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2021 (9) TMI 178 - AT - Income TaxValidity of order passed u/s.143(3) read with section 144C - 'orders passed beyond the period of limitation - orders barred by limitation in terms of Section 153 - statutory time limits for completion of assessments, re-assessments re-computations by the Assessing Officer - HELD THAT - As safely inferred that the office of the CIT had received the order of High Court on or before the date of notice i.e. 06.10.2017. Accordingly, the period of twelve months for completion of assessment began from the end of the month of October 2017 which ended on 31.10.2018. It is noted that the impugned order was passed on 28.12.2018 which was well beyond the date on which the proceedings got time barred - no infirmity in the order of Ld. CIT(A) holding that the AO did not had the jurisdiction to frame assessment after the limitation period has set in and therefore the assessment order passed by AO on 28.12.2018 was barred by limitation and therefore it is null in the eyes of law. DR s contention that section 292BB of the Act, comes to the rescue of the AO in such events is concerned, we note that the provisions of Section 292BB only cures any defect in the service of any notice issued under the provision of this Act and does not deal with orders passed beyond the period of limitation prescribed under the Act. In the present case the assessee has objected to the validity of the order impugned on the premise that it was barred by limitation in terms of Section 153 of the Act. The facts of the case are thus altogether different and the aforesaid provision relied upon by the Ld. DR has no relevance whatsoever. We thus uphold the order of the Ld. CIT(A) on the legal issue and confirm the action of the Ld CIT(A) holding that the AO did not had the jurisdiction to frame assessment after the limitation period has set in and therefore the assessment order passed by AO on 28.12.2018 was barred by limitation and therefore it is null in the eyes of law. and accordingly dismiss the appeal of the Revenue. Revision u/s 263 - Pr. CIT has interdicted with the assessment order passed by the AO dated 28.12.2018 u/s. 143(3) read with section 144C of the Act, which has been held to be non-est in the eyes of law by the Ld. CIT(A), which decision has now been upheld by us (supra). Therefore, the action of the Ld. Pr. CIT is unsustainable since the assessment order dated 28.12.2018 itself is bad in law. Therefore, the Ld. Pr. CIT has interdicted a non-est order of AO dated 28.12.2018. This issue is squarely covered by the legal maxim subleto fundamento credit opus meaning thereby in a case where foundation is removed the super structure falls.
Issues Involved:
1. Validity of the assessment order dated 28.12.2018 passed by the AO under section 143(3) read with section 144C of the Income-tax Act, 1961. 2. Time-barred nature of the assessment order under section 153 of the Act. 3. The applicability of section 292BB of the Act. 4. The validity of the order passed by the Pr. CIT under section 263 of the Act. Detailed Analysis: 1. Validity of the Assessment Order: The Revenue appealed against the Ld. CIT(A)'s decision which upheld the assessee's claim that the AO's assessment order dated 28.12.2018 was non-est in the eyes of law as it was passed beyond the statutory time limit prescribed under section 153 of the Act. The assessee had filed a Cross Objection challenging the merits of the addition made by the AO. 2. Time-barred Nature of the Assessment Order: The assessee argued that the AO's assessment order dated 28.12.2018 was barred by limitation as per section 153 of the Act. The Hon'ble Calcutta High Court had set aside the initial transfer pricing order and directed the AO to proceed afresh. The AO issued a fresh notice on 06.10.2017 and passed the final assessment order on 28.12.2018. The Ld. CIT(A) held that the assessment order was time-barred as it was passed beyond the twelve-month period from the end of the month in which the High Court's order was received (i.e., 31.10.2018). The Tribunal upheld this decision, confirming that the AO lacked jurisdiction to pass the assessment order after the limitation period had expired. 3. Applicability of Section 292BB: The Ld. DR argued that section 292BB of the Act could cure any defect in the service of notice. However, the Tribunal clarified that section 292BB only applies to defects in the service of notice and not to orders passed beyond the period of limitation. Since the assessee challenged the validity of the order on the grounds of being time-barred, section 292BB was deemed irrelevant in this context. 4. Validity of the Order Passed by the Pr. CIT under Section 263: The assessee also appealed against the Pr. CIT's order under section 263, which sought to revise the AO's assessment order dated 28.12.2018. Since the Tribunal upheld that the assessment order dated 28.12.2018 was non-est in the eyes of law, the Pr. CIT's action of revising a non-est order was deemed unsustainable. The Tribunal quashed the Pr. CIT's order dated 23.03.2021, citing the legal maxim "subleto fundamento credit opus," meaning if the foundation is removed, the superstructure falls. Conclusion: The Tribunal dismissed both the Revenue's appeal and the Cross Objection filed by the assessee against the Ld. CIT(A)'s order, upholding that the AO's assessment order was time-barred and invalid. Consequently, the Tribunal allowed the assessee's appeal against the Pr. CIT's order under section 263, quashing it as it sought to revise a non-est assessment order.
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