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2025 (5) TMI 119 - AT - Income TaxValidity of assessment orders passed u/s 153(3) r.w.s. 254/143(3) as barred by limitation - Determination of date of start of limitation i.e. the date of service of Tribunal order on the Department. HELD THAT - In the instant case it is not in dispute that the Tribunal order dated 28.02.2019 was pronounced in the open court and thus the CIT(DR) had knowledge of the said order. Further the order was served on CIT(DR) on the same date. Thus we find merits in Ground of appeal. As the assessment order was served on the office of the CIT(DR) on 28.03.2019 the time available to the AO for passing the assessment order was upto to 31.12.2019. Since the assessment order was passed on 23.04.2021 consequently the same is barred by limitation and no-nest in the eye of law.
1. ISSUES PRESENTED and CONSIDERED
The core legal question considered by the Tribunal in this batch of appeals is whether the assessment orders passed under section 153(3) read with sections 254 and 143(3) of the Income Tax Act, 1961, are barred by limitation. Specifically, the issue revolves around the determination of the commencement date of the limitation period for passing the assessment order consequent to directions issued by the Appellate Tribunal under section 254(1) of the Act. The parties dispute whether the limitation period begins from the date the Tribunal's order is served on the Departmental Representative (CIT(DR)) or from the date it is received in the office of the Commissioner of Income Tax (Judicial). This issue arises in the context of assessment years 2014-15, 2015-16, and 2016-17 and is common to all appeals and cross appeals involved. 2. ISSUE-WISE DETAILED ANALYSIS Issue: Whether the assessment orders passed under section 153(3) read with sections 254 and 143(3) of the Income Tax Act are barred by limitation, and specifically, from which date the limitation period commences? Relevant Legal Framework and Precedents: Section 153(3) of the Income Tax Act prescribes that the assessment order under section 153A shall be passed within nine months from the end of the financial year in which the order under section 254 is received by the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner. Section 254(1) empowers the Appellate Tribunal to pass orders on appeals. The limitation period is therefore linked to the receipt of the Tribunal's order by the appropriate authority within the Department. Judicial precedents relied upon include:
Court's Interpretation and Reasoning: The Tribunal examined the submissions of both parties. The assessee contended that the limitation period should commence from 28.03.2019, the date on which the Tribunal order was served on the office of the CIT(DR). The Department argued that the limitation period should commence from 08.04.2019, the date the order was received in the office of the Commissioner of Income Tax (Judicial), as the CIT(DR) is merely a representative and not the real litigant. The Tribunal analyzed the legal position regarding the role of the CIT(DR). It noted that the CIT(DR) acts as a representative of the Department and assists the Tribunal but is not the real litigant. The original compliance obligation lies with the Assessing Officer, not the CIT(DR). However, the limitation period under section 153(3) is triggered by the receipt of the Tribunal's order by the Departmental authority responsible for taking further action. Relying on the judicial precedents cited, the Tribunal held that the limitation period begins when the Departmental Representative receives the copy of the Tribunal order. The Tribunal reasoned that this is a practical and reasonable interpretation, as the Departmental Representative is the designated officer to receive and act upon the Tribunal's orders. The internal administrative arrangements within the Department regarding communication of the order to other officers do not affect the commencement of limitation. Key Evidence and Findings: The assessee produced information obtained under the Right to Information Act, 2005, establishing that the Tribunal order dated 28.02.2019 was served on the office of the CIT(DR) on 28.03.2019. The Department did not dispute this fact but contended that the order was received by the Commissioner of Income Tax (Judicial) only on 08.04.2019. The Tribunal found that the order was pronounced in open court on 28.02.2019 and that the CIT(DR) had knowledge of the order on 28.03.2019. The Tribunal accepted that the limitation period started from the date of service on the CIT(DR). Application of Law to Facts: Applying the legal principles and precedents, the Tribunal concluded that the limitation period under section 153(3) began on 28.03.2019, the date the order was served on the CIT(DR). Therefore, the Assessing Officer was required to pass the assessment order within nine months from the end of the financial year in which this date falls, i.e., by 31.12.2019. The assessment order impugned was passed on 23.04.2021, well beyond the limitation period. Hence, the assessment order was held to be barred by limitation and void ab initio. Treatment of Competing Arguments: The Department's argument that limitation should start from the date the order was received by the Commissioner of Income Tax (Judicial) was rejected. The Tribunal noted that the CIT(DR) is the designated recipient of the Tribunal's order and that the Department cannot shift its internal administrative burden onto the Commissioner of Income Tax (Judicial) to delay the commencement of limitation. The Tribunal also observed that the CIT(DR) is the real litigant for the purpose of receiving and acting on the Tribunal's order, as supported by case law. The Department's reliance on the role of the Commissioner of Income Tax (Judicial) was found to be inconsistent with the statutory scheme and judicial pronouncements. Conclusions: The Tribunal concluded that the assessment orders passed beyond the prescribed limitation period under section 153(3) are nullities and without jurisdiction. Consequently, the impugned assessment orders for the relevant assessment years were quashed. 3. SIGNIFICANT HOLDINGS "It is quite evident from the decision in Odeon Builders (supra) that limitation begins (for any purpose under the Act) from the point of time when the departmental representative receives a copy of a decision or an order of the ITAT. The evidence on record in this case clearly establishes that the concerned DR (a Commissioner ranking officer) nominated by the revenue received a copy of the ITAT order dated 30.03.2016. The starting point of limitation therefore was 31.03.2016." "The judgment in Surendra Kumar Jain thus makes itself evident that the limitation period under s. 153(3) would begin to run from the date of receipt of order by the Departmental representative for the purposes making assessment in terms of directions of Appellate Tribunal as per its order passed under s. 254(1) of the Act." "In view of the express judicial fiat, the impugned assessment orders framed on 23-04-2021 i.e after the expiry of limitation is thus rendered void and non-est." "The internal administrative arrangement as to how the Departmental representative or Commissioner of Income Tax (Judicial) obtains and further communicates the order to the officer who has to take decision on filing the appeal or any pertinent decision is irrelevant for the purpose of limitation." The Tribunal established the core principle that for the purpose of limitation under section 153(3), the date of receipt of the Tribunal's order by the Departmental Representative (CIT(DR)) is decisive, and any assessment order passed after the expiry of the prescribed period from that date is without jurisdiction and void. Final determinations on each issue:
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