2009 (11) TMI 691 - AT - Income Tax

Summary

Issues Involved:
1. Validity of the assessment order passed by the Assessing Officer considering the provisions of section 10 of the General Clauses Act.
2. Jurisdiction of the Assessing Officer and the validity of the special audit under section 142(2A).
3. Extension of time limit for submission of the special audit report.

Summary:

1. Validity of the Assessment Order Considering Section 10 of the General Clauses Act:
The Revenue contended that the assessment order passed on August 29, 2005, was valid as August 28, 2005, was a Sunday, and August 27, 2005, was a Saturday. They argued that the order was correctly passed on the next working day, i.e., August 29, 2005, in accordance with section 10 of the General Clauses Act. The Tribunal, however, upheld the Commissioner of Income-tax (Appeals)'s decision that the order was time-barred, stating that the General Clauses Act does not generally apply to the limitation period under the Income-tax Act.

2. Jurisdiction of the Assessing Officer and Validity of the Special Audit under Section 142(2A):
The assessee contested the jurisdiction of the Assessing Officer and the validity of the special audit under section 142(2A). The Tribunal noted that the Assessing Officer extended the period for submission of the special audit report from April 28, 2005, to June 28, 2005, without an application from the assessee, which was not in accordance with the provisions of section 142(2C). The Tribunal held that the Assessing Officer had no suo motu power to extend the time limit, and such power was only inserted with effect from April 1, 2008.

3. Extension of Time Limit for Submission of the Special Audit Report:
The Tribunal observed that the Assessing Officer extended the period for submission of the special audit report based on an application from the special auditor and not from the assessee. Since the assessee did not seek an extension, the extension granted by the Assessing Officer was invalid. Consequently, the assessment order should have been passed on or before June 27, 2005. The Tribunal concluded that the order passed on August 29, 2005, was beyond the time limits provided under the Act.

Conclusion:
The Tribunal upheld the Commissioner of Income-tax (Appeals)'s decision to annul the assessment order as it was barred by limitation. The Revenue's appeal was dismissed, and the cross-objection by the assessee was considered allowed for statistical purposes. The order was pronounced in the open court on November 10, 2009.