P.H.I. Seeds P. Ltd., V. DCIT, Central Circle-14(1),

ITA 2261/DEL/2005

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 98141 (ITAT-DELHI)
• Duration Of Justice: 10 year(s) 7 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-12-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Next Hearing Date: 14-09-2015
• Assessment Year: 2001-2002
• Appeal Filed On: 06-05-2005
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIKRAM SAHAY; SULEKHA VERMA
• Assessee Lawyers: S D KAPILA; R R MAURYA ADVS
• Keywords: Opportunity of being heard; Principle of natural justice; Period of limitation
• Section: 143(3); 246; 148; 144; 154

Judgement Text

1 ITA NO. 2256 TO 2261/DEL/ 2005 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: F NEW DELHI BEFORE SHRI J. S. REDDY, ACCOUNTANT MEMBER AND MS. SUCHITRA KAMBLE , JUDICIAL MEMBER I.T.A .NO.- 2256/DEL/2005(A.Y 1996-97) I.T.A .NO.- 2257/DEL/2005(A.Y 1997-98) I.T.A .NO.- 2258/DEL/2005 (A.Y 1998-9 9) I.T.A .NO.- 2259/DEL/2005 (A.Y 1999-2 000) I.T.A .NO.- 2260/DEL/2005 (A.Y 2000-20 01) I.T.A .NO.- 2261/DEL/2005 (A.Y 2001-0 2) PHI SEEDS LTD. NEW DELHI (APPELLANT) VS DY. COMMISSIONER OF INCOME TAX CIRCLE 14(1), NEW DELHI (RESPONDENT) APPELLANT BY SH S. D. KAPILA & SH. R. R. MAURYA, ADVS. RESPONDENT BY SMT. SULEKHA VERMA, CIT (DR) & SHRI VIKRAM SAHAY, SR. DR ORDER PER SUCHITRA KAMBLE, JM THESE APPEALS ARE FILED BY THE ASSESSEE AGAINST THE ORDER DATED 04.03.2005 PASSED BY CIT(A)-XVII, NEW DELHI. DATE OF HEARING 15.09.2015 DATE OF PRONOUNCEMENT 09.12.2015 2 ITA NO. 2256 TO 2261/DEL/ 2005 2. THE PRIMARY GROUNDS RAISED BY THE ASSESSEE ON SE CTION 142(2A) READ WITH SECTION 142(2C) & SECTION 153 OF THE INCOME TAX ACT, 1961 IN ALL THESE APPEALS ARE AS FOLLOWS: GROUND NO. 2 THAT, IN LAW AND ON THE FACTS OF THE CASE, THE COMMISSIONER OF INCOME TAX (APPEALS)-XVII, ERRED IN NOT CANCELLING THE IMPUGNED ASSESSMENT ORDER, AS BEING WITHOUT JURISDICTION AND BARRED BY LIMITATION. GROUND NO. 3 THAT, THE COMMISSIONER OF INCOME TAX (APPEALS)-XVII, ERRED IN LAW AND ON THE FACTS OF TH E CASE, BY HOLDING THAT THE SPECIAL AUDIT PROCEEDINGS UNDER SE CTION 142(2A) OF THE ACT WERE VALIDLY AND PROPERLY INITIA TED. GROUND NO. 4 THAT, THE COMMISSIONER OF INCOME TAX (APPEALS)-XVII, ERRED IN LAW AND ON THE FACTS OF TH E CASE, BY HOLDING THAT THE EXTENSIONS OF TIME FOR COMPLETION OF AUDIT UNDER SECTION 142(2A) OF THE ACT AND FOR SUBMISSION OF TH E SPECIAL AUDIT REPORT WERE PROPER AND VALID AND THAT THE ASS ESSMENT WAS NOT BARRED BY LIMITATION OR WITHOUT JURISDICTIO N ON ACCOUNT OF SUCH ILLEGAL, UNLAWFUL AND INVALID EXTENSION OF TIME. GROUND NO. 5 THAT ORDER OF THE LD. CIT(A) HAS BEEN PASSED IN VIOLATION OF THE RULE AGAINST BIAS WHICH IS A PRINC IPLE OF NATURAL JUSTICE WHICH REQUIRES THAT THE APPELLATE ORDER IS IMPARTIAL, JUDICIOUS AND FAIR, AND AS THE ORDER SUFFERS FROM P RO-REVENUE MIND-SET, IT VIOLATES NATURAL JUSTICE AND HENCE NEE DS TO BE SET- ASIDE. 3 ITA NO. 2256 TO 2261/DEL/ 2005 3. THE ASSESSEE IS AN INDIAN COMPANY [EARLIER A JOI NT VENTURE OF SOUTHERN PETRO CHEMICALS INDIA LTD., SPIC AND PIONE ER OVERSEAS CORPORATION, USA (POC)]. SINCE 1993 IT IS A HUNDRED PERCENT SUBSIDIARY OF POC. IT IS ENGAGED IN THE BUSINESS OF GROWING AND MARKETING TRUTHFULLY LABELED COMMERCIAL HYBRID SE ED UNDER THE SEED ACT, 1966. FOR PRODUCING THE SEED IN COMMERCIA L QUANTITIES, THE ASSESSEE PURCHASES THE BASIC INPUT OF PARENT SE ED FROM THE INDIAN BRANCH OF POC IN LARGE QUANTITIES. THE ASSES SEE COMPANY CLAIMS THAT IT HAD TAKEN ON LEASE, AGRICULTURAL LAN DS FROM OVER 6000 SMALL AND MARGINAL FARMERS FOR A PARTICULAR CROPPIN G SEASON OF 4-6 MONTHS. THESE LANDS ARE SPREAD ACROSS VARIOUS DIST RICTS OF ANDHRA PRADESH AND KARNATAKA. IT CLAIMS THAT RIGHT FROM TH E INCEPTION THE PRACTICE FOLLOWED BY THE ASSESSEE COMPANY HAS BEEN THAT OF TAKING AGRICULTURAL LAND ON SHORT-TERM LEASE AND TAKING PO SSESSION OF SUCH LAND FOR A PARTICULAR SEASON. THE COMPANY CLAIMS TH AT IT CUSTOMARILY ENGAGES THOSE VERY FARMERS WHO LEASED T HE LANDS, TO WORK ON THE LAND ON ITS BEHALF AND IN ACCORDANCE WI TH THE AGRONOMIC PROCEDURES PRESCRIBED BY THE COMPANY FOR SOWING OF PARENT SEED, CULTIVATING, IRRIGATION AND APPLICATIO N OF FERTILIZER, PESTICIDES AND OTHER MODERN AGRICULTURAL TECHNIQUE FOR RAISING HEALTHY CROP OF HYBRID SEED OF