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2017 (9) TMI 744 - DELHI HIGH COURTReassessment proceedings validity - Assessment order in terms of Section 153(2) - Penalty u/s 271(1)(c) - period of limitation - Held that:- In the present case, on the date that the stay order stood vacated only 13 days were left for completion of the proceedings. Since this period was less than 60 days, the period of limitation got extended to 60 days from the date of such vacation of stay, i.e. 60 days from 9th November 2016. This, therefore, meant that the order in the re-assessment proceedings had to be necessarily passed on or before 8th January 2017. This is the only interpretation that is possible on a collective reading of Section 153 (2), Explanation 1, clause (ii) and the first proviso thereto. The decision of the Madras High Court in Thanthi Trust (1988 (11) TMI 77 - MADRAS High Court ) turned on the fact that the Madras High Court narrowly interpreted that the word ‘assessment’ occurring in Explanation 1 (ii) to not take within its ambit reassessment proceedings. Yet, there appears to be a contradiction in terms because the Madras High Court proceeded to exclude the period during which there was stay of the proceedings in terms of that very Explanation. Further, no reference was made to the proviso below Explanation 1. The Madras High Court proceeded on the assumption that there was a time of period of 4 years from the last date of the assessment year in which the notice was served. Going by that yardstick in the present case, the reassessment order would still be time-barred. Court holds that in the present case the impugned assessment order dated 30th January 2017 was time barred and it is accordingly hereby set aside. Consequently, demand notice dated 30th January 2017 and the penalty order dated 26th July 2017, passed by the AO under Section 271(1) (c) of the Act, are also hereby set aside.
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