TaxTMI 
TaxTMI 
2017 (9) TMI 744
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.... on 30th January 2017 when notice was issued in the petition. Thereafter passed, the Assessee filed C.M. No. 7418/2017 seeking to amend the writ petition to challenge the said final assessment order. This application was allowed by the Court by an order dated 22nd February 2017. It was further directed that, "if the assessment is finalized during the pendency of the proceedings, the respondents are directed not to take any coercive measures to enforce the demand till the next date of hearing." 3. During the pendency of the above interim order, the AO passed the penalty order dated 22nd August 2017, as a result of which, a second application being C.M. No. 30034/2017 was filed, seeking a further amendment to the writ petition. This application is being allowed by this order. 4. The facts, in brief, are that the Assessee filed its return of income for AY 2006-07 on 24th November 2006. The return was picked up for scrutiny. On 22nd August 2007, the AO issued a notice to the Assessee under Section 142 (1) of the Act asking the Assessee to furnish certain particulars and documents. A detailed questionnaire was issued in regard to the share application money-cum-share premium received ....
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.... of assessment on 10th December 2012. These objections were rejected by the AO by an order dated 13th December 2012. 7. The Assessee then filed a writ petition, being W.P. (C) No. 1738 of 2013, in this Court seeking the quashing of the notice dated 27th March 2012 under Section 148 of the Act as also the order dated 13th December 2012 passed by the AO rejecting the Assessee's objections to the reopening of the assessment. On 18th March 2013, an interim order was passed by this Court staying all further proceedings pursuant to the notice dated 27th March 2012. 8. W.P. (C) No. 1738 of 2013 was ultimately dismissed as withdrawn on 9th December 2016 with liberty to the Assessee to urge the grounds raised in the petition on merits in the re-assessment proceedings. 9. Consequently, in relation to the re-assessment proceedings that commenced with the issuance of the notice dated 27th March 2012 under Section 148 of the Act, the stay granted by this Court in W.P. (C) No. 1738 of 2013 in favour of the Assessee continued during the period between 18th March, 2013 and 9th November 2016. 10. According to the Assessee, on the date of the stay order being vacated, there were only 13 days lef....
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....iod during which the assessment proceedings stayed by an order or injunction by the Court" shall be excluded. In terms of first proviso to Explanation 1, where, after the vacation of stay, the period available to the AO to complete the re-assessment proceedings is less than 60 days, then "such remaining period shall be extended to 60 days and the aforesaid period of limitation shall be deemed to be extended accordingly." It is submitted that if 60 days were to be calculated from 9th November 2016 then clearly the assessment order under Section 147 read with Section 143 (3) of the Act had to be passed by the AO on or before 8th January 2017. However, the order was passed only on 30th January 2017. 14. Mr. Goel disputed the statement in the counter affidavit filed in terms of the order dated 9th November 2016, was received in the office of the Principal CIT-8 only on 2nd December 2016. There was no document to substantiate this assertion. That apart, the said assertion stood belied with the fact that, on 30th November 2016, the AO issued a notice to the Assessee under Section 142 (1) of the Act. A copy of the said notice has been enclosed in the Assessee's rejoinder affidavit as Ann....
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....cludes from the computation of limitation "the period during which the assessment proceeding is stayed by an order or an injunction of any court." It does not exclude the period between the date of the order of vacation of stay by the Court and the date of receipt of such order by the Department. Therefore, in the present case, the Revenue cannot take advantage of the fact that it received a copy of the order dated 9th November 2016 of this Court only on 2nd December 2016. 19. Even otherwise, the assertion that the Revenue was aware of the order only on 2nd December 2016 does not appear to be correct. The Revenue has been unable to dispute the fact that, on 30th November 2016, a notice was issued by the AO to the Assessee under Section 142 (1) of the Act and this was pursuant to the order passed by this Court on 9th November 2016. Clearly, therefore, on the date that such notice was issued, the AO was aware of the order dated 9th November 2016 of this Court. Also, the order dated 9th November 2016 was passed in the presence of counsel for the Revenue and, therefore, the Revenue clearly was aware of the said order on that date itself. 20. For all of the aforementioned reasons, the....
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....d of 4 years from the last date of the assessment year in which the notice was served. Going by that yardstick in the present case, the reassessment order would still be time-barred. 24. The decision of the Calcutta High Court in India Ferro Alloy (supra) is distinguishable on facts. The Calcutta High Court too did not take into account the purpose for the introduction of the proviso to Explanation 1. However, the essential approach of exclusion of period during which the period during which the stay was operating is the same in all these cases. The interpretation placed by this Court on the above provision finds support from the decision of the Allahabad High Court in Chandra Bhan Bansal (supra) where it was held: "10. The above statutory scheme clearly indicates that for computing the period of limitation the period during which the assessment proceedings is stayed shall be excluded. In excluding the above period, the concept of communication of the order of the Court cannot be imported. The exclusion of the period has been provided because of stay or injunction by any Court during which the assessment proceedings are stayed. The intention is clear that when the limitation for ....