2021 (3) TMI 605 - HC - Income Tax

Period of limitation to comply / give effect to the directions of Commissioner (appeals) - Omission of certain observation from the order of CIT(A) regarding refund of pre-deposit and interest u/s 244A - HELD THAT - An order is passed by the CIT (Appeals) u/s 250, the same has to be given effect to within a period of three months from the end of the month in which the order u/s 250 is passed. The period of three months as above would be computed from the date of receipt by the Pr. CCIT or CCIT or Pr.CIT or CIT as the case may be. If however, it is not possible for the assessing officer to give effect to the appellate order within the aforesaid period of three months which has to be for reasons beyond his control, he has to make a request to the Pr CIT or the CIT seeking extension of time. - Extention can be granted for an additional 6 months. Looking at the requirement of section 153(5) of the Act, the orders giving effect to the appellate orders were to be passed by 30th June 2019. If the extended period of six months is added to this, then the orders ought to have been passed by 30th December 2019. However, nothing has been placed before us as to whether respondent No.1 made written request before respondent No.2 for extension of time and whether respondent No.2 had granted such extension of time on being satisfied. Thus, there is clear delay in passing the orders by respondent No.1 giving effect to the appellate orders. The provisions contained in section 153(5) of the Act have not been taken into consideration. We also find that the requirement of paying interest under section 244A is also missing from the above orders. The above orders are also silent on the adjustment of the 20% of the initial outstanding dues paid by the petitioner before the Commissioner of Income Tax (Appeals) while filing appeals for the purpose of stay. It would be in the interest of justice if the Pr CIT himself looks into the above aspects including impact of Circular No.19 of 2019 and thereafter decide afresh the issue relating to giving effect to the orders of the Commissioner of Income Tax (Appeals) passed under section 250.

Issues Involved:
1. Non-implementation of appellate orders by the assessing officer.
2. Delay in giving effect to the appellate orders beyond the statutory period.
3. Entitlement to interest under section 244A of the Income Tax Act.
4. Validity of manually issued orders without Document Identification Number (DIN).

Issue-wise Detailed Analysis:

1. Non-implementation of appellate orders by the assessing officer:
The petitioner, a co-operative housing society, filed three writ petitions under Article 226 of the Constitution of India, seeking a direction to the respondents to give effect to the appellate orders passed by the Commissioner of Income Tax (Appeals). For the assessment years 2008-09, 2013-14, and 2014-15, the petitioner had filed returns and subsequently faced reassessment orders which significantly increased their total income. The petitioner appealed against these orders, and the Commissioner of Income Tax (Appeals) partly allowed the appeals by deleting substantial additions made by the assessing officer and directed the recomputation of interest. Despite repeated applications by the petitioner, the assessing officer initiated recovery proceedings instead of giving effect to the appellate orders, prompting the petitioner to file the writ petitions.

2. Delay in giving effect to the appellate orders beyond the statutory period:
The court noted that under section 153(5) of the Income Tax Act, the assessing officer is required to give effect to an appellate order within three months from the end of the month in which the order was received by the Principal Commissioner or Commissioner. This period can be extended by an additional six months upon approval. However, in this case, the orders giving effect to the appellate orders were passed much beyond the statutory period, and there was no evidence of a written request for extension or approval by the Commissioner. For instance, for the assessment year 2008-09, the appellate order was passed on 27.03.2019, but the order giving effect was passed on 11.08.2020.

3. Entitlement to interest under section 244A of the Income Tax Act:
Section 244A deals with interest on refunds, mandating that simple interest be paid to an assessee where a refund becomes due. Additionally, sub-section (1A) provides for an additional interest of three percent per annum if the refund arises from giving effect to an appellate order and is delayed beyond the statutory period. The court found that the orders dated 11.08.2020, 14.12.2020, and 14.12.2020 did not consider the provisions of section 244A, and the petitioner was entitled to interest on the delayed refunds.

4. Validity of manually issued orders without Document Identification Number (DIN):
The petitioner referred to CBDT Circular No.19 of 2019, which mandates that all notices and orders of the Income Tax Department be generated electronically with a Document Identification Number (DIN) to ensure proper audit trails. The orders giving effect to the appellate orders were issued manually without quoting any DIN, making them potentially invalid. The court directed the Principal Commissioner of Income Tax-19 to reassess the orders' validity in light of this circular.

Conclusion:
The court concluded that the principal grievance of the petitioner regarding the non-implementation of appellate orders had been addressed, but other issues remained unresolved. The Principal Commissioner of Income Tax-19 was directed to reassess the orders, considering the delay, entitlement to interest, and the impact of the CBDT circular. The reassessment was to be completed within eight weeks, with all contentions kept open. The writ petitions were accordingly disposed of.

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