Assessment Order Passed Beyond Time Limit Prescribed U/s 153 Merits To Be Quashed: Delhi High Court
Pankaj Bajpai
13 March 2024 12:45 PM IST
Finding that no valid demand stood raised against the Petitioner / assessee prior to Sep 30, 2021, the Delhi High Court directed the Respondents / Revenue to re-compute the refund payable to the petitioner along with statutory interest which shall run up to the date of remittance in accordance with law.The High Court therefore quashes the assessment order passed beyond time limit...
Finding that no valid demand stood raised against the Petitioner / assessee prior to Sep 30, 2021, the Delhi High Court directed the Respondents / Revenue to re-compute the refund payable to the petitioner along with statutory interest which shall run up to the date of remittance in accordance with law.
The High Court therefore quashes the assessment order passed beyond time limit prescribed u/s.153 of the Income tax Act.
The Division Bench comprising of Justice Yashwant Varma and Justice Purushaindra Kumar Kaurav observed that “period prescribed under Section 153(3) of the Act would thus have to necessarily be computed from the date when the order of the ITAT was received by the respondents. Even if the benefits of TOLA were extended to the respondents, undisputedly, the order of assessment was liable to be framed lastly by 30 September 2021. The respondents have thus abjectly failed to pass an order in terms of the mandatory provisions comprised in Section 153 of the Act”. (Para 14)
The Bench referred to the assessee's submission that since ITAT's order dated 20.12.2018 was received by Revenue on 31.01.2019, the nine-month window which stands created in terms of Sec.153(3) accorded Revenue the right to frame an order of assessment by 31.10.2019.
The Bench noted that in the meanwhile, the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 came to be promulgated consequent to the outbreak of the COVID-19 pandemic as per which the time limit for compliances which was originally prescribed to be 31.03.2021 was extended from time to time and the extension was to lastly operate up to 30.09.2021.
The Bench stated that in light of Sec.153(3), the period of limitation is liable to be computed from the date when order is received by concerned statutory authority and since ITAT order was received on 31.01.2019, the respondents have failed to address any submission which may compel to doubt the prima facie opinion that came to be recorded by us on that date.
Stating that the period prescribed u/s.153(3) would thus have to necessarily be computed from the date when ITAT's order was received by Revenue, even if the benefits of TOLA were extended to Revenue, the Bench clarified that the order of assessment was liable to be framed lastly by 30.09.2021.
Hence, the High Court sets aside assessment order having failed the mandatory provisions comprised in Sec.153.
Counsel for Petitioner/ Assessee: Percy Pardiwalla along with Sidhinath Singh Sengar
Counsel for Respondent/ Revenue: Puneet Rai along with Ashvini Kumar and Rishabh Nangia.
Case Title: Readers Digest Book and Home Entertainment (India) Pvt Ltd vs DCIT
Case Number: WP(C) No 17376/2022
Click here to read/ download the Judgment
