PANKAJ SHARMA,NEW DELHI vs. DCIT, GHAZIABAD

ORDER PER H.S. SIDHU, JM These appeals filed by the Assessee are directed against the respective Orders of the Ld. CIT(A), Ghaziabad relevant to assessment years 2010-11 & 2011-12. Since the issues involved in these appeals are common and identical, hence, they were heard together and are being consolidated by this common order for the sake of convenience, by dealing with the facts and circumstances of the case of (AY 2010-11), which will apply mutatis mutandis in other appeal. In both the appeals, the assessee has raised as many as 08 grounds of appeal respectively, but he only argued no. 1 raised in both the appeals, which is legal in nature. The following is a common legal ground no. 1 raised in both the appeals:-

“1. That the impugned order as passed by the Ld. AO u/s. 153A/143(3) of the I.T. Act on 28.3.2013 ought to have been cancelled / annulled by the Ld. CIT(A) inter alia because: (a) The impugned assessment order as passed is barred by limitation as the impugned order passed u/s. 143(3) has been antedated as if it was passed on 28.3.2013 as against the actual fact that it was not passed on 28.3.2013. (b) Principles of natural justice had also been violated because no opportunity of being heard was given to the appellant before passing the impugned assessment order.

4. On the contrary, Ld. CIT(DR) relied upon the orders of the authorities below and reiterated the contention made in her written submissions:- a. In ground no. 1 (a) of the Appeal of A.Y. 2010-11 & 2011-12 the appellant has claimed that the assessment order is barred by limitation and required to be set aside on this ground. The appellant has mentioned that the order of assessment, though dated 28.03.2013, but has been made only on 31.03.2013. b. This issue has also been agitated before CIT(A) in appeal no. 296/2013-14/GZB for A.Y. 2010-11 and in appeal no. 297/2013-14/GZB for A.Y. 2011-12 and Ld. CIT(A) had adjudicated this issue in para 5.3 of the order and rejected the plea of the appellant. c. As per the provision of Section 153(1) of the Act the order u/s 143 or u/s 144 shall not be made after the expiry of two years from the end of the A.Y. in which the income was first assessable, meaning thereby that no order of assessment shall be made after 31.03.2016. This fact is also mentioned by the appellant in the written submission and there is no disagreement on this account. However, even after quoting the provision of Section 153(1) where the word the assessment ‘shall be made’ has been given and there is no mention of issue of the order in this section, the appellant has claimed that it ‘should be issued’. The appellant has also relied upon the decisions of Hon’ble Courts where the issue of notice u/s 148 was in question and not the passing of order u/s 143(3). Apparently, in these cases the notice which was signed on 31.03.2010 was sent for booking on subsequent date and the Hon’ble Court has held that the date on which the said notices were actually handed over to the post office for the purpose of booking for affecting service can be said as the date of issue of notice. However, the fact of the case of the appellant is that assessment under section 143(3) of the Act was made on 28.03.2013 and the AO has dispatched these orders to the post office on 31.03.2013. The system in the Income tax department is that the persons from the business post office centre comes and collect the envelopes of speed post from the different offices and then hand it over to the head office of the post office for sorting and further send it for delivery . Apparently, India post centre gives the date when the items are booked in the head office for delivery and it is not the date on which the items are collected from the offices by the persons of the post office. Hence, apparently the speed post no. which is signed by the AO on 28.03.2013 shows that the dispatch was made on 31.03.2013. In this light, also even on facts, there is no delay. d. The time limit for completion of assessment and reassessment has been given u/s 153(1) and this time

limit cannot be compared with the limitation which is given u/s 149 of the Act, which is for the issue of notice u/s 148 of the Act. For better appreciation, both these section 153(1) and Section 148 are reproduced as under: Section 153(1) “Time limit for completion of assessments and reassessments. 153.(1) No order of assessment shall be made under section 143 or section 144 at any time after the expiry of— (a) two years from the end of the assessment year in which the income was first assessable; or (b) one year from the end of the financial year in which a return or a revised return relating to the assessment year commencing on the 1st day of April, 1988, or any earlier assessment year, is filed under sub-section (4) or sub-section (5) of section 139, whichever is later. Provided that in case the assessment year in which the income was first assessable is the assessment year commencing on or after the 1st day of April, 2004 but before the 1st day of April, 2010, the provisions of clause (a) shall have effect as if for the words "two years", the words "twenty-one months" had been substituted. Provided further that in case the assessment year in which the income was first assessable is the assessment year commencing &[on or after the 1st day of April, 2005 but before the 1st day of April, 2009 and during the course of the proceeding for the assessment of total income, a reference under sub-section (1) of section 92CA— (i) was made before the 1st day of June, 2007 but an order under sub-section (3) of that section has not been made before such date; or (ii) is made on or after the 1st day of June, 2007, the provisions of clause (a) shall, notwithstanding anything contained in the first proviso, have effect as if for the words "two years", the words "thirty-three months" had been substituted. Provided also that in case the assessment year in which the income was first assessable is the assessment year commencing on the 1st day of April, 2009 or any subsequent assessment year and during the course of the proceeding for the assessment of total income, a reference under sub- section (1) of section 92CA is made, the provisions of clause (a) shall, notwithstanding anything contained in the first proviso, have effect as if for the words "two years", the words "three years" had been substituted. ”

