M/S RIPPLES ENGINEERING PVT. LTD.,NEW DELHI vs. PCIT-7, NEW DELHI

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ITA 4175/DEL/2026Status: DisposedITAT Delhi20 August 2026AY 2015-166 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the reassessment notice was time-barred as it was issued after the limitation period. Consequently, the assessment order was considered non est and unsustainable in law.

What were the facts?

The assessee filed its return of income, and reassessment proceedings were initiated based on information about accommodation entries. The Assessing Officer made an addition restricted to 12.5% of alleged bogus purchases.

What were the issues?

Whether the reassessment proceedings initiated under Section 147/148 were validly commenced given the limitation period. Whether proceedings should have been initiated under Section 153C instead of Section 147/148.

Which sections of the Income-tax Act were involved?

Section 147,Section 148,Section 148A,Section 153C,Section 263

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH: ‘H’: NEW DELHI

Before: SHRI SUDHIR PAREEK

For Appellant: Shri Raj Kumar CA, Shri J.P. Sharma, CA
For Respondent: Shri Bhopal Singh, CIT (DR)
Hearing: 05.08.2026Pronounced: 20.08.2026

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH: ‘H’: NEW DELHI) BEFORE SHRI SUDHIR PAREEK, JUDICIAL MEMBER AND SHRI AMITABH SHUKLA, ACCOUNTANT MEMBER ITA No:- 4175/Del/2026 (Assessment Years- 2015-16) M/s RIPPLES ENGINEERING PCIT-7 CR Building ITO IP PVT LTD G-36 3rd Floor Green Vs. Estate New Delhi 110002 Park Delhi 110016 PAN No: AACCR3333E APPELLANT RESPONDENT Appellant by : Shri Raj Kumar CA Shri J.P. Sharma, CA Revenue by : Shri Bhopal Singh, CIT (DR) Date of Hearing :05.08.2026 Date of Pronouncement : 20.08.2026 ORDER PER SUDHIR PAREEK, JM

The aforetitled appeal arising out of the order dated 25.03.2026 passed by the Principal Commissioner of Income Tax, Delhi-7 (for the sake of convenience, hereinafter referred in short as Learned PCIT] passed against the order dated 11.05.2023 passed by the Assessing

Officer [(for the sake of convenience, here in after referred in short as Learned AO)] for A.Y. 2015-16.

2.

Facts of the case may be concisely narrated as that the appellant filed his return of income for the Assessment Year 2015- 16 declaring income of Rs.42,09,537/-. Subsequently, information was received from investigation wing, New Delhi based on search and post search enquiries conducted in the case of certain entry operators indicating that the appellant was a beneficiary of accommodation entries in the nature of bogus purchase and on the basis of the said information proceedings u/s 147 of the Act were initiated and accordingly notice u/s 148 of the Act was issued and reassessment completed u/s 147 read with section 144B of the Act determining total income at Rs 57,37,146/-. In the course of reassessment proceedings, the Learned AO held purchase of Rs 1,22,88,695/- from entities identified as accommodation entry providers, to be non genuine but the addition was restricted to 12.5% of such purchases amounting Rs 15,36,086/-.

3.

Heard rival submissions and carefully perused the material available on record.

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4.

Reiterating the grounds of appeal, the Learned AR submitted that invoking section 263 is unwarranted as the assessment order u/s 147/144B of the Act neither erroneous nor prejudicial to the interest of revenue and submitted that the assessment order is barred by limitation and so, no valid jurisdiction can be assumed for invoking section 263 of the Act and assessment could have been initiated only u/s 153C of the Act and not in section 147/148 of the Act. 5. Per Contra, the Learned DR relied upon the orders passed by both lower authorities. 6. The Learned AR further submitted that it is established legal position that since original reassessment order itself was not validly passed, then subsequent revisional order was required to be held invalid as well. Further submitted that as per law the assessee can challenge validity of order passed u/s 263 of the Act on ground that Impugned assessment order was non est. it is submitted that in present case which is related with AY 2015-16 and assessment order has been framed on the basis of notice u/s 148 of the Act dated 27-07-2022 and said notice is barred by limitation in view of

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UOI versus Rajeev Bansal (2024) 167 taxmann.com 70 SCC. The Learned AR shown chronology of relevant events as follows :

Date Event Pg. No 17.05.2021 1st Notice u/s 148 issued 21

04.05.2022 Decision of Hon’ble SC in case of UOI vs Ashish Agarwal ----

27.05.2022 Notice u/s 148A (b) issued ---- 10.06.2022 Reply to Notice u/s 148A (b) filed ----

27.07.2022 Order u/s 148A (d) passed ---- 27.07.2022 2nd Notice u/s 148 issued 28 [I.e after limitation period which ended on 31.03.2022]

11.05.2023 Asst. completed based on Notice u/s 148 dts 27.07.22 ----

7.

The Learned AR vehemently argued that in AY 2015-16 TOLA was not applicable and in present case notice for AY 2015-16 could had been issued up to 31-03-2022 and since notice u/s 148 of the Act was issued on 27-07-2022 was barred by limitation and in the case of Rajeev Bansal (supra) the revenue conceded that for the AY 2015-16, all notices issued on or after 01-04-2021 will have to be dropped as they will not fall for completion during the period prescribed under TOLA and likewise in the case of Makemytrip India

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Pvt Ltd versus DCIT (2025) 173 taxmann.com 497 (Delhi), held that as TOLA was not applicable in respect of said notice u/s 148 of the Act for AY 2015-16, then notice was liable to be set aside. Further submitted that in this case reassessment proceeding u/s 147 of the Act were initiated on account of information received on searchu/s 132 of the Act on Mohit Garg and others on 26-11-2016 and since the date of search is prior to 01-04-2021 then the impugned proceedings should have been only u/s 153C of the Act and not u/s 148 of the Act. Section 148 is applicable only where the relevant search has taken place on or after 01-04-2021. 8. In this matter, it is admitted position that notice u/s 148 of the Act was given on 27-07-2022, which is clearly time barred and so assessment dated 11/05/2023 in pursuance of time barred notice may treated as non est and non sustainable in the eye of law and accordingly there was no valid jurisdiction of the Learned PCIT for invoking section 263 of the Act in respect of above assessement order. There is also material substance in submission that in the established legal position, relevant assessment proceedings could been initiated only u/s 153C of the Act. On considering above, we find material substance in the submissions advanced on behalf of

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the appellant as above and of firm opinion that the appeal of the assessee deserves to be allowed on legal grounds i.e. ground 1 to 4 and addition in question deserves to be deleted. Rest of the grounds need not be adjudicated as appeal is disposed of on legal grounds. 9. Consequently, this appeal is hereby allowed as indicated above.

Order pronounced in the Open Court on 20.08.2026

Sd/- Sd/- (AMITABH SHUKLA) (SUDHIR PAREEK) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 20/08/2026. Copy forwarded to: 1. Appellant 1. Respondent 2. CIT 3. CIT(Appeals) 4. DR: ITAT

ASSISTANT REGISTRAR ITAT NEW DELHI

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