High Court of Punjab and Haryana
Commissioner of Income-tax
v.
Guru Nanak Mercantile
M.M. KUMAR AND RAJESH BINDAL, JJ.
IT REFERENCE NO. 221 OF 1995
April 3, 2007
Section 153, read with section
144B, of the Income-tax Act, 1961 - Assessment - Time limit for completion of -
Assessment year 1978-79 - For relevant year, on remand of assessment, Assessing
Officer passed final assessment order on 21-7-1984 - Tribunal set aside
assessment order holding that in terms of section 153(2A), assessment having
not been completed within two years of remand, same was barred by time -
Admittedly, before passing final order, Assessing Officer had sent draft order
under section 144B to assessee on 23-1-1984 and directions from IAC were
received back by Assessing Officer on 19-7-1984 - Whether if said period of 173
days, as spent in proceedings under section 144B was added in normal period of
limitation, fresh order passed after remand was clearly within period of
limitation as provided for under Act, and Tribunal was wrong in not giving due
effect to clause (iv) of Explanation 1 to section 153(2A) - Held, yes
FACTS
For the assessment year 1978-79, the Assessing Officer completed the assessment of the assessee on 30-1-1981. On appeal, the Commissioner (Appeals) set aside the assessment order. On remand, the Assessing Officer, in terms of section 144B, forwarded the draft assessment order to the assessee and sought directions from the IAC.
Thereafter, on 21-7-1984, the Assessing Officer passed the final assessment order.
On appeal, the Commissioner (Appeals) partially decided in favour of the assessee. On further appeal, the Tribunal set aside the assessment order holding that in terms of section 153(2A), the assessment having not been completed within two years of the remand, the order was barred by time. While doing so, the Tribunal did not give the benefit of the time spent by the revenue in proceedings under section 144B.
On reference:
HELD
In the instant case, the order under section 250 was passed by the
Commissioner (Appeals) on 10-9-1981. If
normal period of limitation was counted in terms of sub-section (2A) of section
153, fresh order of assessment could be passed up to 31-3-1984. However, the extended period of limitation to
the extent of 180 days was available in terms of clause (iv) of Explanation 1
to section 153 as admittedly, draft order was sent to the assessee under
section 144B on 23-1-1984, which was duly received by the assessee on
24-1-1984, directions in terms of section 144B were received back from the IAC
by the Assessing Officer on 19-7-1984;
if this period of 173 days, as spent in proceedings under section 144B was
added in the normal period of limitation, the fresh order passed after the remand
by the Commissioner (Appeals) would clearly fall within the period of
limitation as provided for under the Act. [
The Tribunal had gone wrong in not giving due effect to clause (iv) of Explanation 1 to section 153. [