Assessment Order Barred by Limitation, Revenue Appeal Dismissed

The Tribunal held that the assessment order passed on 13-5-1994 was barred by limitation as the provisions of section 129 did not apply. The CIT (Appeals) correctly annulled the assessment, and the revenue's appeal was dismissed.

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Issues Involved:
1. Annulling of the assessment order on the ground of no application under section 129 before the Assessing Officer.
2. Limitation of the assessment order passed on 13-5-1994.

Issue-wise Detailed Analysis:

1. Annulling of the assessment order on the ground of no application under section 129 before the Assessing Officer:

The case facts reveal that the assessee did not file the return of income despite notices under section 142(1). The initial Assessing Officer concluded the assessment proceedings on 22-11-1993 but did not pass an order. Upon transfer, the succeeding officer took charge in February 1994. The assessee requested a hearing opportunity under section 129 on 1-3-1994, which was received by the Assessing Officer on 25-3-1994. Hearings were conducted on 4-3-1994 and 7-3-1994. The second succeeding officer, who took over in April 1994, issued a notice on 6-5-1994 for a hearing on 9-5-1994 and passed the order on 13-5-1994.

Section 129 stipulates that a succeeding officer may continue proceedings from where they were left, provided the assessee is informed of the change and may demand re-hearing. The Tribunal noted that the assessee was not formally informed about the change of officer, and the letter dated 1-3-1994 could not be treated as an application under section 129. The Tribunal referenced the Patna High Court's decision in CIT v. Jagdish Prasad Chaudhary [1995] 211 ITR 472 (FB), emphasizing the obligation to inform the assessee about the change of officer to exercise their right to re-hearing effectively. The Tribunal concluded that the assessee's application on 1-3-1994 did not discharge the Assessing Officer's obligation to inform the assessee about the change of incumbent.

2. Limitation of the assessment order passed on 13-5-1994:

The assessee argued that the assessment order should have been passed by 31-3-1994, making the order passed on 13-5-1994 barred by limitation. The Tribunal examined the timeline and actions of the Assessing Officers. The first succeeding officer provided a hearing on 4-3-1994 and 7-3-1994, but no further action was taken by 31-3-1994. The second succeeding officer issued a notice on 6-5-1994 and passed the order on 13-5-1994. The Tribunal held that the application dated 1-3-1994 became redundant after the hearings on 4-3-1994 and 7-3-1994, and no new application was filed before the second succeeding officer. The Tribunal stated that the provisions of section 129 and section 153 (Explanation 1) did not apply, as the Assessing Officer failed to inform the assessee about the change of officer. Consequently, the assessment should have been completed by 31-3-1994, and the order passed on 13-5-1994 was beyond the time limit.

Conclusion:

The Tribunal concluded that the provisions of section 129 did not apply, and the assessment order passed on 13-5-1994 was barred by limitation. The CIT (Appeals) rightly annulled the assessment, and the appeal filed by the revenue was dismissed.

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