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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 ..... s 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. Therefore in our considered opinion, the ratio laid down by the Hon ble Supreme Court squarely applies to the instant case also. In the instant case on hand, the Ld. AO ought to have passed an order U/s. 142(2C) of the Act on or before 25/5/2019 ie., expiry of the first extension. Case law relied on by the Ld. AR in ACIT Vs Soul Space projects Limited [ 2020 (6) TMI 696 - ITAT DELHI] is also relevant to the issue which was also considered by the Ld. CIT(A) We find that the Ld. CIT(A) has discussed the issue at length and rightly concluded the matter and therefore we are of the considered view that no interference is required in the order of the Ld. CIT(A) on this issue. - I.T.A. No.16/Viz/2021, I.T.A. No. 17/Viz/202 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Act dated 14/4/2018 which was served on the assessee on 16/4/2018. In response the assessee filed the return of income on 06/6/2018 admitting a total income of Rs. NIL. Subsequently, notice U/s. 143(2) and a detailed questionnaire was issued U/s. 142(1) and served on the assessee on 26/6/2018 and 17/08/2018 respectively. The Ld. AO considering the nature and complexity of the accounts, voluminous seized/impounded material, multiplicity of transactions in the accounts and the specialized nature of the business activity, proposed to Special Audit U/s. 142(2A) of the Act with the consent of the assessee-company. This proposal was approved by the Ld. Pr. CIT (Central), Visakhapatnam vide letter F.No.Pr.CIT(C)/142(2A)/57(1)2018-19, dated 26/12/2018 authorizing Sri K.S.S. Sarma, FCA of M/s. Sarma Rao, Visakhapatnam to conduct the Special Audit. The final audit report was submitted by Sri K.S.S. Sarma vide letter dated 24/6/2019. The Ld. AO then issued a show cause notice along with a copy of the Special Audit Report to the assessee-company vide letter dated 12/7/2019. In response, the assessee furnished required information and necessary explanations and clarifications before the Ld. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 32, A/NFL/46 A/NFL/52 before issue of notice U/s. 153C. 4. The Ld. CIT(A) erred in quashing the assessments completed by the AO u/s. 143(3) of the IT Act, 1961, as barred by limitation. 5. Any other ground urged at the time of hearing. 5. Grounds No. 1 2 pertain to time limit for submission of Special Audit Report as required U/s. 142(2C) of the Act. 6. At the outset, the Ld. AR submitted that the Special Audit was ordered by the Ld. Principal Commissioner of Income Tax (Central), Visakhapatnam on 27/12/2018. The Ld. AR submitted that the Special Auditor was directed to submit his report within a period of 90 days ie., on or before 27/3/2019. Further, the Ld. AR submitted that the Special Auditor sought extension of time limit and the Ld. AO vide letter dated 27/3/2019 merely communicated the permission of the Ld. Pr. CIT (Central), Visakhapatnam allowing of extension of time limit for 60 days which is expiring on 25/5/2019. The Ld. AR further submitted that the Special Auditor requested another extension of time limit by 30 days on 27/5/2019 ie., after the date of expiry of the original limitation period. The Ld. AR submitted that the Ld. AO issued the orde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ized establish any co-relation, document wise, with these assessment year in consideration. Per contra, the Ld. DR relied on the Explanation to section 153B of the Act. The Ld. DR further relied on the order of the Ld. AO. 8. We have heard both the sides and perused the material available on record. As per section 142(2A) of the Act, the Special Auditor is expected to provide his Special Audit Report within a period of 180 days. With respect to Ground No.1 2 regarding the time limit prescribed U/s. 142(2A) for submission of Special Audit Report, we find that the Special Auditor has sought first extension on 26/03/2019 for another 90 days. However, the Ld. Assessing Officer on 27th March, 2019 has merely communicated the permission accorded to him by the Ld. Pr. CIT (Central), Visakhapatnam for extension of time limit by another 60 days which will expire on 25/5/2019. Further, another extension was applied by the Special Auditor on 27/5/2019. The Ld. AO once again has not applied his mind in giving the extension as provided U/s. 142(2C) of the Act but has once again merely communicated the permission accorded to him by the Ld. Pr. CIT (Central), Visakhapatnam. Even though ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r considered opinion, the ratio laid down by the Hon ble Supreme Court squarely applies to the instant case also. In the instant case on hand, the Ld. AO