P R KUMAR CAPITAL PRIVATE LIMITED,JHANDEWALAN EXTN., NEW DELHI vs. DEPUTY COMMISSIONER OF INCOME TAX CENTRAL CIRCLE-28, JHANDEWALAN EXTN., NEW DELHI

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ITA 5249/DEL/2025Status: DisposedITAT Delhi30 January 2026AY 2020-20216 pages

In favour of the Revenue: the assessee's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that the assessment orders were barred by limitation. The CIT(A) had correctly relied on the judgment of the Hon'ble Delhi High Court in the case of Smart Chip (P) Ltd. vs. ACIT reported in 476 ITR 389. The Tribunal noted that a search and seizure operation under Section 132 was conducted on 09.02.2022, and notices under Section 148 were issued on 16.01.2023 for AYs 2012-13 to 2015-16. However, the Tribunal found that the condition stipulated in clause (a) of the fourth proviso to Section 153A(1) of the Act was not satisfied, as the income was not represented in the form of an 'asset' that had escaped assessment. Furthermore, the period of limitation for issuing notice under Section 153A of the Act was confined to six assessment years immediately preceding the assessment year relevant to the previous year in which the search was conducted. Consequently, the grounds of appeal raised by the Revenue were rejected as devoid of merit. The decision in ITA No. 5239/Del/2025 was applied mutatis mutandis to the other appeals.

What were the facts?

The appeals by the Department of Revenue challenge orders of the CIT(A) dated 30.05.2025, which overturned assessment orders passed by the DCIT on 03.03.2023 and 30.03.2023 under Section 143(3) read with Section 147 of the Income Tax Act, 1961, for Assessment Years (AYs) 2012-13 to 2015-16. A search operation under Section 132 was conducted on the assessee, Alsorg Interiors India Private Limited, on 09.02.2022. Subsequently, notices under Section 148 were issued on 16.01.2023. The Assessing Officer (AO) made additions of Rs. 2,01,40,679/- for AY 2012-13, assessing total income at Rs. 3,74,23,454/-. The CIT(A) allowed the assessee's appeals, holding the assessments to be barred by limitation.

What were the issues?

1. Whether the Ld. CIT(A) erred in allowing relief by relying on the decision of the Hon'ble Delhi High Court in Smart Chip (P) Ltd. (Assessee's contention: The CIT(A) correctly relied on this judgment to hold the assessments as barred by limitation. The Department's contention: The CIT(A) wrongly relied on the Smart Chip (P) Ltd. judgment, and the assessment order for the 10th year (presumably referring to AY 2012-13) was valid as the income exceeded Rs. 50,00,000/-). 2. Whether the Ld. CIT(A) erred in not appreciating that the first proviso to Section 149(1) only restrains the AO from going beyond the years that could not have been re-opened under Section 148, 153A or 153C as they stood before 01.04.2021. (Department's contention: This proviso applies to cases where the notice could not have been issued at that time due to being beyond the time limit, and it specifically relates to the time restraint placed by the legislature). 3. Whether the Ld. CIT(A) erred in not appreciating that the first proviso to Section 149(1) specifically relates to restraint placed by the legislature with respect to time. (Department's contention: Similar to issue 2, emphasizing the temporal aspect of the proviso).

Which sections of the Income-tax Act were involved?

Section 132,Section 143(3),Section 147,Section 148,Section 149(1),Section 153A(1),Section 250

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH “E”: NEW DELHI

Before: SHRI S RIFAUR RAHMAN & SHRI VIMAL KUMAR

For Appellant: Shri Salil Aggarwal, Sr. Adv. & Shri
For Respondent: Ms. Ankush Kalra, SR. DR
Hearing: 22.12.2025

O R D E R

PER VIMAL KUMAR, JUDICIAL MEMBER:

1.

