The Dy. Commissioner of Income Tax, Circle-2(1)(1), Baroda V. M/s. Sun Pharmaceuticals Industries Limited, Vadodara

ITA 2260/AHD/2017

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 5616 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 11 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-09-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2007-2008
• Appeal Filed On: 09-10-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: O P SHARMA
• Keywords: Period of limitation; Time period of passing order; Revised return; Reassessment proceedings
• Section: 143(3); 115JB; 143(1); 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD C BENCH (BEFORE SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER & SHRI MAHAVIR PRASAD, JUDICIAL MEMBER) ITA. NO: 2260 & 2261/AHD/2017 (ASSESSMENT YEARS: 2007-08 & 2006-07) DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-2(1)(1), BARODA V/S M/S. SUN PHARMACEUTICALS INDUSTRIES LIMITED SPARC, TANDALJA, VADODARA, 390020 (APPELLANT) (RESPONDENT) PAN: AADCS3124K APPELLANT BY : SHRI O.P. SHARMA, CIT/DR RESPONDENT BY : SHRI S.N. SOPARKAR, SR. ADVO CATE WITH MS. URVAS HI SHODHAN ( )/ ORDER DATE OF HEARING : 23 -09-201 9 DATE OF PRONOUNCEMENT : 26 -09-2019 PER MAHAVIR PRASAD, JUDICIAL MEMBER 1. THESE TWO APPEALS FILED BY THE REVENUE ARE DIRECTED AGAINST THE ORDER OF THE LD. CIT(A)-2, VADODARA DATED 10.07.2017 PERTAINING TO A.Y. 2006-07 AND A COMMON GROUNDS HAVE BEEN TAKEN BY THE REVENUE IN BO TH THE APPEALS: ITA NOS. 226 0 & 2261/AHD/2017 . A.Y. 2006-07 & 2007-08 2 1. 'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE LEARNED CIT(A) ERRED IN THE LAW AND ON FACTS IN DIRECTING THAT THE ASSESSME NT ORDER PASSED ON 04.02.2015 WAS BARRED BY LIMITATION OF TIME WITHOUT APPRECIATI NG THAT THE DELAY IN RECEIPT OF HON'BLE GUJARAT HIGH COURT'S ORDER DATED 29-07-2013 WAS NOT ATTRIBUTABLE TO THE A.O. AND THE A.O. WITHOUT RECEIPT OF HON'BLE GUJARA T HIGH COURT'S ORDER DATED 29- 07-2013 COULD NOT HAVE PROCEEDED WITH REASSESSMENT PROCEEDING SINCE PROCEEDING FURTHER WITH REASSESSMENT PROCEEDINGS WI THOUT THE DIRECTION OF HON'BLE GUJARAT HIGH COURT WOULD AMOUNT TO CONTEMPT OF COURT.' 2. 'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE LEARNED CIT(A) ERRED IN THE LAW AND ON FACTS IN ANNULLING REASSESSMENT ORDE R BY RELYING ON THE DECISION OF HON'BLE ALLAHABAD HIGH COURT IN THE CASE OF CIT VS. CHANDRA BHAN, 46 TAXMANN. 108 (ALL.) AND DECISION OF HON'BLE I.T.A.T. MUMBAI IN THE CASE OF DILIP DAHANUKAR VS. ACIT REPORTED IN 90 ITD 525 WITHOUT TAKING NOTE OF THE FACT THAT TILL THE DATE PRECEDING THE DATE OF RECEIPT OF HON'BLE GUJARAT HI GH COURT'S ORDER DATED 29.07.2013, IN S.C.A. NO. 2966 OF 2013, THE A.O. WA S UNAWARE OF THE FACT THAT STAY ON FINALIZING ASSESSMENT WAS VACATED.' 2. THE FACTS OF THE CASE ARE THAT ASSESSEE IS A PHARMA COMPANY LISTED IN BSE/NSE. IT IS ENGAGED IN MANUFACTURING OF BULK DRU GS AS WELL AS FORMULATION PRODUCTS. THE ASSESSEE FILED ORIGINAL RETURN OF INC OME [ E RETURN] FOR A.Y. 2006-07, DECLARING TOTAL INCOME OF RS. (-) 40,85,09 ,332/- UNDER NORMAL PROVISIONS AND BOOK PROFIT U/S. 115JB OF RS. 83,47, 52,785/- ON 29.12.2006. THE RETURN WAS PROCESSED U/S. 143(1) OF THE ACT ON 27.09.2007. FURTHER, THE ASSESSEE HAS ALSO FILED REVISED RETURN ON 30.03.200 8, DECLARING TOTAL INCOME OF RS. (-) 40,98,79,270/- UNDER NORMAL PROVISIONS AND BOOK PROFIT U/S. 115JB OF RS. 83,47,52,785/-. 