TaxTMI 
TaxTMI 
2017 (9) TMI 1729
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....sessee on draft assessment order passed by the Assistant commissioner of Income tax, Circle 291), New Delhi on 9/8/2012 where in the adjustment proposed by the Additional Commissioner of Income tax, Transfer pricing officer -1(1), New Delhi [ hereinafter referred to as the 'ld TPO'] vide order u/s 92CA (3) of the act passed on 24.10.2011. 2. The revenue has preferred an appeal against the direction of Dispute Resolution Panel for deleting the addition by direction u/s 144C (5) of the Income Tax Act dated 27.05.2013. 3. Brief facts of the case are that the assessee is a company incorporated on 25.10.2005 engaged in the business of providing long distance Telecommunication services based on International Long distance, national long distance, and internet service provider license granted by the Department of Telecommunication. The company carried on the business in terms of its service agreements entered into with its customers for provision of end-to-end telecommunication connectivity services for transmission of data from source location in India to destination location within or outside India. 4. For the impugned assessment year it filed its return of income on 30.09.2008....
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....nt were bad-in-law and ignoring the legal and factual submission filed by the Appellant, and thereby failing to pass a speaking order. 1.2 On the facts and circumstances of the case and in law, since the special audit order dated December 26, 2011 is bad-in-law and void-ab-initio, the draft assessment order dated August 9, 2012 and consequently, the final assessment order dated June 17, 2013 passed by the learned AO are barred by limitation 2. Ground No. 2 - Disallowance of interest incurred on External Commercial Borrowings CECBs') 2.1 On the facts and circumstances of the case and in law. the learned AO/ Hon'ble DRP has erred in making a disallowance of Rs. 22,16,117 towards interest expenditure incurred in relation to the ECBs availed by the Appellant for acquisition of fixed assets, by invoking the proviso to section 36(l)(iii) of the Act. 2.2 Without prejudice to the above ground, on the facts and circumstances of the case and in law, the learned AO/ Hon'ble DRP has erred in making excess disallowance of Rs. 55,534 towards interest expense incurred on ECBs availed during preceding financial year (i.e. FY 2006-07), by computing th....
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.... be allowed as tax deductible expenditure for the subsequent financial year. 5. Ground No. 5 - Disallowance of circuit charges under section 40(a)(ia) of the Act 5.1 On the facts and circumstances of the case and in law, the learned AO/ Hon'ble DRP has erred in disallowing circuit charges (i.e. bandwidth charges and last mile charges), amounting to Rs. 1,38,84,736, by invoking the provisions of section 40(a)(ia) of the Act. 5.2 Without prejudice to the above grounds, on the fact and circumstances of the case and in law, the learned AO/Hon'ble DRP has failed to appreciate that the second proviso to section 40(a)(ia) of the Act inserted vide Finance Act, 2012 is curative in nature and hence, the benefit thereof should be extended to the past years, including the subject AY, and accordingly, the Hon'ble DRP ought to have directed that the deduction of the disallowed amount be allowed in the subsequent year/s, on the satisfaction of the conditions prescribed in the second proviso to section 40(a)(ia) of the Act. Ground No. 6 - Disallowance of prior period expenses 6.1 On the facts and circumstances of the case, the learned AO/ Ho....
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.... AO has erred in not allowing deduction for Rs. 35,82,075, being unrealized foreign exchange fluctuation gain on capital account arising during the subject AY and offered to tax in the return of income, despite a specific recommendation by the special auditor to this effect. 10. Ground No. 10 - Deduction of prior period expenses proposed for disallowance in AY 2009-10 10.1 On the facts and circumstances of the case and in law, the learned AO has erred in not allowing deduction for Rs. 6,24,870, being expenses proposed for disallowance as prior period expenses in the draft assessment order passed for succeeding year (i.e. AY 2009-10). 11. Ground No. 11 - Addition of Rs. 229,114,474 under section 92CA of the Act 11.1 On the facts and circumstances of the case and in law, the learned AO / TPO has erred in making an addition of Rs. 229,114,474 under section 92CA of the Act to the total income of the Appellant on account of adjustment in the arm's length price ("ALP") of the international 11.2 On the facts and circumstances of the case and in law, the learned AO / TPO has erred in not accepting the economic analysis undertaken by the Appe....
