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TMI Blog2023 (1) TMI 1031X X X X Extracts X X X X X X X X Extracts X X X X ..... orders passed U/s. 143(3) r.w.s 153C of the Income Tax Act, 1961 [the Act]. 2. Since the grounds raised by the Revenue in all these appeals are similar in nature, for the sake of convenience, these appeals are clubbed, heard together and disposed off in this consolidated order. Further, considering the similarity of the issue involved in these appeals, we shall take up the ITA No.16/Viz/2021 as a lead appeal. 3. Brief facts pertaining to the Revenue's appeal in ITA No. 16/Viz/2021 (AY: 2015-16) are that the assessee is a limited company carrying out the business of Fish Feeds. The assessee filed its return of income for the AY 2015-16 on 28/03/2016 admitting NIL income. Subsequently, a search and seizure operation u/s. 132 of the Act was undertaken on 18/1/2017 in the case of Nexus Group. Order U/s. 127 for centralization of the case was passed by the Ld. Principal Commissioner of Income Tax, Rajahmundry vide his order in F.No. 127/Pr.CIT- 1/RJY/2017-18, dated 11/09/2017. During the course of search proceedings in the case of M/s. Nexus Feeds Limited, the Ld. AO claimed certain incriminating documents were found and seized pertaining to the assessee-company. As per the materials ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessed income was determined at Rs.4,50,00,000/- against the NIL income returned by the assessee. Aggrieved by the order of the Ld. AO, the assessee filed an appeal before the Ld. CIT(A). Before the Ld. CIT(A), the assessee challenged the issue of notice U/s. 153C of the Act and also challenged the Special Auditor's Report submitted by the Special Auditor beyond the due date prescribed u/s. 142(2A) of the Act. The Ld.CIT(A) relying on various judicial pronouncements as discussed in his detailed order, partly allowed the appeal of the assessee. Aggrieved by the order of the Ld.CIT(A), the Revenue is in appeal before us. 4. The Revenue has raised the following five grounds of appeal: "1. On the facts and in the circumstances of the case, the Ld. CIT(A) erred in holding the assessment void-ab-initio when the AO has extended the time limit for the special audit U/s. 142(2C) after application of his mind. 2. The Ld. CIT(A) failed to appreciate that since on substantial basis the requirement of proviso to section 142(2C) is met, obtaining administrative sanction from the Pr. CIT as per established practices of the office procedure does not vitiate the extension of time for spe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on'ble Supreme Court in the case of State of Punjab & Ors vs. M/s. Shreyans Indus Ltd in Civil Appeal Nos. 2506 to 2511 of 2016 arising out of SLP Nos. 21712 - 21717 of 2009. The Ld. AR also further submitted that since the Ld. AO has not clearly mentioned in the assessment order regarding the material seized belong to the assessee even though satisfaction was recorded by the Ld. AO of the person searched. The Ld. AR therefore pleaded that notice issued U/s. 153C of Act has to be treated as invalid. 7. Further, the Ld. AR also filed a petition for raising the legal ground in accordance with Rule 27 of the ITAT Rules as follows: "1. On the facts and circumstances of the case, assessment is invalid as the assessment proceedings on the basis of return already filed terminated/culminated by operation of law. 2. On the facts and circumstances of the case, issue of notice U/s. 153C is invalid without proper satisfaction note. Further the Assessing Officer recorded satisfaction which was mentioned in the Assessment Order with respect to share capital and issue notice U/s. 153C, but no share capital is being introduced by the firm. Hence notice U/s. 153C is invalid in the eyes of law. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mmunication of extension by the Ld. AO instead of passing an order U/s. 142(2C) is not valid in law. The case law relied on by the Ld. AR, the judgment of the Hon'ble Supreme Court in the case of State of Punjab & Ors vs. M/s. Shreyans Indus Ltd in Civil Appeal Nos. 2506 to 2511 of 2016 arising out of SLP (c) Nos. 21712 - 21717 of 2009 is pertinent to mention here with respect to grant /order of extension of time limit should be given before the time for passing any order expires as prescribed under the Act or before the expiry of the original period of limitation prescribed in the original order. On this issue, the Hon'ble Apex Court observed that once the period of limitation expires, the immunity against being subject to assessment sets in and the right to make assessment gets extinguished. The Hon'ble Supreme Court further observed that "there would no question of extending the time for assessment when the assessment has already become time barred. A valuable right has also accrued in favour of the assessee when the period of limitation expires. If the Commissioner is permitted to grant the extension even after the expiry of original period of limitation prescribed under the Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rom special auditor for extension of time to complete audit u/s 142(2A) which was account of delay on the part of the assessee. 2. The assessing officer was satisfied on the reason submitted by the special auditor and recommended for extension to CIT as there were other cases having inter-group transaction for special audit and extension was granted by CIT(C)-II, New Delhi. 3. CIT(C)-II, New Delhi has conveyed the extension. 4. The AO conveyed the granting of extension of 60 days by the CIT, Central-Il to the assessee. 16. The Sec, 142 (2A) provides that the directions for special audit shall be given by the Assessing officer, with the previous approval of Chief Commissioner or Commissioner. In this case, there is no dispute that these directions have been given. Thus, the legislature clearly intended that initial direction shall be with the approval and after examination of the subject matter by the higher after prior approval of CIT, Central - II, New Delhi. Thereafter, proviso below Sec. 142 (2C) provides for the procedure for giving extension for completing the special audit task. It clearly provides that the Assessing Officer shall extend the said time period if the co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tatute. For example, the power to approve the accounts audited w/s 142(2A) lies with CIT/POIT/COIT or PCCIT. The powers w/: 1444 are to be exercised by the Joint Commissioner or Additional Commissioner. The powers w/s 251 are specific to the Commissioner (Appeals) Similarly, the powers w/s 263 and 264 are to be exercised by the PCIT/CIT. Further, in exercise of the powers conferred under clause (e) of sub-section (2) of section 119 of Income-tax Act, 1961, Central Board of Direct Taxes, may direct that the Chief Commissioner of Income-tax and Director General of Income-tax may reduce or waive interest charged under section 234A or section 2348. Further to mention, while levy of the penalty w/s 271AAB is the power of the Assessing Officer, the provisions w/ 274(2) mandates that the prior approval of the ICIT is required before levy of such penalty. Thus, we find that the statute has accorded implementation of the various provisions to specified authorities which cannot be interchanged 20. A power which has been given to a specified authority has to be discharged only by him. Substitution of that officer/authority by any other officer, may be of higher rank, cannot validate the sai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he statute for extension of time for submission of special Audit report. Under the circumstances, it can be clearly construed that the Assessing Officer has not extended the time limit for submission of special audit report as provided in Section 142(2C). Thus, it is clear that the Assessing Officer has not exercised the Jurisdiction in a proper way. As there is no valid extension as on 27.03.2019, the assessment has to be completed within 60 days U/s 153B from the end of the day in which the last date i.e.27.03.2019 for submission of Special Audit report. By taking into cognizance the above stipulated period, the assessment has to be completed by 25.05.2019. Whereas, the assessment in the instant case under appeal was completed by the Assessing Officer u/s 143(3) r.w.s 153C of the IT Act, on 21.08.2019 which is bad in the eyes of law and is barred by limitation. 7.5 Accordingly, the assessment order for the Asst. Year 2012-13 passed by the Assessing Officer after completion of due date is therefore held as void ab initio. Thus, the appeal made by the appellant on these grounds stands allowed." 10. We find that the Ld. CIT(A) has discussed the issue at length and rightly conclud ..... X X X X Extracts X X X X X X X X Extracts X X X X
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