2015 (1) TMI 1347 - AT - Income Tax

Assessment order under Income Tax Act held time-barred; Tribunal dismisses appeal.

The assessment order dated 10.10.2011 passed by the Assessing Officer under section 143(3)/147 of the Income Tax Act was held to be barred by limitation. ... Assessment order passed under section 143(3)/147 validity - barred by limitation of time u/s 153 - period of limitation - Held that:- Admittedly, in this case, notice u/s. 148 has been issued on 31.5.2002. Keeping in view the provisions of section 153(2) the assessment order should have been passed on or before 31.3.2004. However, assessment proceedings were stayed by the Hon'ble Jurisdictional High Court on 16.3.2004, which was vacated on 16.3.2011 when the writ petition filed by the assessee was dismissed. Admittedly, after 26.5.2011, there was no stay of proceedings before the AO. Thus, the period from 16.3.2004 to 26.5.2011 has to be excluded as per clause (ii) of Explanation (1) to Section 153 of the Act for the purpose of computing the period of limitation. If the above stay period is excluded, the period available for making the assessment order on 26.5.2011 with the AO was less than 60 days, the time limit for making the assessment shall be extended to 60 days i.e. upto 25.7.2011 as per proviso to Explanation (1) of Section 153 of the Act. Admittedly, in this case, the AO has passed the assessment order on 10.10.2011 i.e. beyond 60 days and the order passed by the ld CIT(A) is perfectly correct and, therefore, deserves to be confirmed. Accordingly, we confirm the order of ld CIT(A) in holding that the assessment order passed by the AO is barred by limitation as provided in explanation (1) (ii) to Section 153 of the Act and he was fully justified in annulling the assessment order dated 10.10.2011 passed by the AO. Issues Involved:Assessment order under section 143(3)/147 barred by limitation.Detailed Analysis:The main issue in this case revolves around the assessment order dated 10.10.2011 passed by the Assessing Officer (AO) under section 143(3)/147 of the Income Tax Act, 1961, and whether it is barred by limitation. The assessee had filed its return of income for the assessment year 1999-2000 on 29.12.1999, declaring a total income at Nil. Subsequently, proceedings under section 147 of the Act were initiated, and a notice dated 31.5.2002 u/s.148 of the Act was issued to the assessee. The AO passed the assessment order on 10.10.2011, making certain additions/disallowances. The crux of the matter lies in whether the time period for making the assessment order was within the statutory limitation.The ld CIT(A) held that the assessment order passed by the AO was indeed barred by limitation and annulled the same. The ld CIT(A) analyzed the provisions of section 153 of the Act, particularly focusing on the exclusion of the period during which assessment proceedings were stayed by the order of the Hon'ble Gauhati High Court. The ld CIT(A) referred to relevant case laws to support the conclusion that the assessment order exceeded the permissible time limit as per the statutory provisions.Upon appeal before the Tribunal, it was reiterated that the assessment order passed by the AO on 10.10.2011, after excluding the period of stay granted by the Hon'ble High Court, was indeed barred by limitation. The Tribunal concurred with the ld CIT(A)'s analysis, emphasizing that the exclusion of the stay period was crucial for computing the limitation period. By considering the relevant provisions of the Act and case laws, the Tribunal confirmed the decision that the assessment order was invalid due to exceeding the statutory time limit.Consequently, the Tribunal dismissed the appeal filed by the Revenue and the cross objection filed by the assessee, upholding the decision that the assessment order was barred by limitation. The cross objection filed by the assessee merely supported the ld CIT(A)'s order, without claiming any effective relief, leading to its dismissal.In conclusion, the judgment extensively analyzed the statutory provisions, case laws, and factual circumstances to determine that the assessment order in question was indeed barred by limitation, resulting in its annulment. The decision was upheld by the Tribunal, emphasizing the importance of adhering to statutory timelines in assessment proceedings.