3. SUBSEQUENTLY, NOTICE U/S. 148 WAS ISSUED AFTER RECO RDING REASONS ON 30.03.2012. THE NOTICE WAS SERVED ON THE SAME DATE. THE REASONS RECORDED WERE ALSO COMMUNICATED TO THE ASSESSEE. AFTER RECEIPT OF REAS ONS, THE ASSESSEE FILED AN OBJECTION VIDE LETTER DATED 08.10.2012. THE OBJECTI ONS OF THE ASSESSEE WERE DISPOSED OFF BY THE ASSESSING OFFICER BY PASSING A SPEAKING ORDER DATED ITA NOS. 226 0 & 2261/AHD/2017 . A.Y. 2006-07 & 2007-08 3 16.01.2013. THE REASONS RECORDED FOR REOPENING OF T HE ASSESSMENT HAVE BEEN REPRODUCED BY THE ASSESSING OFFICER IN PARA-3 OF TH E ASSESSMENT ORDER. 4. THE ASSESSEE WAS NOT SATISFIED WITH THE REASONS REC ORDED BY THE ASSESSING OFFICER AND ACCORDINGLY IT HAS FILED A WRIT PETITIO N BEFORE THE HON'BLE GUJARAT HIGH COURT VIDE SCA NO. 3013 ON 12.03.2013. THE HON 'BLE COURT PASSED AN ORAL ORDER ON 18.03.2013 STATING THAT THE RESPONDEN T MAY CONTINUE WITH ASSESSMENT AND FINAL ORDER IN PURSUANCE TO IMPUGNED NOTICE SHALL NOT BE PASSED WITHOUT LEAVE OF THE COURT. THEREAFTER, THE WRIT PE TITION WAS ADJUDICATED BY THE HON'BLE COURT BY ORAL JUDGMENT DATED 29.07.2013. TH E COURT UPHELD THE NOTICE OF REOPENING ON THE GROUND RELATING TO THE D IVERSION OF PROFIT BY TRANSFER OF TECHNOLOGY THROUGH SUN BVI TO CARACO, USA, BUT T HE REOPENING ON SECOND GROUND OF ALLOCATION OF R & D EXPENDITURE WAS NOT U PHELD. SUBSEQUENTLY, THE ASSESSING OFFICER PASSED THE ORDER U/S 143(3) R.W.S . 147 ON 27.02.2015, ASSESSING THE TOTAL INCOME AT RS.97,28,38,307/- UND ER NORMAL PROVISIONS OF THE ACT AND RS. 114,03,61,418/- AS PER THE SECTION 115J B OF INCOME TAX ACT. 5. WHILE PASSING THE ASSESSMENT ORDER U/S. 143(3) R.W. S. 147, THE ASSESSING OFFICER MADE ADDITIONS ON ACCOUNT OF DIVERSION OF P ROFIT AND DISALLOWANCE OF REMUNERATION PAID TO THE PARTNERS. 6. THEREAFTER AN APPEAL WAS FILED BEFORE THE LD. CIT(A ) AFTER TAKING GROUND INCLUDING THE TECHNICAL ONE THAT THE ASSESSMENT GOT BARRED BY THE LIMITATION OF TIME. SINCE THE ASSESSEE HAS CHALLENGED THE ASSESSM ENT ORDER ON THE GROUND THAT IT WAS BARRED BY THE LIMITATION OF TIME. THE LD. CI T(A) DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE HOLDING THAT THE ASSESSMENT ORDER PASSED ON 27.02.2015 WAS BARRED BY LIMITATION TIME AND THUS SAME ANNULLE D. ITA NOS. 226 0 & 2261/AHD/2017 . A.Y. 2006-07 & 2007-08 4 7. AGAINST THE ORDER OF THE LD. CIT(A), REVENUE HAS CO ME BEFORE US IN AN APPEAL. 8. WE HAVE GONE THROUGH THE RELEVANT RECORD AND IMPUGN ED ORDER . LD. A.R. VEHEMENTLY RELIED ON THE ORDER OF THE LD. CIT(A) AN D STATED THAT HE HAS PASSED DETAILED AND REASONED ORDER AND SAME SHOULD NOT BE DISTURBED. IN ORDER TO UNDERSTAND THE TIME LIMIT, WE REPRODUCED THE BELOW TABLE OF THE NOTICE SERVED U/S. 148 AND SUBSEQUENT DATE OF THE ORDERS: SR. NO. PARTICULARS DATES 1 DATE OF ISSUING NOTICE U/S 148 30/03/2012 2 DAT E ON WHICH NOTICE U/S 148 WAS SERVED ON THE APPELLANT 30/03/2012 3 STAY ORDER PASSED BY THE GUJARAT HIGH COUR T AGAINST WRIT PETITION FILED BY THE APPELLANT 18/03/2013 4 FINAL ORDER PASSED BY THE GUJARAT HIGH COURT AND ST AY VACATED AGAINST WRIT PETITION FILED BY THE APPE LLANT 29/07/2013 5 ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER U/ S 143(3) R.W.S. 147 27/02/2015 9. AS WE CAN SEE, NOTICE U/S. 148 WAS SERVED ON THE AS SESSEE ON 30 TH MARCH 2012, THE REASSESSMENT ORDER U/S 147 OUGHT TO BE PASSED B Y THE ASSESSING OFFICER BY 31 ST MARCH 2013 I.E. ONE YEAR FROM 31 ST MARCH 2012 I.E. THE END OF THE FINANCIAL YEAR IN WHICH THE NOTICE IS SERVED. 