TMI Blog2021 (7) TMI 1205X X X X Extracts X X X X X X X X Extracts X X X X ..... such unofficial communications, which would lead to confusion and chaos and the sanctity of the period of limitation contemplated is diluted. Therefore, knowledge and oral communications or private communications would not be taken into consideration for the purpose of reckoning the period of limitation as contemplated under the provisions of the statute and only if such communications are officially effected, the said point is to be taken into account for the purpose of reckoning the period of limitation.' On the issue in the matter of reckoning the period of limitation which would have the binding effect and therefore, as per the judgment of the Constitution Bench of the Hon'ble Supreme Court of India, in the case of National Insurance Co. Ltd., Vs. Pranay Sethi and others, [ 2017 (10) TMI 1276 - SUPREME COURT] the judgment of the Hon'ble Supreme Court of India is to be followed as precedent. Moreover, in the case cited supra, the Hon'ble Apex Court, in clear terms, held that mere pronouncement of the order would not be sufficient. The order must be signed, sealed, dated and communicated to the parties, enabling them to understand the reasons and the spirit of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... law. Mere request in this regard is insufficient and if such a request is considered, the very spirit of the Act as well as the power of the authorities to continue the proceedings would be prejudiced and therefore, this Court is of an opinion that the opportunity provided by the respondent to the petitioner was not properly utilised, but they have utilised the same for the purpose of prolonging the proceedings. Therefore, this Court is of the considered opinion that the principles of natural justice has not been violated in this case, but the opportunities provided are not properly utilised by the petitioner, for which the respondent cannot be faulted. WP dismissed. - W.P.Nos.28836 & 28837 of 2014 and M.P.Nos.1 and 1 of 2014 - - - Dated:- 20-7-2021 - THE HONOURABLE MR. JUSTICE S. M. SUBRAMANIAM For the Petitioner : Mr.G.Baskar For the Respondents : Mr.D.Prabhumukunth Arunkumar (Standing Counsel for IT) ORDER The relief sought for in these Writ Petitions are to set aside the orders of assessment dated 21.10.2014 with reference to two Assessment Years 2005-06 and 2006-07. The petitioner is a Company registered under the provisions of the Indian Companies Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xplanation 1 is to be considered in its straight language and therefore, the last day for passing an order of re-assessment in the present case was 12.10.2014. The learned counsel for the petitioner referred the other provisions of the Income Tax Act, wherein the date of receipt is stipulated. However, under Section 153, there is no such stipulation and therefore, the period of stay means that the date of expiry of stay is to be taken into consideration. As far as the communication of the order is concerned, the learned counsel for the Income Tax Department was very much present while the stay was vacated and he had the knowledge and in normal circumstances, the learned counsel appearing on behalf of the department communicates such orders to the department and thus, the contention that the date of receipt of copy of the order is to be taken is not contemplated under the provisions of the Income Tax Act. 5.In support of the said contention, the learned counsel for the petitioner relied on the judgments of the High Court of Allahabad in the case of Commissioner of Income Tax Vs. DRS. X-ray and Pathology Institute Pvt. Ltd., reported in [2013] 358 ITR 27 (All). The Allahabad High ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uting 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 .............shall be excluded . 10.The above statutory scheme clearly indicates that for computing the period of limitation the period during which the assessment proceedings is stayed shall be excluded. In excluding the above period, the concept of communication of the order of the Court cannot be imported. The exclusion of the period has been provided because of stay or injunction by any Court during which the assessment proceedings are stayed. The intention is clear that when the limitation for assessment has started it can be stayed only by an order or injunction of any Court and as soon as the order or injunction of the Court is vacated, the period of limitation shall restart since after the vacation of the order of the Court, there is no embargo on the authorities to proceed with the assessment. The submission of Shri Shambhu Chopra learned counsel appearing for the Revenue that the limitation will start again only when the order is communicated to the Department thus cannot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Act was served upon the Assessee viz., on 20.04.2000 till 31.07.2000 which will give the exclusion period of 102 days only and therefore, the Assessment Order passed on 13.11.2000 will be hit by the bar of limitation. This contention in our considered opinion is misconceived and contrary to the clear and bare language of the provisions of the Act which employed the word directs the Assessee to get his accounts audited . These words are in contra distinction to the words employed in Section 142(2A) proviso where the extension of period by 180 days will become effective from the date when the order of extension is received by the Assessee. The proviso to Section 142(2A) quoted above, clearly uses the words received by the Assessee and not directs the Assessee . This distinction of two different phrases at two different places cannot be intermixed or confused with each other. 8.The High Court of Madras, in the case of R.V.Sarojini Devi Vs. I.A.C., reported in [2000] 242 ITR 329 (Madras), held as follows: Learned counsel for the appellant submitted that the consequence of a proceeding under this Chapter are rather drastic and, therefore, a liberal construction wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not from the date on which the order is communicated to the department. 11.The learned Standing Counsel appearing on behalf of the respondents disputed the contentions raised by the petitioner, by stating that the impugned orders of re-assessment were passed within the period of limitation, as contemplated under the Act and the calculation of period of limitation made by the petitioner is not correct. The Income Tax Officials are expected to act only on receipt of the order copy from the High Court and not based on the oral informations provided by the learned counsel or in writing by the learned counsels. The order of the Court, in its letter and spirit, must be understood by the Income Tax Officials for the purpose of its implementation. Therefore, mere vacating the stay order by the Court cannot be a ground to reckon the period of limitation and the date of communication of the order to the department would be appropriate for the purpose of reckoning the period of limitation with reference to Sub Clause (ii) of Explanation 1 to Section 153 of the Act. 12.The learned counsel submitted legal submissions on behalf of the respondent, wherein the sequence of dates and events a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me Court as follows: We may make it clear that this Court has not made any observation on the merits of the cases, i.e., the contentions which are raised by the appellant challenging the move of the Income Tax Authorities to re-open the assessment. Each case shall be examined on its own merits keeping in view the scope of judicial review while entertaining such matters, as laid down by this Court in various judgments. We are conscious of the fact that the High Court has referred to the judgment of this Court in Commissioner of Income Tax and others Vs. Chhabil Dass Agarwal, [(2013) ITR 357 (SC)]. We find that the principle laid down in the said case does not apply to these cases. During the pendency of these appeals, stay of reassessment was granted, which shall continue till the disposal of the writ petitions before the High Courts. The appeals are allowed in the aforesaid terms. 