2023 (12) TMI 935 - HC - Income Tax

Limitation for passing fresh assessment order - Whether assessment orders pursuant to the appellate orders of the Tribunal are barred by limitation in terms of section 153? - principal reason petitioner has approached this court is that since limitation under Section 153(2)(A)/153(3) had expired pursuant to the orders passed by Tribunal AO had been emasculated of the jurisdiction to pass a fresh assessment order - HELD THAT - The counter-affidavit filed on behalf of the respondents/revenue, does not indicate the dates of which add of the orders dated 21.11.2014 and 29.05.2015 passed by the Tribunal were served on the petitioner. As would be evident, the best scenario for the respondents/revenue would be if the order of the Tribunal was served on or after 01.04.2016, but on or before 31.05.2016. It is not in dispute that as per Section 153(2)(A) which is the old provision , the limitation would expire on 31.03.2018. However, if the amended provision, i.e., Section 153(3) of the Act were to be taken into account, the limitation would expire on 31.03.2017. It is also not disputed that this aspect of the matter is covered by the judgments of the coordinate bench rendered in Nokia India (P.) Ltd. 2017 (9) TMI 1298 - DELHI HIGH COURT and Aricent Technologies (Holdings) Ltd 2023 (3) TMI 220 - DELHI HIGH COURT . Thus, whichever regime we take into account, i.e., the time limit fixed as per Section 153(2)(A) of the Act or the time limit fixed by the amended provision i.e., Section 153(3) of the Act, as of today the AO is bereft of jurisdiction and hence, would have no legal locus to pass assessment order(s). Therefore, the prayers made in the writ petition are allowed. Assessment proceedings concerning AY 1998-99 to AY 2009-10, pursuant to the orders of the Tribunal dated 21.11.2014 and 29.05.2015, have become time-barred. AO is thus directed to accept the return income lodged by the petitioner for the aforementioned AYs. Resultantly, the return as available on record will be processed and consequential orders would be passed.

Summary

Issues involved:
The judgment involves issues related to the expiration of limitation under Section 153 of the Income Tax Act, 1961 for passing fresh assessment orders, the validity of the notice issued by the Assessing Officer, and the jurisdiction of the court to quash assessment proceedings for assessment years 1998-99 to 2009-10.

Expiration of Limitation for Assessment Orders:
The petitioner approached the court as the limitation under Section 153 of the Income Tax Act had expired after orders passed by the Tribunal. The court noted that the Tribunal remanded the matter to the Assessing Officer (AO) for fresh consideration for multiple assessment years. The petitioner contended that the AO could not pass a fresh assessment order due to the expiration of limitation.

Validity of Notice Issued by AO:
The AO issued a notice to the petitioner on 19.07.2018 for representation regarding assessment years 1998-99 to 2009-10. The petitioner responded by stating that the limitation for passing the assessment order had expired. Despite this, the AO did not drop the proceedings, leading the petitioner to move the court through a writ petition.

Jurisdiction of the Court to Quash Assessment Proceedings:
The court analyzed the amendments made to Section 153 of the Act and the timeline for passing fresh assessment orders based on the dates of Tribunal orders served on the petitioner. The court found that the AO lacked jurisdiction to pass assessment orders for the mentioned assessment years. Consequently, the court allowed the prayers made in the writ petition, quashing the assessment proceedings and directing the AO to accept the return income for the relevant years.

Separate Judgment by the Judges:
The judgment was delivered by Hon'ble Mr. Justice Rajiv Shakdher and Hon'ble Mr. Justice Girish Kathpalia. The court granted the prayers made in the writ petition, declaring the assessment proceedings as time-barred and directing the AO to accept the return income for the specified assessment years. The writ petition was disposed of accordingly, and the interim order was vacated.