ITAT Dismisses Revenue's Appeal, Sides With Assessee in Time-Barred 153C Assessment Case [Read Order]
The tribunal noted the AO had referred a property valuation matter to the DVO on December 23, 2016, claiming this extended the assessment deadline beyond the original December 31, 2016 cutoff.
![ITAT Dismisses Revenues Appeal, Sides With Assessee in Time-Barred 153C Assessment Case [Read Order]](https://www.taxscan.in/wp-content/uploads/2025/05/ITAT-Dismisses-Revenues-Appeal-Assessee-153C-Assessment-Case-TAXSCAN.jpg "ITAT Dismisses Revenues Appeal, Sides With Assessee in Time-Barred 153C Assessment Case [Read Order]")
The Income Tax Appellate Tribunal (ITAT) Delhi bench has quashed a Rs.13.12 crore tax assessment against Delhi-based Dharampal Premchand Ltd, ruling the order was time-barred. The tribunal dismissed the Revenue Department's appeal while partly allowing the assessee's cross-objection regarding the validity of the assessment under Section 153C of the Income Tax Act. The case involved...
The Income Tax Appellate Tribunal (ITAT) Delhi bench has quashed a Rs.13.12 crore tax assessment against Delhi-based Dharampal Premchand Ltd, ruling the order was time-barred. The tribunal dismissed the Revenue Department's appeal while partly allowing the assessee's cross-objection regarding the validity of the assessment under Section 153C of the Income Tax Act.
The case involved Dharampal Premchand Ltd (formerly Affe Technologies Pvt Ltd), a Chandni Chowk-based software publishing firm. The dispute originated from a search operation conducted on November 27, 2014, targeting the Maconns, Meenu and Yadav Singh Group in Noida. The Assessing Officer (AO) had issued a notice under Section 153C on June 18, 2015, later passing an assessment order on August 28, 2017 that added Rs.13 crore as unexplained cash credit under Section 68, along with other disallowances totaling Rs.13.12 crore.
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The tribunal noted the AO had referred a property valuation matter to the DVO on December 23, 2016, claiming this extended the assessment deadline beyond the original December 31, 2016 cutoff. However, no valuation report was ever received, making the August 2017 order invalid as it breached statutory time limits. The bench referenced the Supreme Court's B.C. Srinivasa Setty case (1981) while emphasizing that without a DVO report, no time extension could be granted.
Judicial Member Challa Nagendra Prasad and Accountant Member Brajesh Kumar Singh observed: "The assessment order passed by the AO u/s 153C r.w.s. 143(3) of the Act dated 28.08.2017 is barred by limitation and the same is quashed." They upheld the CIT(A)'s finding that the additions weren't based on incriminating material from the search, a prerequisite for Section 153C cases.
The tribunal's decision renders academic the Revenue's arguments about accommodation entries and share transfers, focusing solely on the limitation issue. The order concludes that since the assessment itself was invalid, other grounds raised by both parties required no examination.
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This ruling reinforces the strict adherence to statutory timelines in tax assessments, particularly in search-related cases where procedural compliance is critical. The Delhi bench's decision marks another instance where courts have intervened to check administrative overreach in tax matters.
To Read the full text of the Order CLICK HERE
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