MILIND DASHRATH PAWAR vs. NATIONAL FACELESS ASSESSMENT CENTRE AND ORS

PDF · subscribers
WP/4539/2023HC BombayHCBM01012623202306 July 2026Bench: HON'BLE SHRI JUSTICE B.P. COLABAWALLA,HON'BLE SHRI JUSTICE FIRDOSH PHIROZE POONIWALLA7 pages
AI SummaryAllowed

What did the High Court hold?

The High Court held that the impugned Assessment Order was clearly barred by limitation and thus bad in law. The Court found that the crucial fact was the date on which the Assessing Officer received the valuation report. Based on the Revenue's submission that the report dated February 16, 2022, was received on February 25, 2022, the Court calculated that the sixty-day period available for passing the Assessment Order would expire on April 26, 2022. The Court emphasized that the date of the order (April 13, 2022) was of no consequence when it was actually signed on May 26, 2022. An order comes into operation upon its signing, not its preparation. Therefore, the order dated May 26, 2022, was beyond the extended limitation period. The Court quashed and set aside the impugned Assessment Order and all consequential orders/proceedings. The Writ Petition was allowed in terms of Prayer Clause (a).

What were the facts?

The Petitioner, Milind Dashrath Pawar, challenged an Assessment Order passed under Section 147 read with Sections 144 and 144B of the Income-tax Act, 1961, for Assessment Year 2014-15. The challenge was solely on the ground of limitation. A notice under Section 148 was issued on July 17, 2019. The Petitioner contended that the Assessment Order, digitally signed on May 26, 2022, was beyond the prescribed time limit. The Revenue argued that the order was dated April 13, 2022, and bore a DIN, implying it was within the limitation period. A crucial fact was the date of receipt of the Valuation Officer's report, which was referenced under Section 142A.

What were the issues?

1. Whether the Assessment Order passed under Section 147 of the Income-tax Act, 1961, for Assessment Year 2014-15, is barred by limitation, considering the date of service of notice under Section 148 and the subsequent events including a reference to the Valuation Officer and the date of the digitally signed Assessment Order. Assessee's contentions: The Petitioner argued that the last date to pass the Assessment Order was April 17, 2022, after excluding the period from the reference to the Valuation Officer (September 24, 2021) to the receipt of the report (February 16, 2022) and the subsequent 60-day extension. The Petitioner contended that the order, digitally signed on May 26, 2022, was beyond this extended period and therefore bad in law. Reliance was placed on Section 153(2) and Explanation-1 to Section 153, as well as Notification No. 10 of 2021 issued under the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 (TOLA). Revenue's contentions: The Revenue submitted that the Assessment Order was dated April 13, 2022, and bore a DIN, which was within the limitation period, despite being digitally signed on May 26, 2022. The Revenue also provided the date of receipt of the Valuation Officer's report as February 25, 2022.

Which sections of the Income-tax Act were involved?

Section 147,Section 144,Section 144B,Section 148,Section 142(1),Section 142A,Section 153(2),Section 153,Section 156,Section 271(1)(c),Section 274

AI-generated summary — verify with the full judgment below

26 wp4539-23.doc

IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURISDICTION WRIT PETITION NO.4539 OF 2023 Milind Dashrath Pawar .. Petitioner Versus National Faceless Assessment Centre, Delhi (NFAC) & Ors. .. Respondents Mr.Vasudev Girde i/b Mr.Kumar Kale, Advocate for the Petitioner. Mr.Akhileshwar Sharma, Advocate for the Respondents(through V.C.).

