TMI Blog2017 (5) TMI 355X X X X Extracts X X X X X X X X Extracts X X X X ..... lanation (1)(ii) to section 153(1) of the Income Tax Act. This Explanation has fallen for consideration before the Hon’ble High Allahabad Court in CIT Versus Drs. X-Ray and Pathology Institute Pvt. Ltd. [2013 (11) TMI 19 - ALLAHABAD HIGH COURT] as held as soon as the order was vacated, the limitation will restart and will exhaust itself on the period of limitation provided under the Act – assessment Barred by limitation – Decided against the Revenue. - ITA No.1688/Ahd/2015 - - - Dated:- 5-5-2017 - SHRI RAJPAL YADAV, JUDICIAL MEMBER, AND AMARJIT SINGH, ACCOUNTANT MEMBER For the Revenue : Shri R.I. Patel, CIT-DR For the Assessee : Shri S.N. Soparkar, AR ORDER PER RAJPAL YADAV, JUDICIAL MEMBER: Revenue is in appeal before the Tribunal against order of the ld.CIT(A)-2, Vadodara passed for the Asstt.Year 2005-06. 2. Grounds of appeal taken by the Revenue are not in consonance with Rule 8 of the Income Tax (Appellate Tribunal) Rules, 1962. They are descriptive and argumentative in nature. In brief, the grievance of the Revenue is that the ld.CIT(A) has erred in law in annulling reassessment order holding that it was passed after expiry of limitation prov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed its contentions before the ld.CIT(A). The ld.CIT(A) has accepted the contentions of the assessee and observed that the Explanation 1(1) appended to section 153(1) postulates for computing period of limitation, the period during which assessment proceedings is stayed, shall be excluded. In excluding the above period, concept of communication of order of the court cannot be imported. Thus, according to the ld.CIT(A) time limit to pass assessment order would run from the date of pronouncement of the order, which was passed in the presence of counsel of counsel for the Revenue. If it is to be computed in this manner, then, assessment order was time barred, and accordingly, the ld.CIT(A) has accepted the contentions of the assessee and annulled re-assessment order. The ld.CIT(A) has fortified itself with order of the ITAT passed in the cases of Dilip Dahanukar Vs. ACIT, 90 ITD 525 (Mum) and also unreported order of the ITAT passed in the case of Bharat V. Patel Vs. ACIT, ITA No.4514/Ahd/2007. Before us, the ld.DR filed a letter dated 24.3.2017. He contended that he has invited comments of the AO in the light of two decisions of the Hon ble Supreme Court rendered in the case of Auto ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ficer has grossly erred in passing an assessment order u/s. 143 r.w.s 147 dated 26th February, 2014, without appreciating that it is time barred and beyond the time specified in 148 was served and hence, void ab initio. 4.2. The appellant during the course of the appellate proceeding Jias made following submissions in this regard: Ground No. 3: Assessment order passed u/s. 143 rws 147 is outside/beyond the period of limitation specified u/s. 153 and needs to be quashed as void ab initio: Ground of Appeal in brief: The Assessing Officer has grossly erred in passing an assessment order u/s. 143 r.w.s. 147 dated 26th February, 2014, without appreciating that it is time barred and beyond the time limit specified in section 153(2) i.e. after the expiry of one year from the end of financial year in which the notice u/s. 148 was served and hence, void ab initio. Overview of Facts: 1. The time limit for the Assessing Officer to pass order u/s.147 is one year from end of Financial Year in which notice was served [S. 153(2)] and the Assessing Officer had to pass the order by 31th March, 2013 since the notice u/s.148 was issued on 30th March, 2012. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ice under section 148 was served 4. Since the notice u/s 148 was served on the Appellant on 30th March 2012, the reassessment order u/s 147 ought to be passed by the Assessing Officer by 31st March 2013 i.e. one year from 31st March 2012 i.e. the end of the financial year in which the notice is served. 5. However, the Appellant had filed a Civil Petition application dated 8th March 2014 against the validity of the said notice before the Honourable Gujarat High Court on 12th March 2013. Subsequently, the Honourable Gujarat High Court vide oral judgement order dated 18th March, 2013 had issued directives to the respondent i.e. the Assessing Officer that it may continue with the assessment but final order pursuant to the impugned notice shall not be passed without the leave of the court. Thus, the Honourable Gujarat High Court had stayed the assessment proceedings with effect from this date. Till this date, only 13 days (18th March 2013 to 31st March 2013) were remaining as per section 153 to pass the order u/s. 147 since the last date to pass the order u/s. 147 was 31st March, 2013. 6. The Honourable Gujarat High Court passed the final order on 29th July, 2013 (se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Date of issuing notice u/s 148 30/03/2012 2. Date on which notice u/s 148 was served on the Appellant 30/03/2012 3. End of the Financial Year in which the notice was served 31/03/2012 4 One year from the end of the Financial Year in which notice was served Time limit given for Assessing Officer to pass order u/s. 147 (as per section 153(2)) 31/03/2013 5 Stay order passed by the Gujarat High Court against Writ Petition filed by the Appellant 18/03/2013 6 Final order passed by the Gujarat High Court and stay vacated against Writ Petition filed by the Appellant 29/07/2013 7 Number of days which will be excluded in computing the time limit (As per expl 1 to sec 153(4)) [6- 5] 134 8 Da ys remaining for AO to complete the assessment after HC order [4 - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed that this order was communicated to him on 14.2.2014 and he was to pass an order within 60 days from this date. Accordingly, he has passed it on 26.2.2014. But this interpretation of the Explanation (1)(ii) appended to section 153(1) has not been approved by the ld.CIT(A). The finding of the ld.CIT(A) is based upon orders of the ITAT, wherein the Tribunal has considered scope of Explanation (1)(ii) to section 153(1) of the Income Tax Act. This Explanation has fallen for consideration before the Hon ble High Allahabad Court and while considering this explanation, the Hon ble high Court has observed as under: The aforesaid writ petitions having been dismissed on 01/8/1995, as per proviso to Explanation 1 to Section 153, the assessment was to be completed by 30/9/1995, but in the present case the assessment was completed on 04/1/1996 i.e. beyond 30/9/1995. The submission of Shri Shambhu Chopra, learned counsel appearing for the Revenue to save the assessment from being beyond the period of limitation is that the period of 60 days is to be computed from the date of communication of the order. He submits that the order of the High Court dated 01/8/1995, dismissing the writ petit ..... X X X X Extracts X X X X X X X X Extracts X X X X
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