10. HOWEVER, THE APPELLANT HAD FILED A CIVIL PETITION A PPLICATION DATED 8 TH MARCH 2013 AGAINST THE VALIDITY OF THE SAID NOTICE BEFORE THE HONBLE GUJARAT HIGH COURT ON 12 TH MARCH 2013. THEREAFTER HONBLE GUJARAT HIGH COURT VIDE ORAL JUDGMENT ORDER DATED 18 TH MARCH 2013 HAD ISSUED DIRECTIVES TO THE RESPONDENT ITA NOS. 226 0 & 2261/AHD/2017 . A.Y. 2006-07 & 2007-08 5 I.E. THE ASSESSING OFFICER THAT IT MAY CONTINUE WIT H THE ASSESSMENT BUT FINAL ORDER PURSUANT TO THE IMPUGNED NOTICE SHALL NOT BE PASSED WITHOUT THE LEAVE OF THE COURT. THUS, THE HONBLE GUJARAT HIGH COURT HAD STAYED THE ASSESSMENT PROCEEDINGS WITH EFFECT FROM THIS DATE. TILL THIS D ATE, ONLY 13 DAYS ( 18 TH MARCH 2013 TO 31 ST MARCH 2013) WERE REMAINING AS PER SECTION 153 OF P ASS THE ORDER U/S 147 SINCE THE LAST DATE TO PASS THE ORDER U/S 1 47 WAS 31 ST MARCH, 29013. 11. THE HONOURABLE GUJARAT HIGH COURT PASSED THE FINAL ORDER ON 29TH JULY, 2013 (PAGE NO.14 TO PAGE NO.16 PAPER B OOK). ACCORDINGLY BY VIRTUE OF THE PROVISIONS OF EXPLANATION 1 TO S. 153, THE PERIOD DURING WHICH THE REASSESSMENT PROCEEDINGS WERE STAYED BY THE ORDER O F THE HONOURABLE GUJARAT HIGH COURT IS TO BE EXCLUDED. EXPLANATION 1 TO SEC. 153 WHICH PROVIDES FOR THE PERIOD TO BE EXCLUDED WHILE CALCULATING THE PERIOD OF LIMITATION READS AS UNDER: 'EXPLANATION L.IN COMPUTING THE PERIOD OF LIMITATIO N FOR THE PURPOSES OF THIS SECTION (I) ...... (II) THE PERIOD DURING WHICH THE ASSESSMENT PRO CEEDING IS STAYED BY AN ORDER OR INJUNCTION OF ANY COURT, OR (IIA) ..... (IN) ...... (IV)..... (IVA) ..... (V)..... (VI) .... (VII).... (VIII) ..... (IX)..... ITA NOS. 226 0 & 2261/AHD/2017 . A.Y. 2006-07 & 2007-08 6 SHALL BE EXCLUDED' THUS, THE PERIOD FROM THE DATE ON WHICH INTERIM REL IEF WAS GRANTED BY THE HIGH COURT TILL THE DATE OF VACATION OF RELIEF BY THE HI GH COURT WILL BE EXCLUDED. SUBSEQUENTLY, THE HIGH COURT WITH ORAL JUDGMENT ORD ER DATED 29TH JULY, 2013 PERMITTED THE ASSESSING OFFICER TO PROCEED WITH THE REASSESSMENT PROCEEDINGS ON THE FIRST GROUND RAISED IN REASONS RECORDED FOR REA SSESSMENT. THUS, THE PERIOD FROM 18TH MARCH 2013 TO 29TH JULY 2013, I.E. 134 DA YS WILL BE EXCLUDED IN CALCULATING THE PERIOD OF LIMITATION [EXPLANATION 1 TO S. 153]. 2.7 HENCE, THE ASSESSING OFFICER HAD TO PASS THE O RDER WITHIN 13 DAYS FROM 29TH JULY, 2013 (DATE WHEN HIGH COURT VACATED THE STAY). HOWEVER, AS PER 1ST PROVISO TO EXPLANATION 1 TO 153 IF AFTER VACATION OF STAY T HE TIME PERIOD REMAINING TO PASS AN ORDER IS LESS THAN SIXTY DAYS IT WILL BE EXTENDE D TO SIXTY DAYS. THE RELEVANT EXTRACT IS PRODUCED HEREIN BELOW: 'PROVIDED THAT WHERE IMMEDIATELY AFTER THE EXCLUSION OF THE AFORESAID TIME OR PERIOD, THE PERIOD OF LIMITATION REFERRED TO IN SUB -SECTIONS (1), 65[(1A), (IB),] 66[(2), (2A) AND (4)] AVAILABLE TO THE ASSESSING OF FICER FOR MAKING AN ORDER OF ASSESSMENT, REASSESSMENT OR RECOMPUTATION, AS THE C ASE MAY BE, IS LESS THAN SIXTY DAYS, SUCH REMAINING PERIOD SHALL BE EXTENDED TO SIXTY DAYS AND THE AFORESAID PERIOD OF LIMITATION SHALL BE DEEMED TO B E EXTENDED ACCORDINGLY:' THUS BASED ON THE ABOVE, THE ASSESSING OFFICER OUGH T TO HAVE PASSED THE ORDER BY 27TH SEPTEMBER 2013. 