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Judgment
PER MANISH AGARWAL, ACCOUNTANT MEMBER:
These are four appeals filed by the Assessee against the common order of Learned Commissioner of Income Tax (Appeals)-3, Gurgaon [“Ld. CIT(A)”], all dated 02.12.2025 arising out of the assessment orders dated 11.04.2022, 11.04.2022, 11.04.2022 and 09.04.2022 passed u/s 153A of the Income Tax Act, 1961 (“the Act”) for Assessment Years 2017-18 to 2020-21 respectively.
Before us, both the parties have stated that the facts involved in all these appeals are common, therefore, they are taken together and decided by a common order.
First we take up the assessee’s appeal for Assessment Year 2017-18 in ITA No.1100/De/2026.
ITA No.1100/De/2026 [Assessment Year 2017-18]
Brief facts of the case that the assessee was Civil Services aspirant, preparing for UPSC Civil services examination till 2017. Thereafter, he joined coaching Institute ‘Triumph IAS’ by Vikash Ranjan (Sociology) as Centre Manager and also gave part time services as tutor cum mentor for Geography to the students of Shri Vikash Ranjan Sir. A search was conducted on 15.01.2021 on the premises of the assessee u/s 132 of the Act at his residence at F-84, Second Floor, Bali Nagar, Delhi-110015. Thereafter, the jurisdiction over the assessee was transferred to AC/DC, Central Circle-2, Gurgaon in terms of the order passed u/s 127 of the I.T. Act. The notice u/s 153A of the Income Tax Act, 1961 was issued on 14.10.2021 and in response assessee has not filed the return of income nor as any return of income filed u/s 139(1) of the Act for the year under consideration. Thereafter, various notices u/s 142(1) were issued time to time, in response to which assessee filed replies and stated that during the year under appeal, he was student and preparing for UPSC exams thus had no income from any source. It was stated that entire expenses towards his household expenses during preparation for UPSC were borne by his father. The AO observed that funds were credited in the bank account of the assessee and the sources was explained as received from his father however, has not filed any supporting documentary evidence. Therefore, in absence of documentary evidences, vide order dt. 11.04.2022 u/s 153A of the Act, the AO made the addition of Rs. 4,23,291/- by holding the credits in bank account as unexplained credit u/s 68 of the Act and further invoked the provisions of section 115BBE of the Act for charging special rate of tax as prescribed in the said section.
Against the said order, assessee filed an appeal before Ld. CIT(A) who vide order dated 02.12.2025, dismissed the appeal of the assessee.
Aggrieved by the order of Ld. CIT(A), assessee is in appeal before the Tribunal by taking following grounds of appeal mentioned in the appeal memo:-
“1.That the ld. CIT(Appeals) has erred in law and on facts in upholding the assessment order passed u/s 153A r.w.s. 143(3) of the Income-tax Act, 1961, assessing the income at Rs. 4,23,291, which is barred by limitation prescribed u/s 153B and hence void ab initio.
2.That the ld. CIT(A) failed to appreciate that the search was conducted on 15.01.2021 whereas the impugned assessment order was passed on 11.04.2022, i.e. beyond the statutory time limit as per section 153B(1)(a) expiring on 31.03.2022.
3.That the mandatory approval u/s 153D was granted only on 07.04.2022, after expiry of the limitation period, rendering the approval invalid and incapable of conferring jurisdiction on the ld. AO to pass the assessment order.
4.That the ld. CIT(A) erred in law and on facts in sustaining the addition of Rs. 4,23,291 u/s 68 in respect of credits appearing in the savings bank account(senior citizen) of his father, without appreciating that the said account was operated by the father and that the assessee was merely a joint holder.
5.That the addition is arbitrary and inconsistent, inasmuch as similar credits in the same joint bank account were not treated as income of the assessee in assessment order for AY 2015-16 and AY 2016-17, thereby violating the principle of consistency.
6.That the Ld. CIT (Appeals) has erred in law and on facts in not appreciating the documentary evidences placed on record by the assessee while sustaining the addition u/s 68 of the Act.
7.That having regard to the facts and circumstances of the case, Ld. A.O. has erred in law and on facts in charging interest u/s 234A, 234B, 234C and 234D of the Income Tax Act, 1961.
8.The appellant craves leave to add, amend, alter, vary and/OR withdraw OR rescind all OR any of the ground of appeal on OR before the final hearing.”