CORAM: B. P. COLABAWALLA & FIRDOSH P. POONIWALLA, JJ. DATE: JULY 06, 2026 P. C. 1. Rule. With consent of parties, Rule made returnable forthwith and heard finally. 2. By this Writ Petition, the Petitioner challenges the validity of the Assessment Order passed under Section 147, read with Sections 144 and 144B, of the Income-tax Act, 1961 ('The Act'), dated 13th April 2022 (digitally signed on 26th May 2022), passed by Respondent No.1 for Assessment Year Page 1 of 7 JULY 06, 2026 Mohite TRUSHA TUSHAR MOHITE Digitally signed by TRUSHA TUSHAR MOHITE Date: 2026.07.09 11:32:20 +0530

26 wp4539-23.doc

2014-15. The only ground of challenge is that the Assessment Order is barred by limitation. 3. Briefly stated, the facts of the case are that a notice under Section 148 of the Act, dated 17th July 2019, was issued by Respondent No.2 reopening the Petitioner's assessment for Assessment Year 2014-15. Several notices under Section 142(1) of the Act were issued in the Petitioner's case from time to time, followed by Show Cause Notices dated 11th September 2021 and 31st March 2022. Eventually, Respondent No.1 passed the impugned order dated 13th April 2022 but digitally signed by him on 26th May 2022 and served upon the Petitioner via email dated 26th May 2022. According to the Petitioner, the said order having been passed on 26th May 2022, is barred by limitation. 4. In this factual backdrop, the learned Counsel appearing for the Petitioner submits that as per the provisions of Section 153(2) of the Act, an Assessment Order under Section 147 is required to be passed within twelve months from the end of the Financial Year in which notice under Section 148 is served on the Assessee. The learned Counsel submits that in the Petitioner's case, the said Notice having been issued on 17 July 2019, the last date to pass the Assessment Order was 31st March 2021. The learned Counsel Page 2 of 7 JULY 06, 2026 Mohite

26 wp4539-23.doc

further submits that in view of Notification No. 10 of 2021 dated 27 th February 2021 issued under Section 3(1) of the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 ("TOLA”), this time limit was extended up to 30th September 2021. Before this date of expiry, on 24th September 2021, Respondent No.1 made a reference under Section 142A of the Act to the Assistant Valuation Officer, Thane ('DVO') to assess the fair market value of the Petitioner's land as on 1st April 2001. The DVO issued the valuation report bearing a date of 16th February 2022. Therefore, as per clause (v) of Explanation-1 to Section 153, the period commencing from the date on which the Assessing Officer made a reference to the Valuation Officer under Section 142A(1) and ending with the date on which the report of the Valuation Officer is received by the Assessing Officer, would have to be excluded in computing the period of limitation. Accordingly, the period from 24th September 2021 to 16th February 2022 shall stand excluded. However, having excluded this period, only 6 days would be left for Respondent No.1 to pass the Assessment Order, and this period being less than 60 days, it would get extended by 60 days from 16th February 2022 as per the first proviso to Explanation-1 to Section 153. The learned Counsel for the Petitioner, however, clarified that the exact date when the valuation report was received by Respondent No.1 is not ascertainable either from the impugned order or the Affidavits in Reply dated Page 3 of 7 JULY 06, 2026 Mohite

26 wp4539-23.doc

31st August 2023 and 25th September 2023 filed by Respondent No.2. The learned Counsel therefore, submits that the last date to pass an Order under Section 147 was 17th April 2022, and though the impugned order is dated 13th April 2022, it having been digitally signed by Respondent No.1 on 26th May 2022, is clearly beyond the limitation period, and therefore bad in law. 5. Summarizing the above submissions, the learned Counsel for the Petitioner submitted a list of dates and events as under: Sr. No. Event Date of Event Remarks, if any 1. Date of service of notice u/s. 148 17.07.2019 - 2. Time Limit to pass Assessment Order u/s. 147 as per provisions of section 153(2) 31.03.2021 Twelve months from the end of the Financial Yearin which notice u/s. 148 is served. 3. Extension of the limitation at Sr. No.2 as per TOLA 30.09.2021 As per TOLA read with Notification No. 10 of 2021 dated 27.02.2021 4. Date of reference to DVO u/s. 142A of the Act 24.09.2021 - 5. Date of finalization of report by DVO 16.02.2022 - 6. Time to be excluded for computing limitation period 24.09.2021 to Clause (v) of Explanation – 1 to section 153 Page 4 of 7 JULY 06, 2026 Mohite

