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TMI Blog2012 (2) TMI 156X X X X Extracts X X X X X X X X Extracts X X X X ..... ra Paul, Advocates. O R D E R Revenue in these appeals under Section 260A of the Income Tax Act, 1961 (Act, for short) impugns order dated 9th October, 2009 passed in ITA Nos. 1569, 1570, 1571 and 1572/Del/2009 in the case of Ulike Promoters Private Limited, the respondent herein. The appeals pertain to assessment years 1998-99, 1999-2000, 2000-01 and 2001-02. 2. Having heard learned counsel for the parties, we formulate the following substantial question of law: Whether the Income Tax Appellate Tribunal was right in holding that the assessment orders under Section 153A dated 29th June, 2007 were barred by limitation? 3. As we have heard learned counsel for the parties on merits, we proceed to pronounce our decision on the aforesaid question. 4. On 16th December, 2003, search and seizure operation under Section 132 of the Act was conducted in the case of the respondent-assessee. On 30th November, 2004, notice under Section 153A of the Act in respect of the four assessment years was issued to the respondent assessee to file their returns. On 1st January, 2005, the respondent assessee filed their returns of income. 5. On 22nd March, 2006, the Assessing Office ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ther or not special audit was required. It is in these circumstances, the Court had specifically directed that the time schedule fixed under the Act, i.e., Section 153B shall apply if the special audit was ordered. It was also clarified that the time spent in prosecuting the petition, i.e., the period between the date of filing of the writ petition and the date of disposal shall be excluded for the purpose of computing the time for completion of assessment. 7. Special audit was directed by the Assessing Officer vide order dated 19th January, 2007 to be completed within 105 days. The appellant has submitted that the special audit was conducted, and on 3rd May, 2007, a report was furnished by the Special Auditor to the Assessing Officer. The respondent assessee has submitted that the report was not filed by the Special Auditor before the Assessing Officer. For the purpose of the present appeal, we only note and record that the tribunal has proceeded on the basis that the report was furnished. Secondly, the Explanation to Section 153B(1) stipulates that the period commencing from the day on which the Assessing Officer directs the assessee to get the accounts audited under Section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... authority under the Act cannot be allowed to make an order extending the period of limitation prescribed by the statute. In these circumstances, we are of the view that the limitation for the completion of the assessment after excluding the time spent in prosecuting the writ petition against the order passed u/s 142(2A) dated 22.03.2006 expires on 20.12.2006 and at the most on 27.12.2006 and consequently the assessment order passed on 29.06.2007 is barred by limitation and we hold so. 10. The appeals require examination and interpretation of Section 153B(1), Explanation and the proviso thereto. The relevant portion of the said Section reads as under:- 153-B. Time-limit for completion of assessment under Section 153-A. (1) Notwithstanding anything contained in Section 153, the Assessing Officer shall make an order of assessment or reassessment, (a) in respect of each assessment year falling within six assessment years referred to in clause (b) of [sub-section (1) of Section 153-A], 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 132-A was executed; (b) in respec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing re-heard under the proviso to Section 129; or (iv) in a case where an application made before the Settlement Commission under Section 245-C is rejected by it or is not allowed to be proceeded with by it, the period commencing from the date on which such application is made and ending with the date on which the order under sub-section (1) of Section 245-D is received by the Commissioner under sub-section (2) of that section, or (v) the period commencing from the date on which an application is made before the Authority for Advance Rulings under sub-section (1) of Section 245-Q and ending with the date on which the order rejecting the application is received by the Commissioner under sub-section (3) of Section 245-R, or (vi) the period commencing from the date on which an application is made before the Authority for Advance Rulings under sub-section (1) of Section 245-Q and ending with the date on which the advance ruling pronounced by it is received by the Commissioner under sub-section (7) of Section 245-R, (vii) the period commencing from the date of annulment of a proceeding or order of assessment or reassessment referred to in sub-section (2) of Section 153-A till th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion to the respondent assessee to move an application before the High Court. It is stated by the learned counsel for the respondent assessee that an application was filed but was dismissed as infructuous. The Assessing Officer on 19th January, 2007 had already passed an order under Section 142(2A) of the Act. 14. In terms of the order dated 19th January, 2007 under Section 142(2A), the Special Auditor was required to complete audit within 105 days, i.e., by 4th May, 2007. This period has to be excluded in terms of Explanation Clause (ii) quoted above. The Assessing Officer passed the assessment order on 29th June, 2007. This order has been passed within a period of 60 days from the day special auditor was required to submit his report. Proviso to the Explanation to Section 153B(1) again became applicable as after excluding the period of special audit, the period available to the Assessing Officer was less than 60 days. 15. The contention of the respondent assessee is that the Assessing Officer was not entitled to period of 60 days in terms of the proviso to the Explanation to Section 153B(1) as in the present case the Assessing Officer had already availed the period of 60 days ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ded. The proviso to Explanation stipulates that the Assessing Officer can pass the assessment order within 60 days, if after excluding the time mentioned in the Explanation, the time for completing the assessment is less than 60 days. In terms of the said proviso, the Assessing Officer had the extended period to complete the assessment proceedings. The Assessing Officer had to complete the assessment within 60 days from the date on which the special audit report was to be submitted to him. 19. The decision in the case of Hope Textiles Limited (supra) relied upon by the tribunal is not apposite. In this case, the assessee had preferred an appeal against the decision of the Madhya Pradesh High Court. The contention of the assessee before the Supreme Court was that by virtue of clause (ii) sub-section 3 to Section 153 of the Act, the High Court should have directed the Assessing Officer to pass the reassessment order pursuant to the reassessment notice notwithstanding the expiry of period prescribed in sub-section 2 to Section 153. It is apparent that the Assessing Officer had not passed a reassessment order and in that context the Supreme Court observed that the courts cannot iss ..... X X X X Extracts X X X X X X X X Extracts X X X X
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