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Generate professional replies, appeals, opinions to Show Cause Notices, assessment orders, audit objections, and other legal communications using TaxTMI's AI Drafter.
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AI Drafter - (New and Powerful) ✕ Generate professional replies, appeals, opinions to Show Cause Notices, assessment orders, audit objections, and other legal communications using TaxTMI's AI Drafter.
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Issues: (i) Whether the assessment orders were barred by limitation and whether the period during which the writ proceedings and appeal proceedings were pending, along with the stay of collection, had to be excluded in computing limitation. (ii) Whether the remand to the assessing authority was justified when the assessee's objections had not been considered.
Issue (i): Whether the assessment orders were barred by limitation and whether the period during which the writ proceedings and appeal proceedings were pending, along with the stay of collection, had to be excluded in computing limitation.
Analysis: The Act and the Rules required assessment on the basis of the return and permitted scrutiny and enquiry for each quarter. The assessee had challenged the amended levy and obtained stay of collection, subject to furnishing security for the differential tax. While the matter remained pending before the High Court and the Supreme Court, the assessee continued to pay tax under the old provision and furnished bank guarantee for the differential amount. In these circumstances, the period covered by the stay orders and the pendency of the proceedings could not be counted against the assessing authority for limitation purposes.
Conclusion: The assessment was not barred by limitation and this issue was decided against the assessee.
Issue (ii): Whether the remand to the assessing authority was justified when the assessee's objections had not been considered.
Analysis: The record showed that the assessee had raised several objections before the assessing authority, but they had not been properly dealt with. Since the objections required consideration and the assessment had not been made after such consideration, the appellate authority was justified in directing a fresh disposal by remand rather than nullifying the assessment outright.
Conclusion: The remand order was valid and this issue was decided against the assessee.
Final Conclusion: The revisions failed because the assessment could proceed after excluding the period covered by the stay orders, and the appellate direction for fresh consideration of objections was upheld.
Ratio Decidendi: Where tax collection is stayed during the pendency of litigation and security for the differential amount is furnished, that period may be excluded in computing delay for assessment, and an appellate remand is proper when the assessee's objections have not been duly considered.
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