Limitation Period To Pass Fresh Assessment Order Expired: Delhi High Court Accepts Returned Income For 12 Years

The Delhi High Court has accepted the returned income for 12 years as the limitation period to pass a fresh assessment order has expired.

The bench of Justice Rajiv Shakdher and Justice Girish Kathpalia has observed that the time limit fixed as per Section 153(2)(A) of the Income Tax Act or the time limit fixed by the amended provision, i.e., Section 153(3), as of today, the AO is bereft of jurisdiction and hence would have no legal locus to pass an assessment order.

The appellant/assessee challenged the proceedings initiated by the Revenue for passing a fresh assessment order pursuant to the directions of the ITAT as barred by limitation under Section 153(2A) and the amended Section 153(3). For AY 1998–99 to AY 2009–10, the assessee filed its return, which was subjected to scrutiny and assessment. For AY 1998-99 to AY 2002-03, Revenue preferred an appeal before the HC, and the Court remanded the matter back to ITAT for fresh consideration.

In turn, the ITAT, by an order dated November 21, 2014, remitted the matter to the Revenue for fresh consideration for AY 1998-99 to AY 2002-03 and also for AY 2003-04 to AY 2009-10. Further for AY 2003-04, the ITAT, vide order dated May 29, 2015, while dealing with the appeal effect order passed under Section 143(3) r.w.s. Section 263, directed the Revenue to pass a fresh assessment order with regard to two issues.

The department issued the first notice pursuant to the ITAT order dated May 29, 2015, on May 18, 2016, and for the remand order dated November 21, 2014, on June 17, 2016, concerning AY 1998–99. The assessee objected to the notice issued on grounds of limitation. In an earlier hearing before this Court, the co-ordinate bench permitted the Revenue to proceed and pass an assessment order with the condition that they would not give effect to it; however, no assessment order(s) had been passed by the AO, despite an opportunity being given by the court via an order dated August 8, 2018.

The issue raised was whether the limitation for passing a fresh assessment order in consonance with the order of the Tribunal had expired.

The court held that the assessment proceedings concerning AY 1998-99 to AY 2009-10, pursuant to the orders of the Tribunal dated November 21, 2014 and May 29, 2015, have become time-barred. The AO is thus directed to accept the return income lodged by the petitioner for the aforementioned AYs. The return as available on record will be processed, and consequential orders will be passed.

Counsel For Petitioner: Ajay Vohra

Counsel For Respondent: Abhishek Maratha

Case Title: Indian Renewable Energy Development Agency Ltd Versus PCIT

Citation: 2023 LiveLaw (Del) 1327

Case No.: W.P.(C) 8313/2018

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