CEREALS. FOR THIS PU RPOSE, THE COMPANY EMPLOYS EXPERTS FOR SUPERVISING THE FARMERS AND ALSO FOR GIVING THEM TRAINING. THE MOST EXPENSIVE INPUT, PAR ENT SEED, IS PROVIDED FREE OF COST AND THE FARMERS ARE PAID COST OF FERTILIZER AND PESTICIDE ON A STANDARDIZED BASIS. TOKEN COST OF SU PERVISION IS 4 ITA NO. 2256 TO 2261/DEL/ 2005 DEDUCTED FROM THE WAGES FOR LABOUR. THE ASSESSEE HA S BEEN FOLLOWING THE CUSTOM OF USING THE OUTPUT OF THE QUA NTITY OF PARENT SEED AS THE MEASURE FOR CALCULATING THE VALUE OF LA BOUR. THE COMPANY PAYS ADVANCES PERIODICALLY DURING THE PRE-H ARVEST PERIOD. IN NO CASE DOES THE COMPANY ACTUALLY RECOVER SUCH A DVANCES PAID TO THESE LABOURER-FARMERS FOR ANY REASON WHATSOEVER INCLUDING NEGLIGENCE. SUCH ADVANCES AND THE COST OF INPUTS AR E EXPENSED OUT BY THE COMPANY. 3.1 THE DETAILS OF ORIGINAL RETURNS FILED, INCOME R ETURNED, INCOME ORIGINALLY ASSESSED AND THE DATE OF ASSESSMENT ORDE R AND DATE OF ISSUE OF NOTICE U/S 148 ARE GIVEN AS UNDER: ASSTT. YEAR DATE OF FILING ORIGINAL RETURN INCOME RETURNED (RS.) DATE OF ASSTT. /INCOME ASSESSED (RS.) DATE OF ISSUE OF NOTICE U/S. 148 REMARKS 1996-97 19/11/1996 10374615 24.12.1998/ 10439865/- 21.03.2003 U/S.143(3) (BEYOND 4 YEARS) 1997-98 29.11.1997 18906373 2.12.1999/ 18906373/- 21.03.2003 -143(3) (BEYOND 4 YEARS) 5 ITA NO. 2256 TO 2261/DEL/ 2005 1998-99 26.11.1998 12357390 22.12.2000/ 12357390/- 21.03.2003 U/S.143(3) (WITHIN FOUR YEARS) 1999- 2000 27.12.1999 9954500 28.09.2000/ 9954500 21.03.2003 U/S.143(1)(A) (WITHIN FOUR YEARS) 2000- 2001 22.11.2000 16980790 13.07.2001/ 16980790 21.03.2003 U/S.143)1)(A) (WITHIN FOUR YEARS) 2001- 2002 30.10.2001 16446094 27.09.2004/ 150261571 - (WITHIN FOUR YEARS) 3.2 FOR REOPENING THE ASSESSMENT FOR 1996-97 ASSESS MENT YEAR THE AO HAS RECORDED FOLLOWING REASONS: ON PERUSAL OF NOTES OF THE ACTIVITIES OF THE COMPA NY SUBMITTED ON BEHALF OF THE COMPANY ON 26.10.1998 DURING THE C OURSE OF ASSESSMENT PROCEEDINGS FOR THE A.Y 1996-97 IT IS NO TICED THAT THE COMPANY IS ENGAGED SOLELY IN MULTIPLICATION PRODUCT ION AND SALE OF HYBRID SEEDS. THE COMPANY IS CLAIMING EXEMPTION U/ S 10(1) OF THE I. T ACT IN RESPECT OF INCOME DERIVED FROM PRODUCTION AND SALES OF HYBRID SEEDS IN THE A.Y 1996-97. 6 ITA NO. 2256 TO 2261/DEL/ 2005 THE LD. ITAT IN ITS JUDGMENT DATED 3.1.2003 IN THE CASE OF M/S PROAGRO SEEDS P. LTD FOR THE A.Y 1994-95 AND 1997-9 8 HAVE UPHELD THE ADDITION MADE BY THE AO ON A/C OF INCOME FROM H YBRID SEEDS, WHICH THE ASSESSEE HAS CLAIMED AS EXEMPTION AS AGRI CULTURAL INCOME. IN VIEW OF THE ABOVE JUDGMENT I HAVE REASON TO BEL IEVE THAT INCOME FROM PRODUCTION AND THE SALE OF HYBRID SEEDS CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT. FOR A.Y 1997-98 TO 2000-01 THE REASONS RECORDED ARE SIMILAR EXCEPT THE CHANGE IN THE ASSESSMENT YEAR, THE DATE OF FILING THE RETURN, THE FIGURES OF INCOME DECLARED AND THE LETT ERS FILED BY THE ASSESSEE COMPANY. 3.3 THE NOTICE U/S. 148 FOR A.Y. 1998-99, 1999-2000 AND 2000-01 WAS ISSUED WITHIN FOUR YEARS FROM THE END OF THE RE LEVANT ASSESSMENT YEAR. THE ASSESSMENTS FOR AY 1996-97 AND 1997-98 WAS REOPENED AFTER THE EXPIRY OF FOUR YEARS FROM TH E END OF THE RELEVANT ASSESSMENT YEAR AND AS THE ORIGINAL ASSESS MENTS WAS COMPLETED U/S. 143(3) OF THE INCOME TAX ACT, 1961 A ND REASONS TO THAT EFFECT WAS RECORDED BY THE AO. THE SAID REASON S WERE PROVIDED TO THE ASSESSEE FOR REOPENING OF THE ASSESSMENT FOR EACH YEAR AND ASSESSEE FILED ITS OBJECTIONS WHICH WAS DISPOSED OF F BY AO VIDE ORDER DATED 04.03.2004. THE LIMITATION DATE FOR COMPLETIO N OF EACH 7 ITA NO. 2256 TO 2261/DEL/ 2005 ASSESSMENT FOR EACH YEAR AND THE ACTUAL DATE OF COM PLETION ARE MENTIONED BELOW:- A.Y. S DATE OF RECEIPT OF ORDER U/S. 142(2A) PERIOD SPECIF IED IN ORDER IN DAYS LAST DATE FOR SUBMISSI ON OF AUDIT REPORT DATE OF EXTENSI ON ORDER EXTEND ED UPTO DATE OF EXTENSI ON ORDER LIMITATION DATE FOR COMPLETION OF ASSESSMEN T DATE ON WHICH ASSESSMEN T WAS TO BE COMPLETED IF NO EXTENSION IS GIVEN FOR SUBMISSIO N OF AUDIT REPORT 96- 97 NONE NONE NA 28.6.04 24.7.04 9.8.04 31.3.04 27.9.04 97- 98 15.3.04 120 DAYS 10.7.04 26.6.04 24.7.04 9.8.04 22.9.04 27.9.04 98- 99 9.3.04 120 DAYS 7.7.04 26.6.04 24.7.04 9.8.04 22.9.04 27.9.04 99- 00 9.3.04 120 DAYS 7.7.04 26.6.04 24.7.04 9.8.04 22.9.04 27.9.04 00- 01 9.3.04 120 DAYS 7.7.04 