DCIT Vs Alsorg Interiors India Private Limited (ITAT Delhi)
Search-Based Reassessments Beyond Six Years Quashed; Revenue Appeals Dismissed
The Delhi Bench of the ITAT dismissed the Revenue’s appeals and upheld the order of the CIT(A) holding the reassessment orders for AYs 2012-13 to 2015-16 in the case of Alsorg Interiors India Private Limited as barred by limitation.
The Tribunal noted that a search under section 132 was conducted on 09.02.2022, pursuant to which notices under section 148 were issued on 16.01.2023 for AYs 2012-13 to 2015-16. The Assessing Officer framed reassessments by making additions on account of alleged undisclosed business income which, however, did not represent income in the form of an “asset”.
Relying on the judgment of the Delhi High Court in Smart Chip (P) Ltd. v. ACIT, the CIT(A) held—and the ITAT concurred—that in search-related cases, where the escaped income is not represented by an asset, the extended limitation under the amended regime cannot be invoked. Consequently, the scope of action was confined to six assessment years immediately preceding the year of search, and the impugned years fell outside the permissible period.
The Tribunal rejected the Revenue’s contention that the first proviso to section 149(1) allowed reopening beyond the permissible years and held that the reassessment notices and consequential orders were without jurisdiction and time-barred. Accordingly, all the Revenue’s appeals were dismissed in entirety.
FULL TEXT OF THE ORDER OF ITAT DELHI
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.
