The Delhi High Court has directed the Assessing Officer (AO) to accept the returned income for 12 years even after the limitation period to pass a fresh assessment order has expired. It was observed that the time limit fixed as per Section 153(2)(A) of the Income Tax Act was expired.
The principal reason why the petitioner, Indian Renewable Energy Development Agency Ltd has approached the court is that since limitation under Section 153(2)(A)/153(3) of the Income Tax Act, 1961 [“the Act”] had expired under the orders passed by the Income Tax Appellate Tribunal [ITAT], the Assessing Officer (AO) had been emasculated of the jurisdiction to pass a fresh assessment order.
The petitioner had filed its return for Assessment Year (AY) 1998-99 to AY 2009-10 under Section 139 of the Act. The petitioner was subjected to scrutiny concerning the above-mentioned AYs, and accordingly, separate assessment orders were framed under Section 143(3) of the Act.
The record discloses that insofar as AY 1998-99 to AY 2002-03 were concerned, the matters were carried in appeal by the revenue on certain aspects to the court. The court set aside the impugned orders and remanded the matter to the Tribunal for fresh consideration. Upon remand by this court, the Tribunal via order dated 21.11.2014 in turn remitted the matter to the AO, not only concerning AY 1998-99 to AY 2002-03, but also for AY 2003-04 to AY 2009-10.
The Tribunal via yet another order dated 29.05.2015, remanded the matter to the AO for AY 2003-04 about two issues. The AO was directed to pass a fresh assessment order having regard to the remand order. It is important to note that in this order, the Tribunal was dealing with the appeal effect order passed under Section 143(3)/263 of the Act. Notices were issued, to which responses were furnished by the petitioner. The first notice was issued by the AO under the ITAT’s order dated 29.05.2015, on 18.05.2016. Insofar as the remand order dated 21.11.2014 is concerned, the AO issued a notice on 17.06.2016 concerning AY 1998-99.
Since the limitation had expired, the petitioner while responding to the notices in and about 2016, also took the stand that the AO could not now proceed to pass a fresh assessment order. Since the AO did not drop the proceedings and accepted the income as declared by the petitioner in its return, the petitioner was constrained to move the court by way of the writ petition.
A division bench comprising Justice Rajiv Shakdher and Justice Girish Kathpalia observed that “whichever regime we take into account, i.e., the time limit fixed as per Section 153(2)(A) of the Act or the time limit fixed by the amended provision i.e., Section 153(3) of the Act, as of today the AO is bereft of jurisdiction and hence, would have no legal locus to pass assessment order(s). Therefore, the prayers made in the writ petition are allowed. “
The Court directed the AO to accept the return income lodged by the petitioner for the aforementioned AYs.
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