13.Relying on the above sequence of dates and events, the learned Standing Counsel referred the interim order passed by the Hon'ble Supreme Court in the SLP filed by the petitioner. The interim order dated 03.11.2014 reveals that in the mean time, the re-assessment order shall not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with regard to vacation of interim relief because in that event, if the information is not correct, he might be held guilty under the provisions of the Contempt of Courts Act. In the instant case, there is nothing on record that prior to 27th March, 2003, the Land Acquisition Collector had received any communication that the stay granted on 12th February, 1999 had been vacated and, therefore, he was absolutely right in not taking any action for proceeding further for making an award till 27th March, 2003. 16.In support of the said judgment, the learned counsel for the petitioner drawn the attention of this Court regarding the facts considered by the Hon'ble Supreme Court in para 13, which reads as under: 13.Looking to the facts of the case we do not accept the said submission because in the instant case the appellants and their father had made all possible efforts to stall the proceedings and only on account of the litigation initiated by them, the acquisition proceedings had been stayed. Ultimately, the stay granted by the High Court had been vacated but intimation of the order, whereby stay was vacated, i.e. dated 23rd July, 2002 was communicated, for the first tim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th the objects and reasons of the Act. 26.Undoubtedly, as rightly pointed out, if the date of expiry of the interim stay is taken into consideration, the petitioner may be correct, as the period of limitation contemplated expired. However, the fact remains that the interim order granted initially on 06.02.2013, which was extended up to 08.06.2014 was neither extended nor vacated by the High Court subsequently. Admittedly, the High Court has not passed any orders either vacating the stay or extending the stay. Thus, no order has been passed on the date of expiry. In practice, the cases are not listed on the date of expiry of interim order in all circumstances by the Registry of High Court, for which the litigants should not made to suffer. In most of the writ petitions, even after the expiry of interim orders, the cases are not listed for various reasons. It is a practical difficulty being faced by the High Courts across the country, as large number of litigations are pending. When the cases are not listed on a particular day more specifically on the day of expiry of an interim order, then the parties cannot be penalised or blamed for non-listing of the matter for hearing, nor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rder is communicated or vacating the interim stay order is communicated. Neither the stay order nor vacating the stay order can be acted upon in the absence of communication of the order passed by the High Court with its seal. Thus, the importance of the official communication cannot be brushed aside. 22.The limitation period contemplated under the Income Tax Act are of paramount importance. More specifically, in Chapter XIV of the Income Tax Act, time limits are prescribed under various provisions for completion of proceedings by the competent authority of the Income Tax Department. When the time limit contemplated are mandatory and binding on the authority, then, the recognition of official communication is also equally mandatory and has got certain significance. It is not as if a competent authority is permitted to act based on certain unrecognised communications or the communications by the respective learned counsels. No doubt, such communications can be taken into consideration for the purpose of acting or initiating action. However, those performance of duties done by the competent authority pursuant to the communication given by the respective learned counsels would not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed ,order the party adversely affected will have no means of knowing the contents of the order, so as to challenge the same and get it set aside by the appellate authority or the higher Forums . 24.The above Supreme Court judgment will have an apt application with reference to the facts on hand. It is not as if the orders pronounced in the open Court, which was communicated to the parties to the lis through their counsels or through their representative would not be considered as a point for reckoning the period of limitation. It is the order which is signed by the authority and appropriately sealed by the Court concerned, which was communicated to the party alone must be the date on which the period of limitation commences and not from the date on which the parties have the knowledge by themselves or through their counsels or otherwise. 25.As far as the judgments cited by the learned counsel for the petitioner is concerned, two judgments are from the High Court of Allahabad and other two judgments are from the Madras High Court and one judgment from the High Court of Delhi. However, the judgment relied on by this Court, cited supra, would throw light on the issue in the matt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der or otherwise is communicated to the authorities, they are bound to proceed under the provisions of the Act, in the manner known to law and therefore, mere filing of the case before the Hon'ble Supreme Court is not a ground to raise that the petitioner was not afforded with opportunity. Even, the petitioner has requested the authorities to wait. The petitioner has no right to make such a request to the Income Tax authorities, stating that they have preferred an appeal and therefore, they should not act under the provisions of the Act. The said submission deserves no merit consideration. The learned Standing Counsel, in this regard, made a submission that the SLP as per the petitioner, was filed on 08.10.2014 and it was taken up for hearing and an interim order was passed on 03.11.2014, after passing of an order of re-assessment by the competent authority on 21.10.2014. This apart, the petitioner has availed the opportunity and submitted their reply on 16.10.2014 and 20.10.2014. However, they made a request to stop all further proceedings till their appeal is taken up for hearing. This Court is of the considered opinion that the processes initiated under any statute need not ..... X X X X Extracts X X X X X X X X Extracts X X X X
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