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Income Tax Appellate Tribunal, “F” BENCH, DELHI
Before: MS. MADHUMITA ROY & SHRI KHETTRA MOHAN ROY
This set of cross appeals preferred by the respective parties are arising out of the order passed by the CIT(A)-30, New Delhi dated 16.11.2023 and 08.11.2023 arising out of the Assessment Orders both dated 23.04.2021 passed by the DCIT, Central Circle-29, New Delhi under Section 153 r.w.s 254/143(3) for Assessment Years 2015-16 & 2016-17.
At the very threshold of the matter, the Ld. Senior Counsel appearing for the assessee argued against the assessment order passed by the Ld. AO under Section 153A r.w.s 254/143(3) of the Act as barred by limitation since, same has been passed beyond the time limit prescribed under the Act. It was submitted by him that the Ld. AO passed the order on 23.04.2021 whereas the same ought to have been passed by 31.12.2019. In fact, by and under the order dated 28.02.2019 the ITAT remanded the issue to the file of the Ld. AO and whereupon the order of assessment under Section 153A r.w.s 254/143(3) was passed on 23.04.2021 the said order passed by the Ld. Tribunal was served upon the Revenue on 28.03.2019 which is evident from the RTI reply dated 27.11.2024 issued by the Ld. CPIO of this Tribunal. Pursuant to such direction given by the Coordinate Bench of this Tribunal the Assessment Order was reframed on 23.04.2021 though the time limit available to the Ld. AO under Section 153 of the Act for passing fresh assessment order pursuant to the order dated 28.02.2019 passed by the Coordinate Bench expires on 31.12.2019. Therefore, admittedly the same has been passed beyond more than 15 months from the limit prescribed under the provision of & 3920/Del/2023 & & 347/Del/2024 (AY: 2015-16 & 2016-17)
Section153(3) of the Act. Such limitation available to the Ld. AO for passing orders is required to be recalled from the date, the department has become privy to. Admittedly, the order is, thus, barred by limitation and therefore, liable to be quashed as was the crux of the submissions made by the Ld. AR before us. In this respect he has further referred to the order passed by the Coordinate Bench dated 12.03.2025 passed in assessee’s own case for Assesment Year 2013-14, 2014-15 whereby and whereunder on the identical facts and circumstances of the matter the order passed by the Ld. AO was found to be barred by limitation and therefore, quashed, a copy whereof has duly been furnished before us. On the contrary, the Ld. DR relied upon the orders passed by the Ld. AO.
Under the present facts and circumstances of the matter, it appears that admittedly when the last date of passing assessment orders pursuant to the order passed by the Ld. Tribunal expires on 31.12.2019 the impugned order passed by the Ld. AO dated 23.04.2021 is beyond more than 15 months from the statutory limit. The order impugned is, thus, found to be barred by limitation and therefore, non-est in the eyes of law and thus, liable to be quashed.
4. Under this facts and circumstances of the matter, we have further considered the judgment passed by the Coordinate Bench. While dealing with this particular aspect of the matter, the Coordinate Bench has been pleased to observe as follows:
“3.1. In this backdrop, the Ld. Counsel asserted that all the assessment orders all dated 23.04.2021 giving rise to captioned 20 appeals are passed beyond statutory time limits prescribed under s. 153(3) of the Act and are hopelessly time barred. To support such plea, the Ld. Counsel pointed out that the appellate order passed under s. 254(1) of the Act by the ITAT in the first round of proceedings were served by the Tribunal to the office of the CIT- DR on 28.03.2019. This fact of service of the appellate order dated 28-02-2019 passed under s. 254(1) of the Act in the first round has come to the surface in terms of the information supplied to the Assessee under the RTI Act, 2005 dated & 3920/Del/2023 & & 347/Del/2024 (AY: 2015-16 & 2016-17)
F.No.39/RTI/2024 dated 27.11.2024 by CPIO, ITAT. Owing to the service of the order passed by the ITAT on the CIT-DR in Feb. 2019, the limitation period would thus begin to run from the date of service of the appellate order. The time limit available to the AO under s. 153 (3) for passing fresh assessment order in pursuance of appellate order of the ITAT comes to an end on 31-12-2019. The impugned assessment orders under s. 143(3) r.w.s 254 have however been passed on 23.04.2021 i.e. beyond more than 15 months of the statutory time limit. The ld. Counsel thus essentially insists that statutory limitation period available to the AO for passing fresh assessment orders under s. 143(3) r.w.s 254 is required to be reckoned from the date on the Income Tax department had become privy to and acquiesced with the appellate order passed in the first round. The limitation period for passing the fresh assessment order thus ends in Dec. 2019 whereas the Ld. AO has passed such order in April 2021 which are barred by limitation.
