Extended limitation fails absent proven suppression or intent to evade duty; audit objections alone cannot time-barred demands.

Extended limitation could not be invoked where the assessee had filed ER-1 returns and the Department failed to prove suppression of material facts or any intent to evade duty. A later audit objection, by itself, was insufficient when the Department could have scrutinised the self-assessment records within the normal period. In the absence of evidence of mens rea or deliberate concealment, the demand was barred by limitation, and the impugned demand and order were set aside without examination of the merits.

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Issues: Whether the extended period of limitation could be invoked for the demand raised on the basis of audit and alleged suppression of facts.

Analysis: The appeal turned on limitation. The appellants had filed ER-1 returns and the Department did not establish any material beyond a bare allegation of suppression or intent to evade duty. The record did not show that the assessee had concealed facts from the Department, and the Department's own statutory and administrative framework required scrutiny of returns and verification of self-assessment. In these circumstances, the mere fact that an audit later raised objections could not justify invocation of the extended period. The absence of evidence showing mens rea or deliberate suppression was decisive.

Conclusion: The extended period of limitation was not available to the Revenue and the demand was held to be time barred, in favour of the assessee.

Final Conclusion: The impugned demand and order were set aside on the ground of limitation, and the appeal succeeded without examination of the merits.

Ratio Decidendi: Extended limitation cannot be invoked in the absence of proved suppression of material facts or intent to evade duty, particularly where the assessee has filed returns and the Department could have scrutinized them within the normal period.

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