Expenses not represented by way of Assets – Assessment quashed by Delhi HC as barred by limitation
Delhi HC has quashed the reassessment on the ground of being barred by limitation as expenses was not represented by way of Assets.
Case Details:
Smart chip Private Limited V. ACIT [W.P.C] 3801/2025 dated 23.04.2025 [Delhi High Court]
Let us have a Short Overview of the case:
Since the reassessment notice was issued doubting the genuineness of the expenses claimed by the taxpayer-such reassessment notice issued for AY 2016-17 in pursuance to search operations will be barred by limitation in terms of fourth proviso to Section 153A(1) of the Act-where the AO does not have any material to establish that such expenses had resulted in the acquisition of any asset.
The fourth proviso to Section 153A(1) of the Act prohibits issuance of any notice for assessment or reassessment in respect of a “relevant assessment year” unless the conditions as stipulated in the fourth proviso are satisfied.
The expression “relevant assessment year” is defined under Explanation 1 to sub-section (i) of Section 153A of the Act to mean a year that falls beyond the period of six assessment years preceding the assessment year relevant to the previous year in which search is conducted or requisition is made, but not later than ten assessment years from the end of the assessment year relevant to the previous year in which search is conducted or requisition is made.
The copy of the order is as under:
