TaxTMI 
TaxTMI 
2026 (2) TMI 1234
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.... issue of notice under Section 143(2) for the Asst Year 2022-23 is bad in law and also notice u/s. 143(2) issued is without Jurisdiction. 4. On the facts and circumstance of the case, the learned CIT(A) is not justified in sustaining the addition of Rs. 2,04,91,041/-. 5. Any other legal and factual ground or grounds that may be urged at the time of hearing of the appeal." 3. The brief facts of the case are that the Assessee company is part of Exel group and was subjected to Search on 04.01.2023. The group consists of M/s Exel Rubber Private Limited, M/s Ace Tyres Private Limited and M/s Vilas polymers private Limited. The Assessments were made for all three companies for 10 years for each company. Simultaneous search proceedings were also conducted in the residential premises of Sri Sanaka Ramesh Kumar, Sr. Accounts Manager who looks after the financial and accounting matters of M/s Exel Rubber group of business Concerns. During the course of Search in the residential premises of Sri Sanaka Ramesh Kumar, the department has found certain loose sheets, promissory notes and excel sheets and a del laptop were found and also seized. On verification of the laptop, it....
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....e quashed. The assessee also challenged the additions made by the A.O towards undisclosed income on the basis of FOCUS 5.5 software. The Ld. CIT (A) rejected the legal ground taken by the assessee challenging the validity of assessment proceedings and adjudicated the issues raised in appeal on merits and partly allowed the appeal filed by the assessee. 6. Aggrieved by the order of Learned CIT(Appeals) the appellant in in appeal before the Tribunal. 7. The learned Counsel for the assessee, Shri M.V. Prasad, C.A, referring to the grounds of appeal filed by the assessee and more particularly, ground no.2 submitted that the assessment order passed by the A.O under section 143(3) of the Act, dated 27/09/2024 is barred by limitation going by the provisions of sec 153 of the I.T. Act, 1961. The learned Counsel for the assessee submitted that the assessment order, in question, before us is for the A.Y 2022-23. The A.O issued notice under section 143(2) of the I.T. Act on 20/06/2023. The search in the present case was conducted on 4/1/2023. As per the provisions of sec 153(1) of the I.T. Act, the time limit for completion of the assessment is 21 months from the end of the A.Y, in whic....
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....xplanation (1) to clause (xii) of section 153 of the Act. The search in the present case was on 4/1/2023 and the A.O received the seized material on 22/08/2023. The above period taken by the A.O of the searched person falls in two financial years i.e. from 4/1/2023 to 31/3/2023 falls in financial year 2022-23 and from 1/4/2023 to 22/08/2023 falls in financial year 2023-24. Since the limitation for passing the assessment order starts from 1/4/2023, whatever time lapsed by the A.O from 1/4/2023 alone needs to be excluded for the purpose of computing the limitation and if we exclude the said period from 1/4/2023 to 22/08/2023, then the A.O shall get exclusion of 144 days and if we add 144 days from 31/03/2024, the A.O shall get extension of time up to 22/08/2024 for passing the assessment order, whereas in the present case, the A.O has passed the assessment order on 24/07/2024 which is beyond the limitation provided under section 153 of the Act and thus, the assessment order passed by the AO is liable to be quashed. Therefore, he submitted that the assessment order passed by the A.O is barred by limitation and the same should be annulled. 8. The Ld. CIT (DR), on the other hand, sup....
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....essable. In the present case, the Asst. Year involved is Asst. Year 2022-23 and time limit for completion of assessment is 12 months from the end of the A.Y 2022-23 i.e. up to 31/03/2024. However, the case of the assessee falls under clause (xii) of Explanation (1) to section 153 of the Act, because a search and seizure operation was conducted under section 132 of the Act on 4/1/2023 and as per clause (xii) of Explanation (1) to section 153, the period (not exceeding 180 days) commencing from the date of search initiated under section 132 of the Act and ending on the date on which the books of account or other document are handed over to the A.O having jurisdiction over the assessee shall be excluded. Therefore, from clause (xii) of Exp. (1) to section 153 of the Act, the A.O gets exclusion of 180 days for the purpose of computing the limitation provided under section 153(1) of the Act, towards the time taken by the A.O of the searched person to hand over the books of account or any other valuable articles or things to the A.O of the assessee up to a maximum of 180 days, even if the time taken by the A.O of the searched person is more than 180 days. If we carefully read clause (xii....
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....erials from 4/1/2023 to 22/08/2023 is 231 days. As per clause (xii) of explanation (I) of section 153, the period taken by the A.O shall not exceed 180 days. As we have already noted in the earlier paragraphs of this order, Exp.(1) of clause (xii) is only an exclusion clause and therefore, whatever time lost by the A.O in the limitation period alone can be excluded for the purpose of computation of limitation period. In other words, if the time taken by the A.O from the date of search to the handing over of the books of account does not fall under the limitation period, then obviously there is no inconvenience is caused to the A.O because of such proceeding and consequent handing over of the books of account and consequently, there is no question of exclusion of the period which is not covered in the limitation period. For example, if the search is conducted on 04/01/2022 and the books of account and other materials are handed over to the A.O on 22/08/2022, in such a situation, the A.O has lost the period from 04/01/2022 to 22/08/2022 and the entire period is not covered in the limitation period and therefore, the question of excluding the period not exceeding 180 days shall not ar....