Case Law Details
CIT Vs Ram Kishan Dass (Supreme Court of India)
Conclusion: Provisions of Section 142(2C) as they stood prior to the amendment which was enacted with effect from 1 April 2008 by the Finance Act, 2008 did not preclude the exercise of jurisdiction and authority by AO to extend time for the submission of the audit report directed under sub-section (2A), without an application by assessee. Thus, AO who prescribed time limit for filing auditor’s report under Section 142(2A) was also entitled to extend time limit even if extension was not sought by assessee.
Held: An assessment under section 153A was passed against assessee. On appeal, Tribunal concluded that prior to the insertion of the expression “suo motu” with effect from 1 April 2008 in Section 142(2C), AO had no jurisdiction to extend time for the submission of the report of an auditor appointed under sub section (2A), of his own accord. As a consequence, it was held that the assessment which was made under Section 153A, in respect of the assessment years in question, was barred by limitation. Revenue adopted a contrary position, submitting that even before 1 April 2008, the jurisdiction of AO to extend time for the submission of the audit report was not confined to a situation in which assessee had made an application for extension. Consequently, the incorporation of a provision for a suo motu exercise of power by AO, with effect from 1 April 2008 by the Finance Act, 2008, was only intended to remove an ambiguity and was clarificatory in nature. High Court dismissed the appeals filed by the Revenue against such order. On further appeal it was held in determining whether the power to extend time vested in AO in a situation where assessee had not made an application for extension, it was well to remember that under the substantive part of sub-section (2C), AO could fix time for the submission of the audit report. Subject to an overall limit of 180 days, AO was fully clothed with the authority to determine the time within which the audit report should be submitted. The creation of a remedy under the proviso in favour of the assessee could not be construed to detract from the authority which vests in AO, who had specified the time limit for the submission of an audit report in the first instance, to extend time without an application by assessee. It was concluded that the provisions of Section 142(2C) as they stood prior to the amendment which was enacted with effect from 1 April 2008 by the Finance Act, 2008 did not preclude the exercise of jurisdiction and authority by AO to extend time for the submission of the audit report directed under subsection (2A), without an application by assessee. Thus, the amendment was intended to remove an ambiguity and was clarificatory in nature.
FULL TEXT OF THE HIGH COURT ORDER / JUDGMENT
1 Leave granted in the Special Leave Petitions.
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