Case Law Details

Case Name : T.T.V. Dhinakaran Vs DCIT (ITAT Chennai)
Appeal Number : IT(SS)A No.1/Chny/2020
Date of Judgement/Order : 09/04/2021
Related Assessment Year : Block period : 01.04.1986 to 31.03.1996 and 01.04.1996 to 15.07.1996

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 ITAT JUDGEMENT

O R D E R

PER G.MANJUNATHA, AM:

This appeal filed by the assessee is directed against the order of the Assessing Officer passed u/s.158BC r.w.s 143(3) r.w.s 254 of the Act, 1961 dated 31.12.2019 and pertain to block period 01.04.1986 to 31.03.1996 and 01.04.1996 to 15.07.1996.

2. The assessee has raised the following grounds of appeal :-

“1. The order of the Deputy Commissioner of Income Tax, Central Circle – 2(2), Chennai dated 31.12.2019 For the above mentioned Block Period is contrary to law, facts, anti in the circumstances of the case.

2. The DCIT erred in completing the block assessment on the complete defiance of the provisions of section 158 BC of the Act without assigning proper reasons and justification and ought to have appreciated that the order of block assessment passed in terms of section 158 BC read with section 143(3)/254 of the Act was passed out of time, invalid, passed without Jurisdiction and not sustainable both on facts and in law.

3. The DCIT failed to appreciate that the findings recorded in para 2.5 of the impugned order in rejecting the contentions with regard to the provisions governing the limitation prescribed for completing the block assessment were wrong, erroneous, unjustified, incorrect, invalid and not sustainable both on facts and in law and ought to have appreciated that the misconstruction of the related provisions discussed in the said para 2.5 would justify the stand of the appellant in substantiating the limitation prescribed in section 158BE of the Act while vitiating the related findings recorded by him.

4. The DCIT failed to appreciate that in any event the impugned order in giving effect to the order of the jurisdictional Bench or the Income Tax Appellate Tribunal dated 4.10.2000 was not passed in accordance with law/not in accordance with the purpose for which the entire matter was remanded back to his file and ought to have appreciated that any order passed in violation of the principles of legitimate expectation and the principles of natural justice should be reckoned as bad in law.

5. The DCIT failed to appreciate that having not conducted the effect giving proceedings as per the order of the Jurisdictional Bench of the Income Tax Appellate Tribunal and having not shared the materials gathered while passing original block assessment order (first round), the completion of the block assessment order in giving effect to the order of the Jurisdictional Bench of the Income Tax Appellate Tribunal in such circumstances should be reckoned as bad in law.

6. The DCIT failed to appreciate that the findings recorded in this regard in para 2.2 of the impugned order were perverse Findings of facts and ought to have appreciated that the repeated request for sharing the information/ details relevant for the purpose of completing the block assessment was wrongly rejected,vthereby vitiating the initiation, continuation and completion of the said block assessment on various facets.

7. The DCIT failed to appreciate that in any event the materials gathered which were admittedly received beyond the date of conclusion of the search should not form part of the present block assessment proceedings for making additions and ought to have appreciated that the misconstruction of the provisions prescribed in relation thereto in Chapter XIV B of the Act would make the block assessment completed and disputed in the present appeal as nullity in law.

8. The DCIT failed to appreciate that the findings in recorded in para 2.4 of the impugned order in this regard were wrong, erroneous, unjustified, incorrect, invalid and not sustainable both on facts and in law.

9. The DCIT erred in estimating the agricultural income with a view to restrict the claim of the agricultural income earned by the appellant in para 5 of the impugned order for the assessment years comprised in the block period under consideration and consequently erred in adding back the differential amount as undisclosed income as per Page No.12 of the impugned order forming part of each of the assessment years comprised in the block period under consideration without assigning proper reasons and justification.

10. The DCIT erred in estimating personal drawings with a view to restrict such claim having cascading impact in cash flow in para 6.2 of the impugned order or the relevant assessment years comprised in the block period under consideration and consequently erred in recasting the cash flow forming part of each of the assessment years comprised in the block period under consideration without assigning proper reasons and justification.

11. The DCIT failed to appreciate that the computation of the assessable income for the assessment year 198788 comprised in the block period under consideration in para 7 of the impugned order on various facets was wrong. erroneous, unjustified incorrect, invalid and not sustainable both on facts and in law.

12. The DCIT failed to appreciate that the computation of the assessable income for the assessment year 1988-89 comprised in the block period under consideration in para 8 of the impugned order on various facets was wrong, erroneous, unjustified, incorrect, invalid and not sustainable both on facts and in law.

13. The DCIT failed to appreciate that the computation of the assessable income for the assessment year 1989- 90 comprised in the block period under consideration in para 9 of the impugned order on various facets was wrong, erroneous, unjustified, incorrect, invalid and not sustainable both on facts and in law.

14. The DCIT failed to appreciate that the computation of the assessable income for the assessment year 1990- 91 comprised in the block period under consideration in para 10 of the impugned order on various facets was wrong, erroneous, unjustified, incorrect, invalid and not sustainable both on facts and in law.

15. The DCIT failed to appreciate that the computation of the assessable income for the assessment year 1991- 92 comprised in the block period under consideration in para 11.1 & para 11.2 of the impugned order on various facets was wrong, erroneous, unjustified, incorrect, invalid and not sustainable both on facts and in law.

16. The DCIT failed to appreciate that the computation of the assessable income for the assessment year 1992-93 comprised in the block period under consideration from para 12 of the impugned order on various Facets was wrong, erroneous, unjustified, incorrect, invalid and not sustainable both on facts and in law.

17. The DCIT failed to appreciate that the assessment of three cash credits aggregating to Rs1,61,132/- in applying the provisions of section 68 of the Act in the computation of undisclosed income for the assessment year 1992-93 comprised in the block assessment period in recording perverse findings of facts while overlooking ht stand of the appellant in establishing the genuineness of the transaction was wrong, erroneous, unjustified, incorrect, invalid and not sustainable both on facts and in law.

18. The DCIT failed to appreciate that the assessment of excess cash outflow of Rs.72,120/- worked out in para 12.7 of the impugned order pertaining to the assessment year 1992-93 comprised in the block period under consideration on various facets was wrong, erroneous, unjustified, incorrect, invalid and not sustainable both on facts and in law.

19. The DCIT failed to appreciate that the computation of the assessable/undisclosed income in para 13.11 of the impugned order for the assessment year 1993-94 comprised in the block period under consideration from para 13 of the impugned order on various facts was wrong, erroneous, unjustified, incorrect invalid and not sustainable both on facts and in law.

20. The DCIT erred in adding back Rs.199,318/- in para 13.3 of the impugned order as part of the computation of undisclosed income for the assessment year 1993-94 comprised in the block period under consideration pertaining to the gifts received at the time of marriage as against the claim of receiving such gifts aggregating to Rs.5,10,000/- on the application of section 68 of the Act without assigning proper reasons and justification.

21. The DCIT erred in bringing to tax Rs.26,25,000/- as the presumed investment in purchase of five tippers in recording wrong and erroneous findings from para 13.4 to para 13.7 of the impugned order in computing the undisclosed income for the assessment year 1993-94 comprised in the block period under consideration without assigning proper reasons and justification.

22, The DCIT erred in making the disallowance of Rs.1,68750/- being the rental charges paid for hiring the tippers in consequence to the addition made in presuming the appellants ownership of the tippers resulting in separate addition in the computation of undisclosed income for the assessment year 1993-94 comprised in the block period under consideration without assigning proper reasons and justification.

23. The DCIT erred in bringing to tax Rs12000/-appearing in the name of Sri K.Muthuswamy in the books of T.C.V.Packers as unexplained cash credit on the application of section 68 of the Act in para 13.9 of the impugned order in the computation of undisclosed income for the assessment year 1993-94 comprised in the block period under consideration without assigning proper reasons and justification.

24. The DCIT erred in computing the undisclosed income for the assessment year 1994-95 in para 14.8 of the impugned order comprised in the block period under consideration without assigning proper reasons and justification.

25. The DCIT erred in bringing to tax Rs.175,000/-being the cash credit appearing in the current account of the appellant with T.C.V. Packers as unexplained cash credit in para 14.2 of the impugned order on the application of section 68 of the Act for the assessment year 1994-95 comprised in the block period under consideration without assigning proper reasons and justification.

26. The DCIT erred in bringing to tax Rs.4,00,000/- being the presumed investment in purchase of shares of M/s T.C.V.Engineering Co. P Ltd. as unexplained investment presumably u/s 69 of the Act in para 14.3 for the assessment year 1994-95 comprised in the block period under consideration without assigning proper reasons and justification.

27. The DCIT erred in bringing to tax Rs.2,49,980/- as unexplained foreign travel expenses quantified as per the discussion in para 14.4 to para 14.6 of the impugned order for the assessment year 1994-95 comprised in the block period under consideration without assigning proper reasons and justification.

28. The DCIT erred in computing the undisclosed income in para 23 of the impugned order relating to the assessment year 1995-96 comprised in the block period under consideration without assigning proper reasons and justification ought to have appreciated that the entire computation of undisclosed income for tile assessment year 1995-96 comprised under the block period under consideration on various facets was wrong, erroneous. unjustified, incorrect, invalid and not sustainable both on facts and in law.