ought to have passed an order U/s. 142(2C) of the Act on or before 25/5/2019 ie., expiry of the first extension. Further, the case law relied on by the Ld. AR in ACIT Vs Soul Space projects Limited [2020] 117 Taxmann.com 395 (Delhi) (Trib.) (supra) is also relevant to the issue which was also considered by the Ld. CIT(A). The Ld. CIT(A) in para 7 of his order held as under: 7. During the course of appellate proceedings, the Authorised Representative of the appellant relied on the decision of the Hon'ble Income Tax Appellate Tribunal, Delhi Bench 'G' in the case of Assistant Commissioner of Income tax vs. M/s. Soul Space Projects Ltd., reported in 177 Taxman, 395 (Delhi Tribunal) wherein similar issue was involved and the Hon'ble Tribunal, while passing the order held as under: Heard the arguments of both the parties and perused the material available on record 15. The case lows quoted by the ld. AR as rebutted by the Id. DR have been closely perused while the Id. DR argued that the relevance of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ointed out that in Sec. 142 (2A) law mandates the prior approval of CCIT/CIT, while in the proviso below Sec. 142 (2C), while to grant extension, the sole power is vested with the Assessing Officer. The statute u/s 142(2A) provides for special audit with the previous approval of the CIT is intended with an objective that the subject matter stands examined by the higher and more experienced officers so that it may not bring unnecessary work and equity to the assessed. Once the issue u/s 142(2A) stands examined by the higher authorities, thereafter, for the issue of extension u/s 142(2C), there is no need for the higher authorities to be involved and the law provided the circumstances, on existence of which, this decision has been left over to be taken by the concerned Assessing Officer. 17. In the present case, the extension has been given by CIT and not by the Assessing Officer, vide letter dtd. 13-4-2010, as under:- - In this connection you are hereby informed that the Commissioner of Income-tax (Central) Il, New Delhi vide his office letter F.No. CIT/(C)-II/10- 11/24 dated 12/04/2010 has granted extension of 60 days to the special auditors M/s. Sanjay Satpal Associat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be given only by competent authority. In this case, the extension has not been given by the Assessing Officer but by the CIT, Central-it and the Assessing Officer has only conveyed the approval, therefore, we hold that the extension given by the CIT, Central-ll is beyond the powers vested as per the statute and accordingly the assessment completed after the due date is held to be void ob initio. 21 . Since, the order has been held to be invalid ab initio, any adjudication on the other grounds would only be academic in nature and hence not resorted to. 22. Before parting, we would like to keep on record our appreciations to the ld. CIT DR, Sh. H.K. Choudhary and the AR, Sh. Rohit Jain for their radiant arguments. 23. In the result, the appeals of the revenue are dismissed and the Cross Objections of the assessee are allowed. 9. Further, the Ld. CIT(A) at paras 7.5 and 7.6 has held as follows: 7.5. Thus the proviso sec.142(2C) is very clear that the authority who is competent to extend the time limit is only the Assessing Officer but not any other superior authority of law. The Statute has rendered the power for extension of time lies with the Assessing Off ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... C of the Act. Even though the Ld. AR has raised this ground but has not argued before us on this ground, we are of the considered opinion that this ground is considered as not pressed by the Ld. AR and hence dismiss the legal ground raised by the assessee. 12. Ground No.4 is with respect to quashing of assessment completed by the Ld. AO u/s. 143(3) r.w.s 153C of the Act. As this issue has been decided in favour of the assessee while adjudicating the Grounds No. 1 2 in the above paragraphs of this order, we are of the considered view that no separate adjudication is required on this ground. 13. Ground No.5 is general in nature and need not be adjudicated. 14. In the result, appeal of the Revenue is dismissed. 15. With respect the other appeals viz., ITA Nos.17/Viz/2021 (AY: 2017-18) in the case of ACIT vs. Sri Golguri Sri Rama Reddy ; ITA No.22/Viz/2021 (AY: 2013-14) in the case of ACIT vs. M/s. Nutrient Marine Foods Ltd ITA No.29/Viz/2021 (AY: 2015-16) in the case of ACIT vs. M/s. Real Grow Exims Pvt Ltd , the Revenue has raised the identical issues to that of the grounds raised in their appeal ITA No.16/Viz/2021 (AY: 2015-16) which we have disposed off as a lea ..... X X X X Extracts X X X X X X X X Extracts X X X X
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