9911796707
TMI Blog2025 (1) TMI 1228X X X X Extracts X X X X X X X X Extracts X X X X ..... d 21.04.2021, is barred by limitation, by 111 days, therefore, the assessment order, should be quashed, on this fact only.
Law is well settled that when the statute requires to do certain thing in certain way, the thing must be done in that way or not at all. Other methods or mode of performance are impliedly and necessarily forbidden. The aforesaid settled legal proposition is based on a legal maxim 'Expressio unius est exclusion alteris', meaning there by that if a statute provides for a thing to be done in a particular manner, then it has to be done in that manner and in no other manner and following of other course is not permissible.
Thus, as the assessment order was not framed within the time limit prescribed u/s 153B therefore, assessment order passed by the assessment officer u/s 153C r/w section 143(3) of the Act, is here by quashed, and consequently, we allow the appeal of the assessee. X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee craves leave to add, amend, alter, vary and / or withdraw any or all the above grounds of Appeal." 4. The assessee also raised additional grounds of appeal, which are reproduced below: "1. That the learned A.O. has grievously erred in law and on facts in passing the assessment order u/s 153C of the Act after the end of time limit for completion of assessment u/s 153C of the Act, as specified u/s 153B of the Act and hence the assessment order is bad and illegal being barred by limitation. 2. That the learned CIT(Appeals) has grievously erred in law and on facts in upholding the action of the learned A.O. even in taxing the alleged unexplained investment in the hands of the Assessee particularly when it is alleged to be the expenditure of the V R Infosystem LLP, in which the Assessee is a partner. 3. That the learned AO has grievously erred in law and on facts in assuming jurisdiction u/s 153C of the Act. The assessee reserves its right to add, amend, alter or modify any of the grounds stated hereinabove either before or at the time of hearing." 5. The appeal filed by the assessee [in IT(SS)A No.78/Rjt/2023-lead case] and appeal in IT(SS)A No. 79/Rjt/2023, bot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as Annexure - D) 5. It is further submitted that only on 01.07.2023 the Assessee came to know about the fact that appellate order u/s 250 of the Act is passed, when the assessee has logged into his account on portal to know the status of the appeal filed. 6. Therefore, in the light of the above stated reason the appeal could not be filed in time and thus a delay has taken place. Hence, there is an appropriate and sufficient reason to condone the delay. 7. From the above facts, it is most respectfully submitted that when substantial justice and technical considerations are pitted against each other, the cause of substantial justice deserves to be preferred, the other side cannot claim to have vested right in injustice being done because of non-deliberate delay. It is further submitted that the appeal may kindly be decided on merits rather than rejecting the same on the ground of delay and latches as the cause of substantial justice shall prevail over the technical considerations." 6. Learned Counsel for the assessee, submitted that similar and identical contents are existed in the petition for condonation of delay, in case of other appeals also, therefore, a consolidated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... quisition vs Mst. Katiji and others, reported in 167 ITR 471, (1988 SC 897) (7) has observed as follows: "4. When substantial justice and technical considerations are pitted against each other, cause of substantial justice deserves to be preferred for the other side cannot claim to have vested right in injustice being done because of a non- deliberate delay." 9. When we weigh these aspects then the side of justice becomes heavier and casts a duty on us to deliver justice. We note that the reasons given in the affidavit for condonation of delay were convincing and these reasons would constitute reasonable and sufficient cause for the delay in filing these appeals. We also note that the sufficient cause or the reasons explained by these assessees, in the petition for condonation of delay, are identical and similar. We, therefore, condone the delay and admit these appeals for hearing. Facts of the assessee's case. 10. The facts of the case which can be stated quite shortly are as follows: The assessee, before us, is an individual and has filed his return of Income u/s 139(1) of the Act, on 04.03.2017, declaring total income at Rs. 2,85,620/-. A search action u/s 132 of the Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... concerned firm, and it was found that expense of Rs. 3,53,670/- and Rs. 10,55,095/- were not recorded in the books of accounts of M/s VR Infosystems LLP. As, the share of the assessee is 10%, therefore, the assessee must have incurred unaccounted expense on behalf of firm of Rs. 35,367/- and Rs. 1,05,509/-. In this regards a show cause notice was issued to the assessee, whereby he was requested to explain the contents of the I-phone images and prove whether the same are accounted in his books. The show cause notice is produced below: "The assessment proceedings in