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2017 (5) TMI 432 - HC - Income TaxValidity of assessment - time barred - pre-condition Clause (iii) of Explanation (i) to Section 153 (1) - Held that - In the present case, the last date on which the Assessee was required to furnish the report was 7th July 2006 in terms of Section 153 (1) of the Act. The time for passing the assessment order expired on 6th September 2006 whereas it was passed only on 14th September 2006. The decision of this Court in CIT v. Bishan Saroop Ram Kishan Agro (P) Limited (2011 (5) TMI 540 - DELHI HIGH COURT ) squarely covers the issue in favour of the Assessee as it took note of the Circular dated 27th March 2009 of the Central Board of Direct Taxes (CBDT) regarding prospective application for amendment to the proviso to Section 142 (2C) of the Act which gave the AO suo motu power to extend time for furnishing the audit report. For all the aforementioned reasons, the Court finds no error having been committed by the CIT (A) or the ITAT in holding that the assessment order in the present is barred by limitation. - Decided in favour of assessee.
Issues involved:
1. Interpretation of Section 153(1) of the Income Tax Act, 1961 regarding the limitation period for assessment. 2. Validity of assessment order for the Assessment Year 2003-04. 3. Extension of time for submission of audit report under Section 142(2C) of the Act. 4. Application of the proviso to Section 142(2C) inserted from 1st April 2008. 5. Exclusion of time period for computing limitation under Section 153(1) for making an assessment order. Analysis: 1. The appeal was filed by the Revenue against the order of the Income Tax Appellate Tribunal (ITAT) regarding the assessment order for the Assessment Year 2003-04. The key question was whether the assessment order was time-barred under Section 153(1) of the Act. The Assessee filed its return on 2nd December 2003, and the assessment order was made on 14th September 2006, which was beyond the limitation period. 2. The Commissioner of Income Tax (Appeals) held that the assessment order was invalid and annulled as it was made after the limitation period expired on 6th September 2006. The Revenue appealed to the ITAT, which dismissed the appeal, upholding that the assessment was indeed barred by limitation under Section 153(1) of the Act. 3. The ITAT analyzed Section 142(2C) of the Act and concluded that the extension granted by the Assessing Officer (AO) for submission of the audit report was not valid as there was no application by the Assessee for an extension after 7th July 2006. The AO extended the submission deadline to 17th July 2006, which was beyond the statutory limit. 4. The Court rejected the Revenue's argument that the period between 7th July 2006 and 17th July 2006 should be excluded for computing the limitation period. The Court emphasized that the language of the statute was clear, and the extension of time could only be granted on application with good reasons. The Court also highlighted the proviso to Section 142(2C) inserted from 1st April 2008, which limited the AO's power to extend the period. 5. The Court referred to relevant case laws and explained that the time taken for obtaining the audit report could not be excluded in this case. The Court upheld the decisions of the CIT (A) and the ITAT, ruling that the assessment order was indeed barred by limitation. The appeal was dismissed in favor of the Assessee with no costs awarded. This detailed analysis of the judgment provides a comprehensive understanding of the issues involved and the Court's reasoning behind the decision.
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