C.I.T.CENTRAL,JAIPUR vs. M/S PRIYANK STEELS

HIGH COURT OF JUDICATURE FOR RAJASTHAN AT JODHPUR D.B. Income Tax Appeal No. 72 / 2012 Commissioner of Income Tax (Central), Jaipur. ----Appellant Versus M/s Priyank Steels (Unit-II), Sohan Pratap Bhawan, Jagat Mehta Ji ki Bari, Fatehpura, Udaipur (Raj.). ----Respondent _____________________________________________________ For Appellant(s) : Mr.KK Bissa. For Respondent(s) : Mr.Anjay Kothari. _____________________________________________________ HON'BLE MR. JUSTICE K. S. JHAVERI HON'BLE DR. JUSTICE PUSHPENDRA SINGH BHATI Judgment / Order 23/01/2018 1. By way of this appeal, the appellant has challenged the judgment and order of the Tribunal whereby the Tribunal has dismissed the appeal of the department allowed the cross objection preferred by the assessee. 2. While admitting the appeal, this Court framed following substantial question of law :- "Whether on the facts and circumstances of the case the ITAT has erred in law in holding that the order passed under Section 158BD read with Section 158BC/143(3) of the Act on 30.03.2009 was beyond time limit as prescribed under Section 158BE of the Act even through the very isue of validity of the notice issued under Section 158BD read with Section 158 BC was ceased with this Court" 3. Learned counsel for the department contended that the Tribunal committed serious error in interpreting the interim order granted by the High Court on 18.8.2004. On 25.8.2007, it was

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observed that the proceedings were stayed for two weeks. The Tribunal in para 3.2 observed as under :- "3.2 The notice was issued on 13-7-2004 u/s 158BD and the assessee filed the writ petition before the Hon'ble Jurisdictional High Court in Aug. 2004 and the Hon'ble Hon'ble Jurisdictional High Court passed the interim order on 18-08-2004. The decision of Hon'ble High Court is available at pages 39 to 42 of the paper book. In the order dated 25- 08-2007, it is mentioned that the proceedings were stayed for two weeks when the notice was issued on 17-08-2004. The said order was not extended by Hon'ble High Court. Thus the period of extension was available only for two weeks because explanation I to Section 158BE mentions that period of limitation is to be considered for excluding the period during which the assessment proceedings are stayed by the order of any Court. Thus the proceedings were stayed only for two weeks. Hence the order passed u/s 158BD on 31-03-2009 is beyond time limit prescribed u/s 158BE. Thus the C.O. of the assessee is allowed. Considering our findings on the C.O., we feel that there is no need to adjudicate upon the issues in respect of which the relief has been allowed by the ld. CIT(A) and to adjudicate upon other grounds ofappeal of the revenue." 4. Learned counsel for the assessee relied upon the decision of Hon'ble Supreme Court reported in (2007) 3 SCC 470 (Ashok Kumar and others. vs. State of Haryana and another) in para 18 held as under :- "18. There is no warrant for the proposition, as was stated by the High Court that unless an order of stay passed once even for the limited period is vacated by an express order or otherwise; the same would continue to operate." 5. We have heard the learned counsel for the parties. 6. In our considered opinion, non-extension of the interim order will entitle the department to proceed in the matter. In most of the circumstances, it is the department's endeavor not to proceed but in the instant case it is for the first time where the department is prompt. In that view of the matter, the issue is answered in favour

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of the assessee and against the department. 7. Accordingly, the appeal stands dismissed.

(DR. PUSHPENDRA SINGH BHATI)J. (K. S. JHAVERI)J. S.Phophaliya/-53