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....ircumstances of the case Hon'ble DRP has erred in deleting the addition of Rs. 57005616/- without considering the facts that assessee has failed to produce invoices to the special auditor for verification. 2. Whether on the facts and circumstances of the case, Hon'ble DRP has erred in deleting the additions of Rs. 156217913/- on account of no supporting invoices of expenses and also failed to explain party-wise details before the Assessing Officer and special auditor. 3. Hon'ble DRP has erred in deleting the addition of Rs. 19488100/- on account of non deduction of TDS, treating that BSNL is also treating as ADC party and parcel of IUC for levy of service tax. 7. The first ground of appeal raised by the assessee is that special audit order is bad in law and the draft assessment order and assessment order is barred by limitation. The assessee argued that the ld DRP did not adjudicate on the aspect of special audit proceedings and further the assessment order passed by the ld Assessing Officer is barred by limitation. 8. The factual matrix providing the sequence of events/ date chart of the case with respect to the special audit is as under: 1 30.09.2008....
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....nt in the present case respectfully submits that the draft order passed by the Ld. Assessing officer is barred by limitation in terms of the provisions of section 153 of the Act. 2.2 It is clearly evident that the order has been passed beyond period of limitation i.e. 31.12.2011. 2.3 In this regard, the relevant provision of Explanation 1 to Section 153 read with the Proviso to such Explanation is reproduced below for ready reference: Quote "Explanation 1 - In computing the period of limitation for the purposes of this section - .... (iii) the period commencing from the date on which the Assessing Officer directs the assessee to get his accounts audited under sub-section (2A) of section 142 and ending with the last date on which the assessee is required to furnish a report of such audit under that sub-section, ..... shall be excluded. Provided that where immediately after the exclusion of the aforesaid time or period, the period of limitation referred to in sub-sections (1), (1A), (1B),] 12a[(2), (2A) and (4) available to the Assessing Officer for making an order of assessment, reassessment or re-compu....
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....a period of 60 days. 2.6 Thus, based on a reading of the above proviso along with Explanation 1, it is clear that the legislature has provided for extension of time period for completion of assessment proceedings by 60 days. The period has to be extended only in cases where after excluding the period as specified in Explanation 1, the time available with the assessing officer for completion of the assessment proceedings is less than 60 days. In such cases, the proviso has provided for extension of the "remaining period" to 60 days. 2.7 To put it simply, the intention of legislature is to provide for extension of the time period only where the assessing officer had some time available for completion of assessment after excluding the time period in view of Explanation 1. 2.8 However, neither the proviso nor any other provision in the Act envisage a situation where the time limit for completion of assessment proceedings has already expired after considering the time period provided in the Explanation. In other words, when the time period provided in the Explanation crosses the Limitation period provided under section 153 for completion of assessment....
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....it for completion of assessment proceedings. Accordingly, the benefit of the proviso is not available with the assessing officer and the assessment order passed after the statutory timeline is barred by limitation and thus making assessment void-ab-initio. 2.13 In light of the above factual and legal position, it is prayed that the assessment may kindly be quashed/annulled. 10. Further, the Ld. AR, specifying the provisions of Section- 142 "Inquiry before Assessment" has elaborately discussed the scheme of the Act in terms of the intertwining between Section 142 and Section 153 of the act .The main thrust of the argument of the Ld. AR had been that since section 142 provides for inquiry before assessment, special audit falling under the provisions of section 142(2A) should be completed before the time limit provided for assessment under Section 153 which are sacrosanct in nature and need to be strictly adhered to. The submission of the Ld. AR in this regard is reproduced herein below: "Draft assessment order is barred by limitation 1. The provisions of Section 153 providing time limit for completion of assessment, reassessment and recomputation are sac....