29. The DCIT failed to appreciate that having not brought on record the seized materials/evidence for the issues contested in all these assessment years including the assessment year 1995-96 comprised in the block period under consideration, the consequential additions made as part of the computation of undisclosed income for all the assessment years comprised under the block period under consideration were wrong, erroneous, unjustified, incorrect, invalid and not sustainable both on facts and in law.

30. The DCIT erred in adding back Rs.2,41,82,880/-being the amount presumed to be spent for acquiring PR status at Singapore in para 15.2 to para 15.9 of the impugned order as unexplained investment on the application of section 69 of the Act in the computation of undisclosed income relating to the assessment year 1995-96 comprised in the block period under consideration without assigning proper reasons and justification.

31. The DCIT failed to appreciate that in the absence of seized materials, the addition made in this regard on presumption of facts was completely unjustified and ought to have appreciated that the definition of undisclosed income incorporated in Chapter XIVB of the Act was completely overlooked and brushed aside.

32. The DCIT erred in adding back Rs.24,00,000/- as unexplained expenditure u/s 69C of the Act pertaining to the presumed expenses incurred for engaging the Advocate/Investment Consultant at Singapore in the computation of undisclosed income for the assessment year 1995-96 comprised in the block period under consideration at para 16.3 of the impugned order without assigning proper reasons and justification.

33. The DCIT erred in adding back Rs.149,39,600/- as unexplained investment u/s 69 of the Act on the presumption of investment in M/s Micam Leathers at para 17.4 of the impugned order in the computation of undisclosed income for the assessment year 1995-96 comprised in the block period under consideration without assigning proper reasons and justification.

34. The DCIT failed to appreciate that having brought on record certain sequence of events without any seized materials, the presumption of investment in shares made by the appellant should be reckoned as bad in law and ought to have appreciated that the presumption of investment in shares by the appellant was wholly unjustified and erroneous, thereby vitiating the related findings.

35. The DCII erred in adding back Rs.53,12,038/- as unexplained expenditure on foreign travel within the scope of section 69C of the Act in recording the findings from para 18.1 to para 18.14 of the impugned order in the computation of undisclosed income for the assessment year 1995-96 comprised in the block period under consideration without assigning proper reasons and justification.

36. The DCIT failed to appreciate that the presumption of facts with regard to Foreign travel was completely erroneous on various facts and further ought to have appreciated that in the absence of seized materials coupled with wrong estimation of such expenses would vitiate the related findings while fortifying he plea for complete deletion of the addition made invoking section 69C of the Act.

37. The DCIT erred in adding back Rs.50,000/- in para 29 for the presumed payment of professional fees to two advisors as unexplained expenditure u/s69C of the Act pertaining to the assessment year 1995-96 comprised in the block period under consideration without assigning proper reasons and justification.

38. The DCIT erred in bringing to tax Rs.45,71,26,016/-being the presumed investment in UK for the reasons stated in pan 20,1 to para 20.7 of the impugned order in terms of section 69 of the Act as unexplained investment in the computation of undisclosed income for the assessment year 1995-96 comprised in the block period under consideration without assigning proper reasons and justification.

39. The DCIT failed to appreciate that having not brought on any material comprised in the seized record to substantiate the presumption of facts of investment in UK by repeating the first block assessment order, the assessment of presumed investment on various facets should be reckoned as bad to law.

40. The DCIT failed to appreciate that having noticed the fact of stay of trial of the proceedings initiated by the ED, the addition made for the presumed investment on various grounds was were wrong, erroneous, unjustified, incorrect, invalid and not sustainable both on facts and in law.

41. The DCIT failed to appreciate that the order of Enforcement Directorate had not reached finality and ought to have appreciated that the findings in the said order on various facets were wrong, erroneous, unjustified, incorrect, invalid and not sustainable both on facts and in law.

42. The DCIT erred in estimating the income at 8% of the said investment on presumptions and assumptions at para 21 of the impugned order and consequently erred in adding back Rs.1,82,85,040/- in the computation of undisclosed income for the assessment year 1995-96 comprised in the block period under consideration without assigning proper reasons and justification.

43. The DCIT erred in adding back Rs1,86,500/- on the ground of in not establishing the loan transaction discussed in para 22 of the impugned order as part of the computation of undisclosed income pertaining to the assessment year 1995-96 comprised in the block period under consideration without assigning proper reasons and justification.

44. The DCIT erred in estimating income/interest on investment in UK at the rate of 8% and consequently erred in adding back Rs.3,80,32884/- at para 23 of the impugned order in the computation of undisclosed income pertaining to the assessment year 1996-97 comprised in the block period under consideration without assigning proper reasons and justification.

45. The DCIT erred in estimating income/interest on investment in UK at the rate of 8% and consequently erred in adding back Rs1,19,80,429/- in the computation of undisclosed income pertaining to the assessment year 1997- 98 (for 3 1/2months) in para 24 of the impugned order comprised in the block period under consideration without assigning proper reasons and justification.

46. The DCIT failed to appreciate that having not furnished the complete information/documents/details obtained from ED and in the possession of the Revenue and further having not permitted the appellant to cross examine the persons who had given statements at various stages/not permitting cross verification of the related documents/details, the additions made in the computation of undisclosed income for all the assessment years comprised tinder the block period under consideration were wrong, erroneous, unjustified, incorrect, invalid and not sustainable both on facts and in law.

47. The DCIT failed to appreciate that the estimated additions, the additions made on presumptions of facts, the additions made without search materials, the additions made solely based on the statements without corroborating the evidences as part of the computation of undisclosed income for the assessment years comprised in the block period under consideration were wrong, erroneous, unjustified, incorrect, invalid and not sustainable both on Facts and in law.

48. The DCIT railed to appreciate that having noticed the scope of the undisclosed income Chapter XIVD of the Act especially the definition of undisclosed income inbuilt therein, the additions made and disputed in the present appeal were wrong, erroneous, unjustified, incorrect, invalid and not sustainable both on facts and in law.

49. The DCIT railed to appreciate that there was no proper opportunity given before passing the impugned order and any order passed in violation of the principles of natural justice is nullity in law.

50. The Appellant craves leave to file additional grounds/arguments at the time of hearing.”

3. Brief facts of the case are that the assessee is an individual engaged in the business of contract work for earth moving. He was proprietor of TVC Packers, partner of M/s. Vivek Finance and management Services and also director of M/s. TVC Engineering Pvt.Ltd. & M/s. Emerald Promoters Pvt.Ltd. The Enforcement Directorate, Chennai has launched investigation against the assessee for alleged violation of Foreign Exchange Regulation Act. He was also detained under COFEPOSA Act for one year from 07.02.1996. The Enforcement Directorate has conducted search in the premises of the assessee and its associates in connection with alleged violation of FERA and seized certain books of account and documents. Simultaneously, the Enforcement Directorate has caused certain inquiries at abroad and particularly in U.K and Singapore with certain banks and certain persons associated with the assessee and gathered particulars and details in connection with alleged violation of FERA by the assessee. In addition, certain details were collected through Additional Chief Judicial Metropolitan Magistrate Court, Economic Offence, Egmore, Chennai-11, by issue of letter to the Competent Authority in U.K. During the course of investigation, statements were recorded from associates of assessee such as Mr. N.C.Rangesh (professional consultant for the assessee), Mr.K.Ramachandran and Mr.S.Rajoo. Consequent to the Enforcement Directorate proceedings, Income tax Department, Chennai i.e., Director of Income Tax (Investigation) has requisitioned books of account and documents seized from the Enforcement Directorate by issue of warrant of authorization dated 12.07.1996. The books of account were obtained from the Enforcement Directorate on 15.07.1996 and requisitioned u/s.132A of the Act, 1961.

4. Thereafter, the assessee was served with notice u/s.158BC of the Income Tax Act, 1961 on 21.11.1996 to file return of income for the block period for which the assessee has filed his return of income in form No.2B on 21.03.1997 admitting Nil undisclosed income. During the course of block assessment proceedings, the assessee was examined on oath u/s.131 of the Act on 25.07.1997. The Assessing Officer has also obtained copies of documents from the Enforcement Directorate and also Additional Chief Metropolitan Magistrate u/s.132A of the Act on 07.08.1997. The Assessing Officer had also obtained statement recorded by the Enforcement Directorate from Mr. N.C.Rangesh, Mr. K.Ramachandran and Mr.S.Rajoo and also from the assessee on various dates. Simultaneously, enquiries were also conducted by the department with Malaysian Revenue authorities through FTD regarding certain investments and received details on 31.01.2000. Based on the information collected from Enforcement Directorate, the Assessing Officer has completed block assessment on 30.07.1997 u/s.158BC of the Income Tax Act,1961 and determined undisclosed income of ` 57,43,79,390/- for the block period by making various additions, including additions towards investments for acquiring PR status at Singapore, investments in business concerns at U.K, investments in M/s.Micom Leather Export Ltd. and addition towards alleged travel expenses to abroad.