26.6.04 24.7.04 9.8.04 22.9.04 27.9.04 01- 02 26.2.04 120 DAYS 24.6.04 28.6.04 24.7.04 9.8.04 23.8.04 27.9.04 8 ITA NO. 2256 TO 2261/DEL/ 2005 4. THE LD. COUNSEL FOR ASSESSEE SUBMITTED THAT THE ORDERS PASSED BY THE ASSESSING OFFICER EXTENDING THE LAST DATE OF SUBMISSION OF THE AUDIT REPORT ON 28/6/2004 FOR A. Y 1996-97 AND ON 2 6/6/2004 FOR A.Y 1997-98 TO A. Y 2000-01 & 2001-02 ARE SUO MOTU AND THAT THE SAME ARE ILLEGAL AND WITHOUT JURISDICTION. ONCE THE ORDER GRANTING EXTENSION DATED 28.06.2004 AND 26.06.2004 ARE NOT I N ACCORDANCE WITH LAW, THEN THESE EXTENSION ORDERS DATED 28.06.2 004 AND 26.06.2004 SHOULD NOT BE CONSIDERED FOR THE PURPOSE OF COMPUTATION OF THE PERIOD OF LIMITATION. THEREFORE HE ARGUED THAT ALL THE SIX ASSESSMENTS MADE ON 27/9/2004 ARE BARRED BY LIMITATION. THE LD. COUNSEL FOR ASSESSEE FURTHER SUBMITTED THAT SECOND EXTENSION ORDER DATED 9/8/2004 PASSED SUO-MOTU BY THE ASSESSING OFFICER U/S 142 (2C) OF THE ACT, WAS INCO RRECTLY HELD TO BE VALID BY THE LD. CIT(A). THE LD. COUNSEL FOR ASSESS EE ALSO MADE SUPPLEMENTARY SUBMISSION THAT IN ABSENCE OF ANY ORD ER U/S 142(2A) FOR EITHER THE ASSESSMENT YEAR 1996-97 OR T HE ASSESSMENT YEAR 1998-99 DEPENDING ON THE VALIDITY OF CORRIGEND UM ORDER DATED 9/8/2004 PASSED BY THE ASSESSING OFFICER, ARE WITH OUT JURISDICTION AND BARRED BY LIMITATION. THIS IS BECAUSE IF THE O RDER U/S 142(2A) FOR ASSESSMENT YEAR 1996-97 IS VALID, THEN THERE IS NO ORDER U/S 142 (2A) SUBSISTING FOR THE FINANCIAL YEAR 1997-98, AND THE REASSESSMENT ORDER FOR ASSESSMENT YEAR 1998-99 IS B ARRED BY LIMITATION. HE FURTHER SUBMITTED THAT THERE IS BREA CH OF PRINCIPLE OF NATURAL JUSTICE BECAUSE ALL THE ORDER U/S 142 (2A) HAVE BEEN PASSED BY THE ASSESSING OFFICER WITHOUT GIVING THE ASSESSE E AN OPPORTUNITY OF BEING HEARD. HENCE ON THIS GROUND ALSO HE SUBMI TS THAT THE 9 ITA NO. 2256 TO 2261/DEL/ 2005 EXTENDED PERIOD PROVIDED UNDER CLAUSE (III) TO EXPL ANATION 1 OF SECTION 153 IS NOT AVAILABLE O THE A.O FOR COMPUTAT ION THE PERIOD OF LIMITATION. 4.1. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THE CASE LAW OF CIT VS. BISHAN SAROOP RAM KISHAN AGRO (P.) LTD. [2011] 15 TAXMANN.COM 221 (DELHI), THE HONBLE DELHI HIGH COU RT HELD THAT (PARA 15) THE PROVISIONS AS EXISTING IN SUB-SECTION (2C) OF SECTION 142 BEFORE 1.4.2008 DID NOT EMPOWER THE ASSESSING O FFICER TO SUO MOTU EXTEND THE TIME FOR SUBMISSION OF AUDIT REPOR T UNDER SUB- SECTION (2A). THIS IS ALSO CLEAR FROM THE MEMORANDU M EXPLAINING THE PROVISIONS OF GRANTING POWER TO THE ASSESSING OFFIC ER TO EXTEND TIME FOR COMPLETION OF SPECIAL AUDIT UNDER SUB-SECTION ( 2A) OF SECTION 142. THE HONBLE HIGH COURT FURTHER HELD THAT (PARA 21) ..THE AMENDMENT WHEREBY THE WORD SUO MOTU WERE INSERTED IN SUB- SECTION (2C) OF SECTION 142 OF THE ACT WAS TO BE AP PLICABLE WITH EFFECT FROM 1 ST APRIL, 2008 ONLY, THE AMENDMENT CANNOT BE SAID TO BE CLARIFICATORY OR RETROSPECTIVE IN NATURE. THE AMEND MENT WAS PROSPECTIVE AND WAS TO BE APPLICABLE WITH EFFECT FR OM 1 ST APRIL, 2008 ONLY. . THUS THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED TH AT THE EXTENSION GRANTED WAS SUO MOTU IN ASSESSEES CASE AS ASSESSEE COMPANY HAS NEVER ASKED FOR EXTENSION AT ANY TIME. THE LETTERS WHICH WERE ADDRESSED BY THE AUDITORS AND ADVOCATE S OR BY THE ASSESSEE COMPANY WAS NOT AN EXTENSION APPLICATION. THE SECOND CASE LAW RELIED UPON BY THE LD. AR IS ASSTT. CIT VS . SUSHILA MILK 10 ITA NO. 2256 TO 2261/DEL /2005 SPECIALTIES (P) LTD. (DEL) (SB) 126 TTJ 289 (DEL.) (SB) WHEREIN THE ASSESSEE COMPANY WAS AN INTERVENER WHICH IS CLEARLY SET OUT IN PARA 4 OF THE SAID JUDGMENT. THE SAID PARA 4 OF THE JUD GMENT IS REPRODUCED HEREIN BELOW: 4. SHRI S. D. KAPILA REPRESENTED ON OF THE INTERVE NER IN THIS APPEAL NAMELY PHI SEEDS PVT. LTD. THE COUNSEL FOR I NTERVENER FAIRLY ADMITTED THAT SINCE THE DECISION OF TRIBUNA L IN THE CASE OF RAJESH KUMAR (SUPRA) HAS BEEN CARRIED IN FURTHER AP PEAL BEFORE THE HIGH COURT AND THE HONBLE DELHI HIGH COURT IN THE CASE OF RAJESH KUMAR VS. CIT WHILE DECIDING THE APPEAL IN I T APPEAL NO. 184 OF 2009 BY ORDER DT. 9 TH APRIL, 2009 HAVE UPHELD THE ORDER OF TRIBUNAL. THEREFORE, IN VIEW OF THE DECISI ON OF JURISDICTIONAL HIGH COURT, THE ISSUE NO LONGER SURV IVES AND IS REQUIRED TO BE DECIDED AGAINST THE ASSESSEE. PARA 15 OF THE SAID ORDER HELD AS 15. ALL IRREGULAR OR ERRONEOUS OR EVEN ILLEGAL ORDERS CANNOT BE HELD TO BE NULL AND V OID AS THERE IS FINE DISTINCTION BETWEEN THE ORDERS WHICH ARE NULL AND V OID AND ORDERS WHICH ARE IRREGULAR, WRONG OR ILLEGAL. WHERE AN AUT HORITY MAKING ORDER LACKS INHERENT JURISDICTION, SUCH ORDER WOULD BE WITHOUT JURISDICTION, NULL, NON EST AND VOID AB INITIO AS D EFECT OF JURISDICTION OF AN AUTHORITY GOES TO THE ROOT OF THE MATTER AND STR IKES AT ITS VERY AUTHORITY TO PASS ANY ORDER AND SUCH A DEFECT CANNO T BE CURED EVEN BY CONSENT OF THE PARTIES. THUS THE AR SUBMITTED THAT THE ASSESSING OFFICER DOES NOT HAVE ANY JURISDICTION/PO WER TO GRANT EXTENSION ON HIS OWN, THE SUO MOTU EXTENSION ORDER ARE NOT LEGAL FOR 11 ITA NO. 2256 TO 2261/DEL /2005 THESE ASSESSMENT YEARS. THUS THE ORDER IS NULL, NON -EST AND VOID AB INITIO. 4.2. THE SUBMISSIONS OF SHRI S.D. KAPILA, LD. COUNS EL FOR THE ASSESSEE CAN BE SUMMARIZED AS BELOW:- (A) GROUND NO. 10, 11 OF THE ASSESSMENT YEAR1996-97 NOT PRESSED. (B) GROUND NO. 11 & 10 A. Y 1996-97 NOT PRESSED. (C) GROUND NO. 11 & 12 A.Y 1997-98 NOT PRESSED. (D) GROUND . 11 & 12 A.Y 1998-99 NOT PRESSED. (E) GROUND 11 & 12 A. Y 1999-2000 NOT PRESSED. (F) GROUND NO. 11 & 13 A. Y 2000-01 NOT PRESSED. (G) GROUND NO. 7 & 9 A. Y 2001-02 NOT PRESSED. AND GROUND NO. 3 (A. Y 1996-97) GROUND NO. 8 (A. Y 1997-98, 98-99, 99-2000) GROUND NO. 9 (A. Y 2000-01) GROUND NOS. 5 (A. Y 2001-02) IS MODIFIED AS UNDER THE ORDER OF THE LD. CIT(A) HAS BEEN PASSED IN VIO LATION OF THE PRINCIPLE OF NATURAL JUSTICE. (B) THE ADDITIONAL GROUND FILED BY THE ASSESSEE FOR THE ASSESSMENT YEARS 1996-97 TO THE ASSESSMENT YEAR 2001-02 UNDER RULE 11 OF THE ITAT RULES IS WITHDRAWN. (C) THE ADDITIONAL GROUND FILED FOR THE ASSESSMENT YEAR 1998-99 THAT NO ORDER U/S 142 (2A) WAS PASSED FOR ASSESSMEN T YEAR 1998- 99 IS WITHDRAWN. 12 ITA NO. 2256 TO 2261/DEL /2005 (D) THE INITIATION OF SPECIAL AUDIT WAS BAD IN LAW, AS NO OPPORTUNITY WAS GIVEN TO THE ASSESSEE BY THE ASSESS ING OFFICER BEFORE APPOINTMENT OF SPECIAL AUDITOR AND CONSEQUEN TLY THE ORDER IS BAD IN LAW AND THE ASSESSMENTS BARRED BY LIMITATION . (E) EXTENSION OF TIME FOR COMPLETION OF SPECIAL AUD IT U/S 142(2A) WAS MADE U/S 142 (2C), WITHOUT AN APPLICATION OR RE QUEST FROM THE ASSESSEE AND HENCE THE EXTENSION GRANTED SUO MOTU IS BAD IN LAW AND CONSEQUENTLY THE ASSESSMENT FRAMED IS BEYOND TH E PERIOD OF LIMITATION. THE PAPER BOOK COMING INTO 76 PAGES WAS FILED AND DETAILED ARGUMENTS WERE MADE WHICH WE WOULD BE TAKING INTO C ONSIDERATION AS AND WHEN NECESSARY DURING THE COURSE OF OUR FIND INGS. 5. THE LD. DR SUBMITTED THAT THE ASSESSEE SOUGHT EX TENSION FOR SUBMISSION OF THE AUDIT REPORT. THEREFORE, THE EXTE NSION GIVEN BY THE ASSESSING OFFICER IS NOT SUO MOTO AND WAS A P ROPER EXTENSION. THEREFORE, THE ASSESSMENTS ARE NOT BARRED BY LIMITA TION. THE LD. DR FURTHER SUBMITTED THAT THE ORDER FOR SPECIAL AUDIT PASSED UNDER SECTION 142 (2A) CANNOT BE CHALLENGED BEFORE THE CI T(A) AND ITAT. THE DR FURTHER POINTED OUT THAT BEFORE CIT(A) ONLY THE SECOND EXTENSION WAS CHALLENGED BY THE ASSESSEE. THE EXTEN SION WAS GIVEN BY THE ASSESSING OFFICER FOR THE BENEFIT OF THE ASS ESSEE, AS THE TIME WAS EXPIRING ON 24.07.2004 AS HENCE SUCH EXTENSION CANNOT BE FOUND FAULT WITH BY THE ASSESSEE. AS PER THE LD. DR , LETTERS WRITTEN BY THE ASSESSEE TO THE A.O EXPRESSES ITS PROBLEMS A ND ISSUES AND WHEN READ IN THE CONTEXT WOULD BE EXTENSION OF TIM E FOR 13 ITA NO. 2256 TO 2261/DEL /2005 SUBMISSION OF AUDIT REPORT SOUGHT BY THE ASSESSEE. THE LD. DR SUBMITTED THAT IN CASE OF SAHARA INDIA (FIRM) VS. CIT [2008] 300 ITR 403 SC HELD IN PARA 29 THAT .THIS COURT HAD DECLINED TO STAY THE ASSESSMENT PROCEEDINGS, WE ARE OF THE OPINION THAT THIS COURT SHOULD BE LOATHE TO QUASH THE IMPUGNED ORDERS. ACCORDINGLY , WE HOLD THAT THE LAW ON THE SUBJECT, CLARIFIED BY US, WILL APPLY PROSPECTIVELY AND IT WILL NOT BE OPEN TO THE APPELLANTS TO URGE BEFORE T HE APPELLATE AUTHORITY THAT THE EXTENDED PERIOD OF LIMITATION UN DER EXPLANATION 1 (III) TO SECTION 153 (3) OF THE ACT WAS NOT AVAILABLE TO THE ASSESSING OFFICER BECAUSE OF AN INVALID ORDER UNDER SECTION 142 (2 A) OF THE ACT . HOWEVER, IT WILL BE OPEN TO THE APPELLANTS TO QUEST ION BEFORE THE APPELLATE AUTHORITY, IF SO ADVISED, THE CORRECTNESS OF THE MATERIAL GATHERED