2016 (3) TMI 283 - HC - Income Tax

Tribunal Decision Upheld: Assessment Orders Barred by Time

The Commissioner of Income Tax, The Deputy Commissioner of Income Tax Versus M/s BJN Hotels Ltd.

The High Court upheld the Tribunal's decision that the assessment orders were barred by time, ruling in favor of the assessee. Due to the orders being ... Validity of assessment - period of limitation - Held that:- In the absence of dispatch date made available to the Court from the records, to prove that the order is issued within the prescribed period, order passed by Assessing Officer is barred by limitation. See Government Wood Works vs. State of Kerala [1987 (1) TMI 451 - KERALA HIGH COURT ] We have noticed certain over writings in the order sheet as regards date of passing of the order by the Assessing Officer and moreover, a particular page of the order sheet is maintained on a rough sheet (in an unusual manner) different from other pages of the order sheet. Besides this flaw in the records, learned Counsel for the revenue is neither able to point out from the records that the Assessment Orders were dispatched on 27.04.2007 nor produced the dispatch register to establish that the orders are complete and effective i.e., it is issued, so as to be beyond the control of the authority concerned within the period of limitation i.e., 29.04.2007. Admittedly, the assessment orders were served on the assessee on 30.04.2007. Hence, we are of the considered opinion that the assessment orders passed are barred by limitation. - Decided in favour of assessee Issues:- Appeal filed by revenue challenging orders passed by the Tribunal for assessment years 2001-02 to 2005-06.- Assessment orders being barred by time.- Assessing Officer's power to withdraw direction for audit under section 142(2A).- Assessment order being beyond the period of limitation.Analysis:Issue 1: Appeal challenging Tribunal's ordersThe appeals were filed by the revenue under Section 260A of the Income Tax Act, challenging the orders passed by the Income Tax Appellate Tribunal for the assessment years 2001-02 to 2005-06. The Tribunal held that the assessment orders passed were barred by time and ruled in favor of the assessee on other grounds. Both the assessee and the revenue then preferred appeals before the High Court.Issue 2: Assessment orders being barred by timeThe High Court examined the substantial question of law relating to the limitation issue. The assessment orders were required to be issued on or before 26.03.2007, as per the prescribed period under the law. However, the assessment orders were dated 27.04.2007. The Court observed discrepancies in the records regarding the date of passing the order by the Assessing Officer and the dispatch of the orders to the assessee. As the assessment orders were served on the assessee on 30.04.2007, the Court concluded that the assessment orders passed were indeed barred by limitation.Issue 3: Assessing Officer's power to withdraw audit directionThe Court also considered whether the Assessing Officer had the power to unilaterally withdraw the direction for audit under section 142(2A) of the Income Tax Act. The Tribunal had held in favor of the assessee on this issue. However, the High Court did not delve into this matter as the assessment orders were already found to be barred by limitation.Issue 4: Assessment order beyond the period of limitationThe High Court referred to a similar case and precedent where the order passed by the Assessing Officer was considered barred by limitation due to the absence of proof of dispatch date within the prescribed period. The Court applied this precedent to the present case and ruled in favor of the assessee, stating that the assessment orders were indeed barred by limitation. Consequently, the appeals were dismissed.In conclusion, the High Court upheld the Tribunal's decision that the assessment orders were barred by time, and based on this finding, ruled in favor of the assessee. The Court did not need to address the other substantial questions of law raised in the appeals due to the limitation issue.