Case Law Details
T.T.V. Dhinakaran Vs DCIT (ITAT Chennai)
Conclusion: Assessment order passed u/s. 158BC r.w.s 143(3) / 254 dated 31.12.2019 determining the undisclosed income of about Rs. 57.43 crores against Mr.D was barred by limitation as per provisions of section 153(2A) and liable to be quashed as AO ought to have passed assessment order on 14.04.2019 whereas the impugned order was passed on 31.12.2019.
Held: In the instant case, the department re-opened an assessment against Mr. D for block period April 1, 1986, to March 31, 1996, and April 1, 1996, to July 15, 1996, consequent to searches made by Enforcement Directorate, Chennai for alleged violation of the Foreign Exchange Regulation Act. In 1997, the department made an assessment of undisclosed income of Rs. 57.43 crores for the subject block period, which Mr. D had challenged before Tribunal wherein the order was quashed and directed AO to start fresh proceedings against Mr. D. Later, Mr. D moved the Madras High Court against the assessment proceedings and the Court had passed an interim order and stayed the second round of block assessment proceedings till further orders. In 2019, Mr. D told the Income Tax Department that the assessment proceeding was time-barred by limitation. Department rejected the grounds taken by him and determined the income to be Rs. 57.43 crore, which was the same as determined in the first round of proceedings. Against the second assessment, Mr. D moved the ITAT citing that it was barred by limitation as per provisions of section 153(2A) of the Income Tax Act and not sustainable both on facts and in law. It was held that as per amended provisions of section 153(2A), time limit for completion of assessment in pursuant to order of the appeal Commissioner u/s 250 or Appellate Tribunal u/s. 254 was one year from the end of the financial year in which such an order was received by Office of Commissioner / PCIT. In this case, order of the Appellate Tribunal was passed on 04.10.2000 and such an order was received by the Office of the Commissioner on 10.11.2000. As per the amended provisions of section 153(2A), the impugned assessment order ought to have been passed on or before 31.03.2002. Because of the intervening order of the High Court in writ and stay of proceedings on 08.03.2002 and subsequent disposal of said Writ Petition on 14.12.2018 (communicated to PCIT on 13.02.2019), the period covered under operation of stay should be excluded while computing period of limitation, as per Explanation 1(ii) to section 153 and if such period was excluded, then AO would get 60 days clear time for completion of assessment, in view of explanation referred to in section 153, because balance time available as on date of interim order passed by High Court was 23 days, which was less than 60 days. Since the order of Hon’ble High Court in Writ Petition was received in the Office of PCIT on 13.02.2019 and AO had sixty days clear time to pass order giving effect order and if such 60 days was considered for limitation period, then AO ought to have passed assessment order on 14.04.2019. In this case, the impugned order was passed on 31.12.2019. Therefore, assessment order passed u/s. 158BC r.w.s 143(3) / 254 dated 31.12.2019 was barred by limitation and liable to be quashed. Accordingly, the assessment order was quashed. Since the assessment order passed by AO was annulled, because the order was barred by limitation, other grounds taken by assessee challenging various additions become academic in nature and did not require specific adjudication.
FULL TEXT OF THE ORDER OF ITAT CHENNAI
O R D E R
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