Validity of assessment orders under Section 144C(3) and 144B beyond limitation challenged; interim stay granted on assessment and demand

Dispute concerns whether the statutory limitation period applies to proceedings under special assessment provisions, with multiple High Courts taking the view that the limitation prescribed for completion of assessment is applicable to such proceedings; consequence: impugned assessment orders, demand notices and penalty proceedings have been granted interim stay pending final adjudication, while conflicting High Court decisions are noted to be pending before the Supreme Court. The petition filed was admitted for final hearing and respondent directed to file reply within six weeks.

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Issues:
Petition under Article 226 seeking various reliefs including a Writ of Certiorari, Mandamus, and Prohibition against final assessment order, demand notice, penalty notices, draft assessment order, and other orders for AY 2021-22. Similar issue previously addressed by the court for AY 2020-21. Petitioner's contention on the assessment orders being beyond the prescribed limitation under Section 153 of the Income-tax Act, 1961. Respondent acknowledging similarity to pending case of the petitioner. Court inclined to pass similar orders and tag the present petition with the pending case for final hearing.

Analysis:
The petitioner filed a petition under Article 226 of the Constitution seeking various reliefs, including a Writ of Certiorari, Mandamus, and Prohibition against multiple orders issued for the assessment year 2021-22. These orders included the Final Assessment Order, Demand Notice, Penalty Notices, Draft Assessment Order, and other related orders. The petitioner contended that a similar issue had been previously addressed by the court in their own case for the assessment year 2020-21. The petitioner argued that the assessment orders exceeded the prescribed limitation under Section 153 of the Income-tax Act, 1961, in conjunction with Section 144C. The court noted that a detailed order had been passed in the previous case, considering the petitioner's arguments and citing relevant case law, including decisions from the Bombay High Court, Madras High Court, and Delhi High Court. The court observed that the issue of limitation for assessment orders was under challenge before the Supreme Court, and interim reliefs were granted in the petitioner's favor pending final hearing.

The respondent's counsel acknowledged the similarity of the issue in the present proceeding to the petitioner's pending case for final hearing. In light of this, the court decided to pass similar orders and tagged the present petition to be heard along with the pending case from the previous assessment year. The court issued specific orders, including granting interim relief by staying the final impugned assessment order, demand notice, and penalty proceedings. The respondents were given a period to file a reply affidavit, and parties were permitted to apply based on any relevant orders or final decisions from the Supreme Court on the issue at hand. The court's decision reflected a cautious approach to ensure consistency and fairness in addressing the legal issues raised by the petitioner in both cases.

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