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TMI Blog2024 (2) TMI 1076X X X X Extracts X X X X X X X X Extracts X X X X ..... deemed assessment. It would arise on the last day of filing of the annual return. Further, the facts disclosed, and figures mentioned in that return were deemed to be part of the assessment order. The deeming fiction in law revived upon order dated 01.02.2016 being passed. Earlier, it may have remained in the shadow and thus dormant in face of the specific/conscious assessment order dated 04.01.2016 yet, in view of that order being recalled on 01.02.2016, it got resurrected by the force of law. It became absolute upon expiry of period of limitation to make a fresh assessment i.e. on 30.09.2016. Since, the assessing officer failed to make any specific order of assessment in terms of Section 29(6) of the Act till 30.09.2016, his powers to make the regular assessment stood exhausted. It is on the occurrence of that passive event on 30.09.2016 i.e. lapse of limitation to make a regular assessment that the deeming fiction of law created by Section 27 of the Act became absolute. If however, as in the present case, jurisdiction to reassess had remained from being assumed within the normal period of limitation - that expired on 31.03.2016, the subsequent setting aside of the regular ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s assessing authority, namely, Deputy Commissioner, Sector-7, Commercial Tax, Ghaziabad, to re-assess the petitioner for the A.Y. 2012-2013 (U.P. and Central), in the extended period of limitation provided under Section 29 (7) of the Act. The petition was entertained vide order dated 22.03.2021. Further, the operation and effect of the order dated 30.01.2021 and the consequential notice dated 15.02.2021 (issued by the assessing authority) were stayed. 3. Despite that stay order an ex-parte reassessment order was passed by the assessing authority. The revenue claims, that reassessment order had been passed on 17.03.2021 itself (i.e. few days before grant of the interim order dated 22.03.2021). However, it was first uploaded on the web portal of the revenue, on 24.03.2021. Occasioned by this development, an Amendment Application was filed to challenge the reassessment order dated 17.03.2021 for the A.Y. 2012-2013 (U.P. and Central). It was allowed. Further, vide order dated 29.07.2021, the operation and effect of the reassessment order was stayed. 4. Pleadings have been exchanged and the matter has thus been heard. The petitioner is a duly incorporated company registered under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... grieved by the inaction of the revenue authorities in not recording the change of address; in not uploading the correct/changed address of the petitioner and in continuing to pass ex parte orders without due service of necessary notice. Thus, the petitioner approached this Court by means of Writ (Tax) Nos. 80 of 2016 and 168 of 2016 to assail the ex parte assessment orders for the A.Ys. 2011-2012, 2013-2014 and 2014-2015. Those writ petitions (for other assessment years) were allowed vide order dated 29.02.2016. Ex parte orders were set aside and refund Rs. 49.24 crores was directed to be made. That refund was also received by the petitioner on 31.03.2016. 11. Then for the A.Y. 2012-2013, fresh notice of assessment was issued to the petitioner under Section 28 (2) (iii) of the Act on 30.03.2016. Also, territorial jurisdiction to assess the petitioner to tax was transferred to the petitioners assessing authority at Ghaziabad. Still, pursuant to the above notice, the third ex parte assessment proceedings for A.Y. 2012-2013 were concluded on 04.05.2016, by the Noida authority. It created a demand of tax at Rs. 1,49,34,487/-. Similar assessment orders were framed for A.Ys. 2013-201 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... isclosed to us, neither party informed the coordinate bench about this/last development. In such facts, it was not disclosed to the co-ordinate bench that the fourth (ex parte) assessment order dated 31.03.2017 for A.Y. 2012-13 had been rectified and thus nullified on 23.04.2018. In ignorance of that fact, the co-ordinate bench quashed the assessment order dated 31.03.2017, vide judgment and order dated 28.08.2019. 17. Meanwhile, the Additional Commissioner had already issued a notice proposing to grant permission to the petitioners assessing authority to reassess the petitioner for the A.Y. 2012-2013 (U.P. and Central) in the extended period of limitation. Later, the Additional Commissioner had issued a consequential notice dated 29.05.2018 to the petitioner seeking to re-assess it, for the A.Y. 2012-2013 (U.P. and Central) by invoking the extended period of limitation. Also, the petitioner applied to the authorities to keep those proceedings in abeyance during the pendency of Writ (Tax) No. 760 of 2017. Still, the petitioner was visited with another notice dated 13.06.2018. In response thereto, on 18.07.2018, it applied to Additional Commissioner to supply the reasons for inv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nother assessment notice dated 06.01.2021 fixing the date 14.01.2021. The petitioner appeared and again applied for reasons to believe. On 31.01.2021 an order was passed by the Additional Commissioner granting permission to the petitioner s assessing authority to re-assess the petitioner in the extended period of limitation for the A.Y. 2012-2013 (U.P. and Central). That order was modified on 08.02.2021. Consequently, the assessing authority issued assessment notice to the petitioner dated 15.02.2021. 