AI Drafter 
TaxTMI 
TaxTMI 
2026 (5) TMI 1491
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....al) respectively. 2. Since the underlying facts are common in the assessee's as well as Revenue's appeals and pertain to same assessee, they were heard together and are disposed of by this common order for the sake of convenience and brevity. 3. In ITA No. 5795-5898/DEL/2025 (Assessee's Appeal) for A.Y. 2014-15 to A.Y.2017-18 and in ITA No. 8131,8132-8133/DEL/2025 (Department's Appeal) for A.Y. 2013-14; 2014-15 & Α.Υ.2017-18, at the outset the ld counsel of the assessee submitted that there was a search conducted on the assessee on 21/01/2023 i.e., in previous year A.Y. 2022-23 relevant to A.Y. 2023-24. Accordingly, the 10 years which can be taken up for assessment (subject to compliance to provisions of the Act) would be from A.Y. 2014-15 to A.Y. 2023-24. 4. It is therefore, the say of the ld AR that, the appeal of the Revenue for AY 2013-14 in ITA 8131/Del/2025 is barred by limitation as beyond 10 years and therefore would not be sustainable in law. The ld AR relied on the decision Hon'ble Delhi High Court in the case of PCIT v. Ojjus Medicare Pvt. Ltd. 2024 (4)TMI 268 (Del) and Filatex India Ltd. v. DCIT, 2023(9) TMI 1484(Delhi High Court). ....
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.....Y. 2020-21 (Department Appeals), the ld AR stated that the notice issued u/s 148 is barred by limitation being beyond 3 years and the condition of section 149(1)(b) are not met. It is submitted that notice u/s 148 for the year under consideration i.e. A.Y. 2018-19 to A.Y. 2020-21 has been issued on 28.06.2024 i.e. after the expiry of 3 years from the end of the relevant assessment year. Further, the provisions of section 149(1) of the Act are not met as there is no income escaping assessment represented in the form of (i) asset, (ii) expenditure in respect of a transaction or in relation to an event or occasion; or (iii) an entry or entries in the books of account, which has escaped assessment amounts to or is likely to amount to fifty lakh rupees or more. The ld AR stated that the AO has made addition on transactions, which according to AO himself, were in respect of unaccounted sales and disallowance of expenses. Such estimated income does not fall in any of the category specified in clause (b) of section 149(1). The ld AR relied on the decision of the Hon'ble Delhi High Court in the case of L-1 Identity Solutions Operating Company Private Limited Versus ACIT, CC-25-2025 (4)....
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....AR submitted that the addition was made by the AO as unexplained cash credit u/s 68 of the Act. The Id. CIT(A) changed the addition from unexplained cash credit to cessation of liability u/s 41(1). It is submitted that there is no cessation of liability as the liabilities of the sundry creditors is duly recorded in the books of accounts and in audited financial statement. The ld AR submitted that the CIT(A) has erred in confirming addition of Rs. 25,19,876/- on account of alleged cessation of liability as against addition made by AO on account of unexplained cash credit. The assessee is duly acknowledging the liabilities and the assessing officer cannot treat the liabilities as having been ceased. The amount was never claimed as deduction in the earlier year. Further the amount has not been written back in the books of account. The assessee company is still admitting its liability. The ld AR relied on CIT v Sugauli Sugar Works (P.) Ltd [1999] 102 Taxman 713 (SC); CIT v Shri Vardhman Overseas Ltd 2011(12) TMI 77 - Delhi High Court and CIT v Kesaria Tea Co. Ltd.* [2002] 122 Taxman 91 (SC). 13. The ld AR further submitted that the CIT(A) changed the head of addition without issuing....
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....,760 8,47,760 0 2015-16 147 Unaccounted sale 47,52,438 7,60,390 0 Yes 29.03.2023 10% of 2,04,47,009 of Contractor Mohd. Rizwan 20,44,701 20,44,701 0 2016-17 147 Unaccounted sale 93,59,392 14,97,503 0 Yes 29.03.2023 10% of 1,19,45,526 of Contractor Mohd. Rizwan 11,94,553 11,94,553 0 2017-18 147 Unaccounted sale 2,41,37,052 38,61,928 2,02,75,124 Yes Yes 28.06.2024 5% of 53,65,989 2,68,299 2,68,299 0 2018-19 147 Unaccounted sale 4,15,15,934 66,42,549 3,48,73,385 Yes Yes 28.06.2024 5% of 37,14,770 1,85,739 1,85,739 0 6.32% of 1,75,65,310 11,10,128 11,10,128 0 2019-20 147 Unaccounted sale 4,83,504 Yes 28.06.2024 5% of 53,65,989 5,58,003 2020-21 147 Unaccounted sale 3,65,91,389 58,54,622 3,07,36,767 Yes Yes 28.06.2024 5% of 53,65,989 9,57,891 9,57,891 0 2021-22 147 Unaccounted sale 1,24,17,538 19,86,806 0 ....
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....was issued on 29.03.2023, considering the AY 2013-14 as the relevant assessment year for which the AO has considered that income has escaped assessment as per the provision of section 147 of the Act. Now, as per the provision of section 149(1)(b) of the Act, which prescribes the time limit for issuance of notice u/s 148, no notice shall be issued for the relevant assessment year if three years but not more than ten years have elapsed from the end of relevant assessment year. Accordingly, the 10 years, for which the notice u/s 148 dated 29.03.2023 can be issued, would commence from A.Y. 2023-24 upto AY 2014-15. The 10 years covered under section 148, in accordance with First Proviso to section 149, would be as under: - A.Y. Year 2023-24 1 2022-23 2 2021-22 3 2020-21 4 2019-20 5 2018-19 6 2017-18 7 2016-17 8 2015-16 9 2014-15 10 We therefore find that AY 2013-14 is beyond the period of ten years for which notice u/s 148 could have been issued in FY 2022-23. We are therefore of the considered view that the notice u/s 148 of the Act for AY 2013-14 and the consequent reassessment made is barred by limitation, as being ....
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.... three year period from the date of issuance of notice u/s 148 of the Act. In such facts and circumstances, the condition of section 149(1)(b) are to be met which mandates that income escaping assessment be represented in the form of: (i) asset, (ii) expenditure in respect of a transaction or in relation to an event or occasion; or (iii) an entry or entries in the books of account, which has escaped assessment amounts to or is likely to amount to fifty lakh rupees or more. 20. We find that the AO has made the assessments for AY 2018-19 to 2020-21, on account of unaccounted sales and estimation of disallowance of expenses. It remains an uncontroverted fact that there is no income escaping assessment represented in the form of (i) asset, (ii) expenditure in respect of a transaction or in relation to an event or occasion; or (iii) an entry or entries in the books of account, which has escaped assessment amounts to or is likely to amount to fifty lakh rupees or more. We are of the considered view that such income on unaccounted sales and estimated disallowance of expense, does not fall in any of the category specified in clause (b) of section 149(1) and in....