2014 (8) TMI 121 - HC - Income Tax

High Court upholds assessment order time limit breach for government contractor

The High Court upheld the findings of the appellate authorities that the assessment order in a case involving an assessee engaged in government contracts ... Time limit for Completion of assessment u/s 153 – scrutiny assessment u/s 143(3) - Held that:- The FAA held that no evidence was produced by the department to indicate that the assessment order was made on 26.12.2008 and it was dispatched along with the notice of demand on or before 31.12.2008 to the assessee - the appellate authority has found that the acknowledgement slip pasted at the back of the notice bore the date of receipt as 12.1.2009 - the FAA as well as the second appellate authority came to the conclusion that the assessment order was passed after the period of limitation - The question as to whether the assessment order was passed within the period of limitation or not is a question of fact based on appreciation of evidence produced before the appellate authorities – no substantial question of law arises for consideration – Decided against Revenue. Issues:- Assessment order completion within the period of limitation under Section 153 of the Income Tax Act.Analysis:The case involved the assessment of an assessee engaged in government contracts for the Assessment Year 2006-07. The initial income shown was revised to a higher amount by an assessment order dated 26.12.2008 under Section 143(3) of the Income Tax Act. The assessee contended that the assessment order was time-barred, as the assessment should have been completed by 31.12.2008 under Section 153 of the Act. The appellate authorities found that the notice of demand was served on 12.1.2009, indicating that the assessment order was passed after the limitation period. The first and second appellate authorities concluded that the assessment order was indeed passed beyond the prescribed time limit.The High Court examined the evidence and upheld the findings of the appellate authorities. It was emphasized that the question of whether the assessment order was passed within the limitation period is a factual determination based on the evidence presented before the appellate bodies. The Court noted that no evidence was provided by the department to establish that the assessment order was made on 26.12.2008 and dispatched to the assessee before 31.12.2008. The acknowledgment slip on the notice of demand indicated a receipt date of 12.1.2009, supporting the conclusion that the assessment order exceeded the time limit prescribed under the law.In light of the above analysis, the High Court found no error or perversity in the decisions of the appellate authorities. Consequently, it was held that no substantial question of law arose for consideration. The appeals filed by the department were deemed to fail, and thus, were dismissed.