2024 (9) TMI 656 - HC - Income Tax

Validity of order passed u/s 144C(3) and 144B beyond period of limitation - HELD THAT - Issue as raised in the proceedings stood covered in view of the decision of this Court in the case of Shelf Drilling Ron Tappmeyer Limited 2023 (8) TMI 460 - BOMBAY HIGH COURT as also a similar view being taken in the case of Commissioner of Income Tax Anr. vs. Roca Bathroom Products P. Ltd. 2022 (6) TMI 848 - MADRAS HIGH COURT It was further observed that even the Delhi High Court in the case of Bid Services Division Mauritius Ltd. 2023 (8) TMI 1496 - DELHI HIGH COURT had taken a similar view. The contention of the assessee in the aforesaid proceedings was to the effect that the assessment orders as also the demand/penalty notices were illegal and void ab initio inasmuch as the same were beyond the prescribed limitation for completion of the assessment as prescribed by Section 153 of the Income-tax Act, 1961 (for short the Act ) read with Section 144C. In Shelf Drilling (supra) the Division Bench of this Court had held that the provisions of Section 153 of the Act which provide for the period of limitation is necessarily applicable to the proceedings u/s 144C of the Act. We have also noted in our order that the decisions as rendered by this Court as also the said decision of the Madras High Court as also the Delhi High Court were subject matter of challenge before the Supreme Court and the proceedings in that regard were pending. In this view of the matter, we admitted the said Writ Petition filed by the petitioner for final hearing while granting interim reliefs. Thus, by way of an interim relief the final impugned assessment order dated 11 August, 2024 passed u/s 143(3) read with Section 144C(3) and 144B as also the consequent demand notice of the even date and the penalty proceedings shall remain stayed. Let reply affidavit to the petition be filed within a period of six weeks form today.

Summary

Issues:
Petition under Article 226 seeking various reliefs including a Writ of Certiorari, Mandamus, and Prohibition against final assessment order, demand notice, penalty notices, draft assessment order, and other orders for AY 2021-22. Similar issue previously addressed by the court for AY 2020-21. Petitioner's contention on the assessment orders being beyond the prescribed limitation under Section 153 of the Income-tax Act, 1961. Respondent acknowledging similarity to pending case of the petitioner. Court inclined to pass similar orders and tag the present petition with the pending case for final hearing.

Analysis:
The petitioner filed a petition under Article 226 of the Constitution seeking various reliefs, including a Writ of Certiorari, Mandamus, and Prohibition against multiple orders issued for the assessment year 2021-22. These orders included the Final Assessment Order, Demand Notice, Penalty Notices, Draft Assessment Order, and other related orders. The petitioner contended that a similar issue had been previously addressed by the court in their own case for the assessment year 2020-21. The petitioner argued that the assessment orders exceeded the prescribed limitation under Section 153 of the Income-tax Act, 1961, in conjunction with Section 144C. The court noted that a detailed order had been passed in the previous case, considering the petitioner's arguments and citing relevant case law, including decisions from the Bombay High Court, Madras High Court, and Delhi High Court. The court observed that the issue of limitation for assessment orders was under challenge before the Supreme Court, and interim reliefs were granted in the petitioner's favor pending final hearing.

The respondent's counsel acknowledged the similarity of the issue in the present proceeding to the petitioner's pending case for final hearing. In light of this, the court decided to pass similar orders and tagged the present petition to be heard along with the pending case from the previous assessment year. The court issued specific orders, including granting interim relief by staying the final impugned assessment order, demand notice, and penalty proceedings. The respondents were given a period to file a reply affidavit, and parties were permitted to apply based on any relevant orders or final decisions from the Supreme Court on the issue at hand. The court's decision reflected a cautious approach to ensure consistency and fairness in addressing the legal issues raised by the petitioner in both cases.