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TMI Blog2011 (5) TMI 540X X X X Extracts X X X X X X X X Extracts X X X X ..... ndment has been made applicable with effect from 1st April, 2008 and it is from this date onwards that the AO shall have power to extend the period of furnishing of special audit report suo motu - the proviso as is existed before or after the amendment and the legislative intent behind the amendment as gathered from the memorandum and the circular not persuaded to agree with the interpretation as given in the case of Jagjit Sugar Mills Company Limited (1993 (9) TMI 19 - PUNJAB AND HARYANA High Court). Thus it comes to be concluded that the Tribunal was correct in holding that the Assessment Order was barred by limitation. Thus the amendment whereby the word "suo motu" were inserted in sub section (2C) of Section 142 was to be applicable with effect from 1st April, 2008 only, the amendment cannot be said to be clarificatory or retrospective in nature. The amendment was prospective and was to be applicable with effect from 1st April, 2008 only - decided against the revenue. - ITA No.1775/2010, ITA No.1776/2010, ITA No.1777/2010, ITA No.1965/2010, ITA No.2032/2010, ITA No.2033/2010 - - - Dated:- 27-5-2011 - MR. JUSTICE A.K.SIKRI, MR. JUSTICE M.L.MEHTA, JJ. For Appellant Thr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f assessment under Section 153A was decided against the Revenue. The cross appeals field by the Assessee and the Revenue against the order of CIT(A) were disposed of by the Tribunal vide impugned order only on the issue of limitation. Since the issue of limitation of finalization of assessment was decided against the revenue, the Tribunal did not choose to decide the other issues raised on merits. 4. The Tribunal held that the AO could not have extended the time for auditor‟s report on his own inasmuch as this power of the AO to extend the time of audit report suo motu under Section 142(2C) came to be inserted by way of an amendment with effect from 1st April, 2008. Consequently, he held the assessment made under Section 153A of the Act in respect of the assessment years in question to be barred by limitation. It is this impugned order that has been challenged by the Revenue by way of these appeals. 5. There is no dispute with regard to the dates. The only issue is with regard to interpretation of provisions of Section 142(2A), (2C) and 153B(1) Explanation (ii). For better understanding these Sections are reproduced hereinbelow: 142. Enquiry before assessment.-(1) For the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the end of the financial year in which the last of the authorisations for search under section 132 or for requisition under section 132A was executed; (b) in respect of the assessment year relevant to the previous year in which search is conducted under section 132 or requisition is made under section 132A, within a period of two years from the end of the financial year in which the last of the authorisations for search under section 132 or for requisition under section 132A was executed : [Provided that in case of other person referred to in section 153C, the period of limitation for making the assessment or reassessment shall be the period as referred to in clause (a) or clause (b) of this sub-section or one year from the end of the financial year in which books of account or documents or assets seized or requisitioned are handed over under section 153C to the Assessing Officer having jurisdiction over such other person, whichever is later:] [Provided further that in the case where the last of the authorisations for search under section 132 or for requisition under section 132A was executed during the financial year commencing on the 1st day of April, 2004 or any subsequ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uch audit under that sub-section; or xxxxx (2) The authorization referred to in clause (a) and clause (b) of sub-section (1) shall be deemed to have been executed.- (a) in the case of search, on the conclusion of search as recorded in the last panchnama, drawn in relation to any person in whose case the warrant of authorization has been issued; (b) in the case of requisition under Section 132A, on the actual receipt of the books of account or other documents or assets by the Authorized Officer.] 6. Section 142 provides the procedure for the enquiry that is required before making assessment. Sub-section (2A) provides for conducting special audit during the proceedings of assessment. This sub section provides that if at any stage of the proceedings, the Assessing Officer was of the opinion, having regard to the nature and complexity of the accounts of the Assessee and in the interest of revenue so to do, he may direct the Assessee to get the accounts audited by the Accountant in the manner prescribed therein. Sub section (2C) provides that every audit report under sub section (2A) is to be furnished by the Assessee to the Assessing Officer within such period as may be specified b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 142 (2C) as or and had held that period for submission of report by the Special Auditor is extendable by the Assessing Officer, even without an application in this regard by the assessee. 