2024 (4) TMI 925 - AT - Income Tax

Validity of Assessment order as time barred - delay dispatching assessment order - as submitted assessment order was required to be passed on or before 31/12/2016 i.e. within 21 months of the end of Assessment Year in which the income was first assessable - HELD THAT - Though in the body of the assessment order the date of passing of the order has been mentioned as 28/12/2016 the assessment order has been dispatched only on 02/01/2017 as per the postal track consignment produced. Thus keeping in view of the order of the coordinate bench of the Tribunal in the case of Pankaj Sharma ( 2019 (2) TMI 789 - ITAT DELHI we are of the considered opinion that the assessment in dispute is time barred and accordingly we set aside the assessment order by allowing the Ground No. 1 of the assessee.

Summary

Issues Involved:
1. Whether the assessment made u/s 143(3) is barred by limitation.
2. Whether the addition of Rs 1,46,60,086/- on account of rejection of claim of Performance Incentive paid during the year is justified.
3. Whether the levy of interest u/s 234B, 234C, and initiation of penalty u/s 271(1)(c) of the Income Tax Act, 1961, is valid.

Summary:

Issue 1: Limitation of Assessment Order
The Assessee contended that the assessment order dated 28/12/2016 was dispatched only on 02/01/2017, which is beyond the limitation period prescribed u/s 153 of the Income-tax Act. The Tribunal noted that the limitation for passing the assessment order was on or before 31/12/2016. The assessment order was indeed dispatched on 02/01/2017 and served on 03/01/2017. The Tribunal referred to the case of Pankaj Sharma Vs. DCIT and other judicial precedents, holding that an assessment order dispatched after the limitation period is barred by limitation. Consequently, the assessment order was set aside.

Issue 2: Addition on Account of Performance Incentive
Since the Tribunal set aside the assessment order on the ground of limitation, it refrained from adjudicating the issue regarding the addition of Rs 1,46,60,086/- on account of the rejection of the claim of Performance Incentive.

Issue 3: Levy of Interest and Penalty
Similarly, the Tribunal did not adjudicate the issue regarding the levy of interest u/s 234B, 234C, and the initiation of penalty u/s 271(1)(c) of the Income Tax Act, 1961, due to the setting aside of the assessment order on the ground of limitation.

Conclusion:
The Tribunal allowed the appeal partly by setting aside the assessment order as it was barred by limitation, without adjudicating the other grounds raised by the assessee.