your case for FY 2015-16 relevant to AY 2016-17 are under progress with this office. In continuation with the earlier notices and after considering the submissions filed till date, following further explanation is required before finalization of the ongoing assessment- On verification of the ITR filed for the year under consideration u/s 153C of the Act, it is noticed that you have considered Rs. 35,367/- being your share in the expenditures incurred for your partnership firm M/s VR info System LLP and paid the taxes thereon as per normal slab rates applicable to Individuals. In this regard, kind attention is invited ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m is bounding on him only. I cannot be made responsible for the acts/statement of Sh. Dignesh Rajeshbhai Patel unless he has been instigated by me or done with my knowledge or consent. However, to avoid long drawn litigation and purchase peace of mind, I have added Rs. 35,367/- (10% of Rs. 3,53,670/-) respectively in my return of income filed in response to notice u/s 153C of the Act. Therefore, you are requested not to charge to tax as per provisions of section 115BBE of the Act, income of Rs. 35,367/-, being offered by me for tax in my Return of income to avoid long drawn litigation and purchase peace of mind and consider the income at normal rate and oblige." 13. However, the assessing officer, rejected the contention of the assessee and held that an income of the assessee of Rs. 35,367/- should be treated as unexplained investment of the assessee in the partnership -firm, therefore, addition u/s 69B r.w.s. 115BBE was made in the hands of the assessee. Findings of the Learned, CIT(A) 14. Aggrieved by the order of assessing officer, the assessee carried the matter in appeal before Ld. CIT(A), who has confirmed the action of the assessing officer, observing as follows: " ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appropriate evidences. Therefore, after considering the reply of show cause of the assessee, the AO had treated the said income of Rs. 35,367/- as unexplained investment of the assessee u/s.69B of the Act and taxed on special rate as per section 115BBE of the Act. 7.2 During the course of appellate proceedings, the assessee has stated that whatever material found and seized belonged to searched person only but to avoid long drawn litigation and purchase peace of mind the assessee offered Rs. 35,367/- in return of income filed in response to notice u/s. 153C of the Act. Thus, the assessee cannot be penalized by applying higher rate of tax on Rs. 35,367/-. 7.3 In this regard, it is observed that the assessee has taken plea that in order to buy Peace and to avoid long drawn litigation, he has already paid the tax along with interest on additional income offered amounting to Rs. 35,367/-, I find that the claim of the assessee is not correct because the assessee was well aware of the facts that he had made unexplained investment in cash in the firm M/s. V. R. Infosystem LLP during the year under consideration and the said cash investment was not offered in the original return of inco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of an assessee includes any income referred to in section 68, section 69, section 69A, section 69B, section 69C or section 69D, the income-tax payable shall be the aggregate of- (a) the amount of income-tax calculated on income referred to in section 68, section 69, section 69A, section 69B, section 69C or section 69D, at the rate of thirty per cent; and (b) the amount of income-tax with which the assessee would have been chargeable had his total income been reduced by the amount of income referred to in clause (a). (2) Notwithstanding anything contained in this Act, no deduction in respect of any expenditure or allowance shall be allowed to the assessee under any provision of this Act in computing his income referred to in clause (a) of sub-section (1)". 7.5 In view of the above, it can be said that for triggering section 115BBE what is relevant is whether income is disclosed or undisclosed or explained or unexplained. If the income is disclosed or explained as mandated by the law, then same would be taxable in the ordinary manner. On the other hand, if the income is undisclosed or unexplained then the provisions of section 115BBE may be triggered depending upon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... us. Adjudication of additional ground raised by the assessee. 16. The assessee has raised the additional ground, which we have already noted above, stating that assessing officer was erred in law and on facts in passing the assessment order u/s 153C of the Act, after the end of time limit for completion of assessment u/s 153C of the Act, as specified u/s 153B of the Act, and hence the assessment order is bad and illegal being barred by limitation. The Ld. Counsel for the assessee, prayed the Bench that additional grounds raised by the assessee should be admitted and it should be adjudicated first because it goes to the root of the matter. 17. However, Ld. DR for the Revenue, opposed the prayer of the assessee, stating that the assessee cannot raise such legal ground, for the first time, before the Tribunal, as the assessee, did not raise this issue, during the assessment proceedings, therefore, additional ground raised by the assessee, may not be admitted. 