5. The assessee has challenged the block assessment order dated 30.07.1997 before the ITAT. The ITAT vide its order dated 04.10.2010 in IT(SS)A No.163/Mds/1997 has set aside the assessment and directed the Assessing Officer to redo the assessment, after taking into consideration all the relevant materials connected to the proceedings and strictly following principles of natural justice and further, giving reasonable and sufficient opportunity to the assessee. Pursuant to the order of the Tribunal, the Assessing Officer had initiated proceedings to complete set aside assessment proceedings. During the course of assessment proceedings, the assessee vide its letters of even dated had requested the Assessing Officer to furnish copies of documents requisitioned from Enforcement Directorate including statements recorded from him and his associates for which the Assessing Officer has provided copies of statement recorded from the assessee and his associates by the Enforcement Directorate and also certain documents collected from Additional Chief Metropolitan Magistrate, Egmore. Thereafter, on 04.03.2002 the assessee has filed a Writ Petition before the Hon’ble Madras High Court in W.P No.7623 of 2002and challenged block assessment proceedings conducted in pursuance to first round of proceedings. The Hon’ble Madras High Court on 08.03.2002 has passed interim order and stayed second round block assessment proceedings, till further orders and said stay has been extended vide order dated 11.04.2002. Finally, the Hon’ble Madras High Court on 14.12.2018 has disposed off Writ Petition filed by the assessee on the ground that they are devoid of merits and further observed that petitioner would co-operate for early completion of all the proceedings and the department to initiate steps to conclude all these proceedings by providing opportunity to the petitioner as contemplated under the Act without any further lapse of time. The said order of the Hon’ble Single Judge in W.P No.7623 of 2002 was received by O/o.the PCIT on 13.02.2019. Thereafter, the Assessing Officer had issued notice u/s 143(2) on 20.02.2019 and called for various details. Further, the Assessing Officer had issued notice u/s 142(1) on 17.09.2019 along with detailed questionnaire, as directed by the Hon’ble High Court and also provided to the assessee an opportunity to take copies of sworn statement, seized records or other records available with the department in connection with block assessment proceedings. Further, the assessee vide submission dated 02.12.2019 contended that there is no jurisdiction for block assessment proceedings, because documents and evidences which are received by the department beyond due date of conclusion of search is being used to compute undisclosed income for the block assessment. Further vide letter dated 24.12.2019, the assessee submitted that assessment is time barred by limitation and is beyond time limit given u/s.153(2A) with Explanation 1(ii)to section 153, because the provisions of section 153 (2A) has been amended by the Finance Act, 2000 w.e.f. 01.06.2001, as per which time limit for completion of fresh assessment u/s.143(3) in pursuance to an appellate order u/s. 250,254, or revision order u/s 263 or section 264 setting aside or cancelling assessment to one year from two years from the end of the financial year in which said order is received by Chief Commissioner / Commissioner.

6. The Assessing Officer, after considering relevant submissions of the assessee has rejected legal ground taken by the assessee challenging block assessment proceedings in light of documents requisitioned u/s.132A and has also rejected another contention of the assessee regarding limitation in light of provisions of section 153(2A) of the Act on the ground that sub-section (2A) to section 153 enables the Assessing Officer to complete the assessment at any time before expiry oftwo years from the end of financial year in which the order passed u/s.146 or 250, 254 /263 /264, as the case may be received by CIT/CCIT. Since, the order passed by the Tribunal on 04.10.2010 was received by O/o. CIT on 10.11.2000, the Assessing Officer shall have time limit upto 31.03.2003 to complete the assessment. Further, since the assessee has challenged the proceedings before the Hon’ble High Court and got stay for proceedings, as per Explanation (ii) period of operation of stay shall be excluded from limitation and if such period is excluded, the Assessing Officer is still having time upto 06.01.2020 to pass assessment order and hence, the order passed u/s 143(3), r.w.s. 254 on 31/12/2019 is well within the time prescribed under section 153(2A) of the Act. Therefore, he opined that no merit in the arguments taken by the learned AR for the assessee that proceedings are barred by limitation. The Assessing Officer has also analyzed provisions of section 153(2A) and 153(ii) and observed that the assessee is under impression that block assessment order in question is being passed in pursuant to order of ITAT u/s.254, but said proceedings is continued in pursuant to the directions of the Hon’ble High Court and hence, order passed under the jurisdiction of writ is not covered by sub-section (2A) to section 153 of the Act. Therefore, he opined that provisions of subsection (3) of section 153 is applicable to the present case, because the present proceedings are taken as per direction of the Hon’ble High Court in Writ, as per which, there is no time limit for completion of assessment. Accordingly, he has rejected the arguments of the assessee taken in light of provisions of section 153(2A) of the Act. Thereafter, the Assessing Officer has completed the block assessment u/s.153BCr.w.s 254 of the Act on 31.12.2019 and determined total income at `57,43,79,390/- which is same as determined in the first round of proceedings vide order dated 30.07.1997. The relevant findings of the Assessing Officer are as under:

“2.5. Further, vide letter dated 24.12.2019, assessee submitted that the assessment is time barred by limitation and is beyond the time limit given in section 153 (2A) with explanation 1(u) to section 153.

The above submission of the assessee is not acceptable as the assessment proceedings are very much within time as seen from the explanations provided below:

For better understanding, the provisions of sub section (2A) & (3) of section 153 as exist on 01.04.2000 needs to be analysed and the same is produced here under:

“Section. 153: Time limit for completion of assessments and reassessments.

(1) No order of assessment shall be made under section 143 or section 144 at any time after the expiry of—

(a) two years from the end of the assessment year in which the income was first assessable; or

(b) one year from the end of the financial year in which a return or a revised return relating to the assessment year commencing on the 1st day of April, 1988, or any earlier assessment year, is filed under sub-section (4) or sub-section (5) of section 139, whichever is later.

(2) No order of assessment, reassessment or recomputation shall be made under section 147 after the expiry of two years from the end of the financial year in which the notice under section 148 was served:

Provided that where the notice under section 148 was served on or before the 31st day of March, 1987, such assessment, reassessment or recomputation may be made at any time up to the 31st day of March, 1990.

(2A,) Notwithstanding anything contained in sub-sections (1)and (2), in relation to the assessment year commencing on the 1st day of April, 1971, and any subsequent assessment year an order of fresh assessment under section 146 or in pursuance of an order under section 250, section 254, section 263 or section 264, setting aside or cancelling an assessment, may be made at any time before the expiry of two years from the end of the financial year in which the order under section 146 cancelling the assessment is passed by the [Assessing) Officer or the order under section 250 or section 254 is received by the [Chief Commissioner or Commissioner or, as the case may be, the order under section 263 or section 264 is passed by the Chief Commissioner or Commissioner)

(3) The provisions of sub-sections (1) and (2) shall not apply to the following classes of assessments, reassessments and recomputations which may, [subject to the provisions of sub-section (2A),] be completed at any time—

(i) where a fresh assessment is made under section 146;

(ii) where the assessment, reassessment or recomputation is made on the assessee or any person in consequence of or to give effect to any finding or direction contained in an order under sections 250, 254, 260, 262, 263, or 264 [or in an order of any court in a proceeding otherwise than by way of appeal or reference under this Act);

(iii) where, in the case of a firm, an assessment is made on a partner of the firm in consequence of an assessment made on the firm under section 147.

Analysis of provision of sub-section (2A)

Taking recourse to provisions of sub-section (2A) to 153, the assessee is of mistaken belief that the assessment got time barred a ready.

Here it is very important to analyse the chronology of various events leading to completion of assessments by the Assessing Officer.

1. Date of original assessment: 30.7.1997

2. Date of order of ITAT: 04.10.2000.

3. Date of receipt of ITAT order by the office of CIT: 10.11.2000

4. Date of order of the Hon’ble High Court staying on the opinion of order of the Hon’ble ITAT : 08.03.2002.

5. Date of order of the Hon’ble High Court directing the Assessing Officer to complete the assessment :14.12.2018.

6. Date of receipt of the order of the Hon’ble High Court by office of the PCIT: 13.02.2019.

This sub-section enables the Assessing Officer to complete the assessment at any time before expiry of 2 years from the end of the F.Y. in which order u/s 146 or order u/s 250 or 254 or order u/s.263 or u/s 264 is passed by the Assessing Officer / CIT/CCIT.

The assessee is under impression that the block assessment order fin question is being passed by me, consequent to the order of the Hon’ble ITAT u/s.254, therefore the assessment got time barred. The time barring date for passing the order in this case is 31.03.2003 i.e. 2 years from the end of the FY 2000-2001 (ITAT order dated 10.11.2000) is 3 1.03.2003. But before the expiry of the 2 years the assessee had filed a writ on 08.03.2002. Thus out of 2 years time limit, one year got expired and I am left with one year for passing the order.

It is not the case where I am passing an order as per the directions of the Hon’ble ITAT. The assessee had filed a writ and the assessment proceeding have been stayed by the Hon’ble High Court. The present order is being passed by me, in compliance to the direction of the Hon’ble High Court and not of the Hon’ble ITAT. The order passed under the jurisdiction of writ is not covered by sub-section (2A) of section 153. If the provisions of sub-section (2A) is analysed carefully then it makes clear that it covers order passed u/s.146 by A.O. or 250/254/263/264 orders by CIT/CCIT and it does not cover order passed by a Court order under the writ jurisdiction.