Section 148 “Issue of notice where income has escaped assessment. 148. (1) Before making the assessment, reassessment or recomputation under section the Assessing Officer shall serve on the assessee a notice requiring him to furnish within such period, as may be specified in the notice, a return of his income or the income of any other person in respect of which he is assessable under this Act during the previous year corresponding to the relevant assessment year, in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed; and the provisions of this Act shall, so far as may be, apply accordingly as if such return were a return required to be furnished under section 139. ” Hence, from the above, it is apparent that Section 149 speaks that no notice u/s 148 shall be issued whereas Section 153 does not give the word issued. It says that no order of assessment shall be made that means it clearly gives the time limitation for ‘completion’ of assessment and reassessment and not for the ‘issue’ of assessment order. The different words used by the legislature in different sections clearly proves that by 31.03.2016 only the assessment/reassessment has to be made and not ‘issued or send’. Hence, the comparison by the appellant of Section 149 and Section 153 is wrongly made. e. From the above, it is apparent that the intention of legislature is to complete the assessment and if the assessment order reaches the appellant within the reasonable time, it cannot be said that it is barred by limitation. Apparently, the assessment order was passed on 28.03.2013, collected from Assessing Officer on 31.03.2013 by the speed post centre people. In this light, there is no merit and substance in ground no. 1 of the appeal and the claim made by the appellant deserves to be rejected.

5. We have heard both the parties and perused the records especially the impugned order passed by the Ld. CIT(A), Paper Books and the case laws referred by both the parties. We find that it is the main contention of the assessee that assessment order is served on assessee on 18.4.2013 and is barred by limitation and therefore, assessment order deserves to be declared null and void. Though the assessment order is dated 28.3.2013, but it is served on assessee on 18.4.2013 i.e. after the expiry of the period on which assessment order was liable to be time barred as per section 153 of the Income Tax Act, 1961 and it is barred by limitation. However, the Ld. CIT(DR) has the contention that the intention of the legislature is to complete the assessment and if the assessment order reaches the assessee within the reasonable time, it cannot be said that is barred by limitation. Apparently, the assessment order was passed on 28.3.2013, collected from Assessing Officer on 31.3.2013 by the speed post centre people. In this light, there is no merit and substance in ground no. 1 of the appeal and the claim by the assessee deserves to be rejected. We further note that Ld. CIT(A) has given the following finding:-