18. We have heard both the parties on this preliminary issue and noted that additional ground raised by the assessee; pertain to passing the assessment order u/s 153C of the Act, after the end of time limit for completion o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... horities, for adjudication afresh. The Ld. CIT- DR submitted that assessee has filed the return of income in response to notice u/s 153C of the Act and paid the taxes and the issue relating to time barred of assessment has neither been raised during the assessment proceedings nor during the appellate proceedings, the assessee has challenged the jurisdiction u/s 153C of the Act, first time, before the Tribunal, which should not be entertained. The Ld. CIT-DR for the Revenue also relied on the judgement of Hon'ble Supreme Court in suo motu writ petition in MA No. 21 of 2022 (SC- - Suo Motu Writ Petition-COVID period) and stated that in assessee's case assessment order was framed by the assessing officer, beyond the time limit prescribed under section 153B of the Act, because Covid-19 period was involved, where everybody was working with safety, therefore assessment order was framed late, due to COVID-19 pandemic, hence as per the judgment of Hon'ble Supreme Court (supra), there should not be any delay in framing the assessment order. Analysis and Conclusion 22. We have heard both the parties and carefully gone through the submissions put forth on behalf of the assessee along with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... months, whichever is later. Therefore, taking the lead case ( as an example) in IT(SS)A No.78/Rjt/2023, for assessment Year 2016-17, in case of Chintan Kumar Rameshbhai Patel, we note that assessment order was passed by the assessing officer, under section 153C read with section 143(3) of the Act, on 21.04.2021. The assessment order ought have been passed on 31.12.2020. Therefore, number of days of delay in passing the assessment order comes at 111 days. We should examine, the conditions and the time limit mentioned in section 153B of the Act, as follows: (A). In this case, date of execution of authorization is 15.02.2017. Now, we can count 21 Months from the end of the financial year 2016-17, in which the last of the authorization for search was executed, which ends on 31.12.2018. ( April 2017 to December 2018= 21 Months). (B). Date on which documents were handed over to assessing officer, or received by the assessing officer, is 09.08.2019 and now, we can count 9 months from the end of the financial year 2019-20, in which book of account or documents or assets seized or requisitioned were handed over, which ends on, 31.12.2020. ( April 2020 to December 2020= 9 Months). Asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... epose. In the context of limitation of actions, "repose" includes at least four distinct but overlapping concepts: (a) to allow peace of mind; (b) to avoid disrupting settled expectations; (c) to reduce uncertainty about the future; and (d) to reduce the cost of measures designed to guard against the risk of untimely claims. (ii) Minimize Deterioration of Evidence. Another policy underlying statutes of limitation is the policy of avoiding deterioration of evidence. Like the policy of promoting repose, however, avoiding deterioration of evidence serves several distinct but overlapping purposes: (a) to ensure accuracy in fact finding; (b) to prevent the assertion of fraudulent claims; (c) to reduce the costs of litigation; and (d) to preserve the integrity of the legal system. (iii) Place Defendants and Plaintiffs on an Equal Footing. One of the most powerful policies supporting limitation of actions is the concern that the passage of time will not only result in the deterioration of evidence, but that it will also allow the plaintiff to gain an unfair advantage over the defendant. Many cases have recognized that one of the purposes of a limitation system is to avoid ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 03.2020 till 28.02.2022 shall also stand excluded in computing the periods prescribed under Sections 23 (4) and 29A of the Arbitration and Conciliation Act, 1996, Section 12A of the Commercial Courts Act, 2015 and provisos (b) and (c) of Section 138 of the Negotiable Instruments Act, 1881 and any other laws, which prescribe period(s) of limitation for instituting proceedings, outer limits (within which the court or tribunal can condone delay) and termination of proceedings." 29.We find that in the assessee's case under consideration, the assessment order was not framed within the time limit prescribed under section 153B of the Act, therefore, assessment order passed by the assessment officer, dated 21.04.2021, under section 153C read with section 143(3) of the Act, is here by quashed, and consequently, we allow the appeal of the assessee. 30. In the result, appeal filed by the assessee, in IT(SS)A No.78/RJT/2023, is allowed. 31. As the assessment order itself is quashed, therefore, all other issues on merits of the additions, in the impugned assessment proceedings, are rendered academic and infructuous. 32. Since the facts and circumstances in the case of other appeals, viz: i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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