The appeals filed by the Department of Revenue are against orders dated 30.05.2025 of Learned Commissioner of Income-Tax (Appeals)-27, New Delhi (hereinafter referred as “Ld. CIT(A)”) under Section 250 of the Income Tax Act, 1961 (hereinafter referred as “the Act”) arising out of assessment order dated 03.03.2023 of Learned Deputy Commissioner of Income Tax, Central Circle- 20, New Delhi (hereinafter referred as “Ld. AO") under Section 143(3) of the Act for assessment years 2012-13 to 2015-16. are that the assessee is a company filed his return of income for assessment year 2012-13 on 29.12.2012 declaring total income of Rs.1,72,82,775/- which was processed under Section 143(1) of the Act, 2.1 A Search & seizure operation under Section 132 of the Act was conducted on 09.02.2022 by the Investigation Wing, Delhi on M/s. Alsorg Interiors Private Limited, wherein its various office premises were covered. The case was then centralized to this Circle vide Order dated 27.05.2022 passed under Section 127 of the Act, by the Ld. Principal CIT-1, Delhi. Subsequently, the case was selected for compulsory scrutiny as Explanation 2(i) of Section 148 of the Act. Accordingly notice, u/s 148 of the Act, dated 16.01.2023 was issued to the assessee, intimating the assessee that its case has been selected for scrutiny. In response to notice u/s 148, the assessee filed its return of Income for AY 2012-13 dated 03.02.2023 declaring total income of Rs.1,72,82,775/-. On completion of proceedings, assessment was completed on 03.03.2023 under Section 143 r.w.s. 147 of the Act by the Ld. AO. and income was assessed al Rs.3,74,23,454/- after making addition of Rs.2,01,40,679/- on account of undisclosed income under the head Income from business and profession under Section 28 of Act. Similarly, Ld. AO passed orders dated 30.03.2023 for AYs 2013-14 to 2015-16.

3.

Against orders dated 03.03.2023 of Ld. AO, the appellant/assessee filed appeals before the CIT(A) which was allowed vide order dated 30.05.2025.

4.

Being aggrieved, the Department of Revenue preferred present appeals with similar grounds. The Grounds of appeal in are as follows:

“1. Whether the Ld. CIT(A) has erred in allowing relief to the assessee by relying on the decision of Hon’ble Delhi High Court in Smart Chip P Ltd? 2. Whether the Ld. CIT(A) has erred in not appreciating that first proviso to Sec 149(1) only restrains the AO not to go beyond the years which could not have been re-opened u/s 148, 153A or 153C as they stood before 1.04.2021? 3. Whether the Ld. CIT(A) has erred in not appreciating that first proviso to Sec. 149(1) specifically applies to cases where notice could not have been issued at That time on account of being beyond time?

4. Whether the Ld. CIT(A) has erred in not appreciating that first proviso to Section 149(1) specifically relates to restraint placed by the legislature with respect to time? 5 (a) The order of the Ld. CIT(A) is erroneous and not tenable in law and on facts. (b) The appellant craves to add, alter or amend any/all of the grounds of appeal

below or during the course of the hearing of the appeal.”

5. Learned Departmental Representative submitted that Ld. CIT(A) erred in holding the assessment order for the 10th year, the date of notice dated 16.01.2023. Income was more than Rs.50,00,000/-. Wrong reliance was placed on judgment of Hon'ble High Court of Delhi in the case of Smart Chip (P) Ltd. vs. ACIT reported in 476 ITR 389.

6. Learned Authorized Representative for the assessee submitted that Ld. CIT(A) at pages 35 to 45 of his order, held that all the captioned assessments are barred by limitation by placing reliance on the judgment of Hon'ble High Court of Delhi in the case of Smart Chip (P) Ltd. Vs ACIT reported in 476 ITR 389. Copies of notice under Section 148 dated 16.01.2023 for AY 2012-13 to 2015-16 along with Reasons recorded and approval of specified authority; Page 1 to 19 of PB. Copy of notice under Section 148 dated 16.01.2023 for AY 2013- 14 along with Reasons recorded and approval of specified authority; Page 5-9 of PB. Copy of judgment of Hon'ble High Court of Delhi in the case of Smart Chip (P) Ltd. vs. ACIT reported in 476 ITR 389. Page 20-30 of PB.

7. From examination of record in light of aforesaid rival contentions, it is crystal clear that in order dated 30.05.2025, Ld. CIT(A) held the assessment order dated 03.03.2023 as barred by limitation by placing reliance on judgment of Hon'ble High Court of Delhi in Smart Chip (P) Ltd. Vs ACIT reported in 476 ITR 389.

7.1 The search and seizure operation under Section 132 of the Act conducted on 09.02.2022 at various premises. Notices under Section 148 of the Act dated 16.01.2023 for AYs 2012-13 to 2015-16 with reasons recorded and approval of specified authority were issued. On completion of proceedings, Ld. AO made additions on account of alleged unaccounted income and expenses and the income is not represented in form of an “asset” has escaped assessment. Therefore, the condition as stipulated in clause (a) of the fourth proviso to Section 153A(1) of the Act is not satisfied. The period of limitation for issuing notice under Section 153A of the Act necessarily had to be confined to a period of six AYs immediately preceding the assessment year relevant to the previous year in which search under Section 132 of the Act was conducted. As such, in view of above material facts and well-settled legal position, the grounds of appeals of Revenue being de void of merit are rejected.

8.

The above decision in will apply mutatis mutandis in to 5242/Del/2025 as the facts, grounds of appeals are similar.

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