Delhi ITAT Grants Sweeping Relief to Mirha Exports: Search Reassessments Across Multiple Years Annulled for Want of Jurisdiction

Background and Context

The Delhi Income Tax Appellate Tribunal recently delivered a wide-ranging ruling in a batch of fifteen appeals — ten filed by the assessee and five by the Revenue — arising from post-search assessment proceedings against Mirha Exports Pvt. Ltd. The combined appeals were adjudicated through a single consolidated order given the common underlying facts, common parties, and interrelated legal questions.

The assessments under challenge had been framed by the Assessing Officer, DCIT, Central Circle – 8, New Delhi under Section 147 read with Section 143(3) of the Income Tax Act, 1961, covering Assessment Years 2014-15 through 2023-24 in the assessee's appeals, and AYs 2013-14, 2014-15, 2017-18, 2018-19, and 2020-21 in the Revenue's appeals. The orders of the ld. Commissioner of Income Tax (Appeals)–24, New Delhi dated 11.08.2025 passed under Section 250 of the Act were the subject of challenge.

A search and seizure operation under Section 132 was conducted on the assessee's premises on 21.01.2023, falling in Financial Year 2022-23 relevant to AY 2023-24. This date of search became the foundational reference point for determining limitation periods across all the impugned assessment years.

Summary of Additions Made Across Assessment Years

The AO framed assessments involving additions on account of alleged unaccounted sales, estimated contractor payments, and other disallowances. The chart below captures the essence of the Revenue's action and the CIT(A)'s response:

Legal Arguments Advanced by the Assessee

The assessee's authorized representative put forward distinct jurisdictional and merit-based challenges for each assessment year:

AY 2013-14 — Beyond Statutory Ten-Year Cap

• Since the search took place on 21.01.2023 (relevant to AY 2023-24), the permissible ten-year window for issuing notice under Section 148 stretched back only to AY 2014-15.
• AY 2013-14 therefore fell entirely outside the outer statutory limit and the reopening was urged to be time-barred.
• Reliance was placed on PCIT v. Ojjus Medicare Pvt. Ltd. 2024 (4) TMI 268 (Del) and Filatex India Ltd. v. DCIT, 2023 (9) TMI 1484 (Delhi High Court).

AYs 2014-15 to 2016-17 — Notice u/s 143(2) Issued Beyond Prescribed Time

• The Section 148 notice was issued on 29.03.2023 and the Return of Income was filed on 13.05.2023.
• The AO was accordingly obligated to issue notice under Section 143(2) by 30.06.2024. Instead, the notice was dispatched only on 19.07.2024, making it time-barred.
• The assessee relied on Paramount Biotech Industries Ltd. (2017) 398 ITR 701 (Del) and Hotel Blue Moon (2010) 321 ITR 362 (SC).

AYs 2014-15 to 2017-18 — Absence of "Asset": Extended Limitation Not Triggered

• These years were admittedly beyond six years from the date of issuance of the respective Section 148 notices.
• Under the proviso to Section 149, reopening beyond six years was permissible only if the case could have been reopened under Section 153A. Under Section 153A, the beyond-six-years block is accessible only when escaped income is represented in the form of an "Asset."
• The assessee submitted that no cash or physical asset was unearthed during the search. All additions were premised purely on estimated unaccounted sales and notional expense disallowances — neither of which constitutes an "asset."
• Reliance was placed on Dinesh Jindal v. ACIT, Central Circle – 20 [2024] 469 ITR 32 (Del) and Smart Chip Pvt. Ltd. vs. ACIT, Central Circle-25, New Delhi, 2025 (5) TMI 216 – Delhi High Court.