THE LIMITATION ALWAYS STARTS FROM THE DATE OF PRONOUNCEMENT OF ORDER/JUDGEMENT OF COURT

[Mr. M. GOVINDARAJAN]

Section 12 of the Limitation Act, 1963 provides that the limitation, in respect of civil courts and High Courts, starts from the date of the pronouncement of the order/judgment. The time taken for obtaining the certified copy of the order/judgment is excluded from the computation of period of limitation. But in Income Tax Act, 1961 the provisions in this respect are different.   Specific provisions are made in the Income Tax Act and rules to clarify that the period of limitation always starts from the date of receipt of the order by the appellant/respondent.

In ‘Regional Director, ONGC Limited V. Association of Scientific and Technical Officers, ONGC Limited’ 2012 (11) TMI 887 - SUPREME COURTthe Supreme Court held that the moment writ petition is dismissed and interim relief is vacated, the parties are to revert back to the position they had on the day when the interim order was granted.

In ‘Deputy Commissioner of Income Tax V. Drs. X-Ray and Pathology Institute Private Limited’ – (2013) 27b ITR (Trib) 434 (Lucknow) a search was conducted at the premises of the assessee on 14.09.2002.   Notice under Section 158 BC was issued on 29.04.2003.   The assessee filed a writ petition before the High Court challenging the search proceedings.   The High Court stayed the proceedings vide interim order dated 12.02.2004. The stay order was vacated on 26.08.2009.

The assessment order was passed on 22.06.2010. Against this order the assessee filed an appeal before the Commissioner of Income Tax (Appeals). Before the appellate authority the Revenue contended that the vacation of stay order was communicated to the Assessing Officer on 09.11.2009.   The normal time for passing the order under Section 158BC of the Act is of two years from the end of the month in which search was taken place. The remaining period available for framing assessment would start from 09.11.2009. The Commissioner (Appeals) found that the time during which proceedings were stayed by the High Court, i.e., 12.02.2004 to 26.08.2009 was to be excluded. Therefore, the time available with the Assessing Officer to frame the assessment was up to 15.04.2010.   The Commissioner (Appeals) was of the view that the stay granted by the High Court got vacated as soon as the Court pronounced it in the open court.   It is not the practice of the High Courts to send copy of the order to the appellant or the respondent as is done when the orders are passed by the Assessing officer, the Commissioner of Income Tax (Appeals), the Income Tax Appellate Tribunal or even the Settlement Commission. The Order of the High Court is pronounced in the open court and if a party is interested in seeking a copy of the order he/she has to apply to the Registrar of the Court for a copy.   Thus, the date of the order of the High Court is the date on which the same is pronounced/passed which in the instant case is 26.08.2009. The Assessing Officer has taken the date of vacation of the injunction as 09.11.2009 which was the date on which the copy of the order was received by him. It is not understood as to from which law did the Assessing Officer get the impression that the date of the order of the High Court would be the date on which he receives a copy. The Commissioner (Appeals) allowed the appeal filed by the assessee holding that the assessment was time barred.

The Revenue filed appeal against the order of Commissioner (Appeals) before the Tribunal. The Revenue contended that the limitation only starts when the order is received.   Since the order was received by the Assessing officer on 09.11.2009, the limitation for the balance period would only start from 09.11.2009. Therefore the assessment order was passed within the period of limitation.

The respondent assessee submitted that-

• As per the Income Tax Act, 1961 or the Rules, the orders of the authorities are required to be communicated by post to the assessee/respondent and the limitation starts from the date of receipt of the order;
• In the High Court, the Supreme Court or any other civil courts, the limitation always starts from the date when the order is pronounced in the open court;
• Whatever time is taken in obtaining the certified copy of the order would be excluded as per the provisions of Section 12 of the Limitation Act;
• Nowhere it has been mentioned in any High Court Rules or under the Limitation Act that the limitation starts only from the receipt of the order of the Court. Whenever the legislature is conscious about this fact, they had made a specific provision in the particular Act;
• Since the time available for the balance period starts from 26.08.2009 the assessment could have been completed up to 15.04.2010;
• Since the assessment was framed on 22.06.2010 it is barred by limitation.

The Tribunal accepted the contentions of the assessee.   The Tribunal held that the writ petitions are filed as per the High Court Rules or the General Clauses Act where the limitation always starts from the date of pronouncement of the order/judgment. Therefore once the stay is vacated, the assessee has to revert back to framing the assessment was only up to 15.04.2010.   Since the assessment order was passed on 22.06.2010, it is certainly barred by limitation.

The Revenue filed appeal before the High Court Commissioner of Income-tax Versus Drs. X-Ray and Pathology Institute Pvt. Ltd. - 2013 (11) TMI 19 - ALLAHABAD HIGH COURT The High Court held that the Court is not concerned with limitation for any particular act to be performed but the arrest of the limitation by an interim order passed by the High Court. As soon as the order was vacated, the limitation will start and will exhaust itself on the period of limitation provided under the Act.   In order to appreciate the submissions of the Revenue the Assessing Officer should get knowledge of the order, the facts as to when the counsel appearing for the Department applied for copy and communicated to the Assessing Officer have not been brought on record.   The High Court dismissed the appeal as the questions of law framed are not substantial questions of law.