12. BUT LD. A.O. PASSED THE ASSESSMENT ORDER 143(3) R.W .S. 147 ON 27.02.2015. 13. IN SUPPORT OF ITS CONTENTION ON SIMILAR FACTS AND C IRCUMSTANCES IN ASSESSEES OWN CASE FOR A.Y. 2005-06 LD. A.R. FILED A COPY OF THE CO-ORDINATE BENCH WHEREIN CO-ORDINATE BENCH DISMISSED THE APPEAL OF T HE REVENUE WITH FOLLOWING OBSERVATIONS: ITA NOS. 226 0 & 2261/AHD/2017 . A.Y. 2006-07 & 2007-08 7 4.2. THE APPELLANT DURING THE COURSE OF THE APPELLA TE PROCEEDING JIAS MADE FOLLOWING SUBMISSIONS IN THIS REGARD: 'GROUND NO. 3: ASSESSMENT ORDER PASSED U/S. 143 RWS 147 IS OUTSIDE/BEYOND THE PERIOD OF LIMITATION SPECIFIED U/S. 153 AND NEEDS TO BE QUASHED AS VOID AB INITIO: GROUND OF APPEAL IN BRIEF: THE ASSESSING OFFICER HAS GROSSLY ERRED IN PASSING AN ASSESSMENT ORDER U/S. 143 R.W.S. 147 DATED 26TH FEBRUARY, 2014, WITHOUT APPR ECIATING THAT IT IS TIME BARRED AND BEYOND THE TIME LIMIT SPECIFIED IN SECTION 153( 2) I.E. AFTER THE EXPIRY OF ONE YEAR FROM THE END OF FINANCIAL YEAR IN WHICH THE NO TICE U/S. 148 WAS SERVED AND HENCE, VOID AB INITIO. OVERVIEW OF FACTS 1. THE TIME LIMIT FOR THE ASSESSING OFFICER TO PASS ORDER U/S.147 IS ONE YEAR FROM END OF FINANCIAL YEAR IN WHICH NOTICE WAS SERVED [S. 15 3(2)] AND THE ASSESSING OFFICER HAD TO PASS THE ORDER BY 31TH MARCH, 2013 SINCE THE NOT ICE U/S.148 WAS ISSUED ON 30TH MARCH, 2012. 2. EXPLANATION 1 TO SEC. 153(4) PROVIDES FOR THE PE RIOD TO BE EXCLUDED WHILE CALCULATING THE PERIOD OF LIMITATION. THUS, THE PER IOD FROM THE DATE ON WHICH INTERIM RELIEF WAS GRANTED BY THE HIGH COURT TILL THE DATE OF VACATION OF RELIEF BY THE HIGH COURT WILL BE EXCLUDED. THUS THE PERIOD FROM 18TH M ARCH 2013 TO 29TH JULY 2013, I.E. 134 DAYS WILL BE EXCLUDED IN CALCULATING THE PERIOD OF LIMITATION [EXPLANATION 1 TO S. 153(4)]. 3. THUS, THE TIME LIMIT WITHIN WHICH REASSESSMENT O RDER U/S. 143(3) R. W. S. 147 AS PER SEC. 153(2) R.W.S. PROVISO TO SEC. 153(4) IS TO BE PASSED IS 27-09-2013. ITA NOS. 226 0 & 2261/AHD/2017 . A.Y. 2006-07 & 2007-08 8 ITA NO.1688/AHD/2015 4- THE ASSESSING OFFICER HAS E RRED IN PASSING THE REASSESSMENT ORDER ON 26-02-2014 AND HENCE, THE SAM E IS VOID-AB-INITIO. SUBMISSIONS: 1. FIRSTLY ALL THE RELEVANT DATES OF PROCEEDINGS ARE M ENTIONED AS UNDER: SR, NO. PARTICULARS DATES 1 DATE OF ISSUING NOTICE U/S 148 30/03/2012 2 DATE ON WHICH NOTICE U/S 148 WAS SERVED ON THE APPELLANT 30/03/2012 3 STAY ORDER PASSED BY THE GUJARAT HIGH COURT AGAINST WRIT PETITION FILED BY THE APPELLANT 18/03/2013 4 FINAL ORDER PASSED BY THE GUJARAT HIGH COURT AND STAY VACATED AGAINST WRIT PETITION FILED BY THE APPELLANT 29/07/2013 5. THE ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER U/S 143(3) R.W.S. 147 26/02/2014 2. WE ENCLOSE HEREWITH THE FOLLOWING DOCUMENTS TO S UBSTANTIATE E ABOVE AT PAGE 1 TO PAGE 5 OF THE PAPERBOOK: NOTICE ISSUED U/S 148 STAY ORDER PASSED BY THE GUJARAT HIGH COURT AGAI NST WRIT PETITION FILED BY THE APPELLANT FINAL ORDER PASSED BY THE