The Hon’ble High Court has dismissed the writ of the assessee vide order dated 14.12.2018, which was received in the office of the PCIT on 13.02.2019.As discussed in the earlier para one year out of 2 year is completed the balance one year period is still left commencing from February 2019 and ending by February 2020. Therefore the assessment in the normal course needs to be completed by February 2020 and hence it is not time barred even presuming that section (2A) is applicable to the facts of the case as claimed by the assessee.

Analysis of provision of sub-section (3)

This subsection covers any finding or direction or an order passed by any court in a proceeding otherwise than by way of appeal or reference under the Act apart from various other orders. The order before me is the order not an order by way of Reference or by way of an appeal, but an order passed by Hon’ble HC under a Writ. In fact, the provisions sub-section (3) of 153 is squarely applicable to the facts of the assessee’s case. No doubt the High court has remitted the matter back to the Assessing Officer and it’s a case of full set-aside, but because the order was passed consequent to Writ, the provisions of rather the assesse’s case falls under the ambit of sub-section(3) of Section 153. For passing an order U/s.153(3), there is no time limit prescribed under the Act. Therefore there is no question of the assessment getting time-barred in this case.

It is interesting to note the recent decision of HC of Delhi in the case or Nokia India (P) Ltd. Vs Dy. CIT (Delhi High Court), where some issues have been partly set-aside and remanded back to the AO. The observation of the court and the finding on the applicability of subsection2A and subsection 3 is as under:

The Hon’ble High Court observed that it could not agree with the contention that unless the entire assessment order is wholly set aside, the time limit for passing the fresh order under Section 153 (2A) to the Court, there was no warrant for such an interpretation.

The Hon’ble High Court observed that the object behind introduction of sub-section (2A) was to prescribe a time limit for completing the assessment proceedings upon the original assessment being set aside or being cancelled in appeal. Clearly, the intention was not to restrict the applicability of subsection (2A) only to such cases where the entire’ original assessment order is set aside. It was noted that, “Under the existing provisions of section 153(3), such fresh assessments are not subject to any time limit.” Indeed, Section 153, as it stood at that time, did not prescribe any time limits. Section 153 (3) (ii), in particular, did not require the order passed thereunder to be issued within any particular time limit.

The Hon’ble High Court observed that there is a distinction between an ‘assessment’ that is set aside and an ‘assessment order’ being set aside. When the assessment on an issue is set aside and the matter remanded, with a direction that the issue has to be determined afresh, Section 153 (2A) of the Act would get attracted.

The Hon’ble High Court noted that along with the insertion of sub-section (2A), sub-section (3) underwent a simultaneous change. It was expressly made “subject to the provisions of sub-section (2A).” This meant that Section 153(3) would thereafter apply only to such cases where Section 153(2A) did not apply. In other words, in all instances of an AO having to pass a fresh assessment order upon remand where Section 153(2A) would apply, the AO would be bound to follow the time limit imposed by sub-section (2A). Where the AO was only giving effect to an appellate order, then Section 153 (3) (ii) of the Act would apply”

Hence as per the elaborations above, Since the block assessment order is being passed by complying the directions of Hon’ble High court of Madras under writ, dated 14.12.2018, I am of the view that the block assessment proceedings are not time barred as per Section153(3) of the Income Tax Act.”

Being aggrieved by the assessment order, the assessee is in appeal before us.

7. The preliminary issue raised by the assessee vide ground no.2 to 4 is with regard to validity of assessment order passed u/s.158BC, r.w.s. 143(3), r.w.s 254 of the Income Tax Act, 1961 dated 31.12.2019 in light of provisions of section 153(2A) of the Act. The learned A.R for the assessee submitted that block assessment order passed by the Assessing Officer is without jurisdiction and out of time, because time limit for completion of assessment in pursuant to an order u/s.254 of the Act by the ITAT is one year from the end of the financial year in which such order is received by the O/o.CIT / PCIT and if such date is considered, then order passed by the Assessing Officer on 31.12.2019 is clearly barred by limitation and not sustainable both on facts and in law. The ld. AR for the assessee referring to relevant dates and events submitted that block assessment in the normal course ought to have been completed by the Assessing Officer within one year from the end of the month in which requisition u/s.132A was executed. However, in the present case, proceeding of block assessment was taken up after the order of the Tribunal in setting aside block assessment order dated 30.07.1997 for fresh consideration / completion for the reasons captured in the order passed on 04.10.2000. As per the said order, assessment has been set aside for denovo assessment, after considering all relevant documents and also giving adequate opportunity of hearing to the assessee. In the present case, the Tribunal has passed its order on 04.10.2000. The said order was received by O/o. Commissioner of Income Tax on 10.11.2000.Further, the provisions of section 153 (2A) of the Act has been amended by the Finance Act, 2000w.e.f 01.06.2001 and reduced time limit for completion of set aside assessment proceedings from existing two years to one year, at any time before expiry of one year from the end of the financial year, in which order under section 254 of the Act is received by Commissioner/CCIT. The said amendment is brought into statute to cover orders passed on or after 01.04.2000, which is clearly evident from the proviso inserted to clarify the purpose of amendment, as per which where an order u/s.250 or 254 is received by Chief Commissioner / Commissioner on or after 01.04.1999, but before 01.04.2000, such an order of afresh assessment may be made at any time upto 31.03.2002. Therefore, from the amended provisions of section 153(2A), time limit for completion of set aside assessment proceedings has been reduced to one year from the end of financial year in which such order has been received by O/o. Chief Commissioner / Commissioner. However, the Assessing Officer on a mistaken of law has considered the pre-amended time limit available as per section 153(2A) by grossly overlooking amendment brought in by the Finance Act, 2000, restricting time limit to one year from the end of financial year in which order is received by CIT. If one year period of limitation is considered, as per amended provisions of section153 (2A), then the order passed by the Assessing Officer on 31.12.2019 is clearly barred by limitation and liable to be quashed.

8. The ld. AR further referring to dates and events submitted that in this case, the order of the ITAT was passed on 04.10.2000 and which was received by the O/o. PCIT on 10.11.2000. Since, the order of the Tribunal was received on or after 1-4-2000, amended provisions of section 153(2A) prescribing restricted time limit would get attracted to the facts of the case, and hence, the AO should have completed assessment on or before 31.03.2002 and not on or before 31.03.2003, as assumed by the Assessing Officer. Because of the intervening order of the Hon’ble High Court in writ and disposal of said writ on 14.12.2018 ( communicated to PCIT on 13.02.2019), the Assessing Officer would get clear 60 days time in view of the Explanation referred to in para (1) to section 153 of the Act, because balance time limit as on date of interim order passed by Hon’ble High Court was 23 days which was less than 60 days. The said 60 days would expire on 14.04.2019 and hence, the order passed by the Assessing Officer in the present case on 31.12.2019 is clearly barred by limitation and unsustainable in law.

9. The learned A.R for the assessee further referring to provisions of sub-section (3) of section 153 of the Act, argued that another fundamental mistake committed by the Assessing Officer in applying sub-section (3) to section 153 of the Act, and according to him, effect giving order passed is in consequent to direction of the Hon’ble Madras High Court in disposal of Writ Petition. The above perception of the Assessing Officer is completely erroneous and the Hon’ble High Court in disposing of writ has only permitted the parties to complete the pending proceedings created due to the order of the Appellate Tribunal in setting aside original assessment order. Hence, provisions of section 153(3) of the Act was wrongly invoked for computing time limit. He therefore submitted that sub-section (3) of Section 153 of the Act, envisages for completing the assessment or reassessment based on a finding or direction of any authority or a court, while in the present case, it is based on the order of the Appellate Tribunal for completing fresh assessment de novo in view of the order in setting aside the original assessment order. Therefore, there is a complete misdirection on the part of the Assessing Officer in falling back to the provisions of section 153(3) of the Act which is not applicable to the present case. He further submitted that the Assessing Officer, while erroneously taking time limit to give effect to the order of the Appellate Tribunal has placed reliance on said sub-section (3) for the purpose of validating his order passed beyond the time limit prescribed. Therefore, he submitted that assessment order passed by the Assessing Officer is clearly barred by limitation and not sustainable in law. In this regard, he relied upon the decision of Hon’ble Delhi High Court in the case of CIT Vs Bhan Textiles P.Ltd (2008) 300 ITR 176 (Del) and the decision of ITAT., Delhi Bench in the case of Awanindra Singh (2019) 104 taxmann.com 171.

