ACCIL STEELS AND TUBES PRIVATE LIMITED,DELHI V. DCIT CENTRAL CIRCLE-29, DELHI

ITA 618/DEL/2024

AI Insights

This case involves a series of appeals by ACCIL Steel and Tubes Pvt. Ltd. against the assessment orders issued by the Deputy Commissioner of Income Tax, CC-29, New Delhi, for the assessment years 2014-15, 2015-16, and 2016-17. The primary legal contention was the validity of the assessment orders, which the assessee argued were barred by limitation. The Tribunal's earlier decision in ITA No. 6445/Del/2018 had restored the matter to the Assessing Officer with directions to verify the financial transactions in question. However, the subsequent assessments were challenged on the grounds that they were not completed within the legally prescribed time frame. The Department argued that the limitation period should start from the date the order was received by the Commissioner of Income Tax (Judicial), not the Departmental Representative. The Tribunal, referencing several precedents, including decisions from the Delhi High Court, found in favor of the assessee, leading to the quashing of the assessment orders.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 312722 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-04-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2014-2015
• Other Referred Cases: Tera Hotels & Resorts P Ltd. vs. DCIT, M/s ACCIL Corporation Pvt. Ltd. vs. DCIT, CC-29, New Delhi, CIT vs. Odeon Builders (P) Ltd., CIT vs. Sudhir Choudhrie, Surendra Kumar Jain, Virendra Kumar Jain vs Pr.CIT (Central- III), New Delhi & Anr., Huawei Telecommunications India Company Private Limited vs. ACIT, CIT(IT) V. Qualcomm Incorporated
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: JAVED AKHTAR
• Assessee Lawyers: VED JAIN; UMA
• Keywords: Period of limitation; Principle of natural justice; Validity of assessment; Right to appeal; Time period of passing order; Procedural lapse
• Section: 153A; 6

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘A’ NEW DELHI BEFORE SHRI VIKAS AWASTHY, JUDICIAL MEMBER AND SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER ITA No. 618/DEL/2024 (AY 2014-15) ITA No. 619/DEL/2024 (AY 2015-16) ITA No.620/DEL/2024 (AY 2016-17) ACCIL STEEL AND TUBES PVT. LTD. Vs. DCIT, CC-29, 405, NIRMAL TOWER, 26, NEW DELHI BARAKHAMBA ROAD, CONNAUGHT PLACE, NEW DELHI – 110 001 (PAN:- AALCA0385J) (APPELLANT) (RESPONDENT) AND ITA No. 621/DEL/2024 (AY 2015-16) ACCIL STEEL PROCESSORS PVT. LTD Vs. DCIT, CC-29, SP-67, MAURYA ENCLAVE, NEW DELHI PITAMPURA, DELHI-88 (PAN:- AAACU5133D) AND ITA No. 980/DEL/2024 (AY 2016-17) ITA No. 986/DEL/2024 (AY 2015-16) JCIT OSD, CC-29, Vs. ACCIL STEEL AND TUBES NEW DELHI PVT. LTD, E-2, ARA CENTRE, 405, NIRMAL TOWER, 26, JHANDEWALAN, DELHI BARAKHAMBA ROAD, CONNAUGHT PLACE, NEW DELHI – 110 001 (PAN:- AALCA0385J) (APPELLANT) (RESPONDENT) Assessee by: Shri Ved Jain, Advocate& Ms. Uma Upadhyay, CA & Shri Aditya Garg, CA Revenue by: Shri Javed Akhtar, CIT(DR) Date of hearing: 15.04.2025 Date of pronouncement: 29.04.2025 2 ORDER PER VIKAS AWASTHY, JUDICIAL MEMBER : Thesebunch of 05 appeals have been filed by the assessee for assessment years 2014-15, 2015-16 & 2016-17 and the Department has filed cross appeals for assessment years 2015-16 & 2016-17 in ITA No. 986/Del/2024 and ITA No. 980/Del/2024, respectively. ITA No. 621/Del/2024 for AY 2015-16 has been filed by different assessee though from the same group. Since, identical issue is involved in all these appeals, these appeals are taken up together for adjudication and are decided by this common order. 2. For the sake of convenience, the Appeal in ITA No. 621/Del/2024 (AY 2015-16) is taken up as lead case, hence, facts are narrated from the said appeal. ITA NO. 621/DEL/2024 (AY 2015-16) 3. This appeal by the assessee is directed against the order of the Commissioner of Income Tax (Appeals)-30, New Delhi dated 13.12.2023. The assessee is in second round of litigation before the Tribunal. Earlier the appeal of the assessee in ITA No. 6445/Del/2018 was allowed for statistical purposes by the Tribunal vide order dated 28.02.2019 and was restored to the Assessing Officer with specific directions to verify the trail of the money received by the assessee by way of share capital/ unsecured loans. The AO in compliance of the aforesaid order of the Tribunal framed the assessment vide 3 order dated 23.04.2021 u/s. 153A read with section 254/143(3) of the Income Tax Act, 1961 (hereinafter referred as “Act”). 