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2015 (12) TMI 569 - HC - Income TaxValidity of reassessment proceedings - whether barred by the period of limitation - Held that:- Provisions of Section 149 of the Income Tax Act, 1961 prescribe a limitation of six years at the relevant time. Accordingly, it is not in dispute that the issuance of notice dated 12.1.1965 is within six years of assessment year 1959-60. But the question referred to is about the order of reassessment dated 18.3.1970. We find that the provisions of Section 153 ( 2) at the relevant time prescribed limitation of four years from the end of assessment year in which notice under Section 148 of the Income Tax Act, 1961 is served upon assessee. Here, though notice is dated 25.1.1965, admittedly, it is served on assessee in September 1965 i.e. in financial year 1965-66 which expired on 31.3.1966. The assessment year for the purposes of Section 153 (2) (a) in present facts , therefore, shall be 196566 only and the order has been passed on 18.3.1970 i.e. before 31.3.1970. It is, therefore, within the stipulated time limit of four years. As such, it cannot be said that it is barred by limitation. - Decided in favour of the Department. Penalty under Section 271(1)(c) - Held that:- The order imposing penalty cannot be passed if the appeal against basic order of assessment is pending before the Competent superior Authority. Here, on 24.2.1972 though 1st Appellate Authority had disposed of the appeal, further appeal of assessee before the ITAT was very much pending. The order imposing penalty, therefore, appears to be premature and, therefore, illegal and without jurisdiction. The notices for initiation of those proceedings are, dated 12.1.1972, 3.2.1972 and 27.9.1972 i.e. during the pendency of appeal before the ITAT. Essential ingredients of Section 275 (1) are clearly not in contemplation of notice issuing authority on these dates. The form or language of these notices shows clear non-application of mind in this respect. It is obvious that such notices initiating the penalty proceedings could not have been issued before 26.3.1974. - Decided in favour of assessee
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