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....ection for the extension of the same. Meaning thereby that even in cases where a report under 142(2A) is to be issued the same should be issued and received within the time limit prescribed under 153(1) of the Act. The intention of legislature is also evidenced from the fact that the period of 180 days has been made part of section 142- Inquiry for assessment and not timelimit for completion of assessment under section 153 (1) of the Act. 6. Subsequently, the law makers envisaged and carved out an exceptional situation that in case after the receipt of the report under 142(2A), the time available to the Assessing Officer for completion of assessment is less than 60 days, then, in that case such period shall be extended upto sixty days. The proviso mentioning the exceptional situation is reproduced below: Provided that where immediately after the exclusion of the aforesaid time or period, the period of limitation referred to in sub-sections (1), (1A), (1B),] 12a[(2), (2A) and (4) available to the Assessing Officer for making an order of assessment, reassessment or re-computation, as the case may be, is less than sixty days, such remaining period shall be extended t....
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.... made on the assessee or any person in consequence of or to give effect to any finding or direction contained in an order under section 250, 254, 260, 262, 263, or 264 or in an order of any court in a proceeding otherwise than by way of appeal or reference under this Act. * Situation 4: Financial Year: 2011-12 Assessment Year: 2012-13 Date of 142(2A) order: 26 December 2014 Date on which Audit report is received: 22 June 2015 Date of completion of assessment: 31 March 2015 Time available= Nil In such a case since the period of completion of assessment has already crossed, no time is left with the Assessing Officer to complete the assessment which could be further extended. 7. On perusal of the above scheme of the Act, it clearly emerges that except for the situations expressly provided under the Act, the timelimits under 153 (1) are to be strictly adhered to. 8. In the case of 142(2A) the onus is on Assessing Officer to make reference for the special audit in a manner that the report is received well within time and in case after the receipt of report the period available to complete the assessment is ....
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.... provisions of the section has to be read harmoniously to give a proper meaning to the words and phrases and promote intent of the legislature. 6. The submission of the assessee canvassing that the assessment is barred by limitation must fail. 12. In response to the above submission of the Ld. DR, the Ld.AR submitted its rejoinder which is as under: "In response to the submissions made by the Learned. Departmental Representative, the appellant seeks to submit as follows: 1. At the outset, it is submitted that the Learned Departmental Representative ("Ld. CIT DR ") in his written synopsis has only narrated the chronological sequence of events during the course of the present assessment proceedings along with the corresponding provisions of the Income-tax Act, 1961 ("the Act"). 2. In this regard, it is submitted that at S No. 1 of the chronological series of the assessment proceedings, the date of issue of directions for special audit by the Assessing Officer ("Ld. AO") has been mentioned as 26.11.2012. Whereas the directions for special audit were issued on 26.12.2011 i.e. 6 days before the period of limitation i.e. 31.12.2011. 3. The ....
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....passing the assessment order. In order to avoid hardship and give reasonable period to complete the assessment, the period of limitation is extended for 60 days in such cases only 5. The appellant most respectfully submits that it would be contrary to the spirit of the provisions if the extension of time period is done where no period is available to the Assessing Officer after obtaining the special audit report. 6. Further, the Ld. CIT DR in para 2 of the synopsis has relied on the decision of the Hon'ble Supreme Court in the case of VLS Finance Ltd vs CIT (in CA No. 2667/2007) dated 28.04.2016 wherein the Court agreed with the Hon'ble High Court in observing that special audit is an integral step towards assessment proceedings. In the said case, the court was dealing with a block assessment case wherein the direction for special audit was quashed by the High Court in writ proceedings. 6.1 In context of the above judgement, it is the humble submission of the appellant that the said judgement is on different facts of the case wherein writ petition of the appellant against the directions of special audit was allowed and the directions of special audit were....