ON THE BASIS OF THE AUDIT REPORT SUBMITTED UNDER SUB-SECTION 2A OF SECTION 142 OF THE ACT. THE LD.CIT(A) DR SUBMITTED THAT HENCE THE VALIDITY OF THE ORDER PASSED U/S 142(2A) OF THE ACT ON THE GROUND OF NATURAL JUSTICE CANNOT BE QUESTIONED BY T HE ASSESSEE AS THE HON'BLE SUPREME COURT HELD THAT THE PREPOSITION S IN THE JUDGMENT APPLY SEPARATELY. THE LD. DR SUBMITTED TH AT IN THIS CASE THE EXTENSION WAS GRANTED ONLY FOR THE BENEFIT OF T HE ASSESSEE WHICH HAD, THE DUTY CAST ON IT, FOR SUBMISSION OF A SPECI AL AUDIT REPORT. THE LD. DR FURTHER RELIED UPON THE CASE OF RAJESH K UMAR VS. CIT, CENTRAL (3) NEW DELHI OF THE HONBLE DELHI HIGH COU RT. THE LD. DR SUBMITTED THAT THE QUESTION OF VALIDITY OF THE ORDE R OF THE ASSESSING OFFICER SHOULD HAVE BEEN CONTESTED BEFORE THE LD. C IT(A) BY THE ASSESSEE, BUT WAS NOT DONE BY THE ASSESSEE. HENCE, IN LIGHT OF THESE 14 ITA NO. 2256 TO 2261/DEL /2005 TWO JUDGMENTS, THE LD. DR SUBMITTED THAT THE ASSESS MENT ORDERS WERE RIGHTLY PASSED AND LD. CIT(A) IS CORRECT IN UP HOLDING THE SAME. 5.1. THE SUBMISSIONS OF THE LD. DR CAN BE SUMMARIZE D AS FOLLOWS: (A) THE VALIDITY OF AN ORDER U/S 142(2A) CANNOT BE QUESTIONED BY WAY OF APPEAL BEFORE THE LD. CIT(A) AND THE TRIBUNA L, AS THERE IS NO PROVISION FOR SUCH APPEAL UNDER THE ACT. SIMILARL Y, THE EXTENSION ORDERS PASSED BY THE A.O GRANTING FURTHER TIME FOR COMPLETION AND SUBMISSIONS OF AUDIT U/S 142(2C) OF THE ACT CANNOT BE QUESTIONED IN APPELLATE PROCEEDINGS BEFORE THE LD. CIT(A) OR T HE TRIBUNAL (ITAT). THAT IT IS OPEN FOR THE ASSESSEE TO QUESTION THE IS SUE BY WAY OF A WRIT PETITION BEFORE THE HIGH COURT AND NOT HAVING DONE SO, IT IS NOT OPEN TO TAKE THE PLEA IN THIS PROCEEDINGS. (B). THE LD. CIT(A) HAS EXPLAINED AND GIVEN THE DE TAILED BACKGROUND AND CIRCUMSTANCES IN WHICH THE ASSESSING OFFICER HAD TO EXTEND THE TIME GRANTED FOR THE SUBMISSION OF AU DIT REPORT U/S 142(2C) IN THE INTEREST OF REVENUE AND HENCE THESE ORDERS FOR THE EXTENSION ARE VALIDLY PASSED. (C). THE ASSESSING OFFICER DID NOT PASS THE ORDER FOR EXTENSION U/S 142(2C) DATED 9/8/2014, SUO MOTU FO R THE REASON THAT, HE HAD TAKEN INTO ACCOUNT THE ASSESSEES LETT ER DATED 31/7/2004 TO SPECIAL AUDITOR AND THE ASSESSING OFFI CER S LETTER DATED 2/8/2004 ADDRESSED TO THE ASSESSEE COMPANY AN D THE REPLY THEREON. IN FACT THE ENTIRE CORRESPONDENCE IS RELIE D UPON TO INFER THAT THE ASSESSEE HAD IN FACT REQUESTED AN EXTENSIO N OF TIME FOR SUBMISSION OF AUDIT REPORT. KEEPING IN VIEW THE IN TENTION OF 15 ITA NO. 2256 TO 2261/DEL /2005 LEGISLATURE AND WITH A VIEW TO AVOID MAKING A BEST JUDGMENT ASSESSMENT U/S 144(1) (B), FOR THE BENEFIT OF THE A SSESSEE, THE EXTENSION WAS GRANTED AND HENCE THE JUDGMENT OF TH E HONBLE DELHI HIGH COURT IN THE CASE OF BISHAN SAROOP RAM K ISHAN AGRO (P). LTD. SUPRA IS DISTINGUISHABLE ON FACTS. (D). THE ISSUE WHETHER THE REVENUE SHOULD NOT BE G IVEN OPPORTUNITY TO THE ASSESSEE BEFORE APPOINTING SPECI AL AUDITORS U/S 142(2A) IS NO MORE RES INTEGRA IN VIEW OF THE JUDGM ENT OF THE LARGER BENCH OF THE HONBLE SUPREME COURT IN THE CASE OF SAHARA INDIA, WHERE IT WAS HELD THAT THE REQUIREMENT WOULD PROSPE CTIVE AND THAT IT WOULD NOT BE OPEN TO THE ASSESSEE TO URGE BEFORE THE APPELLATE AUTHORITY THAT THE EXTENDED PERIOD OF LIMITATION UN DER EXPLANATION 1 (III) TO SECTION 153(3) WAS NOT AVAILABLE TO THE ASSESSING OFFICER BECAUSE OF AN INVALID ORDER U/S 142(2A). THE PLEA O F THE ASSESSEE TO RESTORE THE MATTER BACK TO THE FILE OF THE A.O IN T HE LIGHT OF THE SPECIAL BENCH DECISION IN THE CASE OF SUSHILA MILK SPECIALITIES 126 TTJ 289 DELHI SPECIAL BENCH, CANNOT BE CONSIDERED A S SUFFICIENT OPPORTUNITY WAS GRANTED TO THE ASSESSEE AND THE ASS ESSING OFFICER HAS ISSUED NUMEROUS SHOW CAUSE LETTERS FOR WHICH TH E ASSESSEE HAS SUBMITTED HIS REPLIES. (E). THE TECHNICAL MEANING OF TERM SUO MOTU IS O N HIS OWN MOTION MEANING THEREBY THAT NO OTHER EXTERNAL INFL UENCE SHOULD BE THERE ON THE A.O IN TAKING A DECISION. THE PLEA TH AT THE A.O HAS SUO MOTU EXTENDED THE TIME OF SPECIAL AUDIT IS FA CTUALLY INCORRECT AND THAT THIS IS CLEAR FROM THE VARIOUS COMMUNICATI ONS BETWEEN THE 16 ITA NO. 2256 TO 2261/DEL /2005 AUDITOR, THE ASSESSEE, AS WELL AS THE ASSESSING OFF ICER. THE WORDING IN THE ORDER DATED 28/6/2004 EXTENDING THE TIME LIM IT FOR SUBMISSION OF SPECIAL AUDIT WAS