PROFORM INTERIORS PRIVATE LIMITED,GURGAON vs. DCIT CC-20, DELHI

ITA 2716/DEL/2025Status: DisposedITAT Delhi04 February 2026AY 2021-2250 pages
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What did the Tribunal hold?

The Tribunal held that the approval granted by the Addl. CIT under Section 153D of the Act was invalid. The Tribunal noted that the approval was granted on the same day for multiple assessment years (specifically, for 43 cases on December 30, 2018, and a single approval for AYs 2011-12 to 2017-18 in the assessee's case). This indicated a lack of independent application of mind and a mechanical exercise of power, which is contrary to the principles laid down in various High Court and Supreme Court judgments, including Serajuddin, Anuj Bansal, and Sapna Gupta. The Tribunal found that the approval did not reflect a perusal of the draft assessment orders or the seized material. Consequently, the assessment orders passed based on such an invalid approval were quashed. The Tribunal allowed the appeals filed by the assessee and dismissed the appeals filed by the Revenue. The issue regarding the limitation period for reopening assessments under Section 149(1)(b) and the calculation of the block period under Section 153C were rendered infructuous by the decision on the validity of the approval.

What were the facts?

The assessee, Proform Interiors Pvt. Ltd., is engaged in furniture manufacturing, interior designing, and trading. Following a search and seizure action on February 9, 2022, cases for assessment years (AY) 2012-13 to 2020-21 were re-opened under Section 147, and AY 2021-22 to 2022-23 were taken up under Section 143(3). For AY 2012-13, the Assessing Officer (AO) passed a reassessment order dated March 31, 2023, making additions of Rs. 1,95,65,527/- by estimating profits on undisclosed sales. The Commissioner of Income Tax (Appeals) [CIT(A)] quashed this order on grounds of limitation. The Revenue appealed this decision to the Income Tax Appellate Tribunal (ITAT). The appeals cover various AYs from 2012-13 to 2022-23, involving both assessee and revenue appeals.

What were the issues?

1. Whether the CIT(A) erred in quashing the reassessment order for AY 2012-13 by wrongly interpreting Section 149(1)(b) and Section 153C of the Act, specifically concerning the calculation of the ten-year period for reopening assessments. 2. Whether the CIT(A) erred in holding that the block period for assessment under Section 153C should be calculated from the date of receipt of seized material by the jurisdictional AO of the non-searched person, rather than from the date of the search. 3. Whether the CIT(A) erred in holding that the ten-year period under Section 149(1)(b) should be reckoned from March 31 of the AY relevant to the year of issue of notice under Section 148, not from the AY immediately preceding the year of search, by referencing CBDT Circular No. 2/2018. 4. Whether the approval granted by the Additional Commissioner of Income-tax (Addl. CIT) under Section 153D of the Act was valid, considering it was granted for multiple assessment years on the same day without independent application of mind. Assessee's Contentions: The assessee argued that the reassessment order was bad in law due to the invalid approval under Section 153D, citing judgments like Serajuddin and Anuj Bansal, and that the approval was granted mechanically for 43 cases on a single day. The assessee also relied on the jurisdictional High Court's decision in Sapna Gupta. Revenue's Contentions: The Revenue contended that the CIT(A) wrongly interpreted Section 149(1)(b) and Section 153C regarding the time limit for reopening assessments and the calculation of the block period. The Revenue also argued that the CIT(A) erred in calculating the ten-year period by referencing CBDT Circular No. 2/2018.

Which sections of the Income-tax Act were involved?

Section 147,Section 143(3),Section 148,Section 143(2),Section 142(1),Section 149(1)(b),Section 153C,Section 153D,Section 148B

AI-generated summary — verify with the full judgment below

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

Before: SHRI ANUBHAV SHARMA & SHRI MANISH AGARWAL

For Appellant: Shri Gaurav Jain, Adv, Shri Tarun Chanana, Advs
For Respondent: Ms. Pooja Swaroop, CIT DR
Hearing: 20.01.2026Pronounced: 04.02.2026

PER MANISH AGARWAL, AM:

The captioned appeals are filed by Assessee and Revenue against the separate

orders, all are dated 28.02.2025 passed by Ld. Commissioner of Income Tax (Appeals)-30, New Delhi [‘Ld. CIT(A)’ in short] u/s 250 of the Income Tax Act

The order continues below.

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