22. Learned Senior Counsel for the petitioner has submitted, in the scheme of the Act, in absence of any assessment order being passed by the assessing authority on a conscious application of mind, the assessment made by way of self-assessment arises on a deemed basis, as an enforceable consequence in law, under Section 27 of the Act. 23. For ready reference, the provisions of Section 27 of the Act are quoted below: 27. Self assessment (1) Subject to provisions of section 28, every dealer, who has submitted the annual return of turnover and tax, in the prescribed form and manner, shall be deemed to have been assessed to an amount of tax admittedly payable on the turnover ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as reason to believe that the whole or any part of the turnover of a dealer, for any assessment year or part thereof, has escaped assessment to tax or has been under assessed or has been assessed to tax at a rate lower than that at which it is assessable under this Act, or any deductions or exemptions have been wrongly allowed in respect thereof, the assessing authority may, after issuing notice to the dealer and making such inquiry as it may consider necessary, assess or re-assess the dealer to tax according to law : Provided that the tax shall be charged at the rate at which it would have been charged had the turnover not escaped assessment or full assessment as the case may be. Explanation I: Nothing in this sub-section shall be deemed to prevent the assessing authority from making an assessment to the best of its judgment. Explanation II: For the purpose of this section and of section 31, assessing authority means the officer or authority who passed the earlier assessment order, if any, and includes the officer or authority having jurisdiction for the time being to assess the dealer. Explanation III: - Notwithstanding the issuance of notice under this sub-section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in face of the order passed by the coordinate bench dated 28.08.2019 (extracted above) in Writ (Tax) No. 760 of 2017, the assessment proceedings against the petitioner for A.Y. 2012-13 remained quashed. Neither this Court granted any liberty to the assessing authority to pass a fresh assessment order in the case of the petitioner for the Assessment Year 2012-2013 (U.P. and Central) nor the revenue challenged that order before the Supreme Court. Therefore, the order of the coordinate bench dated 28.08.2019 attained finality. The narration to the contrary made in the re-assessment order for the A.Y. 2012- 2013 is plainly against the record. Liberty had been granted only with respect to A.Y. 2013-2014. 28. Last, it has been submitted, the entire exercise has been made by the revenue authorities in abuse of their powers, despite earlier orders wherein certain adverse observations had also been made. The limitation to make the assessment order existed up to 31.03.2016, in the first place. Upon the ex parte assessment order dated 04.01.2016 being set aside by the assessing authority, in exercise its power under Section 32 of the Act, on 01.02.2016, that limitation stood extended unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessment record to establish that the assessee had made any excessive claim or shown less tax liability. There is no allegation of suppression of turnover etc. The learned Standing Counsel would candidly admit, there is no such material on record. 33. As to the effect of the earlier order of the coordinate bench dated 28.08.2019, learned counsel for the revenue has relied on the operative portion of that order to submit that the writ court left it open to the assessing authority to make a fresh assessment order. At the same time, it is undisputed that the revenue never challenged that order before the Supreme Court. It has not sought review or clarification of that order. 34. Last, it may be specifically noted, the revenue is not relying on the subsequent orders passed by the assessing authority on 31.03.2017. In that regard it has been fairly stated that the normal period of limitation to make a regular assessment expired on 30.09.2016. Thereafter, there did not survive any provision of law to extend the limitation to make a regular assessment. It is that mistake (committed in law), that the assessing authority later corrected by the order dated 23.04.2018. At the same ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -B in case of a dealer executing works contract or transfer of right to use any goods or both, as the case may be; for the preceding assessment year alongwith copies marked Original of all forms of declaration or certificates, on the basis of which exemption or reduction in the rate of tax is claimed or which determine the nature of a transaction and annexure as described in the relevant forms: Provided that the Assessing Authority may, for adequate reasons to be recorded in writing, extend the time for filing such Annexures of Consolidated Details upto a period of ninety days beyond the period prescribed under this sub-rule: Provided Further that the Commissioner or the State Government may, for adequate reasons to be recorded in writing, by an order in general, extend the time for filing the Annexures of Consolidated Details beyond the period prescribed under this sub-rule. 38. Thus, in the present facts the last date of filing of return for the A.Y. 2012-13 would have been 31.10.2013. The petitioner had filed it s annual return on 25.12.2013. Admittedly, it was extended till 31.12.2013. Upon the provisional assessment order set-aside, since the assessing authority ch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on his own, unless he first formed and recorded his reason to believe - as to escapement. 