TaxTMI 
TaxTMI 
2026 (6) TMI 79
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....8,328/-. The assessee, on the other hand, is aggrieved by the sustenance of the balance addition of Rs. 19,88,88,315/-. However, before adverting to the rival contentions on the merits of the addition, it is apposite to first take up the jurisdictional ground raised by the assessee, namely, that the assessment order dated 30.09.2023 passed under section 10 of the Black Money Act is bad in law and barred by limitation. Since this ground goes to the very root of the validity of the assessment itself and, if accepted, would render the entire assessment non est, the same is required to be adjudicated at the threshold. 3. The gravamen of the assessee's challenge is that in terms of section 11 of the Black Money Act, the assessment order ought to have been passed on or before 29.09.2023 and, therefore, the order having been passed on 30.09.2023 is barred by limitation by one day. In order to appreciate this contention, it is necessary to notice the relevant facts, chronology of events and the statutory framework governing the issue. 4. Here in this case a notice under section 10(1) of the Black Money Act dated 24.11.2020 was issued by the Assessing Officer and served upon the asses....
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....on - (i) the time taken in reopening the whole or any part of the proceeding; or (ii) the period during which the assessment proceeding is stayed by an order or injunction of any court; or (iii) the period commencing from the date on which a reference or first of the references for exchange of information is made by an authority competent under an agreement referred to in section 90 or section 90A of the Income-tax Act or under section 73 of this Act and ending with the date on which the Principal Commissioner or the Commissioner last receives the information so requested or a period of one year, whichever is less, 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), (2) and (3) available to the Assessing Officer for making an order of assessment or reassessment, 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." 6.1. Ergo, a plain reading of section 11(1) makes it manifest that the normal limitation for co....
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.... on 30.09.2023, the assessee submits that the same is beyond limitation by one day. 8. The assessee had specifically raised this contention before the learned CIT(A). The appellate authority, however, did not accept the same and upheld the computation made by the Assessing Officer. The relevant observations of the learned CIT(A), as noticed from the appellate order, are to the following effect: "10.5.1 The issue of computation of time barring date has been discussed by the AO in para 13 of the assessment order. It is noted that the references had been made to various foreign tax jurisdictions by the competent authority of India for information and these had been received on various dates. The period required to be excluded has been computed by the AO by specifying the dates on which references were made and the dates on which replies had been received. The BMA mandates computation of exclusion period from the date on which the first reference is made and concluding on the day on which the last of the replies are received. It is noted that no error has been committed by the AO in computing this time. 10.5.2 AO has also reproduced section 11(3) of the BMA which d....
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....d. He emphasized that what is not part of the assessment period cannot be excluded from the assessment period. 11. The learned counsel also invited our attention to the order of the learned CIT(A), wherein the appellate authority upheld the computation of the Assessing Officer on the premise that the Black Money Act mandates exclusion from the date of first reference till the date of receipt of last reply. According to him, the learned CIT(A) addressed the issue only in a mechanical manner, without examining the anterior and more vital question as to whether the period so excluded formed part of the assessment proceedings at all. He submitted that the CIT(A) thus treated the dates of reference and reply as self-executing triggers for exclusion, while overlooking the embedded statutory assumption that such exclusion has relevance only within the currency of pending proceedings. 12. On a without prejudice basis, the learned counsel also urged an alternate submission, namely, that even if one were to compute the limitation from the first day after the end of the financial year in which the notice under section 10(1) was issued, the exclusion could in no event commence prior to 0....
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....o section 11. 16. In our considered opinion, the answer to this question has to be returned in favour of the assessee. The starting point of the analysis must be the nature of proceedings under section 10. The power to make an assessment under the Black Money Act is not an amorphous administrative continuum. It is a jurisdictional process set in motion in the manner prescribed by the statute. Section 10(1) makes the service of notice the operative event by which the assessee is called upon to respond and the assessment proceedings are thereby initiated. Till such service, there may be information in possession of the Department, and there may even be inter-governmental or inter-jurisdictional correspondence, but there are, in the strict legal sense, no assessment proceedings pending against the assessee under the Act. 17. Once that position is accepted, the implications for section 11 become inevitable. Section 11(1) prescribes the outer temporal boundary within which the assessment order must be made. Explanation 1 then permits certain exclusions in computing that limitation. Such exclusion is conceptually intelligible only where it operates upon time which otherwise counts ....
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....11.2020, being anterior to 25.11.2020, did not overlap with any assessment proceedings at all. It therefore could not have depleted the time available to the Assessing Officer for completion of assessment, and consequently could not be restored to him by way of statutory exclusion. 21. The language of section 10(1) fortifies this construction. The provision says that the Assessing Officer may serve on any person a notice requiring him to produce such accounts or documents or evidence as may be required for the purposes of the Act. This is not a mere procedural nicety; it is the point at which the assessee is brought within the fold of proceedings under the Black Money Act. It is only thereafter that the Assessing Officer can be said to have entered the arena of assessment qua that assessee. Prior thereto, the Department may undertake preparatory or investigative steps, but such steps cannot enlarge the statutory period of limitation fixed for the formal adjudicatory process. 22. We also find considerable force in the assessee's submission that the proviso to Explanation 1 reinforces this interpretation. The proviso says that where, immediately after exclusion of the relevant ....
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....this approach begs the very question which required adjudication. The issue was not merely from which date the reference began and on which date the last reply was received. The real issue was whether the period so computed could in law be excluded when part thereof lay outside the commencement of assessment proceedings. That anterior jurisdictional question has not been examined by the learned CIT(A), and hence his conclusion cannot be sustained. 26. We may also note that the assessee had pressed an alternate submission that the limitation period for the purpose of exclusion ought, in the alternative, to be reckoned only from 01.04.2021 and therefore only 55 days would be excludable. Since we have already accepted the principal submission of the assessee and held that the correct time barring date is 29.09.2023, which itself renders the assessment order barred by limitation, we do not consider it necessary to examine the alternate contention any further. Suffice it to state that the assessee succeeds even on the principal legal plank. 27. Thus, on a conspectus of the statutory provisions, the chronology of events, and the legal position emerging from the structure of section....