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Issues:
1. Interpretation of statutory language under section 153 for assessment order limitation 2. Interpretation of the agreement regarding the assessee's role as a selling agent 3. Legality of concluding income not exigible to tax due to diversion by overriding title Analysis: Issue 1 - Interpretation of Statutory Language for Assessment Order Limitation: The case involved a dispute regarding the assessment order's validity and limitation period under section 153 of the Income-tax Act, 1961. The Tribunal had to determine if the assessment order was legally justified and not barred by limitation. The Commissioner of Income-tax argued that fresh assessment orders could be passed within two years from the end of the financial year of the set-aside order as per section 153(2A). However, the respondent-assessee contended that the assessment order should have been passed by a specific date, which had passed, making the current order of assessment time-barred. The High Court analyzed the provisions of section 153 and concluded that the order of assessment was indeed barred by limitation. The Court emphasized that section 153(2A) did not provide for an extension of the limitation period based on the filing of a revised return, unlike section 153(1)(c), which deals with the time limit for filing revised returns. Therefore, the Court ruled in favor of the respondent-assessee on this issue. Issue 2 - Interpretation of the Agreement Regarding the Assessee's Role as a Selling Agent: The case also involved interpreting an agreement between the Government and the assessee regarding the sale of kendu leaves. The dispute arose from the additional amount earned by the assessee, which the Assessing Officer deemed assessable income. The assessee argued that it was merely an agent of the Government, and the amount belonged to the Government from the time of receipt. The High Court did not delve into this issue extensively due to the favorable decision on the first issue regarding limitation. As a result, questions related to the interpretation of the agreement and the assessee's role as a selling agent became academic and did not require further analysis. Issue 3 - Legality of Concluding Income Not Exigible to Tax Due to Diversion by Overriding Title: The final issue revolved around whether the income accrued to the assessee was exigible to tax or whether there was a diversion of income by an overriding title. However, this issue also became moot following the High Court's decision on the first issue regarding the assessment order's limitation. Since the assessment order was deemed invalid due to being time-barred, questions regarding the taxation of the income and diversion by overriding title were not addressed by the Court. In conclusion, the High Court ruled in favor of the respondent-assessee on the first issue, finding the assessment order to be barred by limitation under section 153(2A) of the Income-tax Act. Consequently, the other issues raised in the case became irrelevant, and the reference was answered accordingly by the Court.
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