Agni Estates and Foundations Private Limited Vs DCIT (Madras High Court)
Madras High Court held that clause (xi) to Explanation to Section 153B of the Income Tax Act relating to the exclusion of the period taken for handing over seized material to the assessing officer is effective prospectively from 01.04.2021. Accordingly, prior assessment years are held to be barred by limitation.
Facts- The premises of the petitioner had been subject to a search u/s 132 of the Act and notices u/s. 153A had been issued pursuant to the same. The petitioner challenged those notices in an earlier round of litigation unsuccessfully, and those writ petitions had come to be dismissed on 17.03.2021. Pending those writ petitions, the petitioner had enjoyed interim protection for a substantial length of time. While disposing those writ petitions, this court directed the revenue to proceed to complete the assessments and orders had come to be passed on 29.01.2022 impugned now. The challenge to the assessments raises one legal issue which goes to the root of the matter, relating to the bar of limitation.
The main ground challenging orders of assessment for Assessments Years (AYs) 2011-12 to 2019-20 is the bar of limitation and inter alia, the batch of 9 assessment years can be divided into two. Limitation is to be computed in terms of Section 153B, read with the Explanation thereunder and the extension provided by the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 (‘TOLA’).
Conclusion- In the present case, the last date for completion of assessment as prescribed by Section 153B is within a period of twenty-one months from the end of the financial year in which the last of the authorisations for search under section 132 or for requisition under section 132A was executed.
As far as the defence of the revenue based upon Clause (xi) to Explanation to Section 153B is concerned, that clause relates to the exclusion of the period taken for handing over seized material to the assessing officer. The clause has been inserted with effect from 01.04.2021 and hence operates prospectively only, being a substantive provision. The benefit of the exclusion under that clause thus, would not be available to the revenue in the present assessments. The impugned orders of assessment passed on 28.01.2022 in respect of AYs 11-12, 12-13 and 19-20 are hence held to be barred by limitation qua these three assessment years and are set aside. The writ petitions challenging those notices, orders of assessment and penalties are allowed.
FULL TEXT OF THE JUDGMENT/ORDER OF MADRAS HIGH COURT
This batch of Writ Petitions has been filed by Agni Estates and Foundations Private Ltd. The following Writ Petitions challenge notices, all dated 22.12.2021 issued under the provisions of the Income Tax Act, 1961 (in short ‘Act’) and seek a prohibition as against the Income Tax Department from passing orders of assessment.