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....s the proceedings are stayed by the order of the Court and such stay could extend upto any period as per the directions of the Court. The said period of stay is covered under clause (ii) of Explanation. The Hon'ble Court has not deliberated on the issue involved in the present case which is covered by clause (iv) of Explanation 1. Since the said case does not deal with the issue raised in the facts of the present case and hence being not applicable should not be relied upon. Conclusion The Ld. AO has not been able to counter the primary argument that since there is no time available with the AO after the receipt of special audit report the assessment order is barred by limitation and illegal in the eyes of law. In view of the above, it is most respectfully submitted that the issue raised by the Ld. DR stands answered. 7. Without prejudice to the above, and in support of arguments made during the course of hearing proceedings the appellant further submits as under: 7.1 Before we once again draw the attention of the Hon'ble Tribunal to the provision of Section 153 read with Explanation 1 and the proviso, it would be important to consider t....
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....behalf pointed out in the counter affidavit that the reference to the DVO does not become invalid on the completion of the assessment proceedings before the receipt of the valuation report and that after the receipt of the valuation report after completion of the assessment proceedings, the report would become part of the record which may enable the income tax authorities to take action as permissible under the Act, such as Section 147, Section 263, appellate power under Section 250 or Section 251 etc. It is not necessary to examine the contention of the petitioner that once the assessment proceedings are completed, the pending proceedings under Section 55A become infructuous or invalid or get automatically terminated. "emphasis supplied" 7.2 Further, reference is brought to the decision of the Hon'ble Jurisdictional High Court in the case of Rajan Gupta[2010] 194 Taxman 287(Delhi) where it was held that even where an application is made to settlement commission u/s 245C the same application does not create any bar on the AO in proceeding with the assessment in normal course. (i) Facts: A search was conducted on the assessee and a notice u/s 158BC was issued to as....
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.... court and, therefore, the question of construing the issuance of a notice as a part of an "assessment proceeding" does not arise at all in the present case. The mandatory requirement of law of service of a notice under section 143(2), within time, not having been complied with, the block assessment order made pursuant thereto would be bad in law. The exclusion of time stipulated in clause (v) of Explanation 1 to section 158BC would not be applicable in respect of service of notice under section 143(2) of the said Act inasmuch as it relates only to the computation of the period of limitation for passing an order under section 158BC(c) of the said Act and not to the computation of limitation for serving a notice under section 143(2). 7.3 Similar observation was made in the case of the jurisdictional Hon'ble High Court in case of Deen Dayal Didwania [1986] 160 ITR 12 (Delhi) that there is no bar on the ITO from proceeding from the assessment proceedings during the period wherein the settlement commission is contemplating whether to proceed with the application u/s 245C or reject the same. The relevant extract of the judgement is quoted below: "The question is whethe....
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....es to exercise them. On the other hand, if the Settlement Commission decides not to proceed with the application, there is a distinct possibility of the department not being able to realise the taxes in the circumstances of this case. So, we find that we are unable to interfere both on the ground of there being no statutory provision to justify a stay of proceedings before the income-tax authorities and also because the circumstances of the case would not justify such an act." 7.4 Reliance is placed on the judgement of the Hon'ble High Court of Kolkata in case of Shahdara (Delhi) Saharanpur Light Railway Co. Ltd. [1994] 208 ITR 882 (CAL.) where in its been held that no procedure of the Act should be interpreted in a manner to defeat the very goal which the procedure seeks to achieve. The relevant quote from the judgement is reproduced below: "If it is construed rigidly that the binding nature of section 16A (3) shall deter the Assessing Officer from completing the assessment and let the assessment be barred by limitation of time simply because the Valuation Officer, for reasons good or bad, fails or elects to abstain from making a report of valuation, it shall be ....
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....for reference by the Assessing Officer. That section does not provide that the Valuation Officer shall not proceed with the valuation if the assessment is completed before the valuation is completed. Section 16A(6) of the Act no doubt provides that the assessment shall be completed in accordance with the valuation made by the Valuation Officer. That provision, however, cannot be read as imposing an embargo on the completion of the assessment, till such time the valuer submits his report. Delay on the part of the valuer, cannot have the effect of deterring the Assessing Officer from proceeding to complete the assessment, and allow the proceeding to be barred by limitation." 7.6 In light of the above judgments and our submissions, the provisions of section 153(1), 153(2) and 152(2A) of the Act are absolute. They impose fetters upon the Income tax authorities to complete the assessment after the expiry of time limit mentioned on the sections and sub-sections. Therefore any assessment made after the expiry of time limit is invalid and unenforceable in the eyes of law. This position of law has been upheld by the Hon'ble Apex Court in following case: * Ahmedabad Mfg. an....