5.3 Ground of appeal no. 3:

5.3.1 In this ground the assessee has contended that the assessment is barred by limitation. The assessee appellant has submitted that: That assessment order is served on assessee on 18.4.2013 is barred by limitation and therefore, assessment order deserves to be declared null and void. Though the assessment order is dated 28.03.2013, but it is served on assessee on 18.04.2013 i.e. after the expiry of the period on which assessment order was liable to be time barred as per section 153 of the Income-tax act, 1961 and it is barred by limitation. 5.3.2 In this regard, the assessing officer in his remand report has submitted that:- As per record, the assessment was completed on 28.03.2013 and was dispatched on 31.03.2013 on the address given below:- Sh. Pankaj Sharma, S/o Sh. Dharam Pal Sharma, C-198, 1st Floor, New Panchwati Colony, Ghaziabad. Thus, the assessment was completed on 28.03.2013 which is within limitation and the order was dispatched on 31.03.2013. As the assessment was made within limitation as per provisions of section 153(1) of I.T. Act, the assessee’s contention may kindly be rejected. 5.3.3 In rejoinder report the appellant has reiterated the facts as mentioned his earlier submission. 5.3.4 I have considered the rival contentions and the facts of the case. I find that the requirement of the law is that assessment order should be made under section 143(3) within given period. The law does not require service of such order within the given period. In the present case, the said period ended on 31.03.2013. The order is dated 28.03.2013 and as per the appellant it was dispatched through speed post on 01.04.2013 and assessee received it on 02.04.2013. The appellant on these facts submits that the order is time barred. In support of the same, the appellant has submitted a copy of speed post track report which was sent to the Assessing Officer for his comments. The assertion that speed post was booked on 02.04.2013 is not commented upon by Assessing Officer in his report and it can be presumed that he does not rebut this claim of assessee appellant. The assessing officer has however submitted that order was passed on 31.03.2013 with approval of Addl. CIT, Central Range, Meerut dated 28.03.2013 and was dispatched on 31.03.2013 and given for speed post on 31.3.2013. The scanned copy of the documents produced in report by the Assessing Officer is reproduced below:-….. …..As regards the issue whether assessment was time barred not, as stated above the only requirement of law is to make assessment by given date. The assessee has placed reliance on case of Shanti Lai Godhawat. The case law cited by the assessee i.e. the case of Shantial Godawat decided by Hon’ble ITAT Jodhpur has been considered by the hon’ble ITAT Mumbai in case of Jai Jinendra Cold Storage Pvt Ltd. vs ACIT in and 2585 and after discussing facts of that case, which are similar to that of present case, it has held that Merely because according to the assessee that was dispatched on 1.1.2010 does not mean that the assessment order was passed after the statutory time limit provided under the Act. It has further held that the question as to when an order can be stated to have been made was the subject of consideration in Government Wood Workshop v. State of Kerala [1988] 69 STC 62; [1987] 1 KLT 804 in which the court stated, after relying on various decisions of the Supreme Court culminating in B.J. Shelat v. State of Gujarat. AIR 1978 SC 1109, as follows (at page 69) : "The order of any authority cannot be said to be passed unless it is in some way pronounced or published or the party affected has the means of knowing it. It is not enough if the order is made, signed, and kept in the file, because such order may be liable to change at the hands of the authority who may modify it, or even destroy it, before it is made known, based on subsequent information, thinking o r change of opinion. To make the order complete and effective, it should be issued, so as to be beyond the control of the authority concerned, for any possible change or modification therein. This should be done within the prescribed period, though the actual service of the order may be beyond that period." (emphasis supplied) Having discussed the facts and above judgement, the hon’ble ITAT has held that Respectfully following the same and in the absence of any material to show that the order passed by the AO was not made on 30.12.2009, we hold that the order passed by the AO was within the limitation and not barred by limitation. The plea taken by the learned counsel for the assessee is without any merit, and, hence, the same is rejected. In present case, the evidence proves that the once the assessment order has been given for speed post to a third person (which the appellant claims to be a notice server) be it a postman or notice server of the department, it is out of hands of the assessing officer. The fact that the order has been approved by Addl CIT, has been shown to have been dispatched in the Dispatch and handed over to third person for speed post prior to time barring date prove that the order was made, op or before 31.03.2013. In facts and circumstances of the case, I hold that the impugned assessment order has been made within stipulated time. Therefore, this ground of Appeal is rejected.” 5.1 After perusing the aforesaid finding of the Ld. CIT(A), we find that AO in his remand report has submitted that as per record, the assessment was completed on 28.3.2013 which is within limitation and the order was dispatched on 31.3.2013. Hence, the assessment was within limitation as per provisions of section 153(1) of I.T. Act and same view was adopted by the Ld. CIT(A) and later reiterated by the Ld. CIT(DR) before us. But, after perusing the evidence for postal booking and dispatch register which are placed on record at page no. 11-16 of Paper Book in (AY 2011-12), we find considerable cogency in the contention of the Ld. counsel for the assessee that the assessment order as passed by limitation as the same has been antedated as it was passed on 28.3.2013 as against the actual fact it was not passed on 28.03.2013. Though the assessment order is dated 28.3.2013, but it served on the assessee after the expiry of the period on which assessment order was liable to be time barred as per section 153 of the Income Tax Act, 1961 and it is barred by limitation. We further note that assessee has submitted a Affidavit dated 26.11.2018 which is placed in Paper Book which states that assessment order was not dispatched on 28.03.2013 or 31.03.2013 and it was dispatched in the late evening (Time 19:20) of 01.04.2013 i.e. after the expiry of limitation period. For the sake of convenience, we are reproducing the India Post Track Result Receipt as under:- INDIA POST MINISTRY OF COMMERCE & INFORMATION TECHNOLOGY Track Result forEU283993276IN Tract. More Booked at Booked On Delivered at Delivered on Model Town S.O (Ghaziabad) 01/04/2013 Not Available Not Available Details Detailed Track Events For EU283993276IN Date Time Status at Status 01/04/2013 19:20

