9911796707
TMI Blog1986 (11) TMI 145X X X X Extracts X X X X X X X X Extracts X X X X ..... ') to get the accounts audited and to furnish the report of the audit by 30-6-1985. On the assessee's request by its letter dated 21-6-1985 the ITO extended the date for submission of the audit report till 31-8-1985. By its letter dated 21-8-1985 the assessee informed the ITO that the chartered accountant appointed to hold the audit 'had shown his inability to finalise the audit report referred under section 142(2A) as being very busy in tax audit'. This letter was delivered to the ITO on 22-8-1985. The ITO completed the assessment under section 144 of the Act on 3-9-1985. 3. On appeal it was contended before the Commissioner (Appeals) that the assessment is barred by limitation. It was contended before him that 'the time which was availa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... report as 31st of August and 1st of September were admittedly holidays. The ITO therefore, had to wait for the submission of the audit report till 2nd of September and since the same was not filed till the expiry of 2nd of September he passed the order immediately on the following date, i.e., the 3rd of September, and therefore, in my opinion, the assessment is not barred by limitation." Being aggrieved, the assessee preferred this appeal. 4. The contentions raised before the Commissioner (Appeals) were reiterated before us. The authorised representative for the assessee also placed reliance on section 9 of the General Clauses Act, 1897, contending that 30th March was to be excluded in computing the period for obtaining the audit repor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessment was 31-3-1985. The extension of time in making this assessment is available to the department under clause (iii) of Explanation 1 to section 153. It runs as follows : "Explanation 1: In computing the period of limitation for the purposes of this section-- (i) and (ii) (iii) the period commencing from the date on which the Income-tax Officer directs the assessee to get his accounts audited under sub-section (2A) of section 142 and ending with the date on which the assessee furnishes a report of such audit under that sub-section, or shall be excluded." So under this clause of Explanation 1 the department is entitled to exclusion of the period from the date of the ITO's order to the date of submission of the audit report. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee or that he should wait up to 31-8-1985. We find from the penultimate paragraph of the Commissioner (Appeals)'s order that the ITO enquired as to whether there was default or, the assessee's part in not complying with the direction under section 142(2A) or not. In our opinion the assessment proceeding was not the proper proceeding for this purpose. The proper proceeding to enquire about this reason was a proceeding under section 271B of the Act wherein penalty could be imposed on the assessee for failure without reasonable cause to get the accounts audited. So, in our opinion for this enquiry also the ITO could not have kept the assessment pending. For all the reasons stated above we are of the opinion that the last date for com ..... X X X X Extracts X X X X X X X X Extracts X X X X
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