RELIED UPON AND SUB MITTED THAT IT WAS BECAUSE OF THE DIFFICULTIES FACED BY THE ASSESS EE, WHICH IS EVIDENT FROM THE CORRESPONDENCE, THAT THE EXTENSION WAS GRANTED AND THIS CANNOT BE TERMED AS SUO MOTU ACTION OF T HE A.O (F). THE A.O HAD EXTENDED THE TIME OF SPECIAL AUDIT FOR THE SECOND TIME, BASED ONLY ON THE CIRCUMSTANCES WHICH THE ASS ESSEE COMPANY MADE HIM AWARE OF, FROM TIME TO TIME, BY WAY OF COR RESPONDENCE AND THIS IS A GOOD AND SUFFICIENT REASON FOR GRANT OF EXTENSION OF TIME FOR SPECIAL AUDIT. (G). IN CASE OF BISHAN SAROOP RAM KISHAN AGRO (P) L TD., (SUPRA) THE A.O EXTENDED THE PERIOD OF SPECIAL AUDIT FOR THE FI RST TIME ON THE BASIS OF AUDITORS REQUEST AND THE SECOND AND THIRD TIME ON HIS OWN AND HENCE THE HON'BLE HIGH COURT HELD THAT, THE EX TENSION WAS BAD IN LAW AND THAT SUCH CIRCUMSTANCE IS NOT PREVALENT IN THE PRESENT CASE. (H). THE LD. DR REPEATED THAT THE TRIBUNAL HAS NO J URISDICTION TO EXAMINE THE VALIDITY OF THE ORDERS PASSED U/S 142(2 A) AND ORDER U/S 142(2C). 6. THE LD. COUNSEL FOR THE ASSESSEE ON THE OTHER HA ND IN HIS REJOINDER SUBMITTED THAT (A) A COMBINED READING OF CLAUSE (A) & (B) OF SECTION 246 A (I) MAKES IT CLEAR THAT AN ORDER O F ASSESSMENT OR RE- ASSESSMENT CAN BE CHALLENGED IN APPEAL BEFORE THE L D. CIT(A) 17 ITA NO. 2256 TO 2261/DEL /2005 DENYING AN ASSESSEES LIABILITY TO BE ASSESSED TO T AX OR DISPUTING THE AMOUNT OF INCOME TAX DEMANDED. (B) THAT THE PROVIS IONS OF U/S 142(2A) AND 142(2C) READ WITH EXPLANATION 1(III)OF SECTION 153 ARE INTEGRAL TO THE PROCESS OF MAKING AN ASSESSMENT AND IT IS OPEN FOR THE ASSESSEE TO CHALLENGE THE ASSESSMENT ON THE GRO UND THAT THE PERIOD OF LIMITATION PRESCRIBED HAS EXPIRED ON THES E ORDERS WERE ERRONEOUS OR PASSED WITHOUT JURISDICTION. (C) THAT THE A.O AS WELL AS THE LD. CIT(A) HAVE STATED THAT POWER TO GRANT TIME FOR SUBMISSION OF AUDIT REPORT U/S 142 (2C), SUO MOTU IS AVAILAB LE TO THE A.O WHICH IS NOT THE CORRECT POSITION OF LAW. (D) THAT THE ASSESSEE HAS NOT MADE ANY APPLICATION SEEKING EXTENSION OF TIME FOR SUBMISSION OF AUDIT REPORT. 6.1. RELIANCE WAS ALSO PLACED ON THE JUDGMENT OF T HE HON'BLE DELHI HIGH COURT IN THE CASE OF CIT VS. M/S KASHYAP MOTORS PVT. LTD. JUDGMENT DATED 23 RD AUGUST 2011. 7. AFTER HEARING THE RIVAL CONTENTIONS, PERUSING TH E PAPERS ON RECORDS AS WELL AS THE ORDERS OF THE AUTHORITIES BE LOW AND CASE LAWS CITED WE HOLD AS FOLLOWS. AT THE OUTSET THE FOLLOW ING GROUNDS BY THE ASSESSEE ARE DISMISSED AS NOT PRESSED. THE GROUNDS ARE AS FOLLOWS: (A) GROUND NO. 10, 11 OF THE ASSESSMENT YEAR1996-97 NOT PRESSED. (B) GROUND NO. 11 & 10 A. Y 1996-97 NOT PRESSED. (C) GROUND NO. 11 & 12 A.Y 1997-98 NOT PRESSED. (D) GROUND . 11 & 12 A.Y 1998-99 NOT PRESSED. 18 ITA NO. 2256 TO 2261/DEL /2005 (E) GROUND 11 & 12 A. Y 1999-2000 NOT PRESSED. (F) GROUND NO. 11 & 13 A. Y 2000-01 NOT PRESSED. (G) GROUND NO. 7 & 9 A. Y 2001-02 NOT PRESSED. (H) GROUND NO. 3 (A. Y 1996-97) GROUND NO. 8 (A. Y 1997 -98, 98-99, 99-2000) GROUND NO. 9 (A. Y 2000-01) GROUND NOS. 5 (A. Y 2001-02) IS MODIFIED AS UNDER THE ORDER OF THE LD. CIT(A) HAS BEEN PASSED IN VIO LATION OF THE PRINCIPLE OF NATURAL JUSTICE.. THESE GROUNDS ARE ALSO DISMISSED AS NOT PRESSED. 7.1. THE ADDITIONAL GROUNDS BY THE ASSESSEE UNDER R ULE 11 OF THE ITAT RULES FOR THE A.Y 1996-97 TO 2000-01 STANDS DI SMISSED AS WITHDRAWN. SIMILARLY, THE ADDITIONAL GROUND FILED FOR THE A. Y 1998-99, WITH RESPECT TO PASSING OF AN ORDER U/S 14 2(2A) IS ALSO DISMISSED AS WITHDRAWN. 7.2. THE ONLY QUESTION WHICH WE ADJUDICATE IN THIS ORDER IS WHETHER THE ASSESSMENT ORDERS FOR ALL THE SIX ASSE SSMENT YEARS ARE BARRED BY LIMITATION, IN VIEW OF PROVISIONS OF SECT ION U/S 142(2A) 142(2C) READ WITH EXPLANATION 1 (III) OF SECTION 15 3 OF THE ACT. IN OTHER WORDS THE ISSUE WHICH IS TO BE ADJUDICATED IS , WHETHER ON THE FACTS AND CIRCUMSTANCES OF THIS CASE, THE EXTENDED PERIOD OF LIMITATION IS AVAILABLE TO THE ASSESSING OFFICER AS FOR THE PROVISIONS OF EXPLANATION 1 (III) OF SECTION 153. 19 ITA NO. 2256 TO 2261/DEL /2005 7.3. WE FIRST CONSIDER THE ARGUMENT OF THE LD. DR T HAT ISSUE AS TO WHETHER THE ORDER U/S 142 (2A) IS VALID OR NOT IT C ANNOT BE APPEALED BEFORE THE TRIBUNAL AND THAT THE TRIBUNAL HAS NO JU RISDICTION TO ADJUDICATE SUCH ISSUES OF VALIDITY OF ORDERS PASSED U/S 142(2A) AND SECTION 142(2C). 