10. The learned DR, on the other hand, supporting the order of the Assessing Officer submitted that there is no merit in the arguments of the learned A.R for the assessee that assessment order passed by the Assessing Officer is barred by limitation, because the Assessing Officer has passed order within time limit as provided u/s.153(3) of the Act, where it is clearly envisaged that if an order is passed in consequence of or to give effect to any finding or direction contained in the said order under section 250/254/263 or 264 or in an order of any court in a proceeding otherwise than by way of appeal or reference under this Act, provisions of sub-section (1),(1A),(1B) and (2) shall not apply and hence, there is no time limit as prescribed for completion of assessment. In this case, the Assessing Officer has completed assessment in pursuant to the direction of the Hon’ble Madras High Court vide order dated 14.12.2018, which was received in the Office of PCIT on 13.02.2019. The order passed under writ jurisdiction is not covered by sub-section (2A) of section 153 of the Act. If provisions of sub-section (2A) is analyzed carefully, then it makes clear that it covers orders passed by the Assessing Officer u/s .146 or orders passed by Appellate Tribunal or Commissioner or Chief Commissioner u/s.250 / 254 / 263 or 264 of the Act. Therefore, if provisions of section 153(3) is considered, then time limit available for completion of assessment is ending by February, 2020 and hence, assessment order passed by the Assessing Officer on 31.12.2019 is clearly within time prescribed under the Act and hence, there is no merit in the arguments taken by the learned A.R for the assessee. The DR further submitted that case laws relied upon by the learned A.R for the assessee are not applicable to the facts of the present case, because in those cases order was passed by Assessing Officer in pursuant to order of Appellate Tribunal, whereas in the present case, assessment has been completed in pursuant to the direction of the Hon’ble Madras High Court under writ jurisdiction. Therefore, under those facts, courts held that when set aside proceedings is taken up in pursuant to direction of Appellate Tribunal, then provisions of section 153(2A) will come into operation and not sub-section (3) of section 153 of the Act. Therefore, he submitted that order passed by the Assessing Officer is clearly well within the time limit prescribed under the Act and hence, arguments taken by learned AR for the assessee is unsustainable in law and should be rejected.

11. We have heard both the parties, perused materials available on record and gone through orders of the authorities below. We have also carefully considered case laws cited by the ld. counsel for the assessee on the issue of limitation prescribed u/s.153(2A) of the Act. The preliminary issue raised by the assessee on limitation in light of provisions of section 153(2A) of the Act needs to be answered and for this purpose, it is necessary to understand provisions of Section 153 of the Income Tax Act, 1961. For better understanding, we reproduce provisions of Section 153 of the Act, stood at relevant time, which reads as under:-

“153. Time limit for completion of assessments and reassessments.—(1) No order of assessment shall be made under section 143 or section 144 at any time after the expiry of—

(a) two years from the end of the assessment year in which the income was first assessable ; or

(b) one year from the end of the financial year in which a return or a revised return relating to the assessment year commencing on the 1st day of April, 1988, or any earlier assessment year, is filed under sub-section (4) or sub-section (5) of section 139, whichever is later:

Provided that in case the assessment year in which the income was first assessable is the assessment year commencing on or after the 1st day of April, 2004 but before the 1st day of April, 2010, the provisions of clause (a) shall have effect as if for the words “two years”, the words “twenty-one months” had been substituted:

Provided further that in case the assessment year in which the income was first assessable is the assessment year commencing on or after the 1st day of April, 2005 but before the 1st day of April, 2009 and during the course of the proceeding for the assessment of total income, a reference under sub-section (1) of section 92CA—

(i) was made before the 1st day of June, 2007 but an order under sub-section (3) of that section has not been made before such date; or

(ii) is made on or after the 1st day of June, 2007, the provisions of clause (a) shall, notwithstanding anything contained in the first proviso, have effect as if for the words “two years”, the words ‘thirty-three months” had been substituted:

Provided also that in case the assessment year in which the income was first assessable is the assessment year commencing on the 1st day of April, 2009 or any subsequent assessment year and during the course of the proceeding for the assessment of to income, a reference under sub-section (1) of section 92CA is made, the provisions of clause (a) shall, notwithstanding anything contained in the first proviso, have effect as if for the words “two years”, the words “three years” had been substituted.

(1A) No order of assessment shall be made under section I15WE or section 11 5WF at any time after the expiry of twenty-one months from the end of the assessment year in which the fringe benefits were first assessable.

(IB) No order of assessment or reassessment shall be made under section 11 5WG after the expiry of nine months from the end of the financial year in which the notice under section 1 15WH was served.

(2) No order of assessment, reassessment or recomputation shall be made under section 147 after the expiry of one year from the end of the financial year in which the notice under section 148 was served:

Provided that where the notice under section 148 was served on or after the 1st day of April, 1999 but before the 1st day of April, 2000, such assessment, reassessment or recomputation may be made at any time up to the 31st day of March, 2002:

Provided further that where the notice under section 148 was served on or after the 1st day of April, 2005 but before the 1st day of April, 2011, the provisions of this sub-section shall have effect as if for the words “one year”, the words “nine months” had been substituted:

Provided also that where the notice under section 148 was served on or after the 1st day of April, 2006 but before the 1st day of April, 2010 and during the course of the proceedings for the assessment or reassessment or recomputation of total income, a reference under sub-section (1) of section 92CA—

(i) was made before the 1st day of June, 2007 but an order under sub-section (3) of that section has not been made before such date; or

(ii) is made on or after the 1st day of June, 2007, the provisions of this sub-section shall, notwithstanding anything contained in the second proviso, have effect as if for the words “one year’, the words “twenty-one months” had been substituted:

Provided also that where the notice under section 148 was served on or after the 1st day of April, 2010 and during the course of the proceeding for the assessment or reassessment or recomputation of total income, a reference under sub-section (1) of section 92CA is made, the provisions of this sub-section shall, notwithstanding anything contained in the second proviso, have effect as if for the words “one year”, the words “two years” had been substituted.

(2A) Notwithstanding anything contained in sub-sections (1), (1A), (1B) and (2), in relation to the assessment year commencing on the 1st day of April, 1971, and any subsequent assessment year, an order of fresh assessment in pursuance of an order under section 250 or section 254 or Section 263 or section 264, setting aside or cancelling an assessment, may be made at any time before the expiry of one year from the end of the financial year in which the order under section 250 or section 254 is received by the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner or, as the case may be, the order under section 263 or section 264 is passed by the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner:

Provided that where the order under section 250 or section 254 is received by the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner or, as the case may be, the order under section 263 or section 264 is passed by the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner, on or after the 1st day of April, 1999 but before the 1st day of April, 2000, such an order of fresh assessment may be made at any time up to the 31st day of March, 2002:

Provided further that where the order under section 254 is received by the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner or, as ,the case may be, the order under section 263 or section 264 is passed by the Principal Commissioner or Commissioner on or after the 1st day of April, 2005 but before the 1st day of April, 2011, the provisions of this sub-section shall have effect as if for the words one year”, the words “nine months” had been substituted:

Provided also that where the order under section 254 is received by the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner or, as the case may be, the order under section 263 or section 264 is passed by the Principal Commissioner or Commissioner on or after the 1st day of April, 2006 but before the 1st day of April, 2010, and during the course of the proceedings for the fresh assessment of total income, a reference under sub-section (1) of section 92CA—

(i) was made before the 1st day of June, 2007 but an order under sub-section (3) of section 92CA has not been made before such date; or

(ii) is made on or after the 1st day of June, 2007, the provisions of this sub-section shall, notwithstanding anything contained in the second proviso, have effect as if for the words “one year”. the words “twenty-one months” had been substituted:

Provided also that where the order under section 254 is received by the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner or, as the case may be, the order under section 263 or section 264 is passed by the Principal Commissioner or Commissioner on or after the 1st day of April, 2010, and during the course of the proceeding for the fresh assessment of total income, a reference under subsection (1) of section 92CA is made, the provisions of this sub-section shall, notwithstanding anything contained in the second proviso, have effect as if for the words “one year”, the words “two years” had been substituted.

(3) The provisions of sub-sections (1), (1A), (lB) and (2) shall not apply to the following classes of assessments, reassessments and recomputations which may, subject to the provisions of sub-section (2A), be completed at any time— (i)[***]

(i) where the assessment, reassessment or recomputation is made on the assessee or any person in consequence of or to give effect to any finding or direction contained in an order under section 250,254, 260,262,263, or 264 or in an order of any court in a proceeding otherwise than by way of appeal or reference under this Act;

(ii) where, in the case of a firm, an assessment is made on a partner of the firm in consequence of an assessment made on the firm under section 147.

(4) Notwithstanding anything contained in the foregoing provisions of this section, subsection (2) of section 153A and sub-section (1) of section 153B, the order of assessment or reassessment, relating to any assessment year, which stands revived under sub-section (2) of section 153A, shall be made within one year from the end of the month of such revival or within the period specified in this section or sub-section (1) of section 153B, whichever is later.

