2022 (10) TMI 540 - AT - Income Tax

Assessment order void due to limitation period exceeded; ITAT allows appeal based on lack of jurisdiction

The ITAT allowed the appeal of the assessee, holding that the assessment order passed for Assessment Year 2011-12 was beyond the limitation period and ... Demand u/s 201(1 )/201 (1 A) - jurisdiction on account of expiry of limitation - whether the limitation period would be two years or six years as per amendment and whether amendment applies retrospectively? - HELD THAT:- This issue is squarely covered in favour of the assessee by the order of the Tribunal in assessee’s own case passed [2022 (8) TMI 219 - ITAT DELHI] as ITAT had held that in similar circumstances in the similar period, the assessment order passed was held to be invalid as it was passed beyond the limitation period for two years. Following the precedent in assessee’s own case as above, we hold the assessment order passed in the present case on 05.03.2018 relating to the Assessment Year 2011-12, on the same reasoning is beyond limitation period and void ab intio. Following the decision of the Co-ordinate Bench, the appeal of the assessee stands allowed. Issues Involved:1. Validity of jurisdiction and merits of the assessment order passed by the Assessing Officer under section 201(1)/201(1A) of the Act for Assessment Year 2011-12.2. Applicability of the amendment in provision of section 201(3) w.e.f 01.10.2014 to the case.3. Denial of exemption u/s 10(5) in respect of reimbursement of Leave Travel Concession involving foreign leg through circuitous route.4. Charging and confirming interest u/s 201(1A) of the Act.Issue 1: The validity of jurisdiction and merits of the assessment order passed by the Assessing Officer under section 201(1)/201(1A) of the Act for Assessment Year 2011-12 was challenged by the assessee before the Ld. CIT(A). The Ld. CIT(A) held that the jurisdiction was valid and that the amendment in provision of section 201(3) w.e.f 01.10.2014 applied to the case. On the merits, the Ld. CIT(A) upheld the action of the Assessing Officer, confirming the demand raised. The Ld. CIT(A) dismissed the grounds of appeal related to the jurisdictional issue, citing that the order passed by the AO was within the prescribed time limit as per the amended section 201(3). The Ld. CIT(A) also upheld the action of the AO in denying the exemption u/s 10(5) for reimbursement of Leave Travel Concession involving the foreign leg.Issue 2: The assessee appealed against the order of the Ld. CIT(A) before the ITAT, challenging the validity of the assessment order on the grounds of limitation. The ITAT, considering the precedent in the assessee's own case, held that the assessment order passed on 05.03.2018 for Assessment Year 2011-12 was beyond the limitation period of two years and hence void ab initio. The ITAT concluded that the assessment order was passed without jurisdiction and allowed the appeal of the assessee.Issue 3: The denial of exemption u/s 10(5) in respect of reimbursement of Leave Travel Concession involving a foreign leg through a circuitous route was a significant issue in the case. The Ld. CIT(A) upheld the action of the Assessing Officer in denying the exemption u/s 10(5) for the foreign component of traveling, stating that TDS was required to be deducted on the perquisite value of such Leave Travel Concession.Issue 4: The charging and confirming of interest u/s 201(1A) of the Act was also challenged by the assessee. The Ld. CIT(A) confirmed the interest charged by the Assessing Officer. However, the ITAT's decision to declare the assessment order void ab initio rendered the issue of interest moot.In conclusion, the ITAT allowed the appeal of the assessee, holding that the assessment order passed for Assessment Year 2011-12 was beyond the limitation period and void ab initio. The ITAT's decision was based on the precedent set in the assessee's own case, where similar circumstances led to the assessment order being declared void.