Home Case Index All Cases Income Tax Income Tax + HC Income Tax - 2019 (6) TMI HC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2019 (6) TMI 481 - MADRAS HIGH COURTRevision u/s 263 - delay of 8 years and 7 months for initiation of proceedings initiated u/s 143(3) pursuant to direction by CIT - limitation u/s 153(2A) - whether the revision sought to be made under the impugned notice by the Assessing Authority, would fall u/s 153(2A) or 153(3)? - HELD THAT:- In the instant case in hand, the Commissioner had given certain directions with determined findings and thereby, directed the AO to carry out such directions. In consequence to these findings and directions of the Commissioner, AO will be required to exercise his powers u/s 153 (3) and not u/s 153 (2A). As such, it cannot be said that the impugned proceedings now initiated by the AO is barred by limitation u/s 153(2A) . The first ground raised by the learned counsel for the petitioner is answered accordingly. Consequence of the delay of 8 years and 7 months - inordinate and unreasonable - One of the settled proposition of law, as decided in various decisions of the Hon'ble Apex Court as well as many High Courts is that where no limitation is prescribed for completion of reassessment, such process must be completed within a reasonable time and this proposition would depend on the facts and circumstances of each and every case. In Mohamad Kavi Mohamad Amin v. Fatmabai Ibrahim [1996 (8) TMI 537 - SUPREME COURT] observed that where no time limit is prescribed for exercise of a power under a statute, it does not mean that it can be exercised at any time; such power has to be exercised within a reasonable time. According to the respondents, after the Commissioner had passed orders u/s 263, the Assessee had consistently changed its name on various occasions which resulted in the delay. A further vague reason has also been stated in the counter that after the original assessment order was passed, appeals came to be filed before the CIT and ITAT. Thereafter, when the Assessee sought for refund, the old files of the Assessee were retrieved. Such an explanation cannot be at any stretch of imagination deemed to be sufficient cause for the delay. Insofar as the consistent change of the Assessee's name is concerned, it is nobody's case that the PAN number of the Assessee was also undergoing a change. When the relevant files and documents pertaining to the PAN number of the Assessee was before the AO, we are unable to comprehend as to how the change in names could result in delay of more than 8 years. Hence, the reason of change in name of the Assessee, cannot be accepted as a sufficient cause for the delay and consequently, could only be termed as 'inordinate' or 'unreasonable'. The second reasoning that the Assessee's files were traced only when they made a claim for refund goes to show that the respondents were admittedly sleeping over the matter. The very fact that they had commenced tracing of the old files of the Assessee, when they had filed their claim of refund would amount to an admission on the part of the Department that they were not proceeding any further in the matter. Accordingly, this reason will also not amount to a satisfactory explanation for the delay. When the delay by itself is 8 years and 7 months without any reasonable explanation whatsoever, it can be termed as 'inordinate'. Though there is no limitation prescribed u/s 153(3) for reassessment or recomputation, in view of the unreasonable delay in initiating the proceedings, the impugned notice dated 18.09.2003 is liable to be set aside. This Court, holds that the impugned notice which seeks to give effect to an order u/s 263 for revision u/s 143(3) falls u/s 153(3). However, the delay of 8 years and 7 months in initiating such proceedings is inordinate and therefore fatal to the Department. Accordingly, the impugned notice passed by the first respondent is set aside.
|