STERLING AGRO INDUSTRIES LIMITED,DELHI V. DCIT CC- 20, DELHI

CO 284/DEL/2025

AI Insights

The case involves the Deputy Commissioner of Income Tax, Central Circle -20, Delhi, as the appellant, and Sterling Agro Industries Limited, as the respondent. The core issue was the validity of the reassessment notice issued under section 148 of the Income Tax Act, 1961, for the assessment year 2015-16. The Revenue challenged the order of the Commissioner of Income-tax (Appeals)-27, New Delhi, which had partly allowed the assessee's appeal against the addition of bogus purchases. The Tribunal found that the notice was issued beyond the permissible time limit as per the Supreme Court's decision in Union of India vs. Rajeev Bansal, leading to the quashing of the assessment proceedings.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 839256 (ITAT-DELHI)
• Duration Of Justice: 2 month(s) 3 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 18-02-2026
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2015-2016
• Appeal Filed On: 15-12-2025
• Other Referred Cases: Union of India vs. Rajeev Bansal, IBIBO Group Private Limited vs. ACIT, Union of India vs. Ashish Agarwal
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: POOJA SWAROOP
• Assessee Lawyers: SANJAY KUMAR
• Keywords: Bogus purchase; Period of limitation; Bogus
• Section: 147; 148

