TMI Blog2021 (7) TMI 1243X X X X Extracts X X X X X X X X Extracts X X X X ..... ly, the assessment proceedings have not been stayed by an order or injunction of any Court which fact was also brought on record by the A.O. himself at para-7 of the assessment order. Further, although such direction was challenged before the Hon ble High Court, however, no order setting aside such direction has been received by Pr. CIT or CIT which is to be excluded. CIT(A) has gone wrong by invoking the provisions of Explanation-(b) to Section-153B. We, therefore, set aside the order of the Ld. CIT(A) and quash the assessment order passed by the A.O. being barred by limitation. - Decided in favor of assessee. - ITA.Nos.1766, 1767, 1768, 1769 & 1770/Del./2018 - - - Dated:- 30-7-2021 - Shri R.K. Panda, Accountant Member And Shri Amit Shukla, Judicial Member For the Assessee : Shri Sanjay Kumar, C.A. For the Revenue : Ms. Nidhi Srivastava, CIT-DR ORDER PER R.K. PANDA, A.M. The above batch of five appeals filed by the Assessee are directed against the Common Order Dated 25.01.2018 of the Ld. CIT(A)-IV, Kanpur, relevant to the A.Ys. 2008-2009 and 2010-2011 to 2013-2014 respectively. Since common issues are involved in all these appeals, therefore, f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pts nor the correct expenses have been recorded in the books of accounts and the assessee also admitted its incorrectness during the course of search and has made disclosure of ₹ 20 crores to cover-up the discrepancies. Having regard to the nature and complexity of accounts, incorrectness of the accounts, multiplicity of transactions as well as specialized nature of business activities of the assessee and in the interest of justice, the A.O. vide letter Dated 22.03.2016 (Pages 84-89 of the paper book) directed the assessee to get its accounts audited under section 142(2A) of the I.T. Act, 1961 for the A.Ys. 2008-2009 to 2014-2015 by M/s D.S. Sinha Co. 14, Ratan Villa, 7/33, Tilak Nagar, Kanpur, who was nominated by Ld. Pr. Commissioner of Income Tax (Central), Kanpur and to furnish a Report of such Audit in the Prescribed Form duly signed and verified. The A.O. subsequently vide letter Dated 29.03.2016 (Page-91 of the paper book) communicated the assessee to get its accounts audited by M/s D.C Shukla Co, Kanpur within 90 days from the service of the notice and also stated that the name of D.S. Sinha Co. was inadvertently mentioned. The time span was supposed to be ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... validity of the assessment on account of being barred by limitation is concerned, the Ld. CIT(A) decided the issue against the assessee by observing as under : 5.6. One of the legal challenge of the appellant is that order passed by the AO is barred by limitation. It may be seen from the written submission of the appellant that assessment order passed on 28.10.2016 is void-ab-inito because that was beyond stipulated period of 90+60=150 days after the matter was referred u/s 142(2A) of the Act which had expired on 28.08.2O16. In view of this, assessment order passed by AO on 28.10.2016 is barred by limitation. 2.6. So far as the merits of the case is concerned, the Ld. CIT(A) reduced such estimate of net profit from 15% to 8% by observing as under : 6.4. Now issue to be decided is whether net profit adopted by AO at 15% is justified or not. Perusal of assessment order does not show any reasoning why net profit at 15% is adopted except a sentence where in AO mentioned that in this line of business profits are in the range of 15% to 25%. However no comparable case is cited by the AO with such high profits. On the one hand AO has not shown any comparable case with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erred in law and on facts in upholding the validity of the assessment order dated 28.10.2016 purported to have been passed under section 153A, without appreciating that a) direction dated 29.03.2016 issued for obtaining audit report under section 142(2A) as had been issued by Dy. CIT, Central Circle, Noida, was served on the appellant on 02.04.2016, whereas time limit for completion of assessment as provided in section 153B had already expired on 31.03.2016; and b) in any case, and without admitting, even if the time limit is to be reckoned from the date of service of the said directions i.e. 02.04.2016, the time limit/extended time limit had expired on 31.08.2016 3. BECAUSE the order dated 28.10.2016 was liable to be declared as non-est and wholly unenforceable in law and view to the contrary as has been taken by the CIT(A) is wholly erroneous as being inconsistent with the facts of the case and law applicable thereto. WITHOUT PREJUDICE TO THE AFORESAID 4. BECAUSE all such material and information as was called for from time to time and within time limit permissible under section 153B had duly been furnished and on a due consideration of the same, CIT(A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or Commissioner], direct the assessee to get the accounts audited by an accountant, as defined in the Explanation below sub-section (2) of section 288, nominated by the [Chief Commissioner or Commissioner] in this behalf and to furnish a report of such audit in the prescribed form duly signed and verified by such accountant and setting forth such particulars as may be prescribed and such other particulars as the [Assessing] Officer may require. [Provided that the Assessing Officer shall not direct the assessee to get the accounts so audited unless the assessee has been given a reasonable opportunity of being heard.] (2B) The provisions of sub-section (2A) shall have effect notwithstanding that the accounts of the assessee have been audited under any other law for the time being in force or otherwise. (2C) Every report under sub-section (2A) shall be furnished by the assessee to the [Assessing] Officer within such period as may be specified by the [Assessing] Officer : Provided that the [Assessing] Officer may, [suo motu, or] on an application made in this behalf by the assessee and for any good and sufficient reason, extend the said period by such further peri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the Hon ble High Court against the writ petition filed by the assessee, therefore, the finding of the Ld. CIT(A) is contrary to fact and Law. He accordingly submitted that since the A.O. has passed the order on 28.10.2016 which is after the specified date of 25.08.2016, therefore, such order being barred by limitation, cannot be enforceable in the eye of Law and such assessment order has to be quashed. For the above proposition, he relied on the decision of the Amritsar Bench of the Tribunal in the case of Srinagar Development Authority vs., ITO in ITA.Nos.97 to 99/ASR/2014 vide Order Dated 18.01.2019. 3.5. So far as the merits of the case is concerned, the Learned Counsel for the Assessee submitted that no incriminating material whatsoever was found during the course of search and the addition made by the A.O. is not based on any incriminating material. He has simply estimated the net profit @ 15% of the turnover which was reduced by the Ld. CIT(A) to 8% and that too without any basis. The Learned Counsel for the Assessee relied on various decisions including the decisions of Hon ble Delhi High Court in the case of CIT vs., Kabul Chawla 380 ITR 573 Del.) and in the case of P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and there is no information from the side of the assessee regarding any stay on the pending assessment by the Hon ble High Court. Under these circumstances, we find merit in the submission of the Learned Counsel for the Assessee that as per the provisions of Section 142(2A) of the I.T. Act, 1961, the time period of 90 days plus further extension of 60 days expired on 21.08.2016. Whereas, the A.O. in the instant case has passed the assessment order on 28.10.2016 and, therefore, the order passed by the A.O. is barred by limitation. 5.1. So far as the finding given by the Ld. CIT(A) that in view of provisions of Section 153B read with Explanation- (b) the time period starting with the date of filing of the writ petition and ending on the date of disposal of the writ petition is to be excluded is concerned, we do not find any merit in the same. Admittedly, the assessment proceedings have not been stayed by an order or injunction of any Court which fact was also brought on record by the A.O. himself at para-7 of the assessment order. Further, although such direction was challenged before the Hon ble High Court, however, no order setting aside such direction has been received by Pr. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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