1997 (3) TMI 137 - AT - Income Tax

Tax Appeals Granted for Previous Years, Dismissed for 1987-88 Due to Extended Assessment Period

The Tribunal allowed the appeals for assessment years 1980-81 to 1986-87, as the assessment orders were deemed beyond the limitation period, even after ... - Issues Involved:1. Period of limitation for assessment orders.2. Applicability of Section 153, Explanation 1(v) without giving the assessee an opportunity to be heard.3. Validity of invoking Section 153(3)(v) by the Assessing Officer (AO).Issue-wise Detailed Analysis:1. Period of Limitation for Assessment Orders:The assessee contended that the assessment orders dated 30th Oct., 1992, were beyond the period of limitation specified in Section 153 of the IT Act. The CIT(A) observed that the limitation period for completing the assessments under Section 153(1) was up to 31st March, 1991, for the assessment years 1980-81 to 1986-87 and up to 31st March, 1990, for the assessment year 1987-88. However, since the assessee had filed applications before the Settlement Commission, the period during which these applications were pending was to be excluded as per Section 153, Explanation 1(v). The AO and CIT(A) held that the assessments were completed within the statutory time after excluding the period during which the Settlement Commission was seized of the applications.2. Applicability of Section 153, Explanation 1(v) Without Giving the Assessee an Opportunity to be Heard:The assessee argued that before invoking Explanation 1(v) of Section 153, the AO should have given an opportunity to the assessee to be heard. The learned counsel for the assessee emphasized that the AO did not provide any such opportunity, and thus, the assessments made beyond the normal period of limitation were invalid. The Departmental Representative countered that there was no provision in the IT Act requiring the AO to indicate to the assessee that he was going to invoke particular provisions, especially Explanation 1(v), which statutorily empowered the AO to exclude certain periods.3. Validity of Invoking Section 153(3)(v) by the Assessing Officer (AO):The AO invoked Section 153(3)(v) to justify the timeliness of the assessment orders. The assessee contended that there was no clause (v) in Section 153(3), and the AO referred to the wrong provisions. The CIT(A) observed that the period from the date of filing the application with the Settlement Commission to the date of its rejection should be excluded, as per Explanation 1(v). The Tribunal agreed with the CIT(A) that the AO was competent to exclude this period and that the provisions of Explanation 1(v) were rightly invoked.Conclusion:The Tribunal concluded that the assessment orders for the assessment years 1980-81 to 1986-87 were beyond the period of limitation, even after excluding the period during which the applications were pending before the Settlement Commission. Therefore, these assessments were set aside. However, for the assessment year 1987-88, the Tribunal found that the assessment was made within the extended period allowed by Explanation 1(v), and thus, the appeal for that year was dismissed.Result:- Appeals for assessment years 1980-81 to 1986-87: Allowed.- Appeal for assessment year 1987-88: Dismissed.