4. Shri Ved Jain, Advocate appeared on behalf of the Assessee submits that the assessee in appeal has inter alia, assailed validity of assessment order dated 23.04.2021 (supra) on the ground that the same is barred by limitation. The Ld. Authorised Representative for the assessee submits that under the provisions of section 153(3) of the Act, the AO was required to pass the assessment order within the period of 09 months from the end of the financial year in which the order u/s. 254 is received by Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner as the case may be. In the instant case, the order was served on the Department on 28.03.2019. The ld. Counsel for the Assessee in order to substantiate his contention, placed on record information obtained by the assessee from the Tribunal under Right to Information Act, 2005. As per information received by the assessee under the Right to Information Act, the order of Tribunal was served upon the Department on 28.03.2019. Thus, the limitation for passing the assessment order consequent to directions of the Tribunal was upto 31.12.2019, whereas, the assessment order has been passed by the Assessing Officer on 23.04.2021 i.e. much beyond the limitation period. The ld. Counsel for the assessee submits that in identical set of facts, the Coordinate Bench in assessee’s group concern in ITA No.457/Del/2024 for AY 2012-13 titled Tera Hotels & Resorts P Ltd. vs. DCIT decided on 12.03.2025 held that once the order has been served on the 4 Departmental Representative of the Revenue, the limitation starts. Similar view has been taken by the Tribunal in assessee’s group case in ITA No. 3817/Del/2023 titled M/s ACCIL Corporation Pvt. Ltd. vs. DCIT, CC-29, New Delhi decided on 29.01.2025. 5. Per contra, Shri Javed Akhtar, representing the Department vehemently defended the impugned assessment order and submitted that the assessment order has been passed within the period of limitation as prescribed u/s. 153(3) of the Act. The ld. CIT(DR) submitted that the order of the Tribunal dated 28.02.2019 was received in the office of the Commissioner of Income Tax (Judicial) on 08.04.2019, hence, the limitation would start from the date the order was received in the office of the Commissioner of Income Tax (Judicial) and not when the order was received in the office of the CIT(DR). The Ld. CIT(DR) made detailed written submissions, the same are reproduced here-in- under:- “A. The interpretation of the word \"unless the context otherwise require\" has been distinctly interpreted with context to the present case. In Apar Private Ltd. And others vs Union of India and Others on 17 October, 1985it was held The Supreme Court ruled that the Court cannot interpret a definition clause unless it explicitly states \"unless the context otherwise requires.\" This is because the definition clause itself states \"unless the context otherwise requires\". The Court should interpret the word \"India\" as it is defined in the enactment, \"unless the context otherwise requires\". (Ref- Page 2-4). B. The meaning and interpretation of the word \"litigant has also been elucidated here by analysing few case laws and provisions. The 5 actual litigant is the concerned CIT itself, while the CIT/DR acts on its behalf and assists the Tribunal. Case laws clarify that the CIT/DR is not a party to the appeal but only a representative, with no independent right to appeal or contest beyond the department's stance. 1. CIT vs. Scindia Steam Navigation Co. Ltd. (1961) - Supreme Court Ruling-The Supreme Court ruled that the Revenue Department is the real litigant, not the CIT/DR, who only assists the tribunal and presents the department's case.(Ref- Page 5) 2. ITAT Rules, 1963 - Rule 10 (Representation of Parties) (Ref- Page 6). 3. Delhi High Court in CIT vs. Anil Kumar Nehru (2004) -The court clarified that the DR is merely an officer assisting the tribunal and does not have the right to argue beyond the department's instructions. (Ref- Page 6) C. The original compliance obligation lies with the Assessing Officer, not the CIT-DR, who must ensure proper implementation of the tribunal's order, preventing revenue from shifting its burden onto the CIT-DR. D. The Departmental Representative represents the Department before the Tribunal, handling appeals, cross objections, and miscellaneous applications, starting from the filing of an appeal in the Tribunal's Registry. Ref-Chapter 18 i.e. 