Explanation 1.—In computing the period of limitation for the purposes of this section—

(i) the time taken in reopening the whole or any part of the proceeding or in giving an opportunity to the assessee to be reheard under the proviso to section 129, or

(ii) the period during which the assessment proceeding is stayed by an order or injunction of any court, or

(iia) the period commencing from the date on which the Assessing Officer intimates the Central Government or the prescribed authority, the contravention of the provisions of clause (21) or clause (22B) or clause (23A) or clause (23B) or sub-clause (iv) or sub-clause (v) or sub-clause (v or sub-clause (via) of clause (230 of section 10, under clause ( of the proviso to sub-section (3) of section 143 and ending with the date on which the copy of the order withdrawing the approval or rescinding the notification, as the case may be, under those clauses is received by the Assessing Officer, or

(iii) the period commencing from the date on which the Assessing Officer directs the assessee to get his accounts audited under sub-section (2A) of section 142 and—

(a) ending with the last date on which the assessee is required to furnish a report of such audit under that sub-section; or

(b) where such direction is challenged before a court, ending with the date on which the order setting aside such direction is received by the Principal Commissioner or Commissioner, or

(iv) the period commencing from the date on which the Assessing Officer makes a / reference to the Valuation Officer under sub-section (1) of section 142A and ending with the date on which the report of the Valuation Officer is received by the Assessing Officer, or

(iva) the period (not exceeding sixty days) commencing from the date on which the Assessing Officer received the declaration under sub-section (1) of section 158A and ending with the date on which the order under sub-section (3) of that section is made by him, or

(v) in a case where an application made before the Income-tax Settlement Commission under section 245C is rejected by it or is not allowed to be proceeded with by it, the period commencing from the date on which such application is made and ending with the date on which the order under sub-section (1) of section 245D is received by the Principal Commissioner or Commissioner under sub-section (2) of that section, or

(vi) the period commencing from the date on which an application is made before the Authority for Advance Rulings under sub-section (1) of section 2450 and ending with the date on which the order rejecting the application is received by the Principal Commissioner or Commissioner under sub-section (3) of section 245R, or

(vii) the period commencing from the date on which an application is made before the Authority for Advance Rulings under sub-section (1) of section 245Q and ending with the date on which the advance ruling pronounced by it is received by the Principal Commissioner or Commissioner under sub-section (7) of section 245R, or

(viii) the period commencing from the date on which a reference or first of the references – for exchange of information is made by an authority competent under an agreement referred to in section 90 or section 90A and ending with the date on which the information requested is last received by the Principal Commissioner or Commissioner or a period of one year, whichever is less, or

(ix) the period commencing from the date on which a reference for declaration of an arrangement to be an impermissible avoidance arrangement is received by the Principal Commissioner or Commissioner under sub-section (1) of section l44BA and ending on the date on which a direction under sub-section (3) or sub-section (6) or an order under sub-section (5) of the said section is received by the Assessing Officer, shall be excluded:

Provided that where immediately after the exclusion of the aforesaid time or period, the period of limitation referred to in sub-sections (1), (1A), (1B), (2), (2A) and (4) available to the Assessing Officer for making an order of assessment, reassessment or recomputation, as the case may be, is less than sixty days, such remaining period shall be extended to sixty days and the aforesaid period of limitation shall be deemed to be extended accordingly:

Provided further that where a proceeding before the Settlement Commission abates under section 245HA, the period of limitation available under this section to the Assessing Officer for making an order of assessment, reassessment or recomputation as the case may be, shall, after the exclusion of the period under sub-section (4) of section 245HA, be not less than one year; and where such period of limitation is less than one year, it shall be deemed to have been extended to one year; and for the purposes of determining the period of limitation under sections 149, 153B, 154, 155, 158BE and 231 and for the purposes of payment of interest under section 243 or section 244 or, as the case maybe, section 244A, this proviso shall also apply accordingly.

Explanation 2.—Where, by an order referred to in clause (ii) of sub-section (3), any income is excluded from the total income of the assessee for an assessment year, then, an assessment of such income for another assessment year shall, for the purposes of section 150 and this section, be deemed to be one made in consequence of or to give effect to any finding or direction contained in the said order.

Provided that in respect of an order of assessment relating to the assessment year commencing on the 1st day of April, 2018, the provisions of this sub-section shall have effect, as if for the words ‘twenty-one months”, the words “eighteen months” had been substituted:

Provided further that in respect of an order of assessment relating to the assessment year commencing on or after the 1st day of April, 2019, the provisions of this sub-section shall have effect, as if for the words “twenty-one months”, the words “twelve months” had been substituted.]

(2) No order of assessment, reassessment or recomputation shall be made under section 147 after the expiry of nine months from the end of the financial year in which the notice under section 148 was served:

46[Provided that where the notice under section 148 is served on or after the 1st day of April, 2019, the provisions of this subsection shall have effect, as if for the words “nine months”, the words “twelve months” had been substituted.]

(3) Notwithstanding anything contained in sub-sections (1) and (2), an order of fresh assessment in pursuance of an order under section 254 or section 263 or section 264, setting aside or cancelling an assessment, may be made at any time before the expiry of nine months from the end of the financial year in which the order under section 254 is received by the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner or, as the case may be, the order under section 263 or section 264 is passed by the Principal Commissioner or Commissioner:

46[Provided that where the order under section 254 is received by the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner or, as the case may be, the order under section 263 or section 264 is passed by the Principal Commissioner or Commissioner on or after the 1st day of April, 2019, the provisions of this sub-section shall have effect, as if for the words “nine months”, the words “twelve months” had been substituted.]

(4) Notwithstanding anything contained in sub-sections (1), (2) and (3), where a reference under sub-section (1) of section 92CA is made during the course of the proceeding for the assessment or reassessment, the period available for completion of assessment or reassessment, as the case may be, under the said subsections (1), (2) and (3) shall be extended by twelve months.

Explanation 3.—Where, by an order referred to in clause (ii) of sub-section (3)any income is excluded from the total income of one person and held to be the income of another person, then, an assessment of such income on such other person shall, for the purposes of section 150 and this section, be deemed to be one made in consequence of or to give effect to any finding or direction contained in the said order, provided such other person was given an opportunity of being heard before the said order was passed.”

12. The provisions of section 153 relating to time limit for completion of assessment and reassessment has been amended so as to provide time limit for completion of fresh assessment to be made in a case (1) where original assessment made u/s. 144 has been cancelled by the Assessing Officer u/s.146 or (2) original assessment is set aside or cancelled in appeal by the Appellate Commissioner or Appellate Tribunal or in revision by Commissioner. For this purpose sub-section (2A) has been inserted to section 153 of the Act. Under this sub-section, fresh assessment in case mentioned at (1) may be made at any time before expiry of two years from the end of the financial year, in which original assessment was cancelled by the Assessing Officer u/s.146 of the Act. In a cases mentioned at (2), fresh assessment may be made at any time before expiry of two years from the end of the financial year in which order of the Appellate Commissioner or Appellate Tribunal is received by Commissioner or as the case may be, order in revision is passed by Commissioner. In the above circumstances, assessment may be completed within above mentioned time limit, even if, time limit specified under sub-section(1) & (2) of Section 153 for completion of assessment or reassessment has been expired. The amendment brought out by the Finance Act, 2000, has reduced general time limit prescribed under section 153(2A) to one year and such amendment has been made effective from 01.06.2001. Simultaneously, a proviso has been inserted to make it clear the purpose of amendment of sub-section (2A), as per which, where the order u/s.250 or 254 is received by the Commissioner /Chief Commissioner or as the case may be, or the order u/s.263 or 264 is passed by Commissioner or CCIT on or after 01.04.1999, but before 01.4.2000, such an order of fresh assessment may be made at any time upto 31.03.2002. A plain reading of sub-section 153(2A) along with proviso thereunder, it is very clear that revised time limit of one year is made applicable for those orders which were received by Commissioner /Chief Commissioner on or after 01.4.2000. The meaning thereby is that any orders passed by appellate commissioner or appellate tribunal is received by Commissioner /Chief Commissioner between 01.04.1999 to 31.03.2000, then those orders are covered under pre-amended provisions of section 153(2A), as per which, time limit available for the Assessing Officer to complete the assessment is two years from the end of the financial year in which such order was received by O/o. Commissioner. In other words, any order of Appellate Commissioner or Appellate Tribunal is received by the CIT/PCIT on or after 01.04.2000, then amended provisions of section 153(2A) is applicable, as per which one year time limit is applicable for completion of assessment.

13. In this legal background, if you examine facts of the present case, we find that the order of the Tribunal was passed on 04.10.2000 (received in the office of the CIT on 10-11-2000) and as per amended provisions of section 153(2A) of the Act, fresh assessment order ought to have completed in normal course by the Assessing Officer, at any time before expiry of one year from the end of the financial year in which order u/s.254 of the Act was received by the Commissioner /Chief Commissioner. The Assessing Officer has started fresh block assessment proceedings on the premise of 2 years’ time limit as per old provisions of section 153(2A). The assessee meanwhile challenged block assessment proceedings by filing writ and the Hon’ble Madras High Court at the fag end of the limitation period, namely on 08.03.2002 stayed block assessment proceedings and such stay was in force upto 14.12.2018, i.e till disposal of Writ Petition filed by the assessee. Because of stay, the limitation period for completing fresh block assessment accordingly, was extended in view of the exclusion of such period as contemplated in Explanation 1(ii) to section153 of the Act. Further, when the Hon’ble High Court passed stay order on 8-3-2002, the balance time available with the AO for completion of assessment was 23 days. The Hon’ble High Court in W.P.No7623 of 2002 has vacated stay in view of the disposal of Writ Petition filed by the assessee on 14.12.2018 and such order was received by the office of the CIT on 13-02-2019 and as a consequence, the Assessing Officer should get clear 60 days from the date of receipt of order for completing fresh assessment in light of proviso (ii) below Explanation 1 to section 153 of the Act. Therefore, even if 60 days is excluded, assessment order ought to have been completed on or before 14.04.2019. But, in this case the Assessing Officer has passed assessment order on 31.12.2019 and therefore, in our considered view the assessment order is clearly barred by limitation as per amended provisions of section 153(2A) of the Act.

