ACE Tyres (P) Ltd Vs DCIT (ITAT Hyderabad)
Assessment U/s 143(3) Quashed as Time-Barred – Limitation u/s 153 & Exclusion Period Restricted to Actual Time Lost – ITAT Hyderabad
The assessee, part of Exel Group, was subjected to search and assessment for A.Y. 2022-23 where addition of ₹2.04 crore was made based on alleged unaccounted transactions recorded in “FOCUS 5.5” software seized during search. The assessee challenged validity of assessment contending that the order dated 27.09.2024 was barred by limitation under s.153.
ITAT analysed clause (xii) of Explanation-1 to s.153 relating to exclusion of time taken for handing over seized material. The Tribunal held that exclusion is not an automatic extension of 180 days; only the period falling within the limitation window can be excluded. Since limitation for A.Y. 2022-23 ran from 01.04.2023 to 31.03.2024, only 144 days (01.04.2023 to 22.08.2023) could be excluded, extending deadline to 22.08.2024. As the AO passed the assessment order on 27.09.2024, it was beyond statutory time limit. Accordingly, the Tribunal quashed the assessment as time-barred without examining merits of additions. Appeal allowed.
FULL TEXT OF THE ORDER OF ITAT HYDERABAD
This appeal is filed by the assessee directed against the order passed by the Learned Commissioner of Income Tax (Appeals)-11, Hyderabad, dated 16/10/2025 for the A.Y 2022-23.
