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TMI Blog2019 (2) TMI 366X X X X Extracts X X X X X X X X Extracts X X X X ..... all. - ITA No. 1443/DEL/2014 And ITA No. 1734/DEL/2014 - - - Dated:- 5-2-2019 - SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER, AND MS. SUCHITRA KAMBLE, JUDICIAL MEMBER For The Assessee : Shri Salil Kapoor, Adv Ms. Soumya Singh, Adv And Shri Ananya Kapoor, Adv For The Department : Ms. Nidhi Srivastava, CIT-DR ORDER PER N.K. BILLAIYA, ACCOUNTANT MEMBER, The above two cross appeals by the assessee and Revenue are preferred against the order of the CIT(A), New Delhi dated 31.12.2013 pertaining to A.Y 2008-09. Both these appeals were heard together and are being disposed of by this common order for the sake of convenience and brevity. 2. In the first round of litigation, the assessee had raised the following additional ground, which was not admitted by the Tribunal: That the assessment order passed on 25.06.2012 is illegal, bad in law, without jurisdiction and barred by time limitation as the reference and order u/s 142(2A) of the Act is illegal and bad in law. 3. The assessee preferred an appeal before the Hon'ble High Court and the Hon'ble High Court directed the Tribunal to admit the additional ground and adjudicate upon the same. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e cannot be considered during the present appeal. 9. Per contra, the ld. AR, relying upon the decision of the co-ordinate bench in the case of Unitech Ltd 5180/DEL./2013 pointed out that a similar issue was considered by the co-ordinate bench and the co-ordinate bench held the assessment to be barred by limitation. The relevant finding of the co-ordinate bench reads as under: 43. From the above it is apparent that despite the appellant seeking the basis on which directions for special audit is proposed to be issued, the learned CIT dispensed with that precondition and granted approval which itself vitiates the whole process of granting approval. It is thus apparent that neither the AO nor the learned CIT disclosed the basis of approval after the objection as raised by the appellant to the show cause notice u/s 142(2A) of the Act and hence the order dated 9.12.2011 is a vitiated order. 44. Furthermore, the judgments relied upon by the revenue also do not lead us to take different view of the matter The first judgment relied upon is the case of Rajesh Kumar and Ors v CIT (supra). In this case the Hon ble Court has held in para 34 that the order of assessment can be subj ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ently, the extended time available for passing the order of assessment in terms of Sec.l58BE of the Act cannot also be availed by the AO. The order of assessment is therefore held to be barred by limitation. The order of assessment is therefore invalid and the consequent action u/s.263 of the Act setting aside such invalid assessment cannot also be sustained. 38, The learned counsel for the Assessee and the learned D.R. addressed arguments on the validity of the order passed u/s.263 of the Act on merits also. Since we have decided the issue on the question of limitation of the assessment order that was revised u/s.263 of the Act, we have not dealt with those submissions, 39. For the reasons stated above, the appeal of the Assessee challenging the proceedings u/s.263 of the Act as invalid is allowed and the order u/s.263 of Act is hereby quashed. 40. As far as IT(SS)A, No, 11 l/Mum/08 is concerned, we have already seen that the CIT(A) did not decide the appeal of the Assessee for the reason that the order of assessment has been cancelled u/s.263 of the Act. The order u/s.263 of the Act, has now been quashed and therefore in normal circumstances, the appeal would be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ade under section 142(2A) of the Act had exhausted itself. Admittedly, as noted hereinbefore, vide order of 31-12-2007 special audit was assigned to the auditors named in the order, the auditors tendered their report on 10-3-2008, the petitioners were called for hearing on 20-3-2008 and after that assessments were framed on 31-3-2008, the petitions were moved only on 12-5-2008, despite having been preferred in February, 2008. The Court, therefore, in this peculiar fact situation, does not intend to exercise the extraordinary jurisdiction under article 226 of the Constitution of India and entertain the petitions on this count alone. In the view that the Court has taken, it is not necessary to record and deal with the detailed submissions on merits, considering the fact that the appeals filed by Texpro and Textool are pending and it is open to the said two petitioners to take up all contentions, including challenge to exercise of powers under section 142(2A) of the Act as laid down by the Apex Court in the case of Sahara India (Firm) (supra). 9. The Court is conscious of the fact that even in case of Farmsons Fashions (P.) Ltd. and Gokulanand Texturisers (P.) Ltd., the special ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on an application made in this behalf by the assessee. If it is to be read otherwise, there was no reason for such amendment. The fact that the term suo mota has been inserted with effect from 01.04.2008 shows that before 01.04.2008, the A.O. did not have the inherent powers to extend the time limit without an application from the assessee. Further, even such extension would be controlled in view of the term for any good sufficient reason . Here as the period in the present case is before 01.04.2008 and as it is noticed that the assessee has not made any application for the extension of the period given vide order for special order dated 12.12.2006, the extensions made by the A.O. vide his order dated 7.03.2007, 17.04.2007 and 17.05.2007 are without jurisdiction and consequently such extensions as made vide those letters/orders cannot be said to extend the limitation. The exclusion as provided in the Exp. (ii) to Section 153B would have to be read. to be 90 days being a period between 12.12.2006 to 12.03.2007. Consequently, it would have to be held that the time period u/s 142(2A) is controlled by the provisions of Section 142(2C) and the exclusion provided in explanation (ii) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iven by the Punjab and Haryana High Court in the case of Jagjit Sugar Mills Company Limited (supra). Further in view of our above discussion, it comes to be concluded that the Tribunal was correct in holding that the Assessment Order was barred by limitation. That being so, we answer Question No.1 in affirmative in favour of the Assessee and against the revenue. 21. In view of foregoing discussion that the amendment whereby the word suo motu‟ were inserted in sub section (2C) of Section 142 of the Act 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. Accordingly, we answer Question No.2 against the revenue. 11. The facts in the cases mentioned supra are identical with the facts of the present case. Even in the present case, there was no evidence on record suggesting that the assessee sought suo motu extension of time for submission of audit report under Section 142(2A) of the Act. It is clear from the record that the Assessing Officer had suo motu extended time for furnishing the audi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A.Y 2008-09. 17. The quarrel before us is as to whether the assessment order framed u/s 143(3) is passed within the period of limitation period prescribed under the Act or not. In our considered opinion, for coming to such a conclusion, we can examine whether the order passed u/s 142(2A) of the Act is in accordance with law or not. It is true that the order passed u/s 142(2A) of the Act is not appealable but when an assessment order is challenged, then the different aspects, which are integral to the process and ultimate completion of the amount can be challenged in appeal and since the ground before us is challenged for assessment being barred by limitation, we are well within our rights to consider all material aspects which were considered while framing the assessment order u/s 143(3) of the Act. 18. Considering the facts of the case in totality, we have no hesitation to hold that the assessment order dated 25.06.2012 for the year under consideration is barred by limitation. Since the foundation is removed, the super structure i.e. the assessment order must fall. 19. In the result, the appeal of the assessee in ITA No. 1443/DEL/2014 is allowed whereas the appeal of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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