Before us, in support of the Grounds of appeal No. 1 & 2, ld. AR for the assessee submits that in the case of the assessee, last warrant of authorization was executed on 15.01.2021 and as per the Third proviso to section 153B(1) of the Act, the assessment order u/s 153A of the Act should have been passed on or before the expiry of twelve months from the end of the year in which the last warrant of authorization was executed. Since the assessment order was passed on 11.04.2022 thus, the same is beyond the period of limitation of completion of assessment proceedings commenced u/s 153A of the Act thus the same was barred by limitation. For this reliance is placed on the judgement of the coordinate bench of the Delhi Tribunal in the case of Rolls Royce India (P.) Ltd. reported in [2026] 187 taxmann.com 524 (Del.Trib.) and requested to hold the order so passed as in valid order being barred by limitation.
Per contra, ld. CIT DR has submitted that though the assessment order u/s 153A of the Act must be passed within the limitation as provided u/sec.153B(1) of the Act however, the limitation was extended by the Hon’ble Supreme Court by its order in case of Suo Motu Cognizance for Extension of Limitation reported in 441 ITR 722 (SC) and, therefore, as per the Judgment of Hon’ble Supreme Court the limitation was extended for a further period of 90 days. The learned CIT DR has thus, submitted that in view of Judgment of Hon’ble Supreme Court, the assessment order passed on 11.04.2022 for the assessment year 2017-18 is within the period of limitation. He prayed accordingly.
We have considered the rival submissions as well as the relevant material on record. Before going further we must refer the provisions of section 153B as applicable in the relevant time:
“Section 153B(1) in The Income Tax Act, 1961
(1)Notwithstanding anything contained in section 153, the Assessing Officer shall make an order of assessment or reassessment,—
(a)in respect of each assessment year falling within six assessment years and for the relevant assessment year or years referred to in clause (b) of sub-section (1) of section 153A, within a period of twenty-one months from the end of the financial year in which the last of the authorisations for search under section 132 or for requisition under section 132A was executed;
(b)in respect of the assessment year relevant to the previous year in which search is conducted under section 132 or requisition is made under section 132A, within a period of twenty-one months from the end of the financial year in which the last of the authorisations for search under section 132 or for requisition under section 132A was executed:
Provided that in case of other person referred to in section 153C, the period of limitation for making the assessment or reassessment shall be the period as referred to in clause (a) or clause (b) of this sub-section or nine months from the end of the financial year in which books of account or documents or assets seized or requisitioned are handed over under section 153C to the Assessing Officer having jurisdiction over such other person, whichever is later:
Provided further that in the case where the last of the authorisations for search under section 132 or for requisition under section 132A was executed during the financial year commencing on the 1st day of April, 2018,—
(i)the provisions of clause (a) or clause (b) of this sub-section shall have effect, as if for the words "twenty-one months", the words "eighteen months" had been substituted;
(ii)the period of limitation for making the assessment or reassessment in case of other person referred to in section 153C, shall be the period of eighteen months from the end of the financial year in which the last of the authorisations for search under section 132 or for requisition under section 132A was executed or twelve months from the end of the financial year in which books of account or documents or assets seized or requisitioned are handed over under section 153C to the Assessing Officer having jurisdiction over such other person, whichever is later:
Provided also that in the case where the last of the authorisations for search under section 132 or for requisition under section 132A was executed during the financial year commencing on or after the 1st day of April, 2019,—
(i)the provisions of clause (a) or clause (b) of this sub-section shall have effect, as if for the words "twenty-one months", the words "twelve months" had been substituted;
(ii)the period of limitation for making the assessment or reassessment in case of other person referred to in section 153C, shall be the period of twelve months from the end of the financial year in which the last of the authorisations for search under section 132 or for requisition under section 132A was executed or twelve months from the end of the financial year in which books of account or documents or assets seized or requisitioned are handed over under section 153C to the Assessing Officer having jurisdiction over such other person, whichever is later:
Provided also that in case where the last of the authorisations for search under section 132 or for requisition under section 132A was executed and during the course of the proceedings for the assessment or reassessment of total income, a reference under sub-section (1) of section 92CA is made, the period available for making an order of assessment or reassessment shall be extended by twelve months:
Provided also that in case where during the course of the proceedings for the assessment or reassessment of total income in case of other person referred to in section 153C, a reference under sub-section (1) of section 92CA is made, the period available for making an order of assessment or reassessment in case of such other person shall be extended by twelve months:
[Provided also that in a case where the last of the authorisations for search under section 132 or requisition under section 132A was executed during the financial year commencing on the 1st day of April, 2020 or in case of other person referred to in section 153C, the books of account or document or assets seized or requisitioned were handed over under section 153C to the Assessing Officer having jurisdiction over such other person during the financial year commencing on the 1st day of April, 2020, the assessment in such cases for the assessment year commencing on the 1st day of April, 2021 shall be made on or before the 30th day of September, 2022.]