GUJARAT HIGH COURT AND STAY VACATED AGAINST WRIT PETITION FILED BY THE APPELLANT ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER U/S 143(3) R.W.S. 147 ITA NOS. 226 0 & 2261/AHD/2017 . A.Y. 2006-07 & 2007-08 9 3. SECTION 153 STATES THE TIME LIMITS FOR COMPLETIO N OF ASSESSMENTS AND REASSESSMENTS. SUB-SECTION 2 OF 153 READS AS UNDER 'NO ORDER OF ASSESSMENT, REASSESSMENT OR RECOMPUTAT ION SHALL BE MADE UNDER SECTION 147 AFTER THE EXPIRY OF ONE YEAR FROM THE E ND OF THE FINANCIAL YEAR IN WHICH THE NOTICE UNDER SECTION 148 WAS SERVED' 4. SINCE THE NOTICE U/S 148 WAS SERVED ON THE APPEL LANT ON 30TH MARCH 2012, THE REASSESSMENT ORDER U/S 147 OUGHT TO BE PASSED BY TH E ASSESSING OFFICER BY 31ST MARCH 2013 I.E. ONE YEAR FROM 31ST MARCH 2012 I.E. THE END OF THE FINANCIAL YEAR IN WHICH THE NOTICE IS SERVED. 5. HOWEVER, THE APPELLANT HAD FILED A CIVIL PETITIO N APPLICATION DATED 8TH MARCH 2014 AGAINST THE VALIDITY OF THE SAID NOTICE BEFORE THE HONOURABLE GUJARAT HIGH COURT ON 12TH MARCH 2013. SUBSEQUENTLY, THE HONOURABLE GUJAR AT HIGH COURT VIDE ORAL JUDGEMENT ORDER DATED 18TH MARCH, 2013 HAD ISSUED D IRECTIVES TO THE RESPONDENT I.E. THE ASSESSING OFFICER THAT IT MAY CONTINUE WITH THE ASSESSMENT BUT FINAL ORDER PURSUANT TO THE IMPUGNED NOTICE SHALL NOT BE PASSED WITHOUT THE LEAVE OF THE COURT. THUS, THE HONOURABLE GUJARAT HIGH COURT HAD STAYED THE ASSESSMENT PROCEEDINGS WITH EFFECT FROM THIS DATE. TILL THIS DATE, ONLY 13 DAYS (18TH MARCH 2013 TO 31ST MARCH 2013) WERE REMAINING AS PER SECTION 153 TO PA SS THE ORDER U/S. 147 SINCE THE LAST DATE TO PASS THE ORDER U/S. 147 WAS 31ST MARCH , 2013. 6. THE HONOURABLE GUJARAT HIGH COURT PASSED THE FIN AL ORDER ON 29TH JULY, 2013 (SEE ANNEXURE 1.5 OF PAPER BOOK PAGE NO. 6 TO 14). ACCOR DINGLY BY VIRTUE OF THE PROVISIONS OF EXPLANATION 1 TO S. 153(4), THE PERIOD DURING WH ICH THE REASSESSMENT PROCEEDINGS WERE STAYED BY THE ORDER OF THE HONOURABLE GUJARAT HIGH COURT IS TO BE EXCLUDED. EXPLANATION 1 TO SEC. 153(4) WHICH PROVIDES FOR THE PERIOD TO BE EXCLUDED WHILE CALCULATING THE PERIOD OF LIMITATION READS AS UNDER : ITA NOS. 226 0 & 2261/AHD/2017 . A.Y. 2006-07 & 2007-08 10 'EXPLANATION L.--IN COMPUTING THE PERIOD OF LIMITATI ON FOR THE PURPOSES OF THIS SECTION- - (I) ..... (II) THE PERIOD DURING WHICH THE ASSESSMENT PR OCEEDING IS STAYED BY AN ORDER OR INJUNCTION OF ANY COURT, OR (IIA)..... (III) ...... (IV) (V) ..... (VI).... (VII).... (VIII) ..... (IX)..... SHALL BE EXCLUDED ' THUS, THE PERIOD FROM THE DATE ON WHICH INTERIM REL IEF WAS GRANTED BY THE HIGH COURT TILL THE DATE OF VACATION OF RELIEF BY THE HIGH COU RT WILL BE EXCLUDED. SUBSEQUENTLY, THE HIGH COURT WITH ORAL JUDGMENT ORDER DATED 29TH JULY , 2013 PERMITTED THE ASSESSING OFFICER TO PROCEED WITH THE REASSESSMENT PROCEEDING S ON THE FIRST GROUND RAISED IN REASONS RECORDED FOR REASSESSMENT. THUS, THE PERIOD FROM 18TH MARCH 2013 TO 29TH JULY 2013, I.E.134 DAYS WILL BE EXCLUDED IN CALCULA TING THE PERIOD OF LIMITATION [EXPLANATION 1 TO S. 153(4)]. ITA NOS. 226 0 & 2261/AHD/2017 . A.Y. 2006-07 & 2007-08 11 7. HENCE, THE ASSESSING OFFICER HAD TO PASS THE ORD ER WITHIN 13 DAYS FROM 29TH JULY, 2013 (DATE WHEN HIGH COURT VACATED THE STAY). HOWEVER, AS PER 1ST PROVISO TO EXPLANATION 1 TO 