Composite assessment orders covering multiple tax years are invalid; fresh year-wise proceedings may be initiated separately.

A single composite assessment order covering more than one financial year was held unsustainable because, once the annual return due date had passed, a single show-cause notice or composite assessment could not be issued for multiple tax periods. The impugned order covering several assessment years was set aside on that ground. The other objections were left open, and the respondents were permitted to commence fresh proceedings separately for each assessment year. The period between the impugned order and receipt of the present order was directed to be excluded for limitation purposes.

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Issues: Whether a single composite assessment order covering more than one financial year was valid, and whether it was liable to be set aside with liberty to initiate fresh proceedings year-wise.

Analysis: The challenge was confined to the validity of a composite order of assessment covering multiple financial years. It was noted that a prior Division Bench had already held that a single show-cause notice or a single composite assessment order cannot be passed in relation to more than one tax period once the annual return due date has been reached. As the impugned order covered several assessment years, the order could not be sustained on that ground. The other grounds were left open, and the respondents were permitted to proceed afresh for each assessment year separately. The period between the impugned order and receipt of the present order was directed to be excluded for limitation purposes.

Conclusion: The composite assessment order was invalid and was set aside, with liberty to initiate separate proceedings for each assessment year.

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