TMI Blog2019 (11) TMI 854X X X X Extracts X X X X X X X X Extracts X X X X ..... MAHAVIR PRASAD, JUDICIAL MEMBER 1. These two appeals filed by the Revenue are directed against the order of the Ld. CIT(A)-2, Vadodara dated 10.07.2017 pertaining to A.Y. 2006-07 and a common grounds have been taken by the Revenue in both the appeals: 1. On the facts and in the circumstances of the case, the learned CIT(A) erred in the law and on facts in directing that the assessment order passed on 04.02.2015 was barred by limitation of time without appreciating that the delay in receipt of Hon'ble Gujarat High Court's order dated 29-07-2013 was not attributable to the A.O. and the A.O. without receipt of Hon'ble Gujarat High Court's order dated 29- 07-2013 could not have proceeded with reassessment proceeding since proceeding further with reassessment proceedings without the direction of Hon'ble Gujarat High Court would amount to contempt of Court. 2. On the facts and in the circumstances of the case, the learned CIT(A) erred in the law and on facts in annulling reassessment order by relying on the decision of Hon'ble Allahabad High Court in the case of CIT vs. Chandra Bhan, 46 taxmann. 108 (All.) an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 27.02.2015, assessing the total income at ₹ 97,28,38,307/- under normal provisions of the Act and ₹ 114,03,61,418/- as per the section 115JB of Income Tax Act. 5. While passing the assessment order u/s. 143(3) r.w.s. 147, the Assessing Officer made additions on account of diversion of profit and disallowance of remuneration paid to the partners. 6. Thereafter an appeal was filed before the ld. CIT(A) after taking ground including the technical one that the assessment got barred by the limitation of time. Since the assessee has challenged the assessment order on the ground that it was barred by the limitation of time. The ld. CIT(A) decided the issue in favour of the assessee holding that the assessment order passed on 27.02.2015 was barred by limitation time and thus same annulled. 7. Against the order of the ld. CIT(A), revenue has come before us in an appeal. 8. We have gone through the relevant record and impugned order . Ld. A.R. vehemently relied on the order of the ld. CIT(A) and stated that he has passed detailed and reasoned order and same should not be disturbed. In order to understand the time l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e period during which the reassessment proceedings were stayed by the order of the Honourable Gujarat High Court is to be excluded. Explanation 1 to sec. 153 which provides for the period to be excluded while calculating the period of limitation reads as under: Explanation l.-In computing the period of limitation for the purposes of this section- (i) ...... (ii) the period during which the assessment proceeding is stayed by an order or injunction of any court, or (iia) ..... (in) ...... (iv)..... (iva) ..... (v)..... (vi) .... (vii).... (viii) ..... (ix)..... shall be excluded Thus, the period from the date on which interim relief was granted by the High Court till the date of vacation of relief by the High Court will be excluded. Subsequently, the High Court with oral judgment order dated 29th July, 2013 permitted the Assessing Officer to proceed with the reassessment proceedings on the first ground raised in reasons recorded for re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. 2. Explanation 1 to sec. 153(4) provides for the period to be excluded while calculating the period of limitation. Thus, the period from the date on which interim relief was granted by the High Court till the date of vacation of relief by the High Court will be excluded. Thus the period from 18th March 2013 to 29th July 2013, i.e. 134 days will be excluded in calculating the period of limitation [Explanation 1 to S. 153(4)]. 3. Thus, the time limit within which reassessment order u/s. 143(3) r. w. s. 147 as per sec. 153(2) r.w.s. proviso to sec. 153(4) is to be passed is 27-09-2013. ITA No.1688/Ahd/2015 4- The Assessing Officer has erred in passing the reassessment order on 26-02-2014 and hence, the same is void-ab-initio. Submissions: 1. Firstly all the relevant dates of proceedings are mentioned as under: Sr, No. Particulars Dates ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inue 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 (see Annexure 1.5 of paper book page no. 6 to 14). Accordingly by virtue of the provisions of Explanation 1 to S. 153(4), the period during which the reassessment proceedings were stayed by the order of the Honourable Gujarat High Court is to be excluded. Explanation 1 to sec. 153(4) which provides for the period to be excluded while calculating the period of limitation reads as under: Explanation l.--In computing the period of limitation for the purposes of this section- - (i) ..... (ii) the period during which the assessment proceeding is stayed by an order or injunction of any court, or (iia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4 One /ear 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 - 5] 13 9 Since the time remaining is less than 60 days, time period is extended to 60 days [As per proviso to Expl 1 to Sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unicated 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 ITA No.1688/Ahd/2015 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, dismissin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the same provision which is absent in Explanation 1 (ii) concerned clearly indicates that for the purposes of Explanation 1 (ii), the communication of the order of the Court vacating the stay order or injunction is not contemplated. 9. The Hon'ble Allahabad High Court thereafter considered a large number of decisions rendered by various High Courts and arrived at a conclusion that concept of communication of order of the Court cannot be imported. The ld.CIT(A) has appreciated the controversy in right perspective. Dispute is squarely covered by the decision of the Hon'ble Allahabad High Courts as well by two orders of the ITAT, whose discussions have been reproduced by the ld.CIT(A) in the impugned order. Therefore, we do not see any reasons to interfere in the order of the ld.CIT(A). Accordingly, the appeal of the Revenue is dismissed. 10. In the result, appeal of the Revenue is dismissed. 14. Since assessment order passed beyond the limitation period i.e. beyond the time limit of 60 days as per the Explanation 1 (ii) to section 153 read with the Ist proviso to section 153 i.e. the order is passed after the expiry of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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