43. For that purpose, the relevant date would remain as prescribed under Section 29(1) of the Act being 3 years from the end of the relevant assessment year. In present facts, that date expired on 31.03.2016. The order dated 01.02.2016 passed by the assessing authority under Section 32 of the Act to recall the earlier / regular assessment order dated 04.01.2016, had no bearing on that date. That event only caused the effect of extending the period of limitation to make a fresh assessment (regular), by 30.09.2016. 44. Section 29(1) and Section 29(6) were mutually exclusive provisions. They did not overlap or interject the applicability of the other. Section 29(6) of the Act was applicable to situations where an ex parte order of assessment or reassessment had been set aside by the assessing authority. In contrast, Section 29(1) governed the limitation to initiate a reassessment proceeding. Thus, if an assessment or reassessment proceeding had been validly initiated and consequently, an ex parte assessment / reassessment order was passed then upon it being set aside under section 32 of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es in the annual return filed by the assessee for A.Y. 2012-13, jurisdiction to reassess the petitioner for A.Y. 2012-13 may have been assumed only against a valid reason to believe recorded in the context of the facts and figures that found mentioned in such assessment order/ annual return. We may have been tempted to consider the figures in the annual return and the disclosure made therein, yet, it is an undisputed fact that such return was filed and was subjected to provisional assessment proceeding (once) and regular assessment proceeding (once). At both stages that return was considered. Therefore, no further discussion is required as to the existence of facts and figures disclosed in such annual return. 50. Even if the assessing authority was seeking to reassess the petitioner on the strength of its annual return, it was incumbent on the assessing authority to record his reasons with respect to and/or in contrast to the facts and figures disclosed by the assessee in its annual return. It was further incumbent on the assessing authority to form reasons on the strength of objective material on record that any part of petitioner s turnover had escaped assessment. 51. The b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessment. 11. Once the proviso postulates recording of reasons by the assessing authority, it necessarily obligates the Commissioner or the Additional Commissioner to consider such reasons and make them known to the assessee, before he finally forms his satisfaction and even if the Commissioner or the higher authority on his own reasons feels satisfied that it is just and expedient to reopen the assessment, it would still require that such reason must be made known to the dealer also so that before the assessment is reopened he may have an opportunity to satisfy the higher authority that the reasons assigned by the assessing authority are not relevant or they are incorrect or they do not make out a legal ground for reopening of the assessment and likewise if the Commissioner or the higher authority proposes to authorise the assessing authority for reopening the assessment on his own, then also reasons for such satisfaction have to be supplied to the dealer, so that he may have a say to convince the higher authority for not authorising the assessing officer for reopening the assessment. 13. When an order is passed on the basis of the reasons recorded, it naturally means th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d without recording relevant reason to believe. As held in Fag Precision Bearings (Supra), lapse of time is no reason to reassess an assessee. Paragraph 9 of that report reads as below:- 9. Under the terms of Rule 37-A, the Commissioner must put the reasons and circumstances necessitating stay of assessment proceedings in writing. In the instant case, the reasons and circumstances necessitating stay are that the assessment was in progress and since some more time will be taken and the assessment proceedings are not likely to be completed within the prescribed time it is considered proper to stay the assessment . To accept the aforesaid as good reason to stay assessment proceedings is to hold that the Commissioner, or the State Government, can give a go-by to the statutory provision prescribing the period during which assessment proceedings shall be completed only because the sales tax authorities have not completed the assessment proceedings within the stipulated time. We cannot accept this as a good reason. The aforestated power to stay assessment proceedings can be exercised only in extraordinary circumstances and for supervening reasons which cannot be attributed to the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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