2022. The six preceding years, in which search was conducted on 20.7.2022 is being worked out and the relevant portion thereof read as under:-

1 AY 2023-24 Search Year 2 AY 2022-23 1st year 2nd year 3 AY 2021-22 3rd year 4 AY 2020-21 4th year 5 AY 2019-20 5th year 6 AY 2018-19 7 AY 2017-18 6th year

only if the asset or information about such asset as stated above are found by the search team and they are not disclosed in the regular books of account and has escaped assessment, then only the Assessing Officer can open the window under 4th proviso. 18.1 However, in the instant case, the ld. Assessing Officer has not referred to any of such “asset” neither any information in their in the assessment order about any immovable property being land or building or both, shares and securities, loans and advance, deposits in bank account, in the assessment order. The assets referred in the 4th proviso are the assets which are appearing on the right side of the balance sheet whereas the Assessing Officer is referring to unsecured loan and shares capital and share premium which is on the liability side of the balance sheet. In other words, the 4th proviso to Section 153A of the Act talks about the assets whereas the Assessing Officer has invoked the 4th proviso by referring to liabilities which is completely inverse of what is provided under the Act. 18.2. Now once the basic condition i.e., availability of “asset” as defined under explanation 2 to 4th proviso to Section 153A of the Act, if any, found during the course of search with the assessee/group concern is absent, nor there is any reference to any incriminating material referring to ownership of such undisclosed assets by assessee and only there is a reference of the credits received by the assessee/s which are duly disclosed in the regular books of accounts are part of the audited financial statements, issuing of notice u/s 153A of the Act then invoking the 4th proviso to Section 153A of the Act, is invalid and bad in law and beyond jurisdiction and thus on this ground itself, the assessment order passed u/s 153A of the Act, which is the subject matter of the instant appeals before us has rightly been quashed by the ld. CIT(A) and which thus does not call for any interference. 8. Now in the present case before us and the facts above narrated clearly reveals that in the reasons recorded there is no asset rather the reasons recorded are for the purpose of bringing to tax the entries in the books of accounts as gathered from the seized material that accommodation entries in the form of unsecured loans of Rs. 4,50,00,000/-, which means that the above provisions do not cover the assessee’s situation and assessee’s case is beyond 6 years i.e. AY 2014-15. Accordingly, we uphold the Ld. CIT(A)’s order of quashing the assessment and accordingly, reject the grounds raised by the Revenue. 9. In the result, the revenue appeal for the assessment year 2014-15 is dismissed.

SRBhatnaggar Date: 10-9-2026 Copy forwarded to: - 1. Appellant 2. Respondent 3. DIT 4. CIT (A) 5. DR, ITAT Assistant Registrar, ITAT, Delhi Benches