Judgement Text

" 1 THE INCOME TAX APPELLATE TRIBUNAL, DELHI BENCH “B” NEWDELHI BEFORE SHRI SUDHIR KUMAR, JUDICIAL MEMBER AND SHRI MANISH AGARWAL, ACCOUNTANT MEMBER ITA No.4726/Del/2025 (AY 2015-16) Deputy Commissioner of Income Tax Central Circle -20 Delhi-110055 Vs. Sterling Agro Industries Limited 2nd floor, A-10 Sanskrit Bhawan Qutub Institutional Area Aruna Asaf Ali Marg New Delhi-110067 Pan No. AAACS2278R (Appellant) (Respondent) C.O. No. 284/Del/2025 Assessment Year: 2015-16 Sterling Agro Industries Limited 2nd floor, A-10 Sanskrit Bhawan Qutub Institutional Area Aruna Asaf Ali Marg New Delhi- 110067 Vs. Deputy Commissioner of Income Tax Central Circle -20 Delhi- 110055 Pan No. AAACS2278R (Appellant) (Respondent) Revenue by Ms. Pooja Swaroop, CIT (DR) Assessee by Shri Sanjay Kumar, CA Shri Udayan Garg,CA Shri Akarsh Garg, adv, Ms. Uditie Aggarwal, Adv Printed from counselvise.com 2 ORDER PER SUDHIR KUMAR JM: The Revenue preferred the appeal, challenging the order dated 29-04-2025 passed by The Commissioner of Income –tax (Appeals)-27 New Delhi (in short Ld. CIT(A)) passed by Assessing Officer dated 19- 05-2023 for A.Y. 2015-16 under the section 147 r.w.sc144B of the Income Tax Act, 1961(In short “the Act”). The assessee also filed the cross objection in the appeal. 2. The revenue raised the following grounds in appeal: 1.Whether the Ld.CIT(A) has erred in the facts and in law in restricting the addition of bogus purchases of Rs.3,15,05,731/-of rice husk to Rs.6,777,373/- by applying NP Rate of 2.5%. 2. Whether the Ld.CIT(A) has erred in the facts and in law by ignoring that there were no corresponding sales to such purchases of rice husk therefore the issue of applying NP rate does not arises. Date of hearing 10.02.2026 Date of pronouncement 18.02.2026 Printed from counselvise.com 3 3. Whether the Ld.CIT(A) has erred in not appreciating the fact the purchases of rice husk were miniscule of the total purchases therefore they would have been used to suppress profit. 4. Whether the Ld.CIT(A) has erred in not appreciating that there is specific evidence that the alleged seller was an employee of the assessee company who did not show commensurate profit in the transaction and had admitted that he did not make any such sale to the assessee. 5. That the appellant craves to add alter or amend any/all of the grounds of appeal before or during the course of the hearing of the appeal. 3. The brief facts of the case are that the assessee filed his return of income for A.Y. 2015-16 on 03-11-2015 by declaring total income of Rs.22,91,10,290/-. As per the information available with the office that assessee company has booked bogus expenditure with the bank account of IDBI Bank Account no.0056102000050810in the name of Shri Naresh Singh during the financial year 2014-15. The, proceedings u/s 147 of the Act was initiated in the case of the assessee for A.Y. 2015- 16 and notice u/s 148 of the Act dated 27-07-2022 was served on the assessee. The Assessing Officer completed the assessment after making the addition of Rs.3,15,05,731/. Printed from counselvise.com 4 4. Being aggrieved with the order of the AO, the assessee filed the appeal before the Ld. CIT(A), who vide his order dated 29-04-2025 partly allowed the appeal of the assessee. 5. Aggrieved the order of the Ld. CIT(A), the Revenue is in appeal before the tribunal. The assessee also filed the cross objection in the appeal. 6. Cross Objection No. 284/Del/2025 In the cross objection has filed on the following grounds: (i) Because on facts and in law, the CIT(A) erred in not holding that the order passed under section 148A(d) and notice issued under section 148 both dt. 27-07-2022 were invalid and bad in law being time barred as per the provisions of section 149 of the Act as laid down by the Hon’ble Supreme Court in the case of Union of India vs. Rajeev Bansal [2024] 469 ITR 46 SC. Accordingly the impugned assessment order is liable to be quashed. (ii) Because the order appealed against (filed by revenue) to the extent mentioned above is contrary to law and facts of the case. 7. The assessee has moved an application to condone the delay in filing the cross objection. The assessee stated that the assessee has received the papers of the appeal on 14-08-2025 then in the month of, November the assessee company approached the CA to file the cross objections before the tribunal The assessee company has shown the Printed from counselvise.com 5 sufficient cause not to file the cross objection within time. Therefore, the delay is condoned and cross objection is admitted. 8. The ld. CIT(A) has observed in his order as under: 5.1 During the appellant proceedings it was contented by the appellant that notice was issued u/s 148 of the Act on 15-04 is barred by limitation which is squarely covered with the decision of Hon’ble Supreme Court in the case of Union of India and others vs. Rajeev Bansal. 5.2 In this ground I find in the contentions of the Appellant that notice issued u/s 148 of the Act is barred by limitation as per the decision laid down in the case of Sh. Rajeev Bansal by Hon’ble Supreme Court of India and the Hon’ble Jurisdictional High Court of Delhi in the case of IBIBO Group Private Limited vs. ACIT dated 13-12-2024 has followed the principals laid down by the Apex Court in case of Sh. Rajeev Bansal. Since the appeal of the appellant is being adjudicated on merit of the case in the ground no. 2 and 6 these grounds has become academic in nature. 9. Firstly we take the ground of the cross objection which is legal. The notice u/s 148 of the Act was issued on 15-04-2021 for the A.Y.2015- 16. In consequence to the directions issued by the Hon’ble Supreme court in the case of Union of India vs. Ashish Agarwal dated 04-05- 2022 the Assessing Officer issued the fresh notice u/s 148 of the Act on 27-07-2022. He further submitted that as per the section 149 of the Act the notice u/s 148 of the Act could be issued within a period of six Printed from counselvise.com 6 years from the end of the relevant assessment year i.e 2015-2016. The limitation of issuing notice expired on 31-03-2022. In the present case the notice u/s 148 of the Act was issued on 27-07-2022 which is beyond time. Reliance has placed on the decisions of Union of India & Ors. Vs. Rajeev Bansal 2024 (10) TMI 264 Supreme Court (LB) and relevant parts whereof are reproduced as under: “e” The Finance Act 2021 (2021) 432 ITR (Stat) 52) substituted the old regime for reassessment with a new regime. The first proviso to section 149 does not expressly bar the application of Taxation and other Laws ( Relaxation and Amendment of Certain Provision) Act,2020 Section 3 of the Taxation and other Laws ( Relaxation and Amendment of Certain Provision) Act, 2020 applies to the entire Income Tax Act, including section 149 and 151 of the new regime. Once the first proviso to section 149(1) (b) is read with Taxation and other Laws ( Relaxation and Amendment of Certain Provision) Act, 2020 then all the notices issued between April1,2021 and June 30,2021 pertaining to the assessment years 2013-14, 2014-15, 2015-16, 2016-17 and 2017- 18 will be within the period of limitation as explained in the tabulation below: Assessment year Within 3 years Expiry of Limitation read with TOLA for (2) (3) Within six years(4) Expiry of Limitation read with TOLA for (4)(5) Printed from counselvise.com 7 2013-14 31-03-2017 TOLA not applicable 31-03-2020 30-06-2021 2014-15 31-03-2018 TOLA not applicable 31-03-2021 30-06-2021 2015-16 31-03-2019 TOLA not applicable 31-03-2022 TOLA not applicable 2016-17 31-03-2020 30-06-2021 31-03-2023 TOLA not applicable 2017-18 31-03-2021 30-06-2021 31-03-2024 TOLA not applicable (f) The revenue concedes that for the assessment year 2015-16 all notices issued on or after April 1, 2021 will have to be dropped as they will not fall for completion during the period prescribed under the Taxation and other Laws (Relaxation and amendment of Certain Provisions) Act, 2020” 10. In the above sited case, the revenue concedes that for the assessment year 2015-16, all notices issued on or after 1st April 2021 will have to be dropped as they will not fall for completion during the period prescribed under TOLA. 11. The Ld. DR has submitted that assessee, company has never raised this issue that the assessment, is time barred before the Ld.AO during the re-assessment proceedings. The notice was issued within time in the pursuant to the judgment of the Hon’ble Supreme Court in Printed from counselvise.com 8 Union of India v. Ashish Agarwal after complying the all conditions. She relied the order of the Assessing Officer. 12. We have heard the revival contention of the parties and gone through the material available on record. In view of the observation of the Hon’ble Supreme Court in the case of Rajeev Bansal (Supra) insofar as assessment year 2015-16 is concerned, the Hon’ble Supreme Court has noticed that Revenue concedes that in respect of the A.Y.205-16 , all assessment notices issued on or after 01-04-2021 will have to be dropped. We thus find that the notice in the present case issued on 27-07-2022 was invalid, since, the notice is u/s 148 of the Act is issued on 27-07-2022 is invalid, consequentially assessment proceedings would be liable to be quashed as void ab initio. Respectfully following the decision of the Hon’ble Supreme Court, we allowed the legal issue raised by the assessee and quashed the assessment proceedings. Since we have quashed the impugned assessment order as aforesaid by allowing the cross objection the appeal filed by the Revenue has become infructuous. Resultantly the Revenue’s appeal is dismissed. Printed from counselvise.com 9 13. Since we have decided the legal ground in favour of the assessee, in the cross objection, the other grounds have become academic and keep them open for adjudication. 14. In the result the appeal of the Revenue is dismissed and the cross objection of the Assessee is allowed. Order pronounced in the open court on 18/02/2026. Sd/- Sd/- (MANISH AGARWAL) (SUDHIR KUMAR) ACCOUNTANT MEMBER JUDICIALMEMBER Dated: 18/02/2026 “SR BHATNAGGR” Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR Asst. Registrar, ITAT, Delhi Printed from counselvise.com "