TMI Blog2016 (2) TMI 154X X X X Extracts X X X X X X X X Extracts X X X X ..... ) of the Act vide order dated 28th June, 2004 is bad in law. Consequently the Assessing Officer would not get extension of time for completion of assessment in terms of Explanation 1 (iii) to Section 153 for the purpose of computation of limits. Hence, the assessments are barred by limitation as per the table given at Para 7 of the order. The Assessment for the A.Y 1996-97 was to be complete on or before 31/3/2004 and the assessment order for the Assessment Year 1997-98 to 2000-01 had to be completed on or before 22/9/2004 and the assessment for the A. Y 2001-02 had to be completes on or before 23/8/2004, but all these assessments were completed on 27/9/2004, which is beyond the period of limitation specific in the Act. Hence they are bad in law. - Decided in favour of assessee - ITA No. 2256 to 2261 /Del/2005 - - - Dated:- 9-12-2015 - J. S. Reddy, AM And Suchitra Kamble, JM For the Appellants : Shri S D Kapila Shri R R Maurya, Advs. For the Respondents : Smt Sulekha Verma, CIT (DR) Shri Vikram Sahay, Sr. DR ORDER Per Suchitra Kamble, JM These appeals are filed by the assessee against the order dated 04.03.2005 passed by CIT(A)-XVII, New Delhi. 2. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... work on the land on its behalf and in accordance with the agronomic procedures prescribed by the company for sowing of parent seed, cultivating, irrigation and application of fertilizer, pesticides and other modern agricultural technique for raising healthy crop of hybrid seed of cereals. For this purpose, the company employs experts for supervising the farmers and also for giving them training. The most expensive input, parent seed, is provided free of cost and the farmers are paid cost of fertilizer and pesticide on a standardized basis. Token cost of supervision is deducted from the wages for labour. The assessee has been following the custom of using the output of the quantity of parent seed as the measure for calculating the value of labour. The company pays advances periodically during the pre-harvest period. In no case does the company actually recover such advances paid to these labourer-farmers for any reason whatsoever including negligence. Such advances and the cost of inputs are expensed out by the company. 3.1 The details of original returns filed, income returned, income originally assessed and the date of assessment order and date of issue of notice u/s 148 are g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... similar except the change in the assessment year, the date of filing the return, the figures of income declared and the letters filed by the assessee company. 3.3 The notice u/s. 148 for A.Y. 1998-99, 1999-2000 and 2000-01 was issued within four years from the end of the relevant assessment year. The assessments for AY 1996-97 and 1997-98 was reopened after the expiry of four years from the end of the relevant assessment year and as the original assessments was completed u/s. 143(3) of the Income Tax Act, 1961 and reasons to that effect was recorded by the AO. The said reasons were provided to the assessee for reopening of the assessment for each year and assessee filed its objections which was disposed off by AO vide order dated 04.03.2004. The limitation date for completion of each assessment for each year and the actual date of completion are mentioned below:- A.Y.s Date of receipt of order u/s. 142(2A) Period specified in order in days Last date for submission of audit report Date of extension order Extended upto Date of extension order Limitation date ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Assessment Year 1996-97 or the Assessment Year 1998-99 depending on the validity of corrigendum order dated 9/8/2004 passed by the assessing officer, are without jurisdiction and barred by limitation. This is because if the order u/s 142(2A) for assessment year 1996-97 is valid, then there is no order u/s 142 (2A) subsisting for the Financial Year 1997-98, and the reassessment order for Assessment Year 1998-99 is barred by limitation. He further submitted that there is breach of principle of natural justice because all the order u/s 142 (2A) have been passed by the Assessing Officer without giving the assessee an opportunity of being heard. Hence on this ground also he submits that the extended period provided under Clause (iii) to explanation 1 of Section 153 is not available o the A.O for computation the period of limitation. 4.1. The Ld. Counsel for the assessee submitted the case law of CIT Vs. Bishan Saroop Ram Kishan Agro (P.) Ltd. [2011] 15 taxmann.com 221 (Delhi), the Hon ble Delhi High Court held that (para 15) the provisions as existing in sub-section (2C) of Section 142 before 1.4.2008 did not empower the Assessing Officer to suo motu extend the time for submissi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arties. Thus the AR submitted that the Assessing Officer does not have any jurisdiction/power to grant extension on his own, the suo motu extension order are not legal for these assessment years. Thus the order is null, non-est and void ab initio. 4.2. The submissions of Shri S.D. Kapila, Ld. Counsel for the assessee can be summarized as below:- (a) Ground No. 10, 11 of the assessment year1996-97 not pressed. (b) Ground No. 11 10 A. Y 1996-97 not pressed. (c) Ground No. 11 12 A.Y 1997-98 not pressed. (d) Ground . 