2010 (6) TMI 653 - AT - Income Tax

Summary

Issues involved: Assessment year 1998-99 - Addition under section 68 - Validity of reassessment proceedings - Time limitation for assessment.

Validity of reassessment proceedings:
The appeal filed by the Revenue challenged the order of the learned CIT(A) relating to the assessment year 1998-99. The Revenue contended that the reassessment proceedings were not time-barred, despite the CIT(A) holding otherwise. The proceedings were initiated under section 147 based on information from a search and seizure operation. The Assessing Officer issued a notice under section 148 to the assessee, who challenged the proceedings by filing a writ petition before the High Court. The High Court passed interim orders restraining the Assessing Officer from passing the final assessment order. The interim relief was extended until a certain date. However, after the expiry of the last extension, no further relief was granted. The assessee objected to the proceedings on the grounds of limitation, but the AO proceeded and completed the assessment. The CIT(A) held that the assessment was indeed barred by limitation, as the time limit for completion of assessment had expired before the assessment order was passed. The Tribunal agreed with the CIT(A) and confirmed that the assessment was invalid due to being time-barred.

Conclusion:
The Tribunal dismissed the appeal, upholding the decision that the assessment for the year 1998-99 was invalid due to being barred by limitation. As a result, the Tribunal did not find it necessary to decide on the addition made under section 68.