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....he Assessing Officer intimates the Central Government or the prescribed authority, the contravention of the provisions of clause (21) or clause (22B) or clause (23A) or clause (23B) or sub-clause (iv) or sub-clause (v) or sub-clause (vi) or sub-clause (via) of clause (23C) of section 10, under clause (i) of the proviso to sub-section (3) of section 143 and ending with the date on which the copy of the order withdrawing the approval or rescinding the notification, as the case may be, under those clauses is received by the Assessing Officer; or (iv) the period commencing from the date on which the Assessing Officer directs the assessee to get his accounts audited under sub-section (2A) of section 142 and- (a) ending with the last date on which the assessee is required to furnish a report of such audit under that sub-section; or (b) where such direction is challenged before a court, ending with the date on which the order setting aside such direction is received by the Principal Commissioner or Commissioner; or (v) the period commencing from the date on which the Assessing Officer makes a reference to the Valuation Officer under sub-section (1) of section 14....
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....he exclusion of the aforesaid period, the period of limitation referred to in sub-sections (1), (2), (3) and sub-section (8) available to the Assessing Officer for making an order of assessment, reassessment or recomputation, as the case may be, is less than sixty days, such remaining period shall be extended to sixty days and the aforesaid period of limitation shall be deemed to be extended accordingly: 7.8 The Explanation provides that where immediately after the exclusion of the aforesaid period, the period of limitation available to the Assessing Officer for making an order of assessment, reassessment or recomputation, as the case may be, is less than sixty days, such remaining period shall be extended to sixty days and the aforesaid period of limitation shall be deemed to be extended accordingly. 7.9 A plain interpretation of the above proviso to the explanation is that there has to be some time available/remaining with the AO before the period of limitation ends and if that time is less than 60 days then such available period will be extended to 60 days. To understand it further, let us look at the dictionary meanings of the word "available" and "remaining".....
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....lable within the period of limitation i.e. within those 21 months/33 months (as the case may be). c) And at the end of the proviso, it states which period can be extended in the following words "such remaining period shall be extended to sixty days and the aforesaid period of limitation shall be deemed to be extended accordingly" It implies that that such remaining / available period after obtaining the special audit report within the period of limitation of 21 months/33 months if less than 60 days should be extended to 60 days. Now reading the meaning of the word "available/remaining" herein, it can be safely concluded that there has to be something positive available within the period of limitation. It cannot be zero or NIL. Some period has be left over with the AO to be construed as remaining or available. 7.11 Thus, the combined reading and the intention of the legislature in above proviso clearly shows that the legislature envisaged that there would be class of cases where the special audit report is received when less than 60 days are remaining or available from the period of limitation under the normal provisions. Thus, in order t....
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....he assessee in respect of the Return of Income to assist him in making the assessment. Section 142(2A) provides that in case the Assessing Officer at any stage of the assessment proceedings needs the assistance of an expert i.e. special auditor to complete the assessment proceedings that should be done prior to date of limitation prescribed and available for completing assessment, then only the heading of the section "Inquiry BEFORE Assessment" would be understood in the correct perspective. It would be not out of place to mention that the heading of the section itself says that all the process of getting information should be completed before the time limit prescribed under Section 153 for completion of assessment which is sacrosanct. 8.1 As submitted above, the time limits under section 153 are sacrosanct and are to be strictly followed unless an exception has been provided in the section for the extension of the same. Meaning thereby that even in cases where a report under 142(2A) is to be issued the same should be issued and received within the time limit prescribed under 153(1) of the Act. The intention of legislature is also evidenced from the fact that the period of....