As observed from the above, the limitation for passing the assessment order for the search conducted on or after 01.04.2019 was within a period of twelve months from the end of the financial year in which the last of the authorizations for search under section 132 or for requisition under section 132A was executed. As observed above, in the instant case, the last warrant of authorization was executed on 15.01.2021 which fall within the Financial year 2020-21 and therefore the time limit for passing the assessment order u/s 153A was upto 31.3.2022. The ld. DR has relied upon the Judgment of Hon’ble Supreme Court in Suo Motu Cognizance for Extension of Limitation (supra), for extending the limitation. However, in our considered view that the limitation extended by the Hon’ble Supreme Court is not applicable for passing the orders by the Tax Authorities beyond the limitation provided under the Act. This view is supported by judgement of the coordinate Delhi bench of tribunal in the case of Rolls Royce India (P.) Ltd. (supra) wherein it is held as under:
3.“We have considered the rival contentions and perused the material on record. We have observed that the Tribunal while passing order dated 04.07.2025 in ITA No. 252/Del/2022 in assessee’s case has considered the limitation for passing assessment order under the Income Tax Act , and came to conclusion that the assessment order dated 18.11.2021 was barred by limitation and, hence, the same was quashed. We are of the view that so far as framing of assessment is concerned, the Department has to frame assessment within time provided under the Income Tax Act, 1961. So far as Extension of limitation by way of exclusion of period from 15.03.2020 to 28.02.2022 owing to Covid-19 granted by Hon’ble Supreme Court is not applicable to the assessment proceedings. The Ld. Counsel for the assessee has rightly relied upon the decisions stated as above in this order, and the Tribunal has rightly quashed the assessment being framed by the AO vide assessment order dated 18.11.2021 beyond prescribed time limit under the 1961 Act. Thus, this M.A. lacks merit and is accordingly, dismissed.
4.In the result, the Miscellaneous Application filed by the Revenue is dismissed.”
The coordinate bench of Hyderabad Tribunal in the case of Repal Green Power Private Limited Vs. DCIT reported in 125& 474/Del/2022 has also expressed the similar view and further referred the circular issued by the CBEC explaining that the extension by hon’ble supreme court is not applicable to any proceedings under GST Act except the appellate proceedings. The relevant observations are reproduced as under:
10.“We have considered the rival submissions as well as the relevant material on record. In normal course the limitation for passing the assessment order was available for the assessment year 2017-2018 up-to 31.12.2019. However, since there was a reference u/sec.92CA of the Act, the time period for completing the assessment gets extended up-to 31.12.2020. Further, due to the Covid-2019 pandemic the Government has notified the TOLA whereby the time period was extended up-to 30.09.2021 vide Notification dated 25.06.2021. Therefore, by considering the extension of time period by Notification of TOLA, the Assessing Officer was to complete the assessment by 30.09.2021, but, in the case in hand, the Assessing Officer has passed the impugned order on 26.02.2022 which is beyond the time limitation provided u/sec.153 as well as extension by Notification of TOLA. The learned Authorised Representative of the Assessee has also relied upon Judgment of Hon’ble Supreme Court in suo motu Cognizance for Extension of Limitation (supra), for extending the limitation. However, in our considered view that the limitation extended by the Hon’ble Supreme Court is not applicable for passing the orders by the Tax Authorities beyond the limitation provided under the Act. The learned Authorised Representative of the Assessee has filed copy of the Circulars dated 157/13/2021 dated 20.07.2021 issued by the Central Board of Indirect Taxes and Customs [in short “CBITC”] whereby the CBITC has clarified this point that the extension of limitation was only with reference to the judicial and quasi-judicial proceedings in the nature of appeals/suits /petitions etc., and has not extended to every action or proceedings under the CGST Act, 2017. For ready reference, we reproduce the relevant part of the Circular dated 20.07.2021 vide Paras-3 to 5 as under :
“3.Accordingly, legal opinion was solicited regarding applicability of the order of the Hon'ble Supreme Court to the limitations of time lines under GST Law. The matter has been examined on the basis of the legal opinion received in the matter. The following is observed as per the legal opinion:-
(i)The extension granted by Hon'ble Supreme Court order applies only to quasi-judicial and judicial matters relating to petitions/ applications/suits/appeals/all other proceedings. All other proceedings should be understood in the nature of the earlier used expressions but can only with reference to judicial and quasijudicial proceedings. Hon’ble Supreme Court has stepped into to grant extensions only with reference to judicial and quasi-judicial proceedings in the nature of appeals/suits/petitions etc. and has not extended it to every action or proceeding under the CGST Act.
(ii)For the purpose of counting the period(s) of limitation for filing of appeals before any appellate authority under the GST Law, the limitation stands extended till further orders as ordered by the Hon'ble Supreme Court in Suo Motu Writ Petition (Civil) 3 of 2020 vide order dated 27th April 2021. Thus, as on date, the Orders of the Hon'ble Supreme Court apply to appeals, reviews, revisions etc., and not to original adjudication.
