ITAT Quashes Black Money Act Assessment as Time-Barred Under Section 11

Case Details: Smt. Bindu Todi vs. DDIT(Inv) 1 Gurgaon [2026] 187 taxmann.com 344 (Delhi - Trib.)

Judiciary and Counsel Details

• Sudhir Kumar, Judicial Member & Ramit Kochar, Accountant Member
• Gaurav Jain, Adv. for the Appellant.
• Sidharth Bhimsingh Meena, CIT DR for the Respondent.

Facts of the Case

The assessee, an individual and proprietor of a textile concern, was also a director in M/s Woodstock Universal Ltd. (WUL), a BVI company incorporated on 10-04-2007 and struck off on 01-11-2014. One share of WUL was issued to him on 03-08-2007.
Based on information received through FT&TR references made to BVI and Singapore regarding undisclosed credits allegedly received from WUL in 2008 (USD 11,020 and USD 25,000, aggregating to about Rs. 15.66 lakh), the AO issued a notice under section 10(1) of the Black Money Act on 10-04-2018. After collecting evidence from the Singapore authorities, the AO passed an assessment order adding about Rs. 15.66 lakh.
The matter reached the Tribunal.

ITAT Held

The Tribunal held that the assessee challenged the validity of the assessment on the ground of limitation. The Tribunal observed that the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 (TOLA) was enacted to extend time limits under specified Acts. However, Notification No. 113/2021 dated 17-09-2021 extended timelines only for actions under the Income-tax Act, 1961 and the Prohibition of Benami Property Transactions Act, 1988, and not for proceedings under the Black Money Act.
Under the Black Money Act, an assessment must be completed within two years from the end of the financial year in which the notice under section 10(1) is issued, subject to exclusion of the period relating to exchange of information requests.

The Tribunal noted that the FT&TR references had been both made and responded to before the issuance of the notice under section 10(1). Consequently, no further exclusion was available, and the assessment ought to have been completed by 31-03-2021. Since the assessment order was passed on 17-02-2022, it was held time-barred and quashed. Having allowed the appeal on this legal ground, the Tribunal treated the remaining grounds as academic and left them open for adjudication. Thus, the matter was held in the assessee’s favour.