7.4. IN THE PRESENT PROCEEDINGS WHAT WE ARE EXAMINI NG, IS WHETHER THE EXTENDED PERIOD OF LIMITATION AS PROVIDED UNDER EXPLANATION 1(III) OF SECTION 153 IS AVAILABLE TO THE ASSESSING OFFICER FOR COMPLETION OF ASSESSMENT U/S 143(3), OR NOT. THE A SSESSEE CONTENDS THAT THE ORDER U/S 142(2C), EXTENDING THE PERIOD GRANTED FOR COMPLETION AND SUBMISSION OF AUDIT REPORT IS MA DE WITHOUT AN APPLICATION BEING MADE FOR EXTENSION BY THE ASSESSE E AND FOR ANY GOOD AND SUFFICIENT REASON, AND HENCE THE EXTENSION IS BAD IN LAW AND HENCE THE A.O WOULD NOT GET THE BENEFIT OF THE EXTENDED PERIOD OF TIME TO SPECIFIED IN EXPLANATION 1(III) OF SECTI ON 153 OF THE ACT. IN OUR VIEW, THE TRIBUNAL HAS JURISDICTION TO ADJUDICA TE THE ISSUE AS TO WHETHER AN ORDER OF ASSESSMENT 143(3), IS PASSED WI THIN THE PERIOD OF LIMITATION PRESCRIBED UNDER THE ACT OR NOT. FOR COMING TO SUCH A CONCLUSION, IN OUR VIEW THE TRIBUNAL CAN EXAMINE WH ETHER THE ORDER PASSED U/S 142(2A) OR U/S 142(2C) IS IN ACCORDANCE WITH LAW OR NOT. THE ORDER PASSED U/S 142(2A) OR U/S 142(2C) CANNOT BE APPEALED SEPARATELY. BUT WHEN AN ASSESSMENT ORDER IS CHALLE NGED, THEN THE DIFFERENT ASPECTS WHICH ARE INTEGRAL TO THE PROCESS AND ULTIMATE COMPLETION OF AMOUNT CAN BE CHALLENGED IN APPEAL. FOR EXAMPLE A NOTICE U/S 148 OR REASONS RECORDED BY THE A.O PRIOR TO RE-OPENING OF ASSESSMENT CANNOT BE CHALLENGED SEPARATELY. BUT AN ASSESSMENT 20 ITA NO. 2256 TO 2261/DEL /2005 ORDER CAN BE CHALLENGED IN AN APPEAL BEFORE THE LD. CIT(A) OR THE ITAT ON THE GROUND THAT THE RE-OPENING ITSELF IS BA D IN LAW, AS THE NOTICE IS ILLEGAL OR NOT SERVED OR THAT THERE IS NO MATERIAL BASED ON WHICH REASONS WERE RECORDED ETC. EVERY FACET OF AN ASSESSMENT CAN BE CHALLENGED IN APPEAL TO DENY ONCE LIABILITY TO B E CHARGED TO TAX OR TO CHALLENG THE QUANTUM OF TAX DEMANDED. IN THE CASE OF HAND, THE LEGALITY OF THE ORDERS PASSED U/S 142(2A) OR U/ S 142(2C) CAN BE CHALLENGED TO DEMONSTRATE THAT THE ORDER OF ASSESSM ENT HAS BEEN PASSED BEYOND THE PERIOD OF LIMITATION. THUS, WE RE JECT THIS CONTENTION OF THE LD. CIT. DR. 7.5. WE, NOW CONSIDER THE ISSUE WHETHER THE ORDER P ASSED BY THE A.O EXTENDING TIME GRANTED FOR SUBMISSION OF SPECIA L AUDIT REPORT DATED 28 TH JUNE 2004, IS IN ACCORDANCE WITH LAW OR NOT. FOR THE READY REFERENCE, WE EXTRACT THE ORDER AS FOLLOWS: OFFICE OF THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE 14(1), C.R. BUILDING, I.P. ESTATE, NEW DELHI PIN: 110002 DATE: JUNE 28, 2004 ORDER WHEREAS, IN EXERCISE OF THE POWERS CONFERRED IN TER MS OF THE PROVISIONS OF SECTION U/S 142(2A) OF THE INCOME TAX ACT, 1961, THE ASSESSEE M/S PHI SEEDS LTD., B-4, G. K. ENCLAVE PART II, NEW DELHI WAS DIRECTED VIDE ORDER DATED 21/2/2004 TO 2000- 01 AUDITED BY THE ACCOUNTANT M/S S. K. MITTAL & C., E-29, SOUTH EXTENSION, PART-II, NEW DELHI AND TO FURNISH A REPO RT OF SUCH AUDIT IN PRESCRIBED FORM SETTING FORTH REQUIRED PAR TICULARS WITH IN 120 DAYS. 21 ITA NO. 2256 TO 2261/DEL /2005 NOW, SINCE, IT IS UNDERSTOOD THAT THE AUDIT WORK IS YET TO BE COMPLETED AND ASSESSEE COMPANY NEEDS FURTHER TIME TO COMPLY WITH THE DIRECTIONS, THE TIME LIMIT FOR SUBMISSION OF THE REQUIRED AUDIT REPORT FOR THE ASSESSMENT YEARS 1996-97 TO 20 01-02 IS BEING EXTENDED TO 24/7/2004. 7.6 IN RESPONSE TO THE ABOVE ORDER, THE ASSESSEE ON 5 TH JULY 2004, HAS WRITTEN TO THE ASSESSING OFFICER ON THE ABOVE I SSUE SEEKING RECTIFICATION U/S 154. THIS LETTER IS EXTRACTED FO R READY REFERENCE:- JULY 5, 2004 THE ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE 14(1), NEW DELHI REF: AUDIT U/S 142(2A) YOUR ORDER NO. F NO/ACIT CI R 14(1)/2004-05 U/S 142(2A)/362 DATED JUNE 28, 2004. APPLICATION FOR RECTIFICATION UNDER SECTION 154 OF THE INCOME TAX ACT 1961. DEAR SIR, WITH REFERENCE TO YOUR CAPTIONED ORDER RECEIVED BY US ON JUNE 29, 2004, IT IS SUBMITTED THAT THE SAID ORDER IS FACTUALLY INCORRECT AS IN PARAGRAPH 2 IT ERRONEOUSLY STATES T HAT AND THE ASSESSEE COMPANY NEEDS FURTHER TIME TO COMPLY WITH THE DIRECTIONS. IT IS RESPECTFULLY SUBMITTED THAT THE COMPANY HAS A T NO TIME, AS ERRONEOUSLY ALLEGED IN THE ORDER, MADE ANY SUBMISSION, REQUEST OR APPLICATION TO THE EFFECT THAT IT NEEDS FURTHER TIME TO COMPLY WITH THE DIRECTIONS. IN FACT, VIDE LETTER D ATED JUNE 3, 2004 DULY FILED IN YOUR OFFICE, IT WAS CLEARLY EXPL AINED THAT THE 22 ITA NO. 