14. The learned DR for the Revenue, although vehemently opposed applicability of amended provisions of section 153(2A) of the Act to the present case on the sole ground that said amendment has been given effect from 01.06.2001 onwards, but fact remains that provisions of section 153(2A) prescribed limitation period for passing effect giving orders while starting point though falls before the effective date of the amended provisions prescribing restricted time limit, the completion of pending effect giving orders in view of the transitional provisions by virtue of simultaneous insertion of the proviso should fall in new regime thereby giving harmonious interpretation of the combined reading of the amended subsection and the proviso inserted simultaneously, it is very clear that the proviso takes care of orders received from 01.04.1999 to 31.03.2000 which are pending for passing effect giving orders on the effective date of amendment being 01.06.2001 by granting time limit of two years to pass orders on or before 31.03.2002. Hence, there cannot be any additional protection required as well not intended by the legislature for the orders received after 31.03.2000 for which the time limit intended to be restricted as one year instead of two years. The approach of the Assessing Officer in assuming time limit for two years on the facts of the case could be legally acceptable only in the absence of proviso and however, by insertion of the express proviso simultaneously, the understanding of the Assessing Officer is fully negated. Since, the Appellate Tribunal order under consideration being passed / received on 10.11.2000, the restricted time limit should alone be made applicable and if said restricted time limit is accepted as applicable to the present case, the effect giving order should have been completed on or before 31.03.2002. However, in view of the intervening stay order obtained from Madras High Court on 08.03.2002 and vacated on 14.12.2018 and received by the O/o. PCIT/CIT on 13.02.2019, the time limit for completing the effect giving proceedings should be reckoned as only 60 days, in view of remaining time available as on the date of stay order passed by the High Court was only 23 days which is less than 60 days as per Explanation 1(ii) to section 153 of the Act. If such 60 days is considered from the date of receipt of order of High Court, i.e 13.02.2019, the Assessing Officer ought to have passed the order on 14.04.2019. Since, the impugned order giving effect was passed on 31.12.2019, in our considered view, which is beyond 60 days time available for the Assessing Officer and hence, it can be safely concluded that assessment order passed by the Assessing Officer is barred by limitation.

15. The Assessing Officer, while passing giving effect order rejected the plea of the assessee, application of provisions of section 153(2A) of the Act, on the ground that proviso to sub-section (3) to section 153 of the Act will be applicable and as per said section, there is no time limit prescribed for completing the order. According to the Assessing Officer, he has completed assessment, as per direction of the Hon’ble High Court in writ jurisdiction, but not as per order of ITAT in setting aside assessment order vide its order dated 04.10.2000.The Assessing Officer has discussed the issue in light of decision of Hon’ble Delhi High Court in the case of Nokia Enterprises vs. DCIT(supra) and held that present order is being passed in compliance to the direction of the High Court and as such, the provisions of sub-section (3) of section 153 is squarely applicable to the facts of the case. If such provision is applied, then there is no question of assessment getting time barred.

16. We have given our thoughtful consideration to the reasons given by the Assessing Officer to consider time limit prescribed under sub-section (3) of section 153 of the Act and find that the Assessing Officer has made fundamental mistake in applying sub section (3) of section 153, because the present assessment is completed in pursuant to the order of Appellate Tribunal in setting aside the assessment order . We further noted that Tribunal has set aside the order passed by Assessing Officer for de novo consideration in accordance with material available on record and after affording reasonable opportunity of hearing to the assessee. We further noted that Tribunal has considered fundamental issue raised by the assessee in light of principles of natural justice and has not gone into discuss various additions made by the Assessing Officer in the assessment order. From the above it is clear that assessment order is set aside in total for fresh consideration by the assessing officer. Therefore, when the order is set aside for de novo assessment, then it is as good as afresh assessment is made in accordance with law and the earlier assessment made by the Assessing Officer is either cancelled or non-est in the eyes of law. Therefore, in our considered view above perception of the Assessing Officer in applying provisions of sub-section (3) of section 153 of the Act is completely erroneous, because the Hon’ble High Court in disposing of writ has only permitted the parties to complete pending proceedings arose out of order of the Appellate Tribunal in setting aside the original assessment order. Further, the provisions of section 153(3) of the Act envisages for completion of assessment or reassessment based on a finding or direction of any appellate authority or court. While in the present case, it is based on the order of the Appellate Tribunal for completing fresh assessment de novo, in view of their order in setting aside original assessment order. The courts have interpreted the term ‘finding or direction, as per which finding or direction means while disposing of appeal, any appellate authority makes a direction or finding in connection with any issue or any person, then such finding or direction needs to be followed by the Assessing Officer in true spirit and hence, a provision is provided by way of sub-section (3) without any limitation, because in such cases the role of assessing officer is limited to give effect to the findings or direction of appellate authority or court. But, in a situation, where order is set aside without any restriction as to finding or direction, then such an order is set aside in toto and the Assessing Officer shall complete the assessment de novo, as if such assessment was not made in earlier occasion. In such situation, time limit prescribed u/s.153(2A) is applicable, but not provisions of section 153(3) of the Act.

17. In this case, the Assessing Officer has applied provisions of section 153(3) of the Act, in view of the dismissal of writ petition of the assessee by the Hon’ble Madras High Court. However, the fact remains that impugned order was passed to giving effect to the order of Appellate Tribunal dated 04.10.2000 passed in first round and not at instance of Madras High Court decision in permitting the Assessing Officer to continue proceeding initiated in consequent to the order of Appellate Tribunal. Therefore, reliance placed by the Assessing Officer on the provisions of section 153 (3) of the Act is completely misplaced and misdirected. Because, under the existing provisions of section 153(3), such fresh assessments are not subjected to any time limit, because said sub-section, in particular, did not require order passed therein to be issued within any particular time limit for simple reason that it would get attracted to a finding or direction contained in the appellate order. Since, the decision of the Hon’ble Madras High Court has only permitted to pass effect giving order in pursuant to the order of Tribunal referred hereinabove, and thus, question of application of sub-section (3) to section 153 is totally incorrect. We, further ourselves unable to agree with the contention of the Assessing Officer that when the order of assessment is completed in pursuant to the order of High Court in writ jurisdiction, the provisions of section 153 is come into operation, because the Assessing Officer himself has admitted that impugned assessment order was passed in pursuant to direction of the Tribunal passed u/s.254 of the Income Tax Act, 1961, which is evident from fact that in First page of assessment order, he has mentioned that said order is passed u/s.143(3) r.w.s 254 of the Act. Therefore, application of sub-section (3) of section 153 in the given facts and circumstances of the case is completely misplaced, when there is specific provision by way of sub-section (2A) of section 153 for completing the order passed u/s.250 or 254 or 263 or 264 of the Income Tax Act, 1961. The object behind introduction of sub- section (2A) was to prescribe time limit for completing assessment proceedings upon original assessment being set aside or being cancelled in appeal. Thus, when assessment is set aside and matter is remanded, with a direction that issue has to be determined afresh, section 153(2A) of the Act would get attracted. Further, what is important to note is that along with insertion of sub-section (2A), sub-section (3) underwent simultaneous change, as per which, it was expressly made “subject to the provisions of sub-section (2A)”, this means that section 153(3) would thereafter apply only to such cases, where section 153(2A) would not apply. In other words, in all instances of Assessing Officer having to pass a fresh assessment order upon remand, where section 153(2A) would only applicable, the Assessing Officer would be bound to follow the time limit imposed by sub-section (2A), whereas the Assessing Officer was only giving effect to an appellate order on any finding or direction, then section 153(3) of the Act would apply. In this case, on perusal of order of the Tribunal dated 04.10.2000, it is very clear that entire assessment order has been set aside to the file of the Assessing Officer for de novo assessment because of fundamental objection raised by the assessee in light of principles of natural justice and under those facts, the Tribunal has made categorical observation that because of violation of principles of natural justice, assessment has been set aside for de novo consideration. The Tribunal further observed that while doing set aside assessment proceedings, the Assessing Officer was directed to consider all materials available in respect of various issues and further directed the Assessing Officer to give an opportunity of hearing to the assessee. The meaning thereby is that assessment is being set aside for de novo assessment and thus, there is no question of application of provisions of section 153(3)(ii) of the Act.

