TaxTMI 
TaxTMI 
2019 (1) TMI 1911
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....nt Order, facts of the case are that in the instant cases, the assessee did not file its return of income voluntarily u/s 139 of the Income Tax Act (hereinafter call as 'the Act'. Accordingly notice u/s 148 of the Act was issued and served upon the Assessee on 29th April, 2010. The main business of the assessee is to develop new residential colonies, markets, malls, flats and their ancillary supports. While carrying out all these activities, the assessee charges premium on all of them and in addition to this, it also charges rent, lease rent and other maintenance charges. While fixing the premium of plots, flats and shops etc. the element of profit is always included, therefore, the assessee is not carrying out any charity by allotting the said properties at loss or at cost price, therefore, it was observed by the Assessing Officer that the assessee being a legal authority is under a statutory obligation to file its return of income/loss under the Income Tax Act, 1961. Moreover, section 44AA of the Act requires the assessee to maintain books of accounts as specified in the Act. Notice u/s 142(1) of the Act was also issued on 09.06.2010 fixing the hearing of the case for 15.....
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....he order. While 4 adjudicating the legal issue qua time barring assessment order passed after the prescribed limit i.e. 60 days from the date on which the appellant was required to submit the special audit report, the ld. CIT(A) has held as under: 4. Determination: I have consider the findings of the AO in the asst. order, submissions of the appellant, remand report form the AO and the reply to the remand report. 4.1 Ground of appeal No. 1 relates to the plea of the appellant that the order passed by the AO u/s 147 of the act is barred by time as per the provision of section 153(4) of the Act. I have gone through the submission of the appellant, assessment order and remand report. It is observed that the provisions for time limitation for passing the assessment order u/s 147 are provided under sub section 2 of the Act. Section 153(4) contains the provisions for time limitation of orders passed u/s 153A and 153B of the Act i.e. in case of search and requisition. The relevant extracts of provisions of section 153 (2) are reproduced as under: 'Section 153(2)No order of assessment, reassessment or recomputation shall be made u/s 147 after the expiry of o....
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....t the special audit report was submitted on 24.04.2012 and not on 08.05.2012 and accordingly the time limit for calculation of 60 days should be computed from 24.04.2012 instead of 08.05.2012. On the perusal of the provisions of the Act on this account as also reproduced above, it is clear that the time available for the AO for making assessment where the accounts of appellant are put to special audit u/s 142(2A) is to be computed from the last date on which the audit report was required to be furnished as provided in para (iii) Explanation 1 of section 153. The date on which the audit report was submitted is not relevant, it is the date on which the appellant was required to submit the report was relevant. The appellant is overemphasizing the receipt of audit report on 24.04.2012 and counting 6o days from then. This is perhaps due to omission to consider the last extension by the AO dated 20.04.2012 for furnishing report by 20/05/2012 and absence of its mention in the assessment orde rby the AO. In the present case, the appellant was required to furnish the report on 20.05.2012 and accordingly the assessment was getting time barred on 19.07.2012 i.e., 60 days from 20.05.2012. The ....
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....urisdictional High Court in the case of M/s. Jagjit Singh Mills Co. Ltd. vs. CIT, Civil Writ Petition No.9371/1993 [1994] 74 Taxmann.com 8 (P&H), wherein, it has been held that even in the absence of application by the assessee, the Assessing Officer can extend the period for submission of special audit report. 9. In reply to the objection of the assessee to the effect that order no. ITO Ward-3/SGR/2012-13/45 dated 20-04-2012 was never been served upon the assessee as the same is forged, manufactured and tainted document and was not passed in regular course but fabricated later in order to fill the lacuna, the Ld. DR has submitted that as per the Indian Evidence Act, 1872 all the documents kept in official record are to be presumed as genuine. It was further submitted that for the sake of argument if the claim of assessee is accepted even then also the assessment proceedings cannot be held as void because extension of time is just an procedural irregularity and does not make the Assessment order invalid. In support of its arguments, the Ld. DR also relied upon the order passed by the Kolkata High in CIT Vs. Sri Shyamal Sarkar in ITA No.815/2008 decided on 22nd April, 2015. 10....
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....nvenience and clarity, let us to reproduce the provisions applicable to the instant case. Section 142. Inquiry before assessment (1) For the purpose of making an assessment under this Act, the [Assessing] Officer may serve on any person who has made a return under section 139 2 or in whose case the time allowed under sub- section (1) of that section for furnishing the return has expired] a notice requiring him, on a date to be therein specified,- [(i)] where such person has not made a return within the time allowed under sub- section (1) of section 139, to furnish a return of his income or the income of any other person in respect of which he is assessable under this Act, in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed, or] [(ii)] to produce or cause to be produced, such accounts or documents as the Assessing Officer may require, or [(iii)] to furnish in writing and verified in the prescribed manners information in such form and on such points or matters (including a statement of all assets and liabilities of the assessee, whether included in the accounts or not) as the....