3.2 Delineating further, the Ld. Counsel observed that in terms of s. 153(3), the fresh assessment orders in compliance of the directions of the appellate order of the Tribunal in first round of proceedings ought to have been passed before the expiry of 09 months from the end of the Financial Year in which the appellate order passed under s. 254 was received by the Department and no later.
3.3 To lend support to such plea that all the assessment orders giving rise to captioned appeals stood time barred in terms of s. 153(3) of the Act, the Ld. Counsel referred to and relied upon the judgments delivered by the Hon’ble Delhi High Court in the case of Surendra Kumar Jain, Virendra Kumar Jain vs Pr.CIT (Central-III), New Delhi & Anr. [2018] 408 ITR 328 (Del.); Huawei Telecommunication India Company Pvt. Ltd. vs ACIT, Circle-2 in W.P.(C) 7792/2024 and CM Appl.32296/2024 judgment dated 28.11.2024 and host of other cases rendered on similar footing. The ld. Counsel thus submitted that in the light of the imperatives of judicial propositions governing the field, the assessment orders framed beyond statutory time limits set out under s. 153(3) of the Act do not carry any legal propriety and consequently, requires to be quashed at threshold without any demur.
3.4 In the wake of these submissions, the Ld. Counsel submitted that all other legal and factual grounds as well as the additional grounds raised towards absence of DIN etc. are rendered academic.
The Ld. CIT-DR for the Revenue, on the other hand, vociferously contended that the plea raised on behalf of the assessee are based on misconception of facts and law and the assessment orders have been passed within period of limitation indeed. The Ld. CIT- DR referred to a reply dated 10.09.2024 forwarded by the AO in this regard. Adverting to the aforesaid reply, the Ld.CIT DR submitted that the order of ITAT dated 28.02.2019 was received by the office of CIT (Judicial) as well as CIT, Central-3 on 08.04.2019 and therefore, the time limit for passing the assessment order is set in motion from that date and not any time prior thereto. The Ld. CIT-DR contended that the service of appellate order passed by the Tribunal to the Office of the CIT-DR per se do not trigger the statutory time limit for the purposes of computation of time limit available to redo assessment under s. 143(3) r.w.s 254(1) of the Act. It is the service of order on the prescribed authorities viz. Pr. CCIT/ CCIT/Pr. CIT/ or CIT as the case may be, which is relevant for start of limitation period. The service of ITAT order on authority namely Commissioner (CIT, Central-3) is thus relevant for the purposes of ascertainment of statutory time limit for passing fresh assessment order.
4.1 To prop up such contention, the Ld. CIT-DR adverted to s.153(3) of the Act regulating the statutory time limit for passing fresh assessment order in pursuance of an appellate order passed under s. 254 of the Act and contended that the time limit for & 3920/Del/2023 & & 347/Del/2024 (AY: 2015-16 & 2016-17) passing an assessment order available to the AO is 12 months from the end of the FY in which the order of the Tribunal was received by the Commissioner of Income Tax or the other designated authority on the designated authority as contemplated in sub-section 3 of s. 153 of the Act to enable them to implement the appellate order of ITAT in letter and spirit. The appellate order was delivered to CIT-Central-3 only on 8-4-2019 and consequently the statutory limitation for passing assessment orders to give effect to ITAT order would run from this date. The limitation period was thus ordinarily available upto 31.03.2021 i.e twelve months from the end of the financial year in which the ITAT order was received by the CIT. This date of limitation was however further extended to 30.04.2021 which was further extended to 30.04.2021 by virtue of Taxation and Other Laws (Relaxation and Amendment of certain provisions) Act, 2020 enacted by the Government owing to fiery corona pandemic. A reference of CBDT notification No.20/2021 dated 31.03.2021 was made by which proceedings getting barred by limitation on 31.03.2021 was extended upto 30.04.2021 dated 31/03/2021. A reference was also made to notification S.O. 1432(E) dated 31st March 2021 issued by the Ministry of Finance, Department of Revenue, CBDT in this regard. Accordingly, statutory time limit available to the AO in terms of s. 153(3) /TOLA, 2020 r.w.s CBDT Notification for passing fresh assessment order in terms of order passed under s. 254(1) of the Act was 30.04.2021. The respective assessment orders passed all dated 23.04.2021 under s. 254/153A/143(3) were well within the statutory time limit available under s. 153(3) of the Act.
4.2 The Ld. CIT-DR thus contended that plea canvassed on behalf of the assessee towards bar of limitation do not accord with the express provision of the Act governing the limitation period.
We have carefully considered the rival submissions and perused the material placed on record.
5.1. The substantive plea of the assessee hinges around the breach of statutory time limit available for passing fresh assessment orders under s. 153A r.w.s 153(3)/254 of the Act.
5.2. S.153(3) of the Act which seeks to regulate the statutory time limit for passing fresh assessment orders in terms of order passed under s. 254 of the Act is extracted here under:-
153(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:
[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.”
The Identical controversy towards bar of limitation came up for adjudication before the Hon’ble Delhi High Court in the case of Surendra Kumar Jain, Virendra Kumar Jain & 3920/Del/2023 & & 347/Del/2024 (AY: 2015-16 & 2016-17) vs Pr.CIT (Central-III), New Delhi & Anr.(2018) 406 ITR 328 (Del). The Hon’ble Delhi High took cognizance of Full Bench Judgment in the case of CIT vs Odeon Builders (P.) Ltd. 393 ITR 27 (Delhi) and that of division bench in CIT vs. Sudhir Choudhrie (2005) 278 ITR 490 (Delhi) and observed in unequivocal terms that once the order is listed for pronouncement in the Income Tax Appellate Tribunal, the department representative or the Commissioner of Income Tax (Judicial) should be taken to be aware of the order. From that point, it is a purely internal administrative arrangement as to how the Departmental representative or Commissioner of Income Tax (Judicial) obtains and further communicates the order to the officer who has to take decision on filing the appeal or any pertinent decision. It may be relevant to extract to relevant para of the judgment in Surendra Kumar Jain ( supra) which is decisive in the controversy in hand:
“ it is quite evident from the decision in Odean Builders (sura) that limitation begins ( for any purpose under the Act) from the point of time when the departmental representative receives the copy of a decision or an order of the ITAT. The evidence on record in this case clearly establishes that the concerned DR ( a Commissioner ranking officer) nominated by the revenue received a copy of the ITAT order dated 30.03.2016. The starting point of limitation therefore was 31.03.2016”
The judgment in Surendra Kumar Jain thus makes itself evident that the limitation period under s. 153(3) would begin to run from the date of receipt of order by the Departmental representative for the purposes making assessment in terms of directions of Appellate Tribunal as per its order passed under s. 254(1) of the Act. The receipt of the appellate order dated 28.02.2019 was demonstrated to be received by the office of the Ld.CIT DR on 28.03.2019. The limitation period for framing fresh assessment order thus would end on 31-12- 2019. In view of the express judicial fiat, the impugned assessment orders framed on 23-04-2021 i.e. after the expiry of limitation is thus rendered void and non est.
Similar view has been expressed in Huawei Telecommunications India Company Private Limited vs. ACIT judgment dated 28.11.2024 in W.P. (C) 7792/2024 and CM appl. 32296/2024; CIT(IT) V. Qualcomm Incorporated (2024) 159 Taxmann.com 717(Del.)
Governed by the judicial precedents quoted above, we find substantial merit in the plea of the assessee that all the assessment orders giving rise to the captioned appeals have been passed much beyond the statutory time limit available under s. 153(3) of the Act and thus a nullity in law at the threshold.
The preliminary issue of bar of limitation is thus adjudicated in favour of the assessee and against the revenue. This being so, the other legal and factual objections raised by respective sides do not call for any separate adjudication.
In the result, all captioned appeals/Cross-Objections etc. of the assessee are allowed whereas all the captioned appeals/Cross-objections etc. of the Revenue arising from time barred assessment orders are dismissed.”
5. Thus, having regard to this entire aspect of the matter and particularly considering the order passed by the Coordinate Bench we do not hesitate to observe that the order passed by the Ld. AO dated & 3920/Del/2023 & & 347/Del/2024 (AY: 2015-16 & 2016-17)
23.04.2021 is found to be barred by limitation and respectfully relying upon the judgment passed by the Coordinate Bench, we therefore, quash the same having been found non-est in the eyes of law. Assessee’s appeals are, therefore, allowed. Revenues appeals are, thus, dismissed.
6. The appeals of the assessee are allowed and appeals of the Revenue are dismissed.