'Appeal and Revision' at Page 277 as point 8 in Volume-II (Technical) of the Manual of Office Procedure which was issued on February 2003. (Ref-Page 7). 6 > CIT vs. S. Chenniappa Mudaliar 1969) (SC) -The Supreme Court ruled that revenue authorities should rectify procedural lapses in compliance, such as non-service of notice, rather than the legal representative.(Ref- Page 7) > ITO vs. Murlidhar Bhagwan Das (1964) 52 ITR 335 (SC)- The court upheld natural justice, ensuring both taxpayers and tax departments have a fair hearing and reinforced procedural rights in appeals. > The Apex Court in the case of Improvement Trust vs Ujagar Singh & Ors emphasized the importance of contested cases on merits and legality, rather than technicalities. They suggested setting aside impugned orders and allowing the matter to be considered and disposed of on an early date. (Ref- Page 8).” 6. Both sides heard, orders of the authorities below examined. The short issue argued before us by the rival sides is, whether the assessment order passed u/s. 153(3) with read section 253/143(3) of the Act is within the period of limitation? In so far as the limitation period for passing the assessment order i.e. 09 months from the end of the financial year in which the Tribunal order was received is not in dispute. The issue in dispute is the date of start of limitation i.e. the date of service of Tribunal order on the Department. According to the department, the order was served on Commissioner (Judicial) on 08.04.2019, therefore, the limitation to pass assessment order starts from said date. Whereas, the case of the assessee is that since the order of the 7 Tribunalwas served upon the office of the CIT(DR) on 28.03.2019 the limitation period u/s. 153(3) starts from the said date. 7. The assessee has raised the issue of validity of assessment order on the ground of limitation before the ld. CIT(A) as well, however, while deciding appeal of the assessee, the ld. CIT(A) circumvented the issue and has not given any finding on the issue raised in Ground no. 2 of first appeal. 8. The Ld. Counsel for the assessee has placed reliance on the decision of the Coordinate Bench in assessee’s group concerns wherein, we find that identical issue was considered by the Tribunal. The Tribunal placed reliance on the decision of the Hon’ble Delhi High Court in the case CIT vs. Odeon Builders (P) Ltd. 393 ITR 27 (Delhi) [FB] and on decision in the case of CIT vs. Sudhir Choudhrie (2005) 278 ITR 490 (Delhi) and decided the issue in favour of the assessee. For the sake of completeness, the relevant extract of the Tribunal’s order in ITA No. 457/Del/2024 (Supra) is reproduced herein under:- “6. The Identical controversy towards bar of limitation came up for adjudication before the Hon’ble Delhi High Court in the case of Surendra Kumar Jain, Virendra Kumar Jain vs Pr.CIT (Central- III), New Delhi & Anr.(2018) 406 ITR 328 (Del). The Hon’ble Delhi High took cognizance of Full Bench Judgment in the case of CIT vs Odeon Builders (P.) Ltd. 393 ITR 27 (Delhi) and that of division bench in CIT vs. Sudhir Choudhrie (2005) 278 ITR 490 (Delhi) and observed in unequivocal terms that once the order is listed for pronouncement in the Income Tax Appellate Tribunal, the department representative or the Commissioner of Income Tax 8 (Judicial) should be taken to be aware of the order. From that point, it is a purely internal administrative arrangement as to how the Departmental representative or Commissioner of Income Tax (Judicial) obtains and further communicates the order to the officer who has to take decision on filing the appeal or any pertinent decision. It may be relevant to extract to relevant para of the judgment in Surendra Kumar Jain ( supra) which is decisive in the controversy in hand: “ it is quite evident from the decision in Odean Builders (sura) that limitation begins ( for any purpose under the Act) from the point of time when the departmental representative receives the copy of a decision or an order of the ITAT. The evidence