153(4) IF AFTER VACATIO N OF STAY THE TIME PERIOD REMAINING TO PASS AN ORDER IS LESS THAN SIXTY DAYS IT WILL BE EXTENDED TO SIXTY DAYS. THE RELEVANT EXTRACT IS PRODUCED HEREIN BELOW : 'PROVIDED THAT WHERE IMMEDIATELY AFTER THE EXCLUSION OF THE AFORESAID TIME OR PERIOD, THE PERIOD OF LIMITATION REFERRED TO IN SUBSECTIONS (1), 65[(1A), (IB),] 66[(2), (2A) AND (4)] AVAILABLE TO THE ASSESSING OFFICER FOR MAKING AN ORDER OF ASSESSMENT, REASSESSMENT OR RECOMPUTATION, AS THE CASE MAY BE, IS LESS THAN SIXTY DAYS, SUCH REMAINING PERIOD SHALL BE EXTENDED TO SIXTY DAYS AN D THE AFORESAID PERIOD OF LIMITATION SHALL BE DEEMED TO BE EXTENDED ACCORDING LY:' THUS BASED ON THE ABOVE, THE ASSESSING OFFICER OUGHT TO HAVE PASSED THE ORDE R BY 27TH SEPTEMBER 2013. THE WHOLE WORKING IS SUMMARISED AS UNDER: SR. NO. PARTICULARS DATES 1. DATE OF ISSUING NOTICE U/S 148 30/03/2012 2. DATE ON WHICH NOTICE U/S 148 WAS SERVED ON THE APPELLANT 30/03/2012 3. END OF THE FINANCIAL YEAR IN WHICH THE NOTICE WAS SERVED 31/03/2012 4 ONE /EAR FROM THE END OF THE FINANCIAL YEAR IN WHICH NOTICE WAS SERVED - TIME LIMIT GIVEN FOR ASSESSING OFFICER TO PASS ORDER U/S. 147 (AS PER SECTION 153(2)) 31/03/2013 5 STAY ORDER PASSED BY THE GUJARAT HIGH COURT AGAINST WRIT PETITION FILED BY THE APPELLANT 18/03/2013 ITA NOS. 226 0 & 2261/AHD/2017 . A.Y. 2006-07 & 2007-08 12 6 FINAL ORDER PASSED BY THE GUJARAT HIGH COURT AND STAY VACATED AGAINST WRIT PETITION FILED BY THE APPELLANT 29/07/2013 7 NUMBER OF DAYS WHICH WILL BE EXCLUDED IN COMPUTING THE TIME LIMIT (AS PER EXPL 1 TO SEC 153(4)) [6- 5] 134 8 DA YS REMAINING FOR AO TO COMPLETE THE ASSESSMENT AFTER HC ORDER [4 - 5 ] 13 9 SINCE THE TIME REMAINING IS LESS THAN 60 DAYS, TIME PERIOD IS EXTENDED TO 60 DAYS [AS PER PROVISO TO EXPL 1 TO SEC 153(4)] 6 10 DATE WITHIN WHICH ORDER U/S. 147 HAS TO BE PASSED AND SERVED UPON THE ASSESSEE [ 6 + 9 ] 27/09/2013 11 ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER U/S 143(3) R.W.S. 147 26/02/2014 8. IN VIEW OF THE ABOVE THE REASSESSMENT ORDER WAS PASSED AFTER THE TIME LIMIT PRESCRIBED BY THE STATUTE. SINCE THE ORDER PASSED I S BARRED BY LIMITATION, THE REASSESSMENT ORDER PASSED U/S 143(3) RWS 147 BY THE ASSESSING OFFICER IS VOID AB INITIO AND NEEDS TO BE QUASHED. 9. ON THIS ISSUE, WE FURTHER CLARIFY THAT THE LIMIT ATION PERIOD FOR COMPLETING ASSESSMENT WOULD START FROM DATE WHEN HIGH COURT VA CATED THE STAY ORDER AND NOT FROM DATE WHEN ASSESSING OFFICER RECEIVED SUCH VACA TION ORDER. THUS IN THE PRESENT THE LIMITATION PERIOD WOULD START WITH EFFECT FROM ITA NO.1688/AHD/2015 27TH JULY 2013. THE DATE OF RECEIPT OF THE VACATION ORDER BY THE ASSESSING OFFICER IS IRRELEVANT. ITA NOS. 226 0 & 2261/AHD/2017 . A.Y. 2006-07 & 2007-08 13 10. IN THIS REGARDS, FIRSTLY IT IS SUBMITTED THAT T HE JUDGMENT OF THE HON'BLE HIGH COURT WAS PASSED IN AN OPEN COURT WHEREIN THE DEPARTMENTA L REPRESENTATIVE WAS PRESENT. THE ORDER OF THE HIGH COURT, WAS PASSED IN PRESENCE OF REVENUE COUNSEL. THUS THE DATE OF KNOWLEDGE OF THE DISMISSAL OF SUCH WRIT PET ITION TO THE ASSESSEE OR AO IS IMMATERIAL PARTICULARLY WHEN THE DECISION WAS PRONO UNCED IN OPEN COURT. FURTHER AN AFFIDAVIT IN REPLY WAS ALSO FILED BY THE DEPARTMENT AL REPRESENTATIVE ON 21ST JUNE 2013. THIS SHOWS THAT THE DEPARTMENTAL REPRESENTATI VE WAS AWARE OF THE COURT PROCEEDINGS. HENCE THERE WAS NO REQUIREMENT FOR THE ASSESSING OF FICER TO WAIT FOR THE COMMUNICATION OF THE HIGH COURT ORDER AS WITH THE P ASSING OF THE ORDER, THE STAY AS PROVIDED BY THE HON'BLE HIGH COURT CAME TO AN END. THE DATE OF COMMUNICATION OF ORDER WOULD BE IRRELEVANT.' 