2022 (7) TMI 1444 - HC - Income Tax

Validity of Assessment u/s 153A - Period of limitation - HELD THAT - As rightly noted by the ITAT the requirement under Section 153B (1) is for the AO to make the assessment order within a period of twenty-one months from the end of the financial year in which the last of the authorization for the search under Section 132 of the Act was executed. In the present case, there is no doubt that the last date by which the assessment had to be made was 31st December, 2016. As further rightly noticed Section 153B (1) uses the expression order of assessment and not merely assessment . Therefore, the assessment order becomes an order only when in fact it is communicated and therefore the communication of the order had to be prior to the end of the limitation period. No error has been committed by the ITAT in allowing the Assessee s appeal.

Summary

Issues:
1. Delay in filing appeal petition
2. Challenge to ITAT order by Revenue
3. Interpretation of Section 153-B of the Income Tax Act, 1961
4. Assessment order communication timeline
5. Comparison of decisions from different High Courts
6. Application of precedent in assessment order dispatch

Analysis:
1. The Court condoned a delay of 52 days in filing the appeal petition and allowed I.A. No.7 of 2019.
2. The Revenue challenged an ITAT order regarding the assessment years 2009-10 to 2015-16, questioning the timeliness of the assessment order dated 30th December, 2016 under Section 144 read with Section 153A of the Income Tax Act, 1961. The Court considered divergent views of different High Courts and upheld the decision favoring the Assessee.
3. The Court analyzed Section 153-B (1) of the Act, which requires the assessment order to be made within twenty-one months from the end of the financial year of the search authorization. The last date for assessment in this case was 31st December, 2016.
4. Regarding the communication timeline of the assessment order, the Assessee argued that the order was despatched on 7th January, 2017, and received on 9th January, 2017, making it time-barred. The ITAT relied on precedents to support this argument.
5. The Court compared decisions from different High Courts, emphasizing the requirement for the assessment order to be communicated within the limitation period. The ITAT's decision aligned with precedents from Karnataka and Kerala High Courts.
6. The Court distinguished the facts of the case from a previous decision of the Calcutta High Court, where the assessment order was collected by the Assessee without any dispatch involved. The Court upheld the ITAT's decision based on the clear dispatch timeline in the present case, dismissing the Revenue's appeal.

This detailed analysis of the judgment covers the issues involved comprehensively, providing insights into the legal interpretation and application of relevant provisions and precedents in the context of the case.