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TMI Blog2004 (9) TMI 637X X X X Extracts X X X X X X X X Extracts X X X X ..... differently from existing other provisions of the same enactment. Legislature is not presumed to indulge in any academic exercise and that too in truncated manner. There being a clear provision made to cover the field of computation of limitation provided under Chapter XIV-B and expressly provided taking into account the conditions which also were part of above-referred provision of Section 153, but were not completely in accordance with the Section 153. The part of Section 153 which was expressly not included in the provisions cannot by any stretch of imagination be said that the provision has been made applicable in regard to computing limitation u/s 158BH. The fact that different periods had been provided for cases depending on the date search warrant is executed, a legal fiction defining the term is also enacted under Expln. 2. Thus, on the interpretation of provisions of Section 158BE, if the contention of the learned counsel for the appellant is to be accepted, then insertion of original Expln. 1 firstly by inserting it retrospectively vide Finance Act, 1996 providing for exclusion of period only in two events and then again amending it by substituting Expln. 1 with prospect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , 2002. Since excluding the entire period of 180 days, the assessment order does not fall within the period of limitation and the assessment order in question fails on that ground alone, we do not deem it appropriate to consider the contention of learned counsel for the respondent that even otherwise the appellant is not entitled for any benefit of exclusion of period for having special audit u/s 142(2A) of the Act or at any rate beyond 120 days as has been found by the Tribunal. The appeal fails and is hereby dismissed. - R Balia A Rastogi, JJ. JUDGMENT Rajesh Balia, J. 1. Heard learned counsel for the parties. 2. This appeal is directed against the order of Tribunal, Jodhpur Bench, Jodhpur, dt. 9th May, 2003 (reported as Asstt. CIT v. Ramesh Chand Soni (2003) 81 TTJ (Jd) 253-Ed.), deciding cross-appeals filed by the assessee and the Revenue in respect of block assessment period 1st April, 1988 to 15th July, 1998, pursuant to a search which has taken place on the premises of the assessee in August, 1998. 3. In appeal, following substantial questions of law have been suggested : I. Whether, on the facts and in the circumstances of the case, the learned Tribunal (ITAT) was legally ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l audit at the request of auditor to complete the special audit from 120 days to 180 days under Section 142(2A), being contrary to the provisions of the Act was invalid and strictly speaking the AO cannot take advantage of more than 120 days to the maximum for exclusion of the period for completing of assessment. It also found that direction to get the special audit conducted itself to be not bona Me and was only an attempt to get period of limitation for completing the assessment extended under Clause (ii) to Expln. 1 to Section 158BE, by seeking the exclusion of time in computing the period of limitation. It also found that even by excluding the entire period of 180 days for conducting special audit under Section 142(2A) for the purpose of computing the period of limitation, still assessments framed on 8th March, 2001, were barred by time. 7. The Revenue, on the other hand claims exclusion of 180 days in computing the period of limitation of 2 years under Section 158BE as the time required to furnish a report of special audit as directed under Section 142(2A) and also relied on proviso to Expln. 1 for further extending the remaining period on the expiry of two years and 180 days ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... no Explanations were enacted. Neither any provision for exclusion of any period for any reason in computing period of limitation provided under Section 158BE was made, nor any provision was made assigning meaning to term execution of authorisation. By Finance Act (No. 2) of 1996, an Explanation, later on renumbered as Expln. 1, was inserted in above form with retrospective effect from 1st July, 1995, commensurate with commencement of Chapter XIV-B. It contained only two clauses of exclusion of period from computation of limitation. Vide Finance Act (No. 2) of 1998, Expln. 2, as above, was inserted after renumbering existing Explanation as Expln. 1. Explanation 2 defined the meaning of execution of authorisation. 10. Applying the aforesaid provision as on date the block assessment was made, i.e., 8th March, 2001, the arithmetic of period of limitation on the aforesaid anvil is clear and undisputed that bereft of the controversy about the validity of order under Section 142(2A) or the extension of period for furnishing the report under Section 142(2A), by excluding full period 180 days results in expiry of the period of limitation on 27th Feb., 2001. The commencement of the limitati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e aforesaid period of limitation shall be deemed to be extended accordingly. 13. Apparently, the substituted provision has not been given retrospective effect and no benefit can be derived by the Revenue on account of such proviso. 14. The principle governing the limitation is settled that wherever the law of limitation is altered providing for completing the proceedings or for initiating the proceedings, the extended period can be availed where the limitation in respect of said transaction still exists. If the limitation for completing the proceedings or initiating the proceedings have already expired prior to the amending provisions, extending the period of limitation does not result in relaxing the limitation, unless specific provision is made to that effect. In fact, if the limitation period is reduced which results in expiry of the period of limitation before the commencement of the Act, it needs specific saving clauses to save the existing clauses to be preserved on such amendment of the provisions. The illustration can be found that the Limitation Act, 1963, which has made provisions for saving the limitation where the reduced period of limitation has already expired prior t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e had relied on the amendment made in Section 150(1) of the Act as amended w.e.f. April, 1989. It was contended by the Revenue that the limitation prescribed under Section 149 will not be attracted by virtue of the provisions of Section 150(1) because the notices for reassessments were based on the awards passed in the land acquisition proceedings by the Court of the Addl. District Judge on a reference made under Section 18 of the Land Acquisition Act. Upholding the validity of the assessment proceedings initiated by the Department under Section 148 of the Act, the High Court rejected the contention of the assessee that Sub-section (2) of Section 150 of the Act is an Explanation to Sub-section (1) and proceedings for reassessment, which had already become barred by time under Section 149 of the Act before 1st April, 1989, could not have been commenced on the basis of amended provisions of Sub-section (1) of Section 150. Under the IT Act, 1961, the extended period of making an order under Section 150(1) came into effect w.e.f. 1st April, 1989. The High Court had accepted the contention of the Revenue and dismissed the petition by finding that the Revenue was entitled to seek the ben ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ration. 18. The learned counsel for the appellant has urged that even without the amendment, under Section 158BH, provisions of Section 153 are attracted. It provides that 'save as otherwise provided in this Chapter' all other provisions of the Act are made applicable to proceedings under this Chapter. The learned counsel drew our attention to Expln. 1 to Section 153 which has the like provision as has been inserted through the substitution of Expln. 1 to Section 158BE for existing Expln. 1, w.e.f. 1st June, 2002. 19. Suffice it to say that Section 158BH permits to look at the other provisions of the Act in the field in respect of which no provisions are made under Chapter XIV-B. Under Section 158BE, specific provision has been made for computing the period of limitation prescribed for making assessment under Section 158BE. 20. The Expln. 1 as inserted originally did provide specifically for exclusion of certain period while computing the period of limitation for making assessment for block period under Chapter XIV-B, but neither it was couched pan material with Section 153 nor it made Section 153 applicable to it by incorporating such provision by reference. It is signific ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t, or (iia) the period commencing from the date on which the AO intimates the Central Government or the prescribed authority, the contravention of the provisions of Clause (21) or Clause (22B) or Clause (23A) or Clause (23B) or Sub-clause (iv) or Sub-clause (v) or Sub-Clause (vi) or Sub-clause (via) of Clause (23C) of Section 143 and ending with the date on which the copy of the order withdrawing the approval or rescinding the notification, as the case may be, under those clauses is received by the AO. (iii) the period commencing from the date on which the AO directs the assessee to get his accounts audited under Sub-section (2A) of Section 142 and ending with the last date on which the assessee is required to furnish a report of such audit under that Sub-section, or (iv) Omitted by the Direct Tax Laws (Amendment) Act, 1987, w.e.f, 1st April, 1989. (iva) the period (not exceeding sixty days) commencing from the date on which the AO received the declaration under Sub-section (1) of Section 158A and ending with the date on which the order under Sub-section (3) of that section is made by him, or (v) in a case where an application made before the Income-tax Settlement Commission under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... umed to indulge in any academic exercise and that too in truncated manner. 23. There being a clear provision made to cover the field of computation of limitation provided under Chapter XIV-B and expressly provided taking into account the conditions which also were part of above-referred provision of Section 153, but were not completely in accordance with the Section 153. The part of Section 153 which was expressly not included in the provisions cannot by any stretch of imagination be said that the provision has been made applicable in regard to computing limitation under Section 158BH. The fact that different periods had been provided for cases depending on the date search warrant is executed, a legal fiction defining the term is also enacted under Expln. 2. Thus, on the interpretation of provisions of Section 158BE, if the contention of the learned counsel for the appellant is to be accepted, then insertion of original Expln. 1 firstly by inserting it retrospectively vide Finance Act, 1996 providing for exclusion of period only in two events and then again amending it by substituting Expln. 1 with prospective effect specifically w.e.f. 1st June, 2002 extending the exclusion of per ..... X X X X Extracts X X X X X X X X Extracts X X X X
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