(iii)Various Orders and extensions passed by the Hon'ble Supreme Court would apply only to acts and actions which are in nature of judicial, including quasi-judicial exercise of power and discretion. Even under this category, Hon'ble Supreme Court Order, applies only to a lis which needs to be pursued within a time frame fixed by the respective statutes.
(iv)Wherever proceedings are pending, judicial or quasi-judicial which requires to be heard and disposed off, cannot come to a standstill by virtue of these extension orders. Those cases need to be adjudicated or disposed off either physically or through the virtual mode based on the prevailing policies and practices besides instructions if any.
(v)The following actions such as scrutiny of returns, issuance of summons, search, enquiry or investigations and even consequential arrest in accordance with GST law would not be covered by the judgment of the Hon'ble Supreme Court.
(vi)As regards issuance of show cause notice, granting time for replies and passing orders, the present Orders of the Hon'ble Supreme Court may not cover them even though they are quasijudicial proceedings as the same has only been made applicable to matters relating to petitions/applications/suits, etc.
4.On the basis of the legal opinion, it is hereby clarified that various actions/compliances under GST can be broadly categorised as follows:-
(a)Proceedings that need to be initiated or compliances that need to be done by the taxpayers :- These actions would continue to be governed only by the statutory mechanism and time limit provided/ extensions granted under the statute itself. Various Orders of the Hon'ble Supreme Court would not apply to the said proceedings/compliances on part of the taxpayers
Quasi-Judicial proceedings by tax authorities:- The tax authorities can continue to hear and dispose off proceedings where they are performing the functions as quasijudicial authority. This may interalia include disposal of application for refund, application for revocation of cancellation of registration, adjudication proceedings of demand notices, etc.
Similarly, appeals which are filed and are pending, can continue to be heard and disposed off and the same will be governed by those extensions of time granted by the statutes or notifications, if any.
(c)Appeals by taxpayers/ tax authorities against anv quasijudicial order:- Wherever any appeal is required to filed before Joint Additional Commissioner (Appeals), Commissioner (Appeals), Appellate Authority for Advance Ruling. Tribunal and various courts against any quasi-judicial order or where a proceeding for revision or rectification of any order is required to be undertaken, the time line for the same would stand extended as per the Hon'ble Supreme Court's order.
5.In other words, the extension of timelines granted by Hon'ble Supreme Court vide its Order dated 27.04.2021 is applicable in respect of any appeal which is required to be filed before Joint Additional Commissioner (Appeals), Commissioner (Appeals), Appellate Authority for Advance Ruling, Tribunal and various courts against any quasi-judicial order or where proceeding for revision or rectification of any order is required to be undertaken, and is not applicable to any other proceedings under GST Laws.”
11.Accordingly, we do not find any merits in the arguments of the learned DR that the limitation for passing the assessment order was extended by the Hon’ble Supreme Court……………….”
Thus by respectfully following the afore judgments of the coordinate benches of the Tribunal, we hold that the judgment of hon’ble Supreme Court in Suo Motu Cognizance for Extension of Limitation (supra) dated 27.04.2021 is applicable Judgment of Hon’ble Supreme Court in Suo Motu Cognizance for Extension of Limitation (supra), the extension of limitation was only with reference to the judicial and quasi-judicial proceedings in the nature of appeals/suits /petitions etc. and has not extended to every action or proceedings under the Income Tax Act. Accordingly, the assessment order passed u/s 153A on 11.4.2022 for the case where the last authorization was executed on 15.1.2021 is barred by limitations and therefore, the same is hereby quashed. The grounds of appeal No. 1& 2 raised by the assessee are allowed.
Since we have allowed the grounds of appeal taken by the assessee and quashed the assessment order, the other Grounds of appeal become academic and thus, left open.
In the result, appeal filed by the Assessee is allowed.
ITA Nos. 1101 to 1103/DEL/2026
[Assessment Years: 2018-19 to 2020-21]
In the above-mentioned paras, we have allowed the appeal of the assessee in ITA No.1100/Del/2026 for Assessment Year 2017-18 and quashed the assessment order passed on 11.04.2022 being barred by limitations. Before us, both the parties have fairly admitted that facts are identical in these assessment years which are applied Mutatis Mutandis. Accordingly, Grounds of appeal No.1& 2 raised by the assessee in all these appeals are allowed and remaining grounds of appeal are left open as they become academic.
In the result, all the three appeals of the assessee are allowed.
In the final result, all four [04] captioned appeals of the assessee in ITA Nos. 1100 to 1103/Del/2026 for Assessment Years 2017-18 to 2020-21 respectively, are allowed.