2015 (8) TMI 563 - HC - Income Tax

Validity of assessment order under section 143(3) - Tribunal held that the assessment order under section 143(3) received by the respondent-assessee on April 13, 2005, was barred by limitation and as such perverse - Held that - We have before us the affidavit evidence to show that a representative of the assessee, on his own volition and without intimation to the Department, visited the office and found the assessment order ready to be served upon him. We also find from the oral evidence of the Commissioner of Income-tax, Departmental representative that all records were produced and the Department had not made any attempt to despatch the order for service on the assessee. In the facts as above, there is no indication that the Assessing Officer revisited the order after March 31, 2005. The probability of the order being made and ready to be collected by the representative of the assessee as on April 1, 2005, cannot also be ruled out. For the reasons aforesaid, we find the order of the Tribunal requires interference and the same is set aside with regard to the quashing of the assessment as barred by limitation and, consequently, the cross-objection of the assessee before it being allowed. The rest of the questions before the Tribunal must now be adjudicated by it. - Decided in favour of revenue.

Summary

Issues:
Whether the assessment order under section 143(3) of the Income-tax Act, 1961, dated March 31, 2005, received by the respondent-assessee on April 13, 2005, was barred by limitation and considered perverse.

Analysis:
The appeal was filed by the Revenue against the order passed by the Income-tax Appellate Tribunal regarding the assessment year 2002-03. The main issue was whether the assessment order made on March 31, 2005, and received by the assessee on April 13, 2005, was barred by limitation. The Revenue contended that the order was made within the prescribed period under section 153 of the Income-tax Act, 1961. On the other hand, the respondent-assessee argued that the order's issuance was complete only upon despatch, which had not occurred by March 31, 2005. The respondent relied on various judgments to support this argument.

The respondent's counsel argued that until the order was despatched, it was within the Assessing Officer's power to make changes, and only after despatch, the order would be beyond the officer's control. The counsel cited several judgments to emphasize that despatch was crucial for considering an order as issued. However, the court found the present case to be different from the cited judgments. The court noted that there was no attempt by the Department to despatch the order by the last date it could have been made. The court considered the affidavit evidence and oral testimony presented, indicating that the Department had not taken steps to send the order for service.

Based on the evidence and arguments presented, the court concluded that the Tribunal's decision to quash the assessment as barred by limitation was incorrect. The court found no indication that the Assessing Officer revisited the order after March 31, 2005, and noted the possibility that the order was ready for collection by the assessee's representative on April 1, 2005. Consequently, the court set aside the Tribunal's decision on the limitation issue and ruled in favor of the Revenue. The court directed the Tribunal to adjudicate the remaining questions in the case.

In conclusion, the court answered the formulated question in the affirmative, in favor of the Revenue and against the assessee. The appeal was disposed of, with the Tribunal instructed to address the remaining issues in the case.