on record in this case clearly establishes that the concerned DR ( a Commissioner ranking officer) nominated by the revenue received a copy of the ITAT order dated 30.03.2016. The starting point of limitation therefore was 31.03.2016” 7. The judgment in Surendra Kumar Jain thus makes itself evident that the limitation period under s. 153(3) would begin to run from the date of receipt of order by the Departmental representative for the purposes making assessment in terms of directions of Appellate Tribunal as per its order passed under s. 254(1) of the Act.The receipt of the appellate order dated 28.02.2019 was demonstrated to be received by the office of the Ld.CIT DR on 28.03.2019. The limitation period for framing fresh assessment order thus would end on 31-12-2019. In view of the express judicial fiat, the impugned assessment orders framed on 9 23-04-2021 i.e after the expiry of limitation is thus rendered void and non-est. 8. Similar view has been expressed in Huawei Telecommunications India Company Private Limited vs. ACIT judgment dated 28.11.2024 in W.P. (C) 7792/2024 and CM appl. 32296/2024; CIT(IT) V. Qualcomm Incorporated (2024) 159 Taxmann.com 717(Del.) 9. Governed by the judicial precedents quoted above, we find substantial merit in the plea of the assessee that all the assessment orders giving rise to the captioned appeals have been passed much beyond the statutory time limit available under s. 153(3) of the Act and thus a nullity in law at the threshold.” 9. We further find that while deciding appeals of assessee’s group entities, the Coordinate Bench in lead appeal ITA No. 3817/Del/2023 (Supra) under identical set of facts held that the period of limitation starts from the date of the order served on CIT(DR) office. 10. In the instant case, it is not in dispute that the Tribunal order dated 28.02.2019 was pronounced in the open court and thus, the CIT(DR) had knowledge of the said order. Further, the order was served on CIT(DR) on the same date. Thus, in light of facts of the case and the decisionsrendered above, we find merits in Ground No. 3 of appeal. As the assessment order was served on the office of the CIT(DR) on 28.03.2019, the time available to the AO for passing the assessment order was upto to 31.12.2019. Since, the assessment order was passed on 23.04.2021, consequently the same is barred by limitation 10 and no-nest in the eye of law. As a sequiturthe impugned order is quashed being without jurisdiction. 11. In the result, appeal of Assessee is allowed. ITA Nos. 618/DEL/2024 (AY 2014-15); ITA No. 619/DEL/2024 (AY 2015-16) & ITA No. 620/DEL/2024 (AY 2016-17) 12. Both sides unanimously state that the facts with regard to service of order and the date of passing the assessment orders in respective appeals are identical. Hence, the submissions made in ITA No. 621/Del/2024 would equally apply to the present set of appeals. 13. Since, in all the appeals, assessee has raised identical ground challenging validity of assessment order on the ground of limitation, the facts being identical to ITA No. 621/Del/2024, the findings given while adjudicating said appeal would mutatis mutandis apply. Hence, assessment orders in these appeals are held as non-est and the subsequent proceedings arising therefrom are vitiated,the impugned orders for respective AYs. are quashed being without jurisdiction. Accordingly, these appeals of the assessee are also allowed. ITA No. 980/DEL/2024 (AY 2016-17) ITA No. 986/DEL/2024 (AY 2015-16) 14. The Revenue has filed cross appeals for assessment years 2015-16 & 2016-17 in ITA No. 986/Del/2024 and ITA No. 980/Del/2024, respectively. 11 Since, we have already quashed the assessment ordersfor AY 2015-16 & 2016-17 being non-est, both the cross appeals of the Revenue are dismissed. 15.To sum up: ITA No. 618/DEL/2024 (AY 2014-15); ITA No. 619/DEL/2024 (AY 2015-16); ITA No. 620/DEL/2024 (AY 2016-17); ITA No. 621/DEL/2024 (AY 2015-16) filed by the Assessees are allowed and ITA No. 986/Del/2024 (AY 2015-16) & ITA No. 980/Del/2024 (AY 2016-17) filed by the Revenue stand dismissed. Order pronounced in the Open Court on 29/04/2025. Sd/- Sd/- (S. RIFAUR RAHMAN) (VIKAS AWASTHY) ACCOUNTANT MEMBER JUDICIAL MEMBER ‘SRBHATNAGAR’ Copy forwarded to: - 1. Appellant 2. Respondent 3. CIT 4.CIT(A) 4. DR, ITAT ASSTT. REGISTRAR "