H. Srinivas Reddy Vs ACIT (ITAT Bangalore)
Assessment order was time-barred if there were no credible evidence to prove that same was issued before deadline
Conclusion: Where tax department could not provide credible evidence to prove that the order was “issued” in a search assessment order —meaning it physically left the control of AO within the statutory time limit prescribed under Section 153B, the assessment order was declared barred by limitation and was held to be void ab initio.
Held: An assessment order under Section 153A was passed against the assessee following a search assessment . The order was dated December 29, 2017. The statutory deadline for completing and issuing this order under Section 153B was December 31, 2017. Assessee argued that the order was barred by limitation because it was not served within the prescribed time. AO countered this, claiming the order was dispatched via speed post on December 30, 2017, and had thus left the office within the deadline. However, when the matter was scrutinized, Revenue department failed to produce key evidence like dispatch register entries or postal booking receipts to prove its claim of a December 30 dispatch. The only concrete evidence of postage provided was a speed post slip dated January 1, 2018, a date which was after the deadline had expired. An additional attempt at service on January 9, 2018, was also found to be invalid as it was made on an unrelated third party. It was held that Revenue had failed to produce dispatch register entries or postal booking receipts to prove that the order left AO’s control before 31.12.2017. The only document produced was a speed post slip with date 01.01.2018, which by itself showed that the order entered the postal system after the limitation date. Service through the notice server on 09.01.2018, upon an unrelated third party, was not a valid service in law. Hence, it was concluded that the assessment orders dated 29.12.2017 were not validly issued or served within the statutory period prescribed under section 153B. Revenue had not discharged its burden of proving proper dispatch within time as per manual procedure and postal regulations. The alleged service through notice server was irregular and invalid under section 282 of the Act and Rule 127 of Income Tax Rules. Consequently, the assessment orders were held to be barred by limitation and void ab initio.
