Search Assessment Not Barred by Limitation if Order is Passed within Statutory Period Regardless of Service Date: ITAT [Read Order]
The tribunal ruled that the validity of an assessment depends on the date of order passed by the Assessing Officer, and the subsequent date of service is irrelevant for determining if the order is barred by limitation.
![Search Assessment Not Barred by Limitation if Order is Passed within Statutory Period Regardless of Service Date: ITAT [Read Order]](https://images.taxscan.in/h-upload/2025/12/27/2115207-search-assessment-not-barred-by-limitation-if-order-is-passed-within-statutory-period-regardless-of-service-date-itat-taxscan.webp "Search Assessment Not Barred by Limitation if Order is Passed within Statutory Period Regardless of Service Date: ITAT [Read Order]")
The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) held that search assessment was not barred by limitation if the order of the assessment was passed within the statutory period stated in the Act regardless of the service date to the assessee. Purushttam Lal Soni (assessee) a search and seizure operation conducted under Section 132 and electronic data was seized from...
The Delhi Bench of the Income Tax Appellate Tribunal (ITAT) held that search assessment was not barred by limitation if the order of the assessment was passed within the statutory period stated in the Act regardless of the service date to the assessee.
Purushttam Lal Soni (assessee) a search and seizure operation conducted under Section 132 and electronic data was seized from several computers and hard disks which revealed extensive cash transactions not recorded in the regular books of account.
The AO made additions based on this data: unexplained cash receipts amounted to ₹1,67,95,74,275, unexplained unsecured loans of ₹2,13,40,250 and commission on loans of ₹4,26,805.
Aggrieved by the AO’s addition, the assessee filed an appeal before the Commissioner of Income Tax (Appeals) [CIT(A)]. The CIT(A) upheld the additions. Aggrieved by the CIT(A)’s order, the assessee filed appeals before the ITAT.
The assessee contended that as of December 31, 2019, no valid service of the assessment order or demand notice had been made through the income tax portal, speed post, or personal delivery.
The assessee argued that the orders were only received by the Authorized Representative (AR) on January 13, 2020, following an email request, which was well beyond the expiry of the limitation period.
The two-member bench, comprising Satbeer Singh Godara (Judicial Member) and Manish Agarwal (Accountant Member) examined the provisions of Section 153B of the Income Tax Act, which sets the time limits for the completion of assessments following a search.
The tribunal observed that section 153B mandates that the Assessing Officer (AO) "shall make an order of assessment" within a period of twenty one months from the end of the financial year in which the last search authorization was executed.
The tribunal highlighted that the law requires the order to be made (passed) within the period, but it does not deal with the service of the order for the purpose of limitation. The tribunal found that the AO had passed the assessment orders on December 31, 2019. This date fell strictly within the stipulated time frame allowed under the Act.
The tribunal observed that the assessee's grievance regarding the delayed service of the order was irrelevant to the question of whether the assessment was "time-barred" and held that as long as the record reflects that the order was signed and passed by the AO on or before the deadline, the statutory requirements of Section 153B are satisfied.
The tribunal upheld the validity of the assessment orders and confirmed they were framed within the statutory limitation period. The appeal of the assessee was partly allowed.
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