2022 (3) TMI 537 - HC - Income Tax

Assessment u/s. 153C - time-limit for passing assessment - period of limitation - Scope of amendment made in section 153B of the Income-tax Act 1961 by Finance Act 2016 w.e.f. 01.06.2016 - HELD THAT - The case of the assessee thus was covered under clause (ii) of further proviso to Section 153B(1)(b). The Commissioner therefore correctly examined the factual position in the background of such legal proviso and noted that the documents relating to the assessee were sent to the assessing officer and were received by him on 30.09.2014. As per the second proviso the time-limit for passing assessment would be nine months from the end of financial year of 2014-15 i.e. 31.12.2015 or twenty-one months from the end of financial year in which last of the authorisation and search were made whichever is later. In this case these two relevant dates were 31.12.2015 and 31.12.2014 respectively. The assessing officer had to pass the order of assessment latest by 31.02.2015. He completed the assessment on 31.03.2016 which was clearly time-barred. No question of law arises.

Summary

Issues:
1. Interpretation of the time-limit provision under Section 153B of the Income Tax Act, 1961.
2. Entertaining the ground of assessment order being time-barred at the appellate stage.

Analysis:
1. Interpretation of Section 153B: The case revolved around the limitation for completing assessment in the case of a person other than the searched person. The Commissioner (Appeals) referred to Section 153B of the Income Tax Act, 1961 to determine if the assessment order was passed within the prescribed time limit. Section 153B lays down the period of limitation for assessment under Section 153A. The Commissioner correctly applied the legal provisions and noted that the assessing officer had to pass the assessment order within nine months from the end of the financial year 2014-15 or twenty-one months from the end of the financial year in which the last authorization for search was executed. The assessment completed on 31.03.2016 exceeded the time limit of 31.12.2015, making it time-barred. The Tribunal upheld this interpretation, and the High Court affirmed this decision, stating that no question of law arose.

2. Entertaining Time-Barred Ground at Appellate Stage: The appellant contended that the Commissioner erred in considering the time-barred issue at the appellate stage when it was not raised before the assessing officer. However, the High Court rejected this argument, emphasizing that the facts regarding the limitation period were on record, allowing the Commissioner to address the issue at the appellate stage. Since it was a question of law, the Commissioner was within the scope of authority to entertain it during the appeal process. The High Court upheld the Commissioner's decision to consider the time-barred aspect at the appellate stage.

In conclusion, the High Court dismissed the appeal filed by the Revenue challenging the order of the Commissioner (Appeals) and upheld the Tribunal's decision. The judgment clarified the correct interpretation of the time-limit provision under Section 153B of the Income Tax Act, 1961 and affirmed the Commissioner's authority to address time-barred issues at the appellate stage based on existing legal provisions and factual circumstances.