00. Model Town S.O (Ghaziabad) Item Booked 01/04/2013 19:52

30. GHAZIABAD SH Bag Received 01/04/2013 19:52

46. Model Town S.O (Ghaziabad) Item bagged for GHAZIABAD SH 01/04/2013 19:53:03 Model Town S.O (Ghaziabad) Bag Despatched to GHAZIABAD CSO 01/04/2013 20:51:43 GHAZIABAD SH Bag Opened 01/04/2013 20:51:53 GHAZIABAD SH Item Received 02/04/2013 01:27:09 GHAZIABAD SH Item bagged for Kavi Nagar S.O 02/04/2013 05:02:16 GHAZIABAD SH Bag Despatched to Kavi Nagar S.O 02/04/2013 09:42:17 Kavi Nagar S.O Bag Received 02/1)4/2013 10:02:45 Kavi Nagar S.O Bag Opened 02/04/2013 10:02:45 Kavi Nagar S.O Item Received 5.2 After perusing the aforesaid Tract Report, it is crystal clear that Income Tax Department has booked the DAK containing assessee’s assessment order dated 28.03.2013 in dispute only on 01/04/2013 at 19:20:00 from Model Town S.O. (Ghaziabad) which was received on 02/04/2013 10:02:45 Kavi Nagar, S.O., and did establish that when the assessee has received the assessment order, hence, the assessment is barred by limitation and deserves to be set aside on this account. In this regard, we draw support from the decision dated 27.09.2018 of the ITAT, Cuttack Bench passed in IT(S)A No. 44 to 46/CTK/2016 (AYrs. 2004-05 to 2006- 07) & Ors. in the case of Sri Trinadh Chowdary vs. ACIT, Corporate Circle 1(2), Bhubaneswar & Ors., wherein it has held as under, on similar and identical issue:-

“11. We have heard rival submissions and perused the materials available on record. Ld. AR's contention that the order passed by the AO u/s.153A(b)/254 of the Act is barred by limitation and it was served on the assessee/ld. AR on 06.04.2015. The ld. AR supported his arguments with the paper book and also referred to the earlier directions of the Tribunal in IT(SS)A No.13 to 17/CTK/2017, order dated 10.10.2013, wherein the Tribunal has restored the matter to the file of AO and observed at para 6 to 8, which read as under :-

"6. we have gone through Ground Nos.1 to 3 taken by the assessee, wherein, in Ground No.1, assessee has taken the contention that Id OT(A) has not accepted the fact that the assessment order has been served on the assessee after 46 days from the period of limitation. Therefore, the assessment order is nullity in eyes of law. The second ground is that AO has violated the principles of natural justice by calling return of income u/s.!53A of the I.T.Act, 1961 and third ground is that AO has not given reasonable opportunity to the assessee to produce any evidence in support of return and has violated the principles of natural justice insofar as the issuance of notice u/s.l43(2) is concerned. We also find that Id CIT(A) has dismissed these grounds. We also find from the orders of the AO as well as Id CIT(A) that AO has not given reasonable opportunity of hearing before passing the orders to the assessee. Therefore, in our opinion, AO and Id CIT(A) has passed the orders without following principles of natural justice. In respect of notice under section 143(2), we find that notice was issued on the same date at 11 AM and it was not possible for the assessee to file submission and could not produce details as called for and in view of this, assessee was not able to cooperate with the assessment proceedings.

7. The Hon'ble Orissa High Court in the case of Radhika Charan Banerjee v Sambalpur Municipality, AIR 1979 Orissa 69, has held that right of appeal wherever conferred includes a right of being afforded opportunity of being heard irrespective of language conferring such right that is a part and parcel of principles of natural justice. Where an authority is required to act in a quasi-judicial capacity, it is imperative to give appellant an adequate opportunity of being heard before deciding the appeal. The aim of the rule of natural justice is to prevent miscarriage of justice and denial of principles of audi alteram partem results into such miscarriage of justice. Therefore, the Learned CIT(A) should have afforded reasonable opportunity of being heard to the assessee. Therefore, in order to impart substantial justice to the assessee, we reverse the orders of ld. CIT(A) and restore the appeals to the file of the AO to decide Ground Nos.1 to 3 afresh after giving reasonable opportunity to the assessee.

