ASST CIT 9(2)(2), MUMBAI vs. CLASSIC STRIPS P.LTD, MUMBAI

(i). “Whether on the facts and circumstances of the case and in law the ld. CIT(A) erred in holding that the assessment has been completed beyond the time limit prescribed u/s.153(1)(a) of the Act, without appreciating the fact that the case of the assessee was referred to FT & TR Division, CBDT, New Delhi for seeking information and accordingly the assessment was completed within time as per the provisions of section 153(4) Explanation 1(viii)?”

We have heard rival submissions and perused the materials available on record. We find that assessment for the A.Y. 2011-12 was completed by the ld. AO on 31/03/2015 u/s.143(3) of the Act. The due date for completion of assessment ended on 31/03/2014. Accordingly, the assessee pleaded by way of a specific ground before the ld. CIT(A) that the assessment framed by the ld. AO was barred by limitation. We find that the ld. CIT(A) had issued notice in ITNS 51 to the ld. AO on 12/10/2015 for furnishing particulars and report on the points raised therein, including the desire of the ld. AO to be present at the time of hearing the appeal. We find that assessee has also raised several grounds on merits before the ld. CIT(A) in respect of various disallowances / additions made in the assessment. The ld. AO did not put forth objections either in writing or by physical presence at or before the time of hearing before the ld. CIT(A). In this background, we find that there was no occasion for the ld. CIT(A) to even doubt about the claim made by the assessee that the assessment was barred by limitation. Accordingly, the ld. CIT(A) vide order dated 02/01/2017 held that assessment completed M/s. Classic Stripes Pvt. Ltd., on 31/03/2015 is beyond the time limit prescribed in Section 153(1)(a) of the Act and accordingly, the entire assessment was quashed. No adjudication was made by the ld. CIT(A) on merits, in view of the fact that the entire assessment has been quashed void ab initio. Before us, the revenue has raised only one ground stating that the case of the assessee was referred to FT & TR division of CBDT for seeking information and accordingly, the ld. AO was entitled to one year time limit for completion of assessment in terms of Section 153(4), Explanation – 1, Clause-viii of the Act. We find that the ld. DR vehemently argued that the ld. CIT(A) grossly erred in quashing the assessment without referring to the assessment records which would have disclosed the fact of having made reference to FT & TR division of CBDT which consequently would extend the time limit for completion of assessment by one year. 3.1. Per contra, the ld. AR vehemently opposed to the basic ground raised by the revenue before this Tribunal by stating that the ground raised does not emanate from the order of the lower authorities as there was absolutely no mention about making any reference to FT & TR division of CBDT with regard to the assessee either in the assessment order or in the order of the ld. CIT(A). Accordingly, the ld. AR pleaded that the appeal of the revenue should be treated as not maintainable.