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TMI Blog2017 (9) TMI 744X X X X Extracts X X X X X X X X Extracts X X X X ..... Madras High Court proceeded to exclude the period during which there was stay of the proceedings in terms of that very Explanation. Further, no reference was made to the proviso below Explanation 1. The Madras High Court proceeded on the assumption that there was a time of period of 4 years from the last date of the assessment year in which the notice was served. Going by that yardstick in the present case, the reassessment order would still be time-barred. Court holds that in the present case the impugned assessment order dated 30th January 2017 was time barred and it is accordingly hereby set aside. Consequently, demand notice dated 30th January 2017 and the penalty order dated 26th July 2017, passed by the AO under Section 271(1) (c) of the Act, are also hereby set aside. - W.P. (C) No. 815/2017 - - - Dated:- 8-9-2017 - S. MURALIDHAR PRA THIBA M. SINGH JJ. Petitioner Through: Mr. Nipun Goel, Mr. Pankaj Bhatia, Mr. Ashish Choudhary, and Mr. Dhruv Surana, Advocates. Respondents Through: Mr. Rahul Kaushik, Senior Standing Counsel for Revenue O R D E R Dr. S. Muralidhar, J.: 1. The challenge in this petition under Article 226 of the Constitution of In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the share capital of the Assessee. Thereafter the AO passed a final assessment order on 26th August 2008. 5. Around three years thereafter, on 27th March 2012, the AO issued a notice under Section 148 of the Act proposing to reopen the assessment for AY 2006-07. On 10th December 2012, at the request of the Assessee, the reasons for reopening the assessment were furnished. In the reasons, it was stated as under: DIT (lnv.) during the course of investigation in the case of Tarun Goel Group, found that the Group have operated multiple Accounts in various Branches to plough back unaccounted black money for purposes of the disclosed or for personal need as such the purchase of assets etc. in the form of Gift/s, Share Application Money, Land etc. During the course of investigation by the DIT (lnv.) it was discovered that the assessee have un-accounted money (hereinafter called as Entry Takers or Beneficiaries) and wanted to introduce the same in the Books of Account without paying tax approached another person (Entry Operator) and handover the cash ( plus Commission) and take cheque/DDs/POs. The cash deposited by the Entry Operator in a Bank's Account either in his own nam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ₹ 40 lakhs. On the same date, i.e. 30th January 2017, the AO issued to the Assessee a demand notice where a sum of ₹ 31,64,715/- which included interest of ₹ 17,50,320/- under Section 234B and interest of ₹ 67,995 under Section 234C of the Act. A notice under Section 274 read with Section 271 of the Act was also issued on the same date for initiation of penalty proceedings under Section 271(1) (c) of the Act. Thereafter, on 26th July 2017, a penalty order was passed by the AO under Section 271 (1) (c) of the Act. 12. In the counter-affidavit the stand taken by the Revenue is that the order of this Court dated 9th November 2016 dismissing the Assessee s writ petition W.P. (C) No. 1738 of 2013 was received in the office of Principal CIT-8 only on 2nd December 2016. Thereafter notice was issued to the Assessee on 6th December 2016 under Section 142 (1) of the Act. Within 60 days of the date of the receipt of the order of the High Court, the impugned assessment order under Section 147 read with Section 143 (3) of the Act was passed on 30th January 2017. It is accordingly submitted that the assessment order was not issued beyond the period stipulated under Sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Income-tax-1, Agra v. Chandra Bhan Bansal (2015) 273 CTR (All) 450 and the decisions of the ITAT in Income Tax Officer v. Mahesh Chandra Agrawal [2011] 43 SOT 9 (Luck); Income-tax Officer-I, Bijnor v. Atul Agarwal [2008] 172 Taxmann 170 (Del) and Deputy Commissioner of Income-tax, Circle-Tinsukia v. Steels Worth (P.) Ltd. [2015] 58 taxmann.com 262 (Guwahati - Trib). 16. On the other hand, Mr. Rahul Kaushik, learned Senior Standing Counsel appearing for the Revenue, relied on the decision of the Calcutta High Court in India Ferro Alloy Industry Pvt. Ltd. v. Commissioner of Income-Tax [1993] 202 ITR 671 (Cal) and of the Madras High Court in Thanthi Trust v. Income Tax Officer [1989] 177 ITR 307 (Mad) and urged that the period of limitation of one year in terms of Section 153 (2) of the Act should be reckoned only after the vacation of the stay by this Court, in which case the impugned order of assessment would be within time. He submitted alternatively that, in terms of the first proviso to Explanation 1 to Section 153 of the Act, the period of limitation got extended by 60 days from 2nd December, 2016, i.e. the date of receipt by the Revenue of the certified copy of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of stay. Such an interpretation is not supported by the plain language of the proviso to Explanation 1. In fact, Circular No. 621 dated 19th December 1991 issued by the Central Board of Direct Taxes, while explaining the reasons for introduction of the proviso under Explanation 1, acknowledged that the time remaining after vacation of stay in terms of Section 153 (2) of the Act may not be sufficient to complete the re-assessment proceedings which is why the language used in the first proviso is that the period shall be extended to 60 days for passing the assessment order in terms of Section 153 (2) of the Act if the period remaining within limitation after the excluded period has elapsed is less than 60 days. 22. In the present case, on the date that the stay order stood vacated only 13 days were left for completion of the proceedings. Since this period was less than 60 days, the period of limitation got extended to 60 days from the date of such vacation of stay, i.e. 60 days from 9th November 2016. This, therefore, meant that the order in the re-assessment proceedings had to be necessarily passed on or before 8th January 2017. This is the only interpretation that is possible ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... made on the assessee or any person in consequence of or to give effect to any finding or direction contained in an order of any court in a proceeding otherwise than by way of appeal or reference under this Act, the provisions of sub-section (1) (la) and (lb) of the Act, shall not apply. Thus, where the assessment, reassessment or re-computation is made on the assessee or any person in consequence of or to give effect to any finding or direction in an order of any Court in a proceeding otherwise than by way of appeal or reference under this Act, the period of limitation as provided under Section 153 (2) of the Act, 1961 shall not be attracted. 25. For all of the aforementioned reasons, the Court holds that in the present case the impugned assessment order dated 30th January 2017 was time barred and it is accordingly hereby set aside. Consequently, demand notice dated 30th January 2017 and the penalty order dated 26th July 2017, passed by the AO under Section 271(1) (c) of the Act, are also hereby set aside. 26. The writ petition is allowed but, in the circumstances, with no orders as to costs. C.M. No. 30034/2017 (amendment of the writ petition) 27. For the reasons ..... X X X X Extracts X X X X X X X X Extracts X X X X
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