9. In case of CIT v Puthuthotam Estates Ltd. (supra) it was held that, The circumstances under which the word and may be construed as or and vice versa should be somewhat rare. Otherwise if the two are taken to be interchangeable terms, then it would result in Parliament throwing into the statute the two expressions indiscriminately and leave them to the courts to sort out the meaning. In ordinary usage and is conjunctive and or is disjunctive . 10. In the case of P.V. Devassy v. CIT (supra), it was held as under: An assessee is required to file the return within the time allowed and in the manner prescribed in order that the Income Tax Officer may complete the assessment within the period specified in the Income Tax Act. If the return is not filed in time or, if filed in time, it does not contain all the particulars required, it will not be possible for the Income Tax Officer to complete the assessment within the period specified in the Act. In other words, the object of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Mathuram Aggarwal v State of Madhya Pradesh, 8 SCC 667[1999] held that, In a taxing Act it is not possible to assume any intention or governing purpose of the statute more than what is stated in the plain language. It is not the economic results sought to be obtained by making the provision which is relevant in interpreting a fiscal statute. Equally impermissible is an interpretation which does not follow from the plain, unambiguous language of the statute. Words cannot be added to or substituted so as to give a meaning of the statute which will serve the spirit and intention of the legislature. The statute should clearly and unambiguously convey the three components of the tax law, i.e., the subject of the tax, the person who is liable to pay the tax and the rate at which the tax is to be paid\. If there is any ambiguity regarding any of these ingredients in a taxation statute then there is no tax in law. Then it is for the legislature to do the needful in the matter. 14. In the case of Nasiruddin and others v Sita Ram Agarwal 2 SCC 577 (2003), it is held: 37. The court‟s jurisdiction to interpret a statute can be invoked when the same is ambiguous. It is well ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e only when an application is made in this behalf by the assessee and there are good and sufficient reason for such extension. It is proposed to amend the said proviso so as to also allow the Assessing Officer to extend this period of furnishing of audit report suo motu. Hence, while the Assessing Officer shall continue to have power to grant extension on an application made in this behalf by the assessee and when there are good and sufficient reasons for such extension, he can also grant such extension on his own. The amendment will take effect from 1st April, 2008. 16. Further, the circular No.1. of CBDT dated 27th March, 2009 has also clarified on the issue of applicability of the aforesaid amendment in sub section (2C) with effect from 1st April, 2008. The said circular reads as under:- Direct Tax Circular No.1 dated 27th March, 2009 Explanatory Notes to the Provisions of the Finance Act, 2008. 1. Introduction: 1.1 The Finance Act, 2008 (hereafter referred to as the Act) as passed by the Parliament, received the assent of the President on the 10th day of May, 2008 and has been enacted as act No.18 of 2008. This circular explains the substance of the provisions of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of an amendment with effect from 01.04.2008 would show the legislative intention in the proviso as existed before the amendment which is that the Assessing Officer prior to amendment had no power to extend the period of furnishing audit report of his own. 19. It was to rationalize the said proviso that the word suo motu came to be added by way of amendment with effect from 1st April 2008. As per Clause 27.3 of the Circular dated 27th March, 2009 while the Assessing Officer shall continue to have the power to grant extension on an application made in this behalf by the Assessee, he could also grant extension of his own when there are good and sufficient reasons for such extension. Thus, it is noticed that sub section (2C) before the amendment did not empower the Assessing Officer to extend the time for submissions of special audit report under sub Section (2A). Further, the power of extension of time for submission of special audit report is also subject to limitation of a period of 180 days from the date on which the directions under section 142(2A) of the Act for the audit was received by the Assessee. It is an admitted fact that in the present case, the assessee had not m ..... X X X X Extracts X X X X X X X X Extracts X X X X
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