2008 (2) TMI 33 - HC - Income Tax

Time limit for completion of assessment u/s 143(3) - Although the assessment order passed by the Assessing Officer is dated 26.3.2004, yet it was served on the assessee by affixture only on 1.4.2004 - It was also argued that in case the order was passed on 26.3.2004, why the same was not served by registered post on that date department failed to produce and evidence for dispatching the same on or before 31-3-2004 assessment order was quashed being passed after the statutory time limit.

Summary

Issues:
1. Timeliness of passing the assessment order under the Income Tax Act, 1961.
2. Validity of the service of the assessment order on the assessee.

Analysis:
1. The appeal before the High Court challenged the order of the Income Tax Appellate Tribunal, which had set aside the assessment order dated 26.3.2004 passed by the Assessing Officer. The primary issue was whether the assessment order was passed within the statutory time limit. The Tribunal found that the Revenue failed to produce evidence that the order was passed on or before 31.3.2004. Despite multiple opportunities, the department did not provide the assessment record. The Tribunal concluded that the order was time-barred and quashed it, as it was passed after the statutory time limit.

2. The assessee argued that the assessment order was served by affixture on 1.4.2004, which was beyond the statutory time limit. The Tribunal noted discrepancies in the service procedure, such as the absence of efforts to serve the notice through normal means before resorting to affixture. Additionally, the service by affixture was conducted in the presence of only the Inspector of the department, lacking an independent witness. The Tribunal emphasized the non-production of the assessment record and the failure to show dispatch by registered post on 31.3.2004. Ultimately, the High Court upheld the Tribunal's decision, stating that no evidence proved the order was passed within the statutory time limit.

In conclusion, the High Court dismissed the appeal, affirming the Tribunal's decision that the assessment order was time-barred and quashed. The Court found no substantial question of law, as the evidence on record supported the conclusion that the order was passed after the statutory time limit.