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....report which forms part of available record to look for other powers available to him under sections such as Section 147, Section 263, appellate power under Section 250 or Section 251 etc. In view of the above, the appellant respectfully submits before the Hon'ble Bench that in the facts of the present case the direction of special audit was made on 26 December 2011 and the report was received on 22 June 2012, thus there was no time available with the Assessing Officer, within the period of limitation, to complete the assessment. Hence, period of 60 days should not be provided to the Assessing Officer to complete the assessment. Accordingly, the impugned assessment order being time barred is bad in law and ordered to be quashed/annulled." 13. We have carefully considered the rival contentions and perused the orders of the Assessing Officer i.e. draft assessment order as well as the final order passed u/s 143(3) of the Act and the direction issued by the ld Dispute Resolution Panel. The simple issue involved in this contest is that whether the order passed by the ld Assessing Officer is barred by limitation or not and the consequent assessment is void ab initio. 14. B....
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....er "Inquiry before assessment" and therefore the provisions of 142(2A) ought to be invoked within such time and in such manner so as to complete the assessment within the time limit prescribed u/s 153 of the Act. 17. To appreciate the arguments of the parties it shall be relevant to reproduce the provision mentioned above which will help in understanding the scheme of the Act - Chapter XIV of the Income-tax Act deals with the procedure for assessment under which section 139 deals with return of income, section 140 deals with return by whom to be verified, section 142 deals with inquiry before assessment and 143 deals with assessment. Under inquiry before assessment i.e. Section 142 * 142(1) provides for issuing a notice on a person requiring him to produce such documents as may be required by Assessing Officer for the purpose of assessment. * 142(2) provides that for the purpose of obtaining full information, the Assessing Officer may make such inquiry as he considers necessary and * 142(2A) provides that if at any stage of proceedings before the Assessing Officer having regard to the nature and complexity of accounts or volume of transactions....
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....ssing Officer; or (xvii) the period (not exceeding sixty days) commencing from the date on which the Assessing Officer received the declaration under sub-section (1) of section 158A and ending with the date on which the order under sub-section (3) of that section is made by him; or (xviii) in a case where an application made before the Income-tax Settlement Commission is rejected by it or is not allowed to be proceeded with by it, the period commencing from the date on which an application is made before the Settlement Commission under section 245C and ending with the date on which the order under sub-section (1) of section 245D is received by the Principal Commissioner or Commissioner under sub-section (2) of that section; or (xix) the period commencing from the date on which an application is made before the Authority for Advance Rulings under sub-section (1) of section 245Q and ending with the date on which the order rejecting the application is received by the Principal Commissioner or Commissioner under sub-section (3) of section 245R; or (xx) the period commencing from the date on which an application is made before the Authority for ....
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....t construction. The law of limitation is intended to give certainty and finality to legal proceedings and to avoid exposure to risk of litigation to litigant for indefinite period on future unforeseen events. 20. The moot point raised is that limitation prescribed u/s 153 are sacrosanct and cannot be extended except wherever expressly provided for in the Act. The situations envisaged under Explanation 1 provide for certain exceptional circumstances wherein the AO during the course of the assessment may refer a case to an expert for example a valuation officer or a special auditor or even for the exchange of information. It also captures situations where the assessee has approached settlement commission or has sought ruling from the advance ruling authority. 21. To protect the interest of Revenue, the scheme of Act provided that in case period available to the tax officer, after excluding the circumstances covered in Explanation 1, is less than 60 days, such remaining period can be extended up to 60 days as per the proviso. To appreciate the content of the proviso it is being reproduced as under: Provided that where immediately after the exclusion of the aforesaid time or p....
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....le within the period of limitation i.e. within those 21 months/33 months (as the case may be). c) And at the end of the proviso, it states which period can be extended in the following words "such remaining period shall be extended to sixty days and the aforesaid period of limitation shall be deemed to be extended accordingly" It implies that that such remaining / available period after obtaining the special audit report within the period of limitation of 21 months/33 months if less than 60 days should be extended to 60 days. Reading the above meaning of the word "available/remaining" herein, it can be inferred that there has to be something positive available within the period of limitation. It cannot be zero or NIL. Some period has be left over with the AO to be construed as remaining or available. 25. We also appreciate the arguments of the revenue stating chronological events and highlighted that at the time of receipt of the audit report by the Assessing Officer 6 days were remaining when the matter was referred to the special auditor. Thus, since the reference was made well within the period of limitation, the AO should be given the bene....