8. A PERUSAL OF THE ABOVE DETAILS WOULD INDICATE TH AT 194 DAYS ARE AVAILABLE TO THE AO FROM 29.7.2013. BUT HE PASSED THE ASSESSMENT ORD ER AFTER MORE THAN 200 DAYS. THE AO WAS OF THE OPINION THAT TIME LIMIT FOR PASSI NG THE ASSESSMENT ORDER WOULD COMMENCE FROM THE DATE OF COMMUNICATION OF THE ORDE R. IT HAS BEEN OBSERVED THAT THIS ORDER WAS COMMUNICATED TO HIM ON 14.2.2014 AND HE WAS TO PASS AN ORDER WITHIN 60 DAYS FROM THIS DATE. ACCORDINGLY, HE HAS PASSED IT ON 26.2.2014. BUT THIS INTERPRETATION OF THE EXPLANATION (1)(II) APPENDED TO SECTION 153(1) HAS NOT BEEN APPROVED BY THE LD.CIT(A). THE FINDING OF THE LD.CI T(A) IS BASED UPON ORDERS OF THE ITAT, WHEREIN THE TRIBUNAL HAS CONSIDERED SCOPE OF EXPLANATION (1)(II) TO SECTION 153(1) OF THE INCOME TAX ACT. THIS EXPLANATION HAS FALLEN FOR CONSIDERATION BEFORE THE HON'BLE HIGH ALLAHABAD COURT AND WHILE CONSIDERING THIS EXPLANATION, THE HON'BLE HIGH COURT HAS OBSERVED AS UNDER: 'THE AFORESAID WRIT PETITIONS HAVING BEEN DISMISSED ON 01/8/1995, AS PER PROVISO TO EXPLANATION 1 TO SECTION 153, THE ASSESSMENT WAS TO BE COMPLETED BY 30/9/1995, BUT ITA NOS. 226 0 & 2261/AHD/2017 . A.Y. 2006-07 & 2007-08 14 IN THE PRESENT CASE THE ASSESSMENT WAS COMPLETED ON 04/1/1996 I.E. BEYOND 30/9/1995. THE SUBMISSION ITA NO.1688/AHD/2015 OF S HRI SHAMBHU CHOPRA, LEARNED COUNSEL APPEARING FOR THE REVENUE TO SAVE THE ASSES SMENT FROM BEING BEYOND THE PERIOD OF LIMITATION IS THAT THE PERIOD OF 60 DAYS IS TO BE COMPUTED FROM THE DATE OF COMMUNICATION OF THE ORDER. HE SUBMITS THAT THE ORD ER OF THE HIGH COURT DATED 01/8/1995, DISMISSING THE WRIT PETITIONS COULD BE R ECEIVED BY THE OFFICE OF THE ACIT (INVESTIGATION) ON 18/12/1995. THERE ARE TWO REASON S DUE TO WHICH THE SAID SUBMISSION CANNOT BE ACCEPTED. FIRSTLY, THE ORDER O F THE HIGH COURT DATED 01/8/1995, DISMISSING THE WRIT PETITIONS WAS PASSED IN THE PRE SENCE OF THE LEARNED COUNSEL FOR THE REVENUE, HENCE THE SUBMISSION THAT IT WAS COMMU NICATED ON 18/12/1995 HAS NO RELEVANCE, AND SECONDLY THE PROVISION OF EXPLANATIO N 1 (II) OF SECTION 153 OF THE ACT, 1961 WHICH IS TO THE FOLLOWING EFFECT: 'EXPLANATION 1- IN COMPUTING THE PERIOD OF LIMITATIO N FOR THE PURPOSES OF THIS SECTION -(I) ............. (II) THE PERIOD DURING WHICH THE ASSESSMENT PROCEED ING IS STAYED BY AN ORDER OR INJUNCTION OF ANY COURT, OR .............SHALL BE E XCLUDED'. THE ABOVE STATUTORY SCHEME CLEARLY INDICATES THAT F OR COMPUTING THE PERIOD OF LIMITATION THE PERIOD DURING WHICH THE ASSESSMENT P ROCEEDINGS IS STAYED SHALL BE EXCLUDED. IN EXCLUDING THE ABOVE PERIOD, THE CONCEP T OF COMMUNICATION OF THE ORDER OF THE COURT CANNOT BE IMPORTED. THE EXCLUSION OF T HE PERIOD HAS BEEN PROVIDED BECAUSE OF STAY OR INJUNCTION BY ANY COURT DURING W HICH THE ASSESSMENT PROCEEDINGS ARE STAYED. THE INTENTION IS CLEAR THAT WHEN THE LI MITATION FOR ASSESSMENT HAS STARTED IT CAN BE STAYED ONLY BY AN ORDER OR