18. Coming back to case laws relied upon by the learned A.R for the assessee. In this regard, the learned AR relied upon direct decision of Hon’ble Delhi High Court in the case of CIT Vs. Bhan Textile Pvt.Ltd. (2008) 300 ITR 176(Del), wherein the Hon’ble High Court under identical circumstances held that where the Assessing Officer was directed by Commissioner (Appeals) to pass fresh order u/s.144, meaning thereby that assessment order was set aside or cancelled and there was no independent finding or direction which the Assessing Officer was required to comply with, it was limitation u/s. 153(2A) which was applicable and not limitation u/s.153(3)(ii) of the Act. The Hon’ble High Court, while confirming order of the Tribunal quashed impugned order passed by the Assessing Officer by holding that the provisions of section 153(3) has no application, where order of the Assessing Officer has been set aside by the Appellate Tribunal or Appellate Commissioner. In the said decision, the Revenue has opted to challenge only applicability of section 153(3) of the Act and apparently not objected to decision of the Appellate Tribunal in applying amended provisions incorporating restricted time limit for completing the effect giving proceedings pertaining to the proceedings as on 01.06.2001, consequent to the appellate order received by the O/o. Commissioner or PCIT after 01.04.2000. In this case, facts are identical to facts considered by the Hon’ble Delhi High Court and hence, this case is squarely covered by the decision of Hon’ble Delhi High Court.

19. The assessee has also relied upon the decision of ITAT, Delhi Benches in the case of Awanindra Singh Vs. DCIT (2019) 104 taxmann.com171, where the Tribunal has accepted similar argument for quashing the effect giving order passed beyond prescribed time limit of one year in applying amended provisions taking effect from 01.06.2001. The relevant findings of the Tribunal are as under:-

45. In the above proviso, the legislature has provided that where the order under Section 250 is received by the Chief Commissioner or the Commissioner on or before the 1st day of April, 1999 but before 1st day of April, 2000, in those cases, order of fresh assessment can be made at any time up to 31st March, 2002. Meaning thereby, the old provision of Section 153(2A) would be applicable in respect of cases where the order of set aside is received by the Commissioner before the 1st day of April, 2000. By necessary implication, it has to be held that when the order of set aside under Section 250 by the CIT(A) is received by the Commissioner or the Chief Commissioner after the 1st day of April, 2000, the new provision would be applicable. In the CBDT’s Circular which is the explanatory notes on the provisions relating to direct taxes in Finance Act, 2001, again, the CBDT has clarified that where the appellate or revisionary order mentioned in Section 153(2A) has been received or passed, as the case may be, on or after 1st day of April, 1999 but before the 1st day of April, 2000, the existing time limit will continue. Therefore, in our opinion, the existing time limit i.e., the period of limitation of two years would be applicable only where the 28 ITA-300/Del/2001 & 5 others appellate or revisionary order setting aside an assessment is received or passed before 1st April, 2000. If the contention of the Revenue that the amended provision of Section 153(2A) would be applicable in respect of the cases where the appellate or revisionary order is received or passed after 1st June, 2001, there was no necessity of proviso to Section 153(2A) and the said proviso would become redundant. It cannot be presumed that the legislature would provide a proviso which is redundant. That in the CBDT’s Circular No.14 of 2001 paragraph 68.3, it has been clearly provided “The period of two years provided for making such assessments or reassessments is more than necessary considering that the scope of such assessment or reassessment is generally limited to a few specific issues. With a view to bringing about an early finalization of such proceedings, the Act has amended sub-sections (2) and (2A) of section 153 to reduce the timelimit for making such orders of assessment, reassessment or recomputation to one year.” Thus, the legislature has taken a conscious decision to reduce the period of two years for making reassessment of set aside matters to one year. They have also consciously provided that the old provisions of two years would be applicable where such order of set aside was passed or received on or before 1st April, 2000. Thus, to our mind, there is no doubt that where the order of set aside is passed by the CIT(A) under Section 250 after 1 st day of April, 2000, the new provision of Section 153(2A) providing the time limit of one year would be applicable.

46. We find that Hon’ble Jurisdictional High Court has also considered the applicability of limitation under Section 153(2A) in the case of Bhan Textile P.Ltd. (supra). The facts of the said case are that the assessment in respect of the assessee was completed under Section 144 on 31st March, 1999. The assessee, aggrieved by the assessment 29 ITA-300/Del/2001 & 5 others order, preferred an appeal before the CIT(A) who passed an order dated 12th May, 2000 wherein the CIT(A) passed the following order :-

“It was also the case of learned counsel that the additions were made without any basis and there was no history of case which could justify such an assessment. I have considered this argument also. It is true that there is no history of case in respect of the additions made in the assessment order. At least nothing is mentioned in the order in this respect. It is also felt that the learned Assessing Officer could have specifically granted one more opportunity to the appellant to state his case in respect of the matters covered in the questionnaire. This is so because the appellant could have thought that the proceedings may be dropped after hearing the preliminary objection. Though it is mentioned in the note that the authorised representative did not agree to file any detail. Yet the Assessing Officer could have granted one more opportunity, particularly when the matter had remained pending up to March 31, 1999. It is also seen that the assessment was taken up on March 5, 1999, while the initial notice had been issued on November 27, 1997, and there was no follow up of the case in the interregnum. In view of this, I am of the view that the learned Assessing Officer should have granted one more opportunity to the appellant on proposed additions. Therefore, it is held that it will be the interest of the justice to restore the matter to the file of the Assessing Officer, so that one more opportunity may be given to the appellant to file evidence and state his case in respect of the matters covered in the show-cause notice dated March 5, 1999. Thereafter, the learned Assessing Officer may pass order under section 144 taking the explanation into account. Therefore, this matter is restored to the file of the Assessing Officer. Thus, ground No.2 of the appeal is treated as allowed.”

47. When the matter was taken up by the Assessing Officer, he issued a notice under Section 143(2) of the Act on 24th February, 2003. The assessee claimed the notice to be barred by limitation in view of provisions of Section 153(2A). Since the assessee did not cooperate with the Assessing Officer, he completed the assessment once again as 30 ITA-300/Del/2001 & 5 others originally framed. On appeal, learned CIT(A) upheld the assessment order. The assessee preferred an appeal to the ITAT which held the assessment to be barred by limitation under Section 153(2A). Hon’ble Jurisdictional High Court upheld the order of the ITAT.

48. We find that the precise dispute before the Hon’ble Jurisdictional High Court was whether in respect of such an order of set aside, Section 153(2A) was applicable or Section 153(3)(iii) was applicable and Hon’ble Jurisdictional High Court held that Section 153(2A) was applicable. However, the facts are identical. That in the said case also, the order of set aside was received on 12th May, 2000 i.e., after the 1st day of April, 2000 but before 1st June, 2001 and notice under Section 143(2) issued on 24th February, 2003 which was held to be barred by limitation. Thus, this decision also supports the case of the assessee. In any case, after considering the proviso to Section 153(2A) as well as the memorandum explaining the provisions of Finance Act, 2001, we are clearly of the opinion that the amended provisions would be applicable where the appellate order is passed or received after 1st April, 2000. As per amended provision, the set aside assessment is to be completed within one year from the end of the financial year in which appellate order setting aside the assessment was received. In this case, order of learned CIT(A) is dated 27th November, 2000 though the exact date of receipt of such order by the CIT is not given before us but it can be reasonably presumed that it was received within the financial year ended on 31st March, 2001, especially when no contrary claim is made by the Revenue. In such circumstances, the set aside assessment was to be completed before 31st March, 2002 while the set aside assessment is completed on 31st March, 2003 which is clearly barred by limitation. In view of the above, we quash the assessment order dated 31st March, 2003. Once the impugned assessment order is 31 ITA-300/Del/2001 & 5 others quashed, the other grounds raised in the assessee’s appeal do not require any adjudication.”

20. In this view of the matter and considering facts & circumstances of the case, we are of the considered view that provisions of section 153(3) of the Act has no application and provisions of section 153(2A) should be applied as discussed in preceding paragraphs. As per amended provisions of section 153(2A) of the Act, time limit for completion of assessment in pursuant to order of the appeal Commissioner u/s 250 or Appellate Tribunal u/s. 254 is 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 O/o.PCIT on 13.02.2019), the period covered under operation of stay shall be excluded while computing period of limitation, as per Explanation 1(ii) to section 153 of the Act and if such period is excluded, then the Assessing Officer will get 60 days clear time for completion of assessment, in view of explanation referred to in section 153 of the Act, because balance time available as on date of interim order passed by High Court was 23 days, which is 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 the Assessing Officer has sixty days clear time to pass order giving effect order and if such 60 days is considered for limitation period, then the Assessing Officer ought to have passed assessment order on 14.04.2019. In this case, the impugned order was passed on 31.12.2019. Therefore, we are of the considered view that the assessment IT(SS)A No.1/Chny/2020 order passed u/s. 158BC r.w.s 143(3) / 254 dated 31.12.2019 is barred by limitation and liable to be quashed. Accordingly, the assessment order is quashed.

21. The assessee has raised various grounds to challenge additions made by the Assessing Officer in the assessment. Since the assessment order passed by the Assessing Officer is annulled, because the order is barred by limitation, other grounds taken by the assessee challenging various additions become academic in nature and does not require specific adjudication. Hence, all other grounds taken by the assessee are dismissed as infructuous.

22. In the result, appeal filed by the assessee is allowed.

Order pronounced in the open court on 9th April, 2021

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