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....t was submitted by the Ld. Counsel that once limitation period was crossed, and the information sought by the AO under the Explanation 1 to section 153 was pending, then there was no provision in the Act, which dealt with such situation. 31. In this connection he relied on the Delhi HC decision in the case of ACC Ltd. vs. District Valuation Officer [2013] 357 ITR 160 (Delhi) while deliberating clause (v) of Explanation i.e. where reference was made to the Valuation Officer under section 142A and report was not received till the date of limitation for assessment proceedings. The relevant observation of the Hon'ble Delhi High Court is reproduced to understand the situation: Even otherwise there is no provision in the Act which deals with the situation as to what would happen to a reference made to the DVO under Section 55A which is pending completion at the time of passing the assessment order. Obviously the assessment order cannot be deferred in view of the limitation prescribed for passing the same. The report of the DVO, as and when received by the Assessing Officer, may be acted upon by the income tax authorities and if they do so, the validity of that action can be questio....
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....245C or reject the same. The relevant extract of the judgment is quoted below: "The question is whether the income-tax authorities can proceed with the assessment proceedings while the Settlement Commission is contemplating whether to proceed with the application or reject the same. We have examined the provisions of the Act and do not find that there is any bar on the ITO from proceeding with the assessment or any pending case. We find that the circumstances would not justify a stay by us. Furthermore, the Act does not contemplate a stay of the assessment proceedings during the period when the Settlement Commission is deciding whether to proceed or not to proceed. If we grant a stay, we will be adding a provision to the statute, which is not justified. On the other hand, if the Settlement Commission decides not to proceed with the application, there is a distinct possibility of the department not being able to realise the taxes in the circumstances of this case. So, we find that we are unable to interfere both on the ground of there being no statutory provision to justify a stay of proceedings before the income-tax authorities and also because the circumstances of the cas....
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....the brink of limitation for failure on the part of the Departmental Valuation Officer either to report or not being enabled to report on the value of the asset referred to him. As an alternative, in such contingencies, the power of valuation has to revert to the Assessing Officer. Unless the Valuation Officer sends his report, there is no bar to the Assessing Officer's completing the assessments taking the value of the asset referred for valuation in the best possible method he can take in the limiting circumstances of the situation.So, if, till the expiry date of the limitation, no report of valuation comes from the DVO, the original power of the Assessing Officer to value the asset himself revives. Therefore, in this case, the Income-tax Officer was right in valuing the property in the best manner possible on the facts of the case to save the case from limitation because the ultimate statutory duty to complete assessment before the expiry of the limitation period rests with the Assessing Officer and not with the Valuation Officer." 37. In view of the above facts and detailed submissions brought on record, we agree with the arguments put forth by the Ld. Counsel of the asse....
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....elow sub-section (2) of section 288, nominated by the [Principal Chief Commissioner or] in this behalf and to furnish a report of such audit in the prescribed form duly signed and verified by such accountant and setting forth such particulars as may be prescribed and such other particulars as the [Assessing] Officer may require:..." As per section 142(2C), every report under sub-section (2A) shall be furnished by the assessee to the [Assessing] Officer within such period as may be specified by the [Assessing] Officer..." As per Proviso to section 142(2C), "provided that [Assessing] Officer may, [SuoMotu or] on an application made in this behalf by the assessee and for any good and sufficient reason, extend the said period by such further period or periods as he think fit; so, however, that the aggregate of the period originally fixed and the period or periods so extended shall not, any case, exceed one hundred and eighty days from the date on which the direction under sub-section (2A) is received by the assessee." As per section 142(2C), every report under sub-section (ZA) shall be furnished by the assessee to the [A....