2256 TO 2261/DEL /2005 COMPANY HAD DULY COMPLIED WITH THE DIRECTIONS AND F ULLY COOPERATED IN THIS REGARD AND THAT THE DELAY IN THE STARTING OR COMPLETING THE AUDIT WAS NOT ATTRIBUTABLE TO THE CO MPANY IN ANY MANNER WHATSOEVER. IT IS ACCORDINGLY PRAYED THAT THE ORDER REFERRED AB OVE MAY KINDLY BE RECTIFIED U/S 154 OF THE INCOME TAX ACT 1 961 BY DELETING/EXPUNGING THE WORDS AND THE ASSESSEE COM PANY NEEDS FURTHER TIME TO COMPLY WITH THE DIRECTIONS I N PARAGRAPH 2 OF THE SAID ORDER. THANKING YOU, YOURS FAITHFULLY, FOR PHI SEEDS LIMITED. THUS FROM THE ABOVE CORRESPONDENCE IT IS CLEAR THAT THE ASSESSEE COMPANY DENIES THAT IT APPLIED OR REGENERATED FOR T HE TIME TO COMPLY WITH THE ORDER PASSED U/S 142(2A) 7.7 SECTION 142(2C), READ AS FOLLOWS:- (2C) EVERY REPORT UNDER SUB-SECTION (2A) SHALL BE FURNISHED BY THE ASSESSEE TO THE 3 [ASSESSING] OFFICER WITHIN SUCH PERIOD AS MAY BE SPECIFIED BY THE 3 [ASSESSING] OFFICER: PROVIDED THAT THE 3 [ASSESSING] OFFICER MAY, 4 [SUO MOTU, OR] ON AN APPLICATION MADE IN THIS BEHALF BY THE ASSESSEE AND FOR ANY GOOD AND SUFFICIENT REASON, EXTEND THE SAID PERIOD BY SUCH FURTHER PERIOD OR PERIODS AS HE THINKS FIT; SO, HOW EVER, THAT THE 23 ITA NO. 2256 TO 2261/DEL /2005 AGGREGATE OF THE PERIOD ORIGINALLY FIXED AND THE PE RIOD OR PERIODS SO EXTENDED SHALL NOT, IN ANY CASE, EXCEED ONE HUND RED AND EIGHTY DAYS FROM THE DATE ON WHICH THE DIRECTION UN DER SUB- SECTION (2A) IS RECEIVED BY THE ASSESSEE. ( 4 . INSERTED BY THE FINANCE ACT, 2008 W.E.F.1-4-2008 ) THE TERM SUO MOTU WAS INSERTED BY THE FINANCE ACT, 2008 W.E.F. 1/4/2008. THUS PRIOR TO THAT, THE REQUIREME NT OF THE ACT IS VERY CLEAR THAT THE PERIODS FOR FURNISHING THE AUDI T REPORT CAN BE EXTENDED ONLY BY AN APPLICATION MADE IN THIS BEHALF BY THE ASSESSEE AND NOT OTHERWISE. THE JUDGMENT IN THE CASE OF BI SHAN SAROOP RAM KISHAN AGRO (P) LTD. (SUPRA) IN THIS REGARD IS CLEAR. 7.8. INFERENCE DRAWN BY THE ASSESSING OFFICER, WHI LE EXTENDING THE PERIOD GRANTED VIDE ORDER DATED 28 TH JULY 2004 CANNOT IN OUR VIEW REPLACE AN APPLICATION MADE BY THE ASSESSEE FOR GRA NT OF EXTENSION OF TIME, WHICH IS A REQUIREMENT OF THE ACT. WHEN T HE ASSESSEE HAS NOT MADE A SPECIFIC APPLICATION FOR EXTENTS OR SOUG HT FOR THE TIME TO SET THE AUDIT COMPLETES, THE A.O CANNOT BASED ON CO RRESPONDENCE DRAW AN INFERENCE AND GRANT AN EXTENSION OF TIME. HE SHOULD WRITE TO THE ASSESSEE IN CASE OF DOUBT. 7.9. EVEN OTHERWISE, THE ASSESSEE HAS SPECIFICALLY IN ITS LETTER DATED 5 TH JULY 2004, SUBMITTED BEFORE THE ASSESSING OFFICER THAT HE IS FACTUALLY WRONG IN COMING TO A CONCLUSION THAT T HE ASSESSEE NEEDS FURTHER TIME TO COMPLY WITH THE DIRECTIONS. THUS TH E INFERENCE OR PRESUMPTION DRAWN BY THE A.O HAS BEEN REBUTTED BY T HE ASSESSEE. 24 ITA NO. 2256 TO 2261/DEL /2005 UNDER SUCH CIRCUMSTANCES, THE ASSESSING OFFICER WA S DUTY BOUND TO COMPLETE THE ASSESSMENT, WITHOUT GRANTING FURTHE R TIME TO THE ASSESSEE FOR FURNISHING OF AUDIT REPORT, EVEN IF HE HAD TO INVOKE THE PROVISIONS OF SECTION 144 OF THE ACT. WHEN THE ASS ESSEE DOES NOT ASK FOR TIME AND SPECIFICALLY STATES SO, THE A.O CA NNOT THRUST AN EXTENSION ON IT. 7.10. THE LD. DR HAD SUBMITTED THAT THE TERMS SUO MOTU MEANS ON ITS OWN MOTION AND THAT ASSESSING OFFICER HAS NOT ACTED ON HIS OWN. THE REQUIREMENT OF THE ACT DOES NOT SP EAK OF SUO MOTU. IT SPEAKS OF EXTENSION BEING GRANTED ON AN A PPLICATION BEING MADE BY THE ASSESSEE AND ALSO FOR GOOD AND SUFFICI ENT REASON. IN THIS CASE, THERE IS NO SPECIFIC APPLICATION BY THE ASSESSEE FOR THE EXTENSION OF TIME. HENCE, IN OUR VIEW, THE ORDER PASSED U/S 142(2C) DATED 28 TH JUNE 2004, IS NOT IN ACCORDANCE WITH THE PROVISIONS OF LAW. THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF BISHAN SAROOP RAM KISHAN AGRO (P) LTD. SUPRA HEL D THAT THE TERM SUO MOTU INSERTED IN THE PROVISIONS OF SECTI ON 142(2C) W.E.F 1/4/2008 IS PROSPECTIVE IN NATURE AND THAT PRIOR TO THE AMENDMENT THE ASSESSING OFFICER DID NOT HAVE THE INHERENT POW ER TO EXTEND THE TIME LIMIT FOR THE AUDIT REPORT WITHOUT AN APPLICAT ION BY THE ASSESSEE. RECENTLY, THE HONBLE JURISDICTIONAL HIG H COURT IN THE CIT VS. M/S KASHYAP MOTORS PVT. LTD JUDGMENT DATED 23 RD AUGUST 2011 IN ITAT 582/2011 FOLLOWED THE JUDGMENT OF THE HON'BLE HIGH COURT IN THE CASE OF BISHAN SAROOP RAM KISHAN AGRO (P) LTD. SUPRA AND HELