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TMI Blog2017 (8) TMI 319X X X X Extracts X X X X X X X X Extracts X X X X ..... Officer has passed the impugned assessment order only on July 18, 2005, the assessment order is barred by limitation and so we have no other alternative but to quash the same. Thus, the appeal of the assessee is allowed - I. T. (SS) A. No. 21/Patna/2011 - - - Dated:- 13-4-2017 - Aby T. Varkey (Judicial Member) And Waseem Ahmed (Accountant Member) For the Appellant : Sanjeev Kumar Anwar, Advocate For the Respondent : Archana Sinha, Senior Standing Counsel ORDER 1. This appeal by the assessee is arising out of the order of the Commissioner of Income-tax (Appeals)-1, Patna dated October 21, 2010 for the block assessment years 1997-98 to 2002-03 (up to 28-11-2002). 2. Ground No. 2 in the grounds of appeal is as under : For that the assessment under section 158BC is barred by limitation in view of the provisions of section 158BE. The block assessment order has been passed on July 18, 2005 which is beyond two years of the last of the authorisation even after excluding the period commencing from the day on which the Assessing Officer directs the assessee to get his accounts audited under section 142(2A) and ending on the day on which the assessee is required ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for another 90 days i.e. up to April 21, 2005. According to the learned counsel, even if the special audit report was filed on April 20, 2005 then also the Assessing Officer should have passed the assessment order within 60 days from the date i.e., on June 20, 2005. It was pointed out by the counsel that the Assessing Officer did not had the power at that point of time as per law existing, to suo motu extend the period for submission of the special audit report, so according to the learned authorised representative the extension of period by Assessing Officer itself is illegal, so the consequent assessment order is not valid in the eyes of law. And since the Assessing Officer has passed the order only on July 18, 2005, therefore, according to the learned counsel, the assessment order passed under section 158BC of the Act is hit by the limitation and, therefore, the order is void in the eyes of law and, therefore, it has to be quashed. 4. On the other hand, the learned senior standing counsel for the Revenue, Smt. Archana Sinha pleaded that the assessee did not co-operate with the special auditor so the auditor was not able to complete the special audit by February 20, 2005 and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... learned counsel for the assessee drew our attention to the calendar for the year 2005 to the fact that February 25, 2005 on which the Assessing Officer suo motu extended the period of special audit falls on Friday and the February 24, 2005 being Guru Ravidas Jayanti being a restricted holiday, the Assessing Officer ought to have passed the extension order before February 20, 2005, and so since the Assessing Officer has passed the order on February 25, 2005 the extension given to the special auditor suo motu by the Assessing Officer is not in accordance to law, and therefore, subsequent proceedings are vitiated in the eyes of law and, therefore, the impugned assessment is bad in law and need to be quashed. 6. The learned senior standing counsel for the Revenue tried her best to suggest that because of the non-co-operative attitude of the assessee the special auditor could not complete the special audit, therefore, the Assessing Officer had no other alternative but to extend the period for another 90 days and that the Assessing Officer has power to extend the time limit suo motu and for the said proposition she relied on the order of the hon'ble Punjab and Haryana High Court d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icient 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 made any application for extension of period of audit report. Therefore the extension which was granted by the Assessing Officer on the request of the auditor could be taken to be a suo motu action of the Assessing Officer which power, as noted above, was not available with the Assessing Officer prior to the amendment with effect from April 1, 2008. Not only this the said power of extension was also further controlled in the words 'for any good and sufficient reasons'. This would mean that the Assessing Officer was supposed to record reasons for granting extension on his own. Clause 27.4 of the circular also clarifies that this amendment has been ..... 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