2023 (2) TMI 533 - HC - Income Tax

Block assessment u/s 158BC - Period of limitation after remanding back the order to AO - as per Section 153(3) of the Act the time limit for completion of such assessment proceedings viz. nine months had elapsed - Revenue did not receive the order - petition for seeking refund of the tax paid and return of the jewellery seized - HELD THAT - It is not in dispute that the DCIT Central Circle 2(2) Pune received the letter from the Petitioner as more particularly stated in paragraph 4.4 of the reply and that a letter was sent on 9th February 2022 to the ITAT requesting for a copy of the ITAT order dated 18th February 2010. We are unable to agree with the respondent s Counsel s contention that they have not received the order dated 18th February 2010. Section 254 (3) itself provides for ITAT to send a copy of the order to both the assessee and to the Commissioner; therefore, the onus would lie on the respondent to prove that they had not received the said order. If we had to accept the contention of the Respondent it would have led to extending the time for compliance with the order dated 18th February 2010 for almost 12 years at least in this case. Further, it would lead to shifting the onus on the assessee to oversee that the Principal Commissioner or Commissioner, as the case may be, receives the copy of the order. We don t agree as it does not appear to be the intention of the legislature. We are unable to accede to the contention of the respondent to construe the words is received in section 153(3) to mean till its received and thereby extend the limitation in perpetuity. It has to be a reasonable period of time especially when the respondents are a party to the proceeding. Respondents who were party to the proceedings could have requested for a copy of the order from the ITAT at least a month after the order was passed on 18th February 2010. One would have at least expected that after receiving the letter from the Petitioner on 6th March 2018 the respondent could have requested for a copy from the ITAT, as they eventually did on 9th February 2022 or could have requested the assessee to forward a copy of the said order pursuant to the receipt of the letter dated 6th March 2018. Having failed to take steps to comply with the order and even within 9 months after receipt of the letter addressed by the Petitioner we direct the respondents to issue a refund plus additional interest (under section 244A of the Act) till date of payment to the Petitioner and to release the jewellery seized within two weeks from the date of this order.

Summary

Issues Involved:
Challenge to inaction by respondents in complying with ITAT order for assessment completion and refund issuance.

Detailed Analysis:

1. Compliance with ITAT Order:
The petitioner, as the legal heir of Late Mr. Lakhpatrai Agarwal, filed a petition challenging the respondents' inaction in complying with the ITAT's direction and order dated 18th February, 2010. The issue arose from a survey and search conducted in 2002, resulting in the seizure of jewellery and admission of undisclosed income. The subsequent assessment order by the AO was challenged through appeals, leading to the ITAT partially allowing the appeal due to violations of natural justice. The petitioner contended that the AO's failure to complete the assessment within the stipulated time as per Section 153(3) of the Income Tax Act, 1961, was time-barred.

2. Limitation Period for Fresh Assessment:
The petitioner relied on legal precedents to support the argument that the AO's action, seeking to give effect to the ITAT order beyond the prescribed time limit, was barred by limitation. The respondent, on the other hand, argued that the limitation period under Section 153(3) had not commenced as the order had not been 'received' by the concerned authority. The respondent emphasized the importance of 'receipt of the order' for the limitation period to begin.

3. Compliance and Refund Obligation:
The court examined the steps taken by the respondents in response to the ITAT order and the petitioner's communications regarding refund and jewellery return. The court noted that the respondent's contention of not receiving the ITAT order was not tenable, especially given the statutory requirement for the ITAT to send copies to both the assessee and the Commissioner. The court held that the onus was on the respondent to prove non-receipt. Failure to act within a reasonable time led the court to direct the respondents to issue the refund and release the seized jewellery within a specified timeframe.

Conclusion:
The court, after considering the arguments and evidence presented, directed the respondents to comply with the ITAT order by issuing the refund and returning the jewellery to the petitioner. The court emphasized the importance of timely action by the authorities and rejected the respondent's contention of non-receipt of the order as an excuse for delay. The petition was disposed of with no order as to costs, and the parties were instructed to act based on the court's order.

Judgment by: DHIRAJ SINGH THAKUR & KAMAL KHATA, JJ.