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Udhna Udyog Nagar Sahkari Sangh Limited Versus Shailendra Lodha Or His Successor

2016 (10) TMI 98 - GUJARAT HIGH COURT

Validity of reopening of assessment - period of limitation - expiry of issue of notice - Held that:- The petitioner filed a return of income on 21.08.2007. As per the then prevailing proviso to section 143(2), the Assessing Officer could not serve the notice on the assessee after expiry of twelve months from the end of the month in which the return was furnished. The outer limit as per this provision worked out to 31.08.2008. This proviso was, however, substituted w.e.f. 01.04.2008 which provide .....

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lative philosophy for making such a change, one thing that cannot be denied is that the substitution had to take effect from 01.04.2008. We may record that the Finance Act 2008 received assent of the President on 10.05.2008 and was published in official gazette on the same day. By 10.05.2008 therefore, this provision formed part of the statute and was given effect of 01.04.2008. For two reasons the contention of the petitioner cannot be accepted that such a provision cannot be applied to the pet .....

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provision underwent a change by virtue of which such a notice could be served latest by 30.09.2008. The Assessing Officer was, thus, authorized to issue such a notice as per the amended provision. He was not bound by the unamended provision since the same had already been amended long before the final date for serving of notice even as per the unamended provision had expired. This is therefore, not a case where a vested right is being taken away by amendment in the statute. The notice under sect .....

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of the Income Tax Act, 1961 ['the Act' for short]. 2. Brief facts are as under: The petitioner is a co-operative society registered under the Gujarat Co-operative Societies Act and is engaged in development of real estates. For the assessment year 2007-08, the petitioner filed the return of income on 21.08.2007. As per the proviso to sub-section (2) of section 143 of the Act which prevailed at the time of filing of the return, notice could be issued by the Assessing Officer latest upto .....

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8. The Assessing Officer issued such a notice on 18.09.2008. 3. In this background, a short question that calls for consideration is, was the notice barred by limitation. In other words, the question is, whether the Assessing Officer was bound by the limitation prescribed under the proviso to section 143(2) of the Act which prevailed prior to 01.04.2008 or could he avail of the amended provision by virtue of the Finance Act, 2008 with effect from 01.04.2008. 4. Learned counsel for the petitioner .....

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el relied on the decision of Supreme Court in case of K.M.Sharma vs. Income Tax Officer reported in 254 ITR 772. 5. On the other hand, learned counsel for the Revenue submitted that the period of limitation was extended for issuance of notice under section 143(2) of the Act and such period would apply in the present case. He relied on the decision of Division Bench of P & H High Court in case of Amarjit Singh Tut vs. Union of India and ors reported in 347 ITR 585. 6. Section 143 of the Act, .....

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sessee a notice requiring him to attend his office to produce or cause to be produced evidence which the assessee may rely in support of the return. Proviso to sub-section 2 of section 143 prescribes the time limit for issuing such a notice and is worded in a negative covenant providing that no notice under the said sub section shall be served on the assessee after expiry of a certain period. This prescription of the period beyond which such a notice could not be issued and the language used for .....

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the expiry of six months from the end of the financial year in which the return is furnished. 9. We are concerned with the position prevailing before and after 01.04.2008. The petitioner filed a return of income on 21.08.2007. As per the then prevailing proviso to section 143(2), the Assessing Officer could not serve the notice on the assessee after expiry of twelve months from the end of the month in which the return was furnished. The outer limit as per this provision worked out to 31.08.2008. .....

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ase of commonly placed class of assessees. Whatever be the legislative philosophy for making such a change, one thing that cannot be denied is that the substitution had to take effect from 01.04.2008. We may record that the Finance Act 2008 received assent of the President on 10.05.2008 and was published in official gazette on the same day. By 10.05.2008 therefore, this provision formed part of the statute and was given effect of 01.04.2008. For two reasons the contention of the petitioner canno .....

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be served latest by 31.08.2008. Long before that, the statutory provision underwent a change by virtue of which such a notice could be served latest by 30.09.2008. The Assessing Officer was, thus, authorized to issue such a notice as per the amended provision. He was not bound by the unamended provision since the same had already been amended long before the final date for serving of notice even as per the unamended provision had expired. This is therefore, not a case where a vested right is bei .....

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was filed on 31.7.2007 and limitation for issuance of notice under Section 143(2) of the Act was upto 31.7.2008. However, by virtue of amendment by Finance Act, 2008, w.e.f. 1.4.2008, limitation stood extended upto six months from the end of the financial year in which the return was furnished i.e. upto 30.9.2008. 10. It is well settled that a statute of limitation is a procedural statute and is applicable to pending proceedings. However, limitation law is prospective as it does not revive an a .....

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hey neither have the effect of reviving a right of action which is already barred on the date of their coming into operation, nor do they have the effect of extinguishing a right of action subsisting on that date. But a statute may, expressly or impliedly by retrospectively extending limitation, revive a barred claim...." 11. The judgments relied upon do not take any contrary view and are not to the effect that limitation law will not apply to pending proceedings. In Mahi Valley Hotels [200 .....

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red. There is no dispute with this proposition. In the present case, proceedings had not become time barred before the amendment came into force. In K.M. Sharma [2002] 254 ITR 772 (SC), it was observed that principle of strict interpretation of the taxing statute applies also to law regulating limitation. Virtual Soft [2007] 289 ITR 83(SC) deals with the general principle of an amendment being prospective in the absence of express or implied intention to the contrary. Judgments in Ajantha Indust .....

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ejudice, objection of lack of jurisdiction at a belated stage could not be entertained. This aspect will be considered under Question (ii). 11. In case of K.M. Sharma (supra) the facts were very different. The assessee's lands were acquired under the Land Acquisition Act. He received interest on delayed payments of compensation under an award passed by the District Court. His contention was that such interest had occurred from year to year and would be assessable separately in each year. He .....

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pted by the High Court. In appeal the question that the Supreme Court considered was, whether the amended provision of sub-section (1) of section 150 w.e.f 01.04.1989 could be applied to the assessments which had become time barred before 01.04.1989. It was, in this context, held that the amended provision of sub section (1) of section 150 which was amended w.e.f. 01.04.1989 cannot be used for reopening of assessments which had attained finality and could not be reopened due to bar of limitation .....

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