2014 (9) TMI 308 - AT - Income Tax

Bar of limitation in passing assessment order delay of 47 days - order passed u/s 143(3) - scrutiny assessment Held that - The date noted for framing of assessment order is 31.12.2008 but this is disputed by the assessee - the assessment order and demand notice were received by assessee after 47 days, which is beyond the prescribed date of limitation for passing of assessment order u/s. 143(3) of the Act - The assessment was getting time barred as on 31.12.2008 and demand notice and assessment order were served on 16.02.2009 - Where an assessment order has been purported to have been passed within the prescribed period of limitation but the same is served on the assesse after a long delay, without there being an explanation coming forward for such delay, in the absence of any explanation, whatsoever, it can be presumed that the order was not made on the date on which it is purported to have been made - the revenue has not furnished any explanation and has not produced any documentary evidence despite repeated directions on 27.10.2011 and 09.07.2012 that let the assessment records and dispatch records be produced for verification. There is no requirement that service must be effected before the expiry date but there must be evidences to show that assessment order was indeed passed before the limitation - no such evidence has been adduced by revenue that the order was indeed passed on or before 31.12.2008 - evidences are against the revenue that the assessment order and demand notice were dispatched only on 12.02.2009 and the same was served on assessee on 16.02.2009 i.e. beyond 47 days of limitation - There can be postal delay of a week s time or a fortnight s time at the maximum and it cannot be 47 days delay - in order to make the assessment order complete and effective, it should be issued so as to be beyond the control of the authority concerned for any possible change or modification and this should be done within the limitation period though actual service of the assessment order may be beyond that period - When an assessment order has been purported to have been passed within the prescribed period of limitation but the same is served on the assessee after unreasonable delay without being an explanation coming forward for such delay, in the absence of any explanation whatsoever it can safely be presumed that the order was not made on the date on which it purports to have been made and on the basis of such presumption it can be held that the order was passed after the expiry of limitation - the assessment order was barred by limitation Decided in favour of assessee.

Summary

Issues Involved:
1. Whether the assessment was barred by limitation due to the delayed service of the assessment order and demand notice.

Issue-wise Detailed Analysis:

1. Whether the assessment was barred by limitation due to the delayed service of the assessment order and demand notice:

The primary issue in the appeal was whether the assessment was barred by limitation as the assessment order and demand notice were served on the assessee 47 days after the expiry of the limitation period. The assessee argued that the assessment order dated 31.12.2008 was dispatched by the AO on 12.02.2009 and received on 16.02.2009, thus making it barred by limitation. The CIT(A) held that the assessment was completed within the limitation period based on the assessment records, which showed that the assessment was completed and signed on 31.12.2008. The CIT(A) also noted that the assessment order and demand notice were initially handed over to the Departmental Notice Server, who reported that the assessee refused to accept them, and they were later sent by registered post.

The Tribunal examined the facts and found that despite the assessment order being dated 31.12.2008, it was undisputed that it was dispatched on 12.02.2009 and received on 16.02.2009. The Tribunal noted that the revenue did not provide any evidence to support the claim that the assessment order was handed over to the Departmental Notice Server or that the assessee refused to accept it. The Tribunal emphasized that the service of the assessment order after the expiry of the limitation period raises a presumption against the passing of the order within the limitation period. The Tribunal referenced several case laws, including KanuBhai M. Patel(HUF) v. Hiren Bhatt, CIT v. Rai Bahadur Kishore Chand And Sons, and others, to support the view that the assessment order must be beyond the control of the authority within the limitation period, even if the actual service occurs later.

The Tribunal concluded that the assessment order was not passed within the limitation period as required by section 153 of the Act. The Tribunal noted that the revenue failed to produce any evidence to show that the assessment order was dispatched before the limitation period expired. Consequently, the Tribunal held that the assessment order was barred by limitation and allowed the appeal of the assessee.

Conclusion:

The Tribunal's judgment focused on the critical issue of whether the assessment was barred by limitation due to the delayed service of the assessment order and demand notice. The Tribunal found in favor of the assessee, concluding that the assessment order was not completed within the limitation period and thus was barred by limitation. The appeal of the assessee was allowed.