2023 (1) TMI 1031 - AT - Income Tax
Special audit U/s. 142(2C) - time limit for submission of Special Audit Report as required u/s. 142(2C) - HELD THAT:- In the instant case, the Ld. AO failed to pass such order in both the circumstances to extend the time limit. AO merely communicated the decision of the Ld. Pr. CIT (Central), Visakhapatnam on 6/6/2019 which is beyond the limitation period of the second extended time. Even assuming a moment that it is a valid extension, we find that the extension as per the Limitation Act should have been granted before the expiry of the time limit permitted in the earlier extension ie., on 25/5/2019.
We find force in the arguments of the Ld. AR that mere communication of extension by the Ld. AO instead of passing an order U/s. 142(2C) is not valid in law. The case law relied on by the Ld. AR, the judgment of the Hon’ble Supreme Court in the case of State of Punjab & Ors vs. M/s. Shreyans Indus Ltd i[2016 (3) TMI 331 - SUPREME COURT] is pertinent to mention here with respect to grant /order of extension of time limit should be given before the time for passing any order expires as prescribed under the Act or before the expiry of the original period of limitation prescribed in the original order. On this issue, the Hon’ble Apex Court observed that once the period of limitation expires, the immunity against being subject to assessment sets in and the right to make assessment gets extinguished. Therefore in our considered opinion, the ratio laid down by the Hon’ble Supreme Court squarely applies to the instant case also. In the instant case on hand, the Ld. AO ought to have passed an order U/s. 142(2C) of the Act on or before 25/5/2019 ie., expiry of the first extension.
Case law relied on by the Ld. AR in ACIT Vs Soul Space projects Limited [2020 (6) TMI 696 - ITAT DELHI] is also relevant to the issue which was also considered by the Ld. CIT(A)
We find that the Ld. CIT(A) has discussed the issue at length and rightly concluded the matter and therefore we are of the considered view that no interference is required in the order of the Ld. CIT(A) on this issue.