TMI Blog2010 (11) TMI 339X X X X Extracts X X X X X X X X Extracts X X X X ..... Nair J.- This is an appeal filed by the Revenue challenging the order of the Tribunal confirming the first appellate authority s order which declared the assessment as time-barred under section 153 of the Income-tax Act and hence invalid. In this case the income returned by the assessee was Rs. 76,84,450 whereas the income assessed by the Assessing Officer after getting the accounts audited by the auditor appointed by the Department was Rs. 6,02,07,350 and so much so the tax dispute is above the limit that entitles the Department to file the appeal under instruction issued by the Central Board of Direct Taxes. We have heard the senior counsel Sri P. K. R. Menon appearing for the appellant Revenue and Sri P. Balakrishnan, advocate appearing for the respondent- assessee. 2. The facts leading to the controversy are the following. The return filed by the assessee for the assessment year 1995-96 was processed under section 143(1)(a) of the Act and intimation was forwarded to the assessee. There after, assessment was taken as a scrutiny assessment and notice was issued to the assessee under section 143(2) of the Act. The developments subsequent to service of intimation under secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nded by the Finance (No. 2) Act, 1996 by restricting extension of time only up to the date the assessee was required or granted time to furnish the audit report. In other words, after the amendment, the extended period of limitation will not be available if the assessee furnishes the audit report beyond the date granted by the officer for furnishing it. There is a controversy as to whether the amended provisions introduced by the Finance (No. 2) Act of 1996, with effect from April 1, 1996 is applicable for the assessment year 1995-96 which is the year of assessment involved in this case. However, we do not propose to consider this issue because, going by the meaning we assign to section 142(2A) and (2C), we feel the assessment is not time-barred even if the amended provisions are applied for considering the validity of assessment for the year 1995-96. The provisions of section 142(2A) and (2C), the scope and meaning of which will decide the issue, are extracted hereunder for easy reference. 142. (2A) If, at any stage of the proceedings before him, the Assessing Officer, having regard to the nature and complexity of the accounts of the assessee and the interests of the Revenue, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te the assessment and since the assessment was in fact completed on September 3, 1998, it is perfectly valid. 5. After hearing both sides and after going through the above provisions of the section, what we find is that sub-section (2A) of section 142 authorises the Assessing Officer with the previous approval of the Chief Commissioner or Commissioner to direct the assessee to get the accounts audited by an accountant nominated by the Chief Commissioner or Commissioner, as the case may be. Even though this provision only says that audit report to be called for should be in the prescribed form, this provision does not prescribe the Assessing Officer s power to fix time to complete audit and furnish the report. However, sub-section (2C) authorises the Assessing Officer to fix the time within which the audit report should be furnished by the assessee from the auditor appointed by the Department under clause (2A). The proviso to sub-section (2C) authorises the Assessing Officer to extend the time for producing the audit report on application made by the assessee and if the Assessing Officer finds that the assessee has established good and sufficient reason for getting the time exte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e is free to extend the time initially granted under sub-section (2C). In this case, admittedly, within the time originally granted by the Assessing Officer for completion of audit and for filing report, the auditor requested the officer on December 24, 1997 for further time up to February 15, 1998 and the Assessing Officer, after getting approval from the Commissioner granted time in terms of the request of the auditor. We do not think there is any need to involve the assessee at this stage because, the Assessing Officer, who has the authority to fix the time for submission of audit report under sub-section (2C) has the inherent authority to extend the time on request by the auditor if he finds that the auditor s request is reasonable and justified. It is pertinent to note that the Legislature has carefully avoided fixing any statutory time for filing audit report by the auditor appointed under section 142(2A) and when discretion to fix time is conferred on the officer under sub-section (2C), it obviously means that he should fix the time in consultation with the auditor and by taking into consideration all reasonable suggestions from the auditor. If the powers of the officer to f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rovisions of a statute, including every word, have to be given full effect, keeping the legislative intent in mind, in order to ensure that the projected object is achieved. In other words, no provisions can be treated to have been enacted purposelessly. 6. From the above we conclude that the authority of the Assessing Officer to specify the period for the assessee to furnish the audit report under sub- section (2C) includes the authority to refix the period, whether by extending or by reducing it and it can be done suo motu or on the request from the auditor. The proviso specifically confers right on the assessee for his own reasons to request for extension of time originally granted by the Assessing Officer which also the officer has to consider and grant if the assessee establishes sufficient reason. In this case the audit report was filed on February 17, 1998 and the time extended by the Assessing Officer for furnishing audit report was only up to February 15, 1998. Therefore, the Assessing Officer is entitled to reckon the time only up to February 15, 1998 for extending limitation in terms of the amended provisions of clause (iii) of Explanation 1 to section 153(3) for co ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
