MOHIT INDUSTRIES LIMITED,SURAT vs. ACIT, CIRCLE-1(1)(1), SURAT

As the facts are identical in these appeals, we hereby pass a consolidated order by taking ITA No.1049/SRT/2025 pertaining to A.Y. 2011-12 as the lead case.

The assessee has raised the following grounds of appeal: “1. That on the facts and circumstances of the case as well as in law, the Id. CIT (A), NFAC, DELHI, [CIT (A)] has erred in confirming the addition by way of disallowance of depreciation of Rs. 11,48,529/-, whereas the appellant is lawfully entitled for such depreciation and disallowance thereof is grossly wrong, unjustified and contrary to the settled law. Appellant prays for deleting this wrong and unjustified addition.”

Being aggrieved by the assessment order, the assessee filed appeal before the CIT(A). The CIT(A) partly allowed the appeal of the assessee.

The Ld. Authorised Representative (in short “Ld. AR”) for the assessee at the time of hearing submitted that the assessee has filed additional ground of appeal thereby challenging the notice issued u/s 148 of the Act that the same is beyond four years from end of the assessment year.

We have heard both the parties and perused all the relevant materials available on record. It is pertinent to note that the original assessment u/s 143(3) of the Act was completed on 28.02.2017 and the notice u/s 148 of the Act was issued on 31.03.2017. As per the first proviso where an assessment under sub clause (3) of section 143 of the Act has been made for the relevant assessment year, no action shall be taken under this section after the expiry of four years from the end of the relevant assessment year. Unless any income chargeable to tax has escaped assessment, for such assessment year by reason of the failure on the part of the assessee to make a return u/s 139 of the Act or in response to a notice issued under sub section (1) of section 142 of section 148 of the Act or to disclose fully and truly all material facts necessary for his assessment for that assessment year. The second proviso further noted that nothing contain in the first proviso shall apply in a case where any income in relation to any asset including financial interest in any entity located outside India chargeable to tax has escaped assessment for any assessment year. In the present case, the assessment year is that of 2011-12 and the relevant original return was processed u/s 143(3) of the Act on 28.02.2014. The relevant assessment year is 2011-12 and the four years to expire from the end of the relevant assessment year has not been complied in the present assessee’s case as the notices beyond four years’ period u/s 148 of the Act which was issued on 31.03.2017. The exception provided in the first proviso to section 147 of the Act also does not support the assessee’s case to issue notice u/s 148 of the Act. The Hon’ble Supreme Court in case of ACIT vs. Marico Ltd. (2021) 133 taxman.com 122 (SC) has categorically mentioned that since the AO was acting solely on the basis of information and material already on record in original assessment, the reopening notice issued beyond the period of four years was unjustified. Thus, the assessment itself becomes void ab-initio and bad in law. The additional ground taken by the assessee is allowed. Since

In result, the appeal i.e. ITA No.1049/SRT/2025 filed by the assessee is allowed.

As relates to ITA No.1050/SRT/2025, the original assessment was completed on 27.12.2016 and the reassessment was done beyond four years. The notice u/s 148 of the Act was issued on 28.03.2021 which was beyond four years. The decision of the Hon’ble Apex Court will apply in this year as well. Thus, the grounds No.1 & 2 are allowed.

There is no need to adjudicate the issues on merit. Hence, ITA No.1050/SRT/2025 is allowed.

In result, both the appeals filed by the assessee are allowed.