PCIT Vs Sanjay Jain (Delhi High Court)
The Delhi High Court dealt with multiple appeals filed by the Revenue challenging a common order of the Income Tax Appellate Tribunal for Assessment Years (AYs) 2011-12 to 2017-18. The Tribunal had held that the assessment orders were barred by limitation. Before examining the merits, the Court condoned a delay of 36 days in filing the appeals and allowed the related applications.
The factual background showed that a search was conducted on 27.02.2017 at the premises of the AMQ Group, and proceedings were initiated against the assessee based on material found during the search. As the case arose from a search, the statutory limitation for passing the assessment orders was 31.12.2018. Prior to this date, on 04.12.2018, the Assessing Officer (AO) made a reference to the Foreign Tax and Tax Research Division (FT&TR) seeking information from Hong Kong authorities. It was undisputed that no information was ever received from Hong Kong.
Relying on the FT&TR reference, the Revenue claimed that the limitation period stood extended up to 31.12.2019 under clause (ix) of the Explanation to section 153B of the Income Tax Act, 1961. The Commissioner of Income Tax (Appeals) later affirmed the additions made by the AO. However, the Tribunal allowed the assessee’s appeal, following an earlier Delhi High Court judgment which held that an invalid reference for foreign information could not extend the limitation period.
