Assessment order invalid when dispatched after statutory deadline despite being dated within time limit

The ITAT Delhi held that an assessment order was time-barred despite being dated 28/12/2016 within the statutory 21-month deadline ending 31/12/2016. The tribunal found that actual dispatch occurred on 02/01/2017 based on postal tracking evidence, making it beyond the permissible time limit. Following the coordinate bench precedent in Pankaj Sharma case, the ITAT ruled the assessment invalid due to delayed dispatch and set aside the assessment order, allowing the assessee's ground of appeal.

---

---

Issues Involved:
1. Whether the assessment made u/s 143(3) is barred by limitation.
2. Whether the addition of Rs 1,46,60,086/- on account of rejection of claim of Performance Incentive paid during the year is justified.
3. Whether the levy of interest u/s 234B, 234C, and initiation of penalty u/s 271(1)(c) of the Income Tax Act, 1961, is valid.

Summary:

Issue 1: Limitation of Assessment Order
The Assessee contended that the assessment order dated 28/12/2016 was dispatched only on 02/01/2017, which is beyond the limitation period prescribed u/s 153 of the Income-tax Act. The Tribunal noted that the limitation for passing the assessment order was on or before 31/12/2016. The assessment order was indeed dispatched on 02/01/2017 and served on 03/01/2017. The Tribunal referred to the case of Pankaj Sharma Vs. DCIT and other judicial precedents, holding that an assessment order dispatched after the limitation period is barred by limitation. Consequently, the assessment order was set aside.

Issue 2: Addition on Account of Performance Incentive
Since the Tribunal set aside the assessment order on the ground of limitation, it refrained from adjudicating the issue regarding the addition of Rs 1,46,60,086/- on account of the rejection of the claim of Performance Incentive.

Issue 3: Levy of Interest and Penalty
Similarly, the Tribunal did not adjudicate the issue regarding the levy of interest u/s 234B, 234C, and the initiation of penalty u/s 271(1)(c) of the Income Tax Act, 1961, due to the setting aside of the assessment order on the ground of limitation.

Conclusion:
The Tribunal allowed the appeal partly by setting aside the assessment order as it was barred by limitation, without adjudicating the other grounds raised by the assessee.

---