26 wp4539-23.doc

16.02.2022 (145 days) 7. Extended period of limitation 22.02.2022 145 days from 30.09.2021 8. No. of days left for AO to complete assessment as on 16.02.2022 6 days (16.02.2022 to 22.02.2022) 9. Further extended limitation period as per 1st proviso to Explanation – 1 to section 153 17.04.2022 (60 days from 16.02.2022) 10. Date of passing of Assessment Order u/s. 147 26.05.2022 Barred by Limitation

6.

In this case, the most crucial fact to determine the period of limitation is the actual date on which Respondent No.1 received the valuation report of the DVO. On a query raised by us, Mr. Akhileshwar Sharma, the learned Counsel appearing for the Revenue, submitted that, as per the written instructions received by him from the Income Tax Officer 2(2) Kalyan, who is Respondent No. 2, the DVO's report dated 16th February 2022 was received on 25th February 2022 in the worklist. Mr. Sharma, however, submits that the impugned Assessment Order is dated 13th April 2022 and bears the DIN also, which is within the limitation period, though it is digitally signed on 26 May 2022. Page 5 of 7 JULY 06, 2026 Mohite

26 wp4539-23.doc

7.

We have heard the learned Counsel for the parties and also perused the papers and proceedings in the above Writ Petition. The short issue for our consideration is as to when the limitation period in this case expired. It is the Petitioner's case that the same expired on 17th April 2022, as explained in the Table set out in paragraph (5) above, which is based on the date of the valuation report. But having regard to the fact admitted by Mr. Sharma, appearing on behalf for the Respondents, that Respondent No.1 received the valuation report on 25th February 2022, the sixty days limitation period available for passing the Assessment Order would expire on 26th April 2022, which is much before the date on which the Assessment Order was digitally signed on 26th May 2022. In our view, the fact that the impugned order is dated 13th April 2022 is of no consequence, when it was actually signed on 26th May 2022. The Assessment Order would come into operation only upon its signing and not the date on which it was prepared. We are, therefore, of the considered view that the impugned order is clearly barred by limitation, and thus, bad in law, and is required to be quashed and set aside. 8. We, therefore, quash and set aside the impugned order dated 13th April 2022 (digitally signed on 26th May 2022) passed by Respondent No.1 and all consequential orders/proceedings emanating therefrom, and allow this Writ Petition in terms of Prayer Clause (a), which reads as thus: Page 6 of 7 JULY 06, 2026 Mohite

26 wp4539-23.doc

“(a) that this Hon’ble Court may be pleased to issue a Writ of Certiorari or a Writ in the nature of Certiorari or any other appropriate Writ, Order or direction, calling for the records of the Petitioner’s case and after going into the legality and propriety thereof, to quash and set aside the impugned Assessment Order passed on 26.05.2022 under section 147 read with section 144 read with section 144B of the Act (Exhibit “M”), the notice of demand issued on 26.05.2022 under section 156 of the Act (Exhibit “N”), the notice issued on 26.05.2022 under section 274 read with section 271(1)(c) of the Act (Exhibit “O”), penalty order passed on 23.02.2023 u/s. 271(1)(c) of the Act (Exhibit “P”) and the notice of demand issued on 23.02.2023 under section 156 of the Act (Exhibit “Q”).” 9. Rule is made absolute in the aforesaid terms and the Writ Petition also stands disposed of in terms thereof. However, there shall be no order as to costs. 10. This order will be digitally signed by the Private Secretary/ Personal Assistant of this Court. All concerned will act on production by fax or email of a digitally signed copy of this order. [FIRDOSH P. POONIWALLA, J.] [B. P. COLABAWALLA, J.] Page 7 of 7 JULY 06, 2026 Mohite

More judgments on Section 147

All 49,210 judgments and leading authorities on Section 147 →

Recent GST High Court judgments

Search GST case law →