INJUNCTION OF ANY COURT AND AS SOON AS THE ORDER OR INJUNCTION OF THE COURT IS VACATED, THE PERIOD O F LIMITATION SHALL RE-START SINCE AFTER THE VACATION OF THE ORDER OF THE COURT, THERE IS NO EMBARGO ON THE AUTHORITIES TO PROCEED WITH THE ASSESSMENT. THE SUBMISSION OF SHRI SHAMBHU CHOPRA LEARNED COUNSEL APPEARING FOR THE REVENUE THAT THE LIMITATI ON WILL START AGAIN ONLY WHEN THE ITA NOS. 226 0 & 2261/AHD/2017 . A.Y. 2006-07 & 2007-08 15 ORDER IS COMMUNICATED TO THE DEPARTMENT THUS CANNOT BE ACCEPTED. THE OTHER REASON FOR NOT ACCEPTING THE ABOVE SUBMISSION IS AL SO EQUALLY POTENT. EXPLANATION 1(V) AND (VI) TO SECTION 153 OF THE ACT, 1961 ARE A LSO PART OF THE SAME STATUTORY SCHEME. IN EXPLANATION 1 (V) AND (VI) TO SECTION 15 3 OF THE ACT, 1961 THE STATUTORY SCHEME PROVIDES FOR COMPUTING THE PERIOD OF LIMITAT ION FROM THE DATE WHEN THE ORDER UNDER SUB-SECTION (1) OF SECTION 245D AND 245 Q IS RECEIVED BY THE COMMISSIONER. THUS, THE LEGISLATURE HAS PROVIDED FO R EXCLUDING THE PERIOD FROM THE DATE OF COMMUNICATION OF THE ORDER WHERE THEY SO IN TENDED. THE USE OF CONCEPT OF COMMUNICATION OF RECEIVING THE ORDER IN THE SAME PR OVISION WHICH IS ABSENT IN EXPLANATION 1 (II) CONCERNED CLEARLY INDICATES THAT FOR THE PURPOSES OF EXPLANATION 1 (II), THE COMMUNICATION OF THE ORDER OF THE COURT V ACATING THE STAY ORDER OR INJUNCTION IS NOT CONTEMPLATED.' 9. THE HON'BLE ALLAHABAD HIGH COURT THEREAFTER CONS IDERED A LARGE NUMBER OF DECISIONS RENDERED BY VARIOUS HIGH COURTS AND ARRIV ED AT A CONCLUSION THAT CONCEPT OF COMMUNICATION OF ORDER OF THE COURT CANNOT BE IMPOR TED. THE LD.CIT(A) HAS APPRECIATED THE CONTROVERSY IN RIGHT PERSPECTIVE. D ISPUTE IS SQUARELY COVERED BY THE DECISION OF THE HON'BLE ALLAHABAD HIGH COURTS AS WE LL BY TWO ORDERS OF THE ITAT, WHOSE DISCUSSIONS HAVE BEEN REPRODUCED BY THE LD.CI T(A) IN THE IMPUGNED ORDER. THEREFORE, WE DO NOT SEE ANY REASONS TO INTERFERE I N THE ORDER OF THE LD.CIT(A). ACCORDINGLY, THE APPEAL OF THE REVENUE IS DISMISSED . 10. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISS ED. 14. SINCE ASSESSMENT ORDER PASSED BEYOND THE LIMITATION PERIOD I.E. BEYOND THE TIME LIMIT OF 60 DAYS AS PER THE EXPLANATION 1 (II) TO SECTION 153 READ WITH THE IST PROVISO TO SECTION 153 I.E. THE ORDER IS PASSED AFTER THE EXPIRY OF 60 DAYS FROM THE DATE OF VACATION OF STAY BY THE HIGH COURT . ITA NOS. 226 0 & 2261/AHD/2017 . A.Y. 2006-07 & 2007-08 16 15. AND IN PARITY WITH THE ABOVE SAID ITAT ORDER, WE AR E NOT INCLINED TO INTERFERE IN THE ORDER PASSED BY THE LD. CIT(A) . IN OUR CONS IDERED OPINION, LD. CIT(A) HAS PASSED DETAILED AND REASONED ORDER. 16. IN THE RESULT, APPEAL FILED BY THE REVENUE IS DISMI SSED. 17. NOW WE COME ITA NO. 2261/AHD/2017 FOR A.Y. 2006-07. 18. SINCE PARTIES AND ASSESSMENT YEAR ARE SAME AND FACT S ARE IDENTICAL TO THE ITA NO. 2260/AHD/2017 ONLY AMOUNT OF ADDITION IS DIFFER ENT, THEREFORE, THIS APPEAL IS ALSO DISMISSED. 19. IN THE RESULT, BOTH THE APPEALS FILED BY THE REVENU E ARE DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 26 - 09- 2019 SD/- SD/- (PRADIP KUMAR KEDIA) (MAHAVIR PRASAD) ACCOUNTANT MEMBER TRUE COPY JUDICIAL MEMBER AHMEDABAD: DATED 26 /09/2019 RAJESH COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT,AHME DABAD