TMI Blog2004 (9) TMI 637X X X X Extracts X X X X X X X X Extracts X X X X ..... here was no approval of the CIT for getting the books of account audited under Section 142(2A) of the Act, therefore, the same was invalid, despite the fact that the reference was made absolutely in conformity with the provisions of Section 142(2A) of the Act? III. Whether the learned Tribunal was justified in holding that CIT has no power under the Act to extend the time and AO is only competent to extend time upon application of the assessee by virtue of proviso to Section 142(2C) of the IT Act? 4. With regard to substantial question of law raised in this appeal about the expiry of limitation for completing the assessment for the block period in terms of Section 158BE, the Tribunal found the assessment of block period 1988-89 framed on 8th March, 2001 to be barred by time in view of the existing provisions as on the date the assessment was made. 5. The facts which are not in dispute, are that in pursuance of the authorisation of search, last of Panchnama against the assessee was prepared on 28th Aug., 1998. An order under Section 142(2A) of the Act of 1961 was made on 2nd Aug., 2000 requiring the assessee to get his book of accounts subjected to special audit within a p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 158BH r/w Section 153(3) of the IT Act, 1961, to claim the benefit of extended period of limitation upto 60 days from the expiry of the period after exclusion of 180 days, the time requisite for completing the special audit. 8. We may notice the relevant provisions of Section 158BE. Sub-section (1), Clause (b) with Explanations to Section 158BE as it existed on 8th March, 2001 read as under: 158BE. Time limit for completion of block assessments-(1) The order under Section 158BC shall be passed- (a)..... (b) within two years from the end of the month in which the last of the authorisations for search under Section 132 or for requisition under Section 132A, as the case may be, was executed in cases whereas search is initiated or books of account or other documents or any assets are requisitioned on or after the 1st day of January, 1997. (2)...... Explanation 1.-In computing the period of limitation for the purposes of this section, the period- (i) during which the assessment proceeding is stayed by an order or injunction of any Court, or (ii) commencing from the day on which the AO directs the assessee to get his accounts audited under Sub-section (2A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Sept., 1998, and the two years would expire on 31st Aug., 2000, 11. The period which is sought to be excluded by the Revenue under Clause (ii) of Expln. 1 to the maximum limit of 180 days if added after 31st Aug., 2000, the period expires on 27th Feb., 2001. The assessment was still barred by limitation by 9 days. Therefore, unless the benefit of proviso inserted vide Finance Act, 2002, w.e.f, 1st June, 2002 can be extended to the Revenue, the limitation had clearly and unquestionably expired for completing the assessment for block period in question when the order was made. This is also not a matter of contention. 12. The new Expln. 1 has been substituted, as noticed above, by Finance Act, 2002 w.e.f. 1st June, 2002. The substituted Expln. 1 reads as under : Explanation 1.-In computing the period of limitation for the purposes of this section,- (i) the period during which the assessment proceeding is stayed by an order or injunction of any Court; or (ii) the period commencing from the day on which the AO directs the assessee to get his accounts audited under Sub-section (2A) of Section 142 and ending on the day on which the assessee is required to furnish a repo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... od of limitation has not been considered to be statute of repose, but somewhat same position has been accepted. It will be apposite to recall what justice Hidatullah, as his Lordship then was, had said in S.C. Prashar, ITO v. Vasantsen Dwarkadas and Ors. AIR 1963 SC 1356: .....We wish to say a few words about well known principle that subsequent changes in the period of limitation do not take away an immunity which has been reached under the law as it was provisionally. In this sense, statutes of limitation have been picturesquely described as statutes of repose ... in our opinion, it is somewhat inapt to describe Section 34 with its amendments and validity as a section of repose. Under that section, there is no repose till the tax is paid or the tax cannot be collected. What the law does by prescribing certain periods of time for acting is to create a bar against its own officers administering the law. It tries to twin between recovery of tax and possibility of harassment to an innocent person and fixes a duration for action from these two points of views. These periods are occasionally readjusted to cover some cases which would otherwise be left out and hence, amendments. An ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of limitation is intended to give certainty and finality to legal proceedings and to avoid exposure to risk of litigation of litigants for an indefinite period on future unforeseen events. Proceedings which had attained finality under existing law due to bar of limitation cannot be held to be open for revival unless the amended provision is clearly given retrospective operation so as to allow upsetting of proceedings which had already concluded and attained finality. The amendment to Sub-section (1) of Section 150 of the IT Act, 1961, extending the bar of limitation in cases of orders passed by a Court in proceedings under any other law is not expressed to be retrospective and, therefore, has to be held to be only prospective. The amendment to Section 150(1), which intends to lift the embargo of the period of limitation under Section 149 to enable the authorities to reopen assessments not only on the basis of orders passed in proceedings under the IT Act but also on the basis of an order of a Court in any proceedings under any law has to be applied prospectively on or after 1st April, 1989, when the amendment was introduced. The provisions of Sub-section (1), therefore, can h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct of 1961 but the substantive provisions as well as Expln. 1 to Section 153 are confined to computation of period of limitation prescribed under Section 153 only. Substantive provision provides limitation for completing assessments under Section 143 or Section 144 under Sub-section (1) for assessment, reassessment or recomputation under Section 147 [as per Sub-section (2)]. Sub-section (2A) deals with limitation for making fresh assessment under Section 146 or in pursuance of an order under Sections 250, 254, 263 or 264 setting aside or cancelling an assessment. All these provisions referred to assessment for particular assessment year only. It does not provide for limitation in respect of any other proceedings, e.g., period of limitation for making an order of rectification under Section 154 is governed by Sub-section (7) of Section 154. Similarly, provisions for assessment for number of years together as one block were introduced for the first time vide Finance. Act, 1995 w.e.f. 1st July, 1995, in such cases. Period of limitation for such special assessment was too separately provided under Section 158BE. It provided independently period of limitation for completing assessment u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under Sub-section (1) of Section 245D is received by the Commissioner under Sub-section (2) of that section, shall be excluded : Provided that where immediately after the exclusion of the aforesaid time or period, the period of limitation referred to in Sub-sections (1), (2) and (2A) available to the AO for making an order of assessment, reassessment or recomputation, as the case may be, is less than sixty days, such remaining period shall be extended to sixty days and the aforesaid period of limitation shall be deemed to be extended accordingly. Explanation 2.-Where, by an order any income is excluded from the total income of the assessee for an assessment year, then, an assessment of such income for another assessment year shall, for the purposes of Section 150 and this section, be deemed to be one made in consequence of or to give effect to any finding or direction contained in the said order. Explanation 3.-Where, by an order any income is excluded from the total income of one person and held to be the income of another person, then, an assessment of such income on such other person shall, for the purposes of Section 150 and this section, be deemed to be one made in co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uch intention cannot be attributed to the legislature. 24. In fact, Section 158BE provides a complete code prescribing limitation and mode for computing such period of limitation for assessment for block period. It provides for commencement of period of limitation, it provides specific circumstance or condition in which time is to be excluded. It also prescribes the maximum extent upto which time is to be excluded in computing period of prescribed limitation. Thus, Section 158BE, being a complete code in itself on the subject of prescribing and computing limitation for completing block assessment, which itself is a special provision, other provisions of the Act outside the provisions are necessarily excluded. That was the reason, the amendment in Section 158BE by substituting Expln. 1 was necessitated. It also gives a clue that it was never intended to be clarificatory but was an excuse with non-purpose in nature but was by way of making substantial amendment. We may notice that by the amending provisions Clause (3) and (4) have been added for additional exclusion of period in computing limitation for completing block assessment under Section 158BE and proviso has also been a ..... 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