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.... Provided that where the notice u/s 148 was served on or after the 1st day of April, 1999 but before the 1st day of April, 2000, such assessment, reassessment or re-computation may be made at any time upto the 31st Day of March, 2002. Provided further that where the notice u/s 148 was served on or after the 1st day of April, 2005 (but before the 1st day of April, 2011), the provision of this sub-section shall have effect as if for the words "one year", the word "nine months had been substituted)' 'Explanation 1- In computing the period of limitation for the purposes of this section:- (i) .......... (ii) ......... (iia) ......... (iii) the period commencing from the date on which the AO directs the assessee to get his accounts audited under sub-section 2(A) of section 142 and ending the last date on which the assessee is required to furnish a report of such audit under 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 section (1), [(1A), (1B)] [(2), (2A), and (4)] available to ....
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....ee was directed to get his account audited under section 142(2A) of the Income Tax Act, 1961, for the assessment year 2006-07 from M/s K.B. Sharma & Company, Chartered Accounts, 172P/3, Trikuta Nagar Jammu who were nominated by the Worthy Commissioner of Income Tax Jammu vide above order. A copy of the letter under reference was also endorsed to M/s. K.B. Sharma & Company, Chartered Accountants, 172P/3, Trikuta Nagar Jammu for conducting the special audit of the assessee and to furnish a report of such audit in the prescribed from No.6B read with rule 14A of the Income Tax Rule,1962 duly signed and verified. The assessee was required to furnish report of the auditors within 90 days from the date of receipt of this letter. The said letter was duly served upon the assessee. X. In compliance to above directions, the assessee was required to file the audit report by or before 21-03-2012. However, no such report(s) was filed by the assessee up to date that. However, the time was suo moto extended by the undersigned on 10.04.2012 vide office letter no.10 by further 45 days which means that the assessee was allowed to file the audit report by extended time of 135 days and the said date....
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....iod of 45 days. Further the Revenue Department also claimed that the objection was raised by the assessee on audit report, therefore, the Assessing Officer was compelled to revise the time period of 45 days (as per order dated 10.04.2012) to 59 days vide its order dated 20.04.2012 and in view of the order, audit report was supposed to be filed on or before 20.05.2012 and consequently, the assessment order was framed on 06.07.2012 which is certainly within time limit as prescribed under law. The ld. AR vehemently opposed the said stand of the revenue and submitted that the order dated 20.04.2012 bearing no. ITO, Ward-2/SGR/2012-13/3841 by which the time period modified to 59 days instead of 45 days for filing of the audit report is not only forged, frivolous but in fact is a tainted document, made later on without serving the same to the appellant. In response to the allegations of the assessee, the Revenue Department also filed the affidavit of the process server Mr. Brij Mohan Vaid, contents of the same are reproduced herein below:- 1. That I was posted as Inspector of Income tax Range-3, Srinagar with additional charge as inspector of Income tax Ward 3(3) Srinaga....
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....gar on 21st April 2012 as is apparent from my report dated 21st April 2012 on the order issued by the then AO Ward 3(3) Srinagar, which was duly received by the receipt clerk of SDA Office, Bemina by affixing office stamp with date and signature" . However from the letter dated 20-4-2012, it does not reflect that the same was duly received by the receipt clerk of SDA Office, Bemina by affixing office stamp with date and signature. For clarity the remarks are reproduced herein below:- Sir, As directed, the letter has been served upon the employee of the 'A' who was available 4.30 P.M on 21st April, 2012. Even in para no. 4 of its affidavit, the process server claimed "That I acknowledge of having received the order on behalf of the then Joint Commissioner of Income tax, Range,-3 Srinagar at Srinagar office is also seen from noting of the said order" . But from the order dated 20-04-2012, it does not reflect that the same was delivered to and received by the said officers or its office. 17. We are also in agreement with the stand of the Revenue that as per the Indian Evidence Act, 1872 all the documents kept in official record are to be presumed as gen....
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....y purpose. The Revenue Department clearly failed to establish the authenticity of extension order dated 20-04-2012, either by serving to the higher authorities and/or to the assessee and also failed to establish the genuineness of its order sheets on which the noting of order dated 20.04.2012 have been made because from the perusal of the various order sheets relevant to the A.Y. 2007-08, 2008-09 & 2009-10, it reflects that the Assessing Officer vide its order dated 20.04.2012 extended the time to 20.05.2012. However, it appears that the order dated 10.04.2012 does not find mention in the order sheets relevant to A.Y.2007-08 and 2009-10 but only appears in order sheets relevant to A.Y.2008-09. We further noted that the assessee's employee has acknowledged while signing almost each and every order sheets, however the order sheets of A.Y.2007-08, 2008-09 & 2009-10 which pertain order dated 20.04.2012, are not reflecting the acknowledgment or the signature of the assessee, which strengthen the claim of the assessee that the order dated 20.04.2012 seems to be fabricated in order to cover time limit for completion of the assessment. 18. It is admitted fact that order dated 2....