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TMI Blog2025 (2) TMI 120X X X X Extracts X X X X X X X X Extracts X X X X ..... n 5th January,2016. Thus, we are of the considered opinion that order was barred by limitation as it should have served on the assessee on or before 31.12.2015
Appeal of the assessee is allowed on legal issue. X X X X Extracts X X X X X X X X Extracts X X X X ..... ct, was passed on 30.04.2012, assessing total income of ₹ 77,830/-. Thereafter, Pr. Commissioner of Income Tax (in short 'PCIT') on perusal of the record observed that assessee has e-filed its return on 04.02.2011, declaring total income of ₹ 6,519/- and the assessee has raised share capital to the tune of ₹ 44,50,000/- and share premium ₹ 10,44,00,000/- by issue of equity shares. The PCIT also noticed that during the reassessment proceedings, the ld. AO issued notice u/s 133(6) of the Act to the 9 out of 20 subscribers and completed the assessment vide order dated 30.04.2012. According to the PCIT, notices u/s 133(6) of the Act were not served through postal services. In reply to notices u/s 133(6) of the Act, all replies were received in the office, which appears to have been prepared by the same person. The PCIT also noted that the assessee company was a newly started company having no record of any worthwhile business nor any reputation and thus there was no justification for issue of equity shares at high share premium. According to the PCIT, the AO has not carried out any through enquiry calling for intervention u/s 263 of the Act as the order passed b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... R also produced before us, the acknowledgement slip where the date of service was stated as 05.01.2016. In defense of his argument the ld. DR relied on the decision of Hon'ble Supreme Court of India in the case of CIT vs. Mohammed Meeran Shahul Hameed (2021) 131 taxmann.com 94 (SC) & Prakash Lal Khandelwal Vs. CIT [2023] 151 taxmann.com 72 (Jharkhand), and prayed that in view of the ratio laid down in the above decisions, the ld. AO has rightly framed the assessment within the due time though the services was made on 05.01.2016 and the contention and argument of the assessee may kindly be rejected by dismissing the additional ground raised by the assessee. 09. In rebuttal, the assessee submitted before the Bench that the case law relied upon by the Department in the case of Mohammed Meeran Shahul Hameed (Supra), was rendered under different facts altogether. The ld. AR submitted that the present case relates to Section 143(3)/144 of the Act and has no action that section 263 of the Act, as relied upon by the Department. In the instant case, the order was dispatched before the limitation period but in the present case in hand, the assessment order was dispatched after the end o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der as 30.12.2015. The AO further mentioned in the order that assessment order the day of passing the order was Thursday and 2nd and 3rd January, 2016 were holidays being Saturday and Sunday and thereafter the order was served on 5th January,2016. Having considered these facts, we are of the considered opinion that order was barred by limitation as it should have served on the assessee on or before 31.12.2015. The case of the assessee is squarely covered by the decision of Hon'ble Orissa High Court in case of PCIT Vs. Nidan in ITA No.157 of 2018, I.A. No. 7 of 2019 and decision of the Karnataka high court in CIT Vs. BJN Hotels Ltd.[2017] 79 taxmann.com 336 (Karnataka). The operative paras in the case of PCIT Vs M/S Nidan (supra) which also discusses the decision of the Hon'ble Karnataka High Court in the case of CIT Vs. BJN Hotels Ltd(supra) in para 8 as under: "3. The facts in brief are that a search was as conducted under Section 132 of the Income Tax Act, 1961 ('Act') in the case of the Respondent Assessee on 20th May, 2014. Pursuant thereto an assessment was completed under Section 153-A read with Section 144 of the Act and an assessment order was passed for the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ustries Ltd. (supra) which favoured the Revenue and not the decisions of Karnataka and Kerala High Courts which were against it. 7. As rightly noted by the ITAT the requirement under Section 153B (1) is for the AO to make the assessment order within a period of twenty-one months from the end of the financial year in which the last of the authorization for the search under Section 132 of the Act was executed. In the present case, there is no doubt that the last date by which the assessment had to be made was 31st December, 2016. As further rightly noticed Section 153B (1) uses the expression "order of assessment" and not merely 'assessment'. Therefore, the assessment order becomes an order only when in fact it is communicated and therefore the communication of the order had to be prior to the end of the limitation period. In BJN Hotels Ltd. (supra) the Karnataka High Court, held as under: "That the revenue is neither able to point out from the records that the assessment orders were dispatched on 27.4.2007 nor produced the dispatched register to establish that the orders were complete and effective i.e. it was issued, so as to be beyond the control of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... concerned. 11. Consequently, the Court is satisfied that no error has been committed by the ITAT in allowing the Assessee's appeal. This Court is, therefore, not persuaded to frame the questions of law as urged by the Revenue. 12. The appeal is accordingly dismissed." 012. We have also perused the decision relied by the ld. DR in CIT vs. Mohammed Meeran Shahul Hameed (2021) 131 taxmann.com 94 (SC) and Prakash Lal Khandelwal Vs. CIT [2023] 151 taxmann.com 72 (Jharkhand) and find that they are distinguishable on facts and are not applicable as discussed above. Considering these facts and circumstances and the decision of the Hon'ble Orissa High Court as discussed above, we hold that the assessment order is barred by limitation and is accordingly quashed as nullity and non-est. The appeal of the assessee is allowed on legal issue. 013. The issue raised in ITA No.582/Kol/2022 by the assessee is against the imposition of penalty u/s 271(1)(c) of the Act. Since we have quashed the assessment order passed by the AO, therefore the penalty order being consequential to assessment order and is also quashed. 014. In the result, the appeals of the assessee are allowed. Order pronou ..... X X X X Extracts X X X X X X X X Extracts X X X X
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