11 12 A.Y 1998-99 not pressed. (e) Ground 11 12 A. Y 1999-2000 not pressed. (f) Ground No. 11 13 A. Y 2000-01 not pressed. (g) Ground No. 7 9 A. Y 2001-02 not pressed. And Ground No. 3 (A. Y 1996-97) Ground No. 8 (A. Y 1997-98, 98-99, 99-2000) Ground No. 9 (A. Y 2000-01) Ground Nos. 5 (A. Y 2001-02) is modified as under the order of the Ld. CIT(A) has been passed in violation of the principle of natural justice. (b) The Additional ground filed by the assessee for the assessment years 1996-97 to the Assessment Year 2001-02 under Rule 11 of the ITAT Rules is withdrawn. (c) The additional ground filed for the Assessment Yea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uthority, if so advised, the correctness of the material gathered on the basis of the audit report submitted under sub-section 2A of Section 142 of the Act. The Ld.CIT(A) DR submitted that hence the validity of the order passed u/s 142(2A) of the Act on the ground of Natural Justice cannot be questioned by the assessee as the Hon'ble Supreme Court held that the prepositions in the judgment apply separately. The Ld. DR submitted that in this case the extension was granted only for the benefit of the assessee which had, the duty cast on it, for submission of a special audit report. The Ld. DR further relied upon the case of Rajesh Kumar Vs. CIT, Central (3) New Delhi of the Hon ble Delhi High Court. The Ld. DR submitted that the question of validity of the order of the assessing officer should have been contested before the Ld. CIT(A) by the assessee, but was not done by the Assessee. Hence, in light of these two judgments, the Ld. DR submitted that the Assessment Orders were rightly passed and Ld. CIT(A) is correct in upholding the same. 5.1. The submissions of the Ld. DR can be summarized as follows: (a) The validity of an order u/s 142(2A) cannot be questioned by way of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... granted to the assessee and the Assessing Officer has issued numerous show cause letters for which the Assessee has submitted his replies. (e). The technical meaning of term suo motu is on his own motion meaning thereby that no other external influence should be there on the A.O in taking a decision. The plea that the A.O has suo motu extended the time of special audit is factually incorrect and that this is clear from the various communications between the auditor, the assessee, as well as the Assessing Officer. The wording in the order dated 28/6/2004 extending the time limit for submission of special audit was relied upon and submitted that it was because of the difficulties faced by the assessee, which is evident from the correspondence, that the extension was granted and this cannot be termed as suo motu action of the A.O (f). The A.O had extended the time of special audit for the second time, based only on the circumstances which the assessee company made him aware of, from time to time, by way of correspondence and this is a good and sufficient reason for grant of extension of time for special audit. (g). In case of Bishan Saroop Ram Kishan Agro (P) Ltd., (s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ied as under the order of the Ld. CIT(A) has been passed in violation of the principle of natural justice. . These grounds are also dismissed as not pressed. 7.1. The additional grounds by the assessee under Rule 11 of the ITAT Rules for the A.Y 1996-97 to 2000-01 stands dismissed as withdrawn. Similarly, the additional ground filed for the A. Y 1998-99, with respect to passing of an order u/s 142(2A) is also dismissed as withdrawn. 7.2. The only question which we adjudicate in this order is whether the assessment orders for all the six assessment years are barred by limitation, in view of provisions of Section u/s 142(2A) 142(2C) read with Explanation 1 (iii) of Section 153 of the Act. In other words the issue which is to be adjudicated is, whether on the facts and circumstances of this case, the extended period of limitation is available to the Assessing Officer as for the provisions of Explanation 1 (iii) of Section 153. 7.3. We first consider the argument of the Ld. DR that issue as to whether the order u/s 142 (2A) is valid or not it cannot be appealed before the Tribunal and that the Tribunal has no jurisdiction to adjudicate such issues of validity of or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... I.P. Estate, New Delhi Pin: 110002 Date: June 28, 2004 Order Whereas, in exercise of the powers conferred in terms of the provisions of Section u/s 142(2A) of the Income Tax Act, 1961, the assessee M/s PHI Seeds Ltd., B-4, G. K. Enclave Part II, New Delhi was directed vide order dated 21/2/2004 to 2000- 01 audited by the Accountant M/s S. K. Mittal C., E-29, South Extension, Part-II, New Delhi and to furnish a report of such audit in prescribed form setting forth required particulars with in 120 days. Now, since, it is understood that the audit work is yet to be completed and assessee company needs further time to comply with the directions, the time limit for submission of the required audit report for the assessment years 1996-97 to 2001-02 is being extended to 24/7/2004. 7.6 In response to the above order, the assessee on 5th July 2004, has written to the Assessing Officer on the above issue seeking rectification u/s 154. This letter is extracted for ready reference:- July 5, 2004 The Assistant Commissioner of Income Tax Circle 14(1), New Delhi Ref: Audit u/s 142(2A) your order No. F No/ACIT Cir 14(1)/2004-05 u/s 142(2A)/362 date ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee and not otherwise. The judgment in the case of Bishan Saroop Ram Kishan Agro (P) Ltd. (supra) in this regard is clear. 7.8. Inference drawn by the Assessing Officer, while extending the period granted vide order dated 28th July 2004 cannot in our view replace an application made by the assessee for grant of extension of time, which is a requirement of the Act. When the assessee has not made a specific application for extents or sought for the time to set the audit completes, the A.O cannot based on correspondence draw an inference and grant an extension of time. He should write to the assessee in case of doubt. 7.9. Even otherwise, the assessee has specifically in its letter dated 5th July 2004, submitted before the Assessing Officer that he is factually wrong in coming to a conclusion that the assessee needs further time to comply with the directions. Thus the inference or presumption drawn by the A.O has been rebutted by the assessee. Under such circumstances, the Assessing Officer was duty bound to complete the assessment, without granting further time to the assessee for furnishing of audit report, even if he had to invoke the provisions of Section 144 of the Act. Wh ..... X X X X Extracts X X X X X X X X Extracts X X X X
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