Limitation for reassessment proceedings under amended rules made pending cases time-barred when orders were passed after one year.

Rule 28(3), inserted with effect from 21.07.2001, made pending reassessment cases under section 12(5) or section 12(8) subject to disposal within one year from the commencement of the amendment rules, while later cases could be disposed of within two years. Because the reassessment notices were signed and dispatched before 21.07.2001, the proceedings were treated as pending cases governed by the one-year period. The limitation prescribed by the amended rule was held binding, not merely directory. As the assessment orders were passed after expiry of the applicable one-year period, the reassessment orders were without jurisdiction and liable to be quashed.

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Issues: Whether reassessment orders passed under section 12(8) were barred by limitation in view of the insertion of rule 28(3), and whether the reassessment proceedings initiated before 21.07.2001 were to be treated as pending cases governed by the one-year disposal period.

Analysis: Rule 28(3), inserted with effect from 21.07.2001, prescribed that pending cases under section 12(5) or section 12(8) were to be disposed of within one year from the date of commencement of the amendment rules, while cases instituted thereafter were to be disposed of within two years. The notices for reassessment had been signed on 18.07.2001 and dispatched on 20.07.2001, so the reassessment proceedings were initiated before the rule came into force and therefore fell within the category of pending cases. As the Rules were framed under the Act, the limitation prescribed by the amended rule was binding and not merely directory. The assessment orders were passed on 30.06.2003, beyond the one-year period applicable to pending proceedings.

Conclusion: The reassessment orders were without jurisdiction as they were passed beyond the applicable limitation period and were liable to be quashed.

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