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Generate professional replies, appeals, opinions to Show Cause Notices, assessment orders, audit objections, and other legal communications using TaxTMI's AI Drafter.
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AI Drafter - (New and Powerful) ✕ Generate professional replies, appeals, opinions to Show Cause Notices, assessment orders, audit objections, and other legal communications using TaxTMI's AI Drafter.
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Issues: Whether the assessment was barred by limitation because the extension of time for submission of the special audit report was not validly granted by the Assessing Officer under the statutory scheme, rendering the assessment void ab initio.
Analysis: The special audit framework required the Assessing Officer to exercise the statutory power to extend time under the proviso to section 142(2C) of the Income-tax Act, 1961. The extension in the case was only communicated as an administrative approval from the Principal Commissioner and not by a speaking order of the Assessing Officer within the permissible time. The Tribunal held that a power vested in a specified statutory authority cannot be exercised by another authority, and that extension granted after expiry of the earlier period was ineffectual. On that basis, the assessment completed after the relevant limitation date was held to be time-barred. The challenge to the section 153C notice was not substantively pressed and did not call for adjudication.
Conclusion: The assessment for the relevant years was invalid and barred by limitation because the extension for special audit was not lawfully granted in terms of section 142(2C) of the Income-tax Act, 1961.
Ratio Decidendi: Where the statute vests the power to extend time in a particular assessing authority, the extension must be granted by that authority within the prescribed period and cannot be validated by a mere administrative communication from another authority; otherwise, the assessment made after expiry of limitation is void.
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