Accordingly, as per the directions of the Tribunal the AO has passed the reassessment order on 30.03.2015 against which the assessee has filed an appeal with the first appellate authority and was dismissed by the CIT(A). The contention of ld. AR is that the reassessment order passed on 30.03.2015 is barred by limitation as the same was served on 06.04.2015. Further ld. AR demonstrated the service of order with paper book along with copy of the notice of demand u/s.156 of the Act dated 30.03.2015 with endorsement of receipt of the order on 06.04.2015 for the said assessment year, which the Revenue has not disputed. Ld. AR vehemently emphasized that the reassessment order was passed beyond limitation period and is barred by limitation and supported his submissions with the decisions of coordinate bench of the Tribunal.

We found that this issue of service of the order was dealt by this coordinate bench of the Tribunal in the case of Geetarani Panda & Ors. Vs. ACIT, IT(SS)A Nos.01&02/CTK/2017, dated 05.07.2018, wherein the Tribunal observed as under :-

"19. We have heard the rival submissions, perused the orders of lower authorities and materials available on record. In the instant case, the assessee has raised two legal issues. Firstly, the order of assessment being issued after the statutorily permitted time is barred by limitation. Secondly, no requisite approval as envisaged under the provisions of Section 153D of the Act was obtained and, therefore, the impugned order of assessment is barred in law.

8. On the other hand, ld D.R. placed reliance on the orders of the CIT(A).

153B (1) Notwithstanding anything contain in section 153, the AO shall make an order of assessment or reassessment - (a) In respect of each assessment year falling within six assessment years [and for the relevant assessment year or years] referred to in clause (b) of sub-section (1) of section 153A, within a period of twenty-one months from the end of the financial year in which the last of the authorisations for search under section 132 or for requisition under section 132A was executed.

12. In our considered view, simply determining the total income of an assessee and determining its tax liability on a piece of paper and signing the same may constitute an assessment but only on its communication to the assessee it becomes "order of assessment". Thus, in our considered opinion, to become a legal valid order of assessment, its communication must be within a period of limitation prescribed by the law though the communication may end after the prescribed period of limitation. Our above view derives support from the decision of Hon'ble Karnakata High Court in the case of B J N Hotels Ltd (supra), wherein, it has been held as under:

That the revenue is neither able to point out from the records that the assessment orders were dispatched on 27.4.2007 nor produced the dispatch register to establish that the orders were complete and effective i.e. it was issued, so as to be beyond the control of the authority concerned within the period of limitation i.e. 29.4.2007. Admittedly, the assessment orders were served on the assessee on 30.4.2007. hence, the assessment orders passed were barred by limitation.

In the above decision, Hon'ble High Court follows its one earlier decision and has stated as under:

An identical issue was before this Court in (D.D. 14.10.2014 in the case of Maharaja Shopping Complex vs DCIT. This court following the judgment of Kerala High Court in the case of Government Wood works vs State of Kerala (1988) 69 STC 62 has held that in the absence of dispatch date made available to the Court from the records, to prove that the order is issued within the prescribed period, order passed by AO is barred by limitation. The said judgment squarely applies to the facts of the present case.

"Despite a reminder given on 19th March, 2015 to submit the time barring draft assessment orders for approval u/s. 153D on or beforej23i03.2015, the draft orders in M/s. Neelachal Carbo Metalicks Pvt. Ltd. Group of cases has been received in this office only on ill 26th March, 2015 in the afternoon. The draft orders having being submitted only 5 days before final orders are getting barred by limitation,, I have no other option but to accord the approval to the same as the approval is statutorily required u/s. 153D, even though there is no time left for undersigned to ensure that all the points raised in the appraisal report, the appellate proceedings, audit inspection etc. are duly taken into account, and the enquiries and investigations that are required to be made are actually made before finalization of the assessment orders.

It would have been much better and in the interest of Revenue, if you had submitted the draft orders atleast one month earlier so as to allow the undersigned sometime to go through and analyse the same vis-a-vis the appraisal report and seized records. It also goes without saying that you never cared even to discuss these cases with the undersigned for guidance and line of investigation to be taken.

However, despite all this, I have gone through the material available on records and some of the observations, in respect of the following cases are given in subsequent paras."

by the assessee. In the result, the appeal of the assessee is partly allowed.

6. Since in other (AY 2011-12), similar facts are permeating therefore, my finding given above will apply mutatis mutandis in this appeal also, because the facts and circumstances of the case are exactly the same, hence, this appeal is also partly allowed.

7. In the result, both the appeals filed by the Assessee stand partly allowed. Order pronounced on 08-02-2019.