2022 (1) TMI 597 - AT - Income Tax

Validity of assessment passed u/s. 143(3) r.w.s. 144A r.w.s. 147- Period of limitation - HELD THAT - On perusal of sub-section (2) of section 153 of the Act explains that no order of assessment, reassessment or recomputation shall be made u/s. 147 of the Act after the expiry of one year from the end of the financial year in which the notice u/s. 148 of the Act was served. In the present case, we note that the notice u/s. 148 of the Act was served on the assessee on 30- 03-2014 i.e. F.Y. 2013-14, thus, the time limit for reassessment is available with the AO is upto 31-03-2015. The AO passed pre-dated order on 30-03-2015 incorporating the directions dated 31-03-2015 issued by the Addl. CIT, directions of which are subsequent to the assessment order. DR submits that is a mistake the date was mentioned as 30-03- 2015 in place of 31-03-2015 and argued that the date of order may be treated as passed on 31-03-2015 as it is a rectifiable mistake. We are not convinced with the argument. In the ordinary circumstances, it is not possible that the direction of the Addl. CIT u/s. 144A, having been signed by him on 31-03-2015 which the AO on the same date; he dictated the order on same date after considering everything; it got typed on that date; and got signed by the AO also on 31-03-2015. This shows that the order was passed by the AO somewhere in April, 2015 and signed by pre-dating it as 30-03-2015. The order was actually passed after 31-03-2015, it was barred by limitation. We therefore, set aside the assessment order as time barred and the consequential first appellate proceedings. - Decided in favour of assessee.

Summary

Issues Involved:
1. Validity of the assessment order passed under sections 143(3) read with 144A and 147 of the Income Tax Act.
2. Validity of the reassessment proceedings initiated under section 147 of the Income Tax Act.
3. Consideration of alternative claim under section 10A of the Income Tax Act.

Detailed Analysis:

1. Validity of the Assessment Order:
The assessee challenged the assessment order passed under sections 143(3) read with 144A and 147 of the Income Tax Act, arguing that it was invalid under the law. The assessee contended that the original assessment proceedings had already scrutinized the claim under section 10B of the Act, and the reassessment was merely a change of opinion based on a subsequent judicial decision (Regency Creation case). The Tribunal found that the reassessment order dated 30-03-2015, which incorporated directions dated 31-03-2015 from the Additional Commissioner, was pre-dated and thus time-barred. Consequently, the assessment order was set aside as it was passed beyond the permissible time limit.

2. Validity of the Reassessment Proceedings:
The Tribunal examined whether the reassessment proceedings initiated under section 147 were valid. The assessee argued that the reassessment was based on a change of opinion and lacked fresh material. The Revenue contended that the reassessment was justified based on new information from the Regency Creation case, which constituted valid grounds for reopening the assessment. The Tribunal, however, held that the reassessment order was invalid due to the pre-dated nature of the order, rendering the proceedings time-barred.

3. Alternative Claim under Section 10A:
The Revenue's appeal challenged the CIT(A)'s direction to allow the assessee's alternative claim for deduction under section 10A of the Act. Since the Tribunal quashed the assessment order as time-barred, the issues raised in the Revenue's appeal became infructuous and were dismissed.

Conclusion:
The Tribunal allowed the assessee's appeal, quashing the reassessment order as time-barred, and dismissed the Revenue's appeal as infructuous. The order was pronounced in the open court on 13th January 2022.