C.I.T NEW DELHI vs. RAM KISHAN DASS

C.A. No.-003211-003211 - 2019Supreme Court2019 INSC 40026 March 2019Bench: HON'BLE THE CHIEF JUSTICE HON'BLE MR. JUSTICE HEMANT GUPTAAuthor: HON'BLE THE CHIEF JUSTICE19 pages
For Petitioner: ANIL KATIYAR
AI SummaryRemanded

What were the facts?

The Supreme Court of India heard a batch of appeals concerning the interpretation of Section 142(2C) of the Income Tax Act, 1961, as it stood prior to April 1, 2008. The core issue revolved around the Assessing Officer's (AO) power to extend the time for submitting a special audit report. The Delhi High Court had previously upheld the Income Tax Appellate Tribunal's view that the AO lacked suo motu jurisdiction to extend this period before the insertion of the expression "suo motu" in Section 142(2C) by the Finance Act, 2008. This led to assessments made under Section 153A being considered time-barred. The appeals before the Supreme Court were filed by the Revenue challenging this High Court decision.

What did the Supreme Court hold?

The Supreme Court held that the provisions of Section 142(2C) of the Income Tax Act, 1961, as they stood prior to April 1, 2008, did not preclude the Assessing Officer (AO) from exercising jurisdiction and authority to extend the time for the submission of a special audit report without an application from the assessee. The Court declared that the amendment made by the Finance Act, 2008, which inserted the expression "suo motu," was intended to remove an ambiguity and was clarificatory in nature. The reasoning was based on interpreting the statutory context, legislative history, and the purpose of the amendment, aligning with the views of several High Courts. The Court found no substance in the assessee's argument that this interpretation would enable the AO to extend the limitation period for assessments under Section 153B, as the exclusion of time for audit purposes would still apply based on the date the report was required to be furnished, whether originally fixed or extended. Consequently, the judgment of the Delhi High Court was overruled. The appeals were restored to the respective appellate authorities for decision on merits.

What were the issues?

1. Whether, under Section 142(2C) of the Income Tax Act, 1961, as it stood prior to April 1, 2008, the Assessing Officer (AO) had the jurisdiction to extend the time for submission of a special audit report without an application from the assessee? (Question of law) Assessee's contentions: The assessee argued that the AO could only extend the time for submitting the audit report upon an application made by the assessee for good and sufficient reason, as indicated by the phrase "on an application made in this behalf by the assessee and for any good and sufficient reason." They contended that the AO had no inherent power to extend time suo motu. They relied on the legislative intent behind the insertion of "suo motu" by the Finance Act, 2008, and Circular No. 1/2009, suggesting the amendment was substantive, not clarificatory. Revenue's contentions: The Revenue contended that the AO's power to extend time was not limited to situations where the assessee applied. They argued that the AO, having directed the audit, had the authority to specify the period and extend it within the overall limit of 180 days, even without an assessee's application. The Revenue submitted that the amendment introducing "suo motu" was merely clarificatory, intended to remove ambiguity, and that the expression "and for any good and sufficient reason" should be interpreted as "or for any good and sufficient reason."

Which sections of the Income-tax Act were involved?

Section 142(2A),Section 142(2C),Section 153B

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances
REPORTABLE IN THE SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION Civil Appeal No 3211 of 2019 (Arising out of SLP (C) No 2810 of 2012) The Commissioner of Income Tax, New Delhi …Appellant(s) VERSUS Ram Kishan Dass …Respondent(s) WITH Civil Appeal No(s). 3214, 3212, 3213, 3228, 3230, 3215, 3229, 3216, 3219, 3220, 3217, 3221, 3218, 3222, 3223, 3225, 3226, 3224, 3227 of 2019 @SLP (C) No. 6082, 2808, 2811, 27681, 36495, 6680, 36496, 7573, 8761, 9463, 7660, 9720, 8512, 10191, 10190, 12026, 12027, 11869, 16130 of 2012, Civil Appeal No 2951 of 2012, Civil Appeal Nos.4334, 4599, 5305 of 2017, Civil Appeal Nos.3231, 3232, 3233 of 2019 @ SLP (C) Nos 10248, 10247, 17500 of 2017 and Civil Appeal No 7076 of 2017

J U D G M E N T Dr Dhananjaya Y Chandrachud, J. 1 Leave granted in the Special Leave Petitions. 2 This batch of appeals involves the interpretation of a cluster of provisions of 1 the Income Tax Act 19611, particularly Section 142(2C). A Division Bench of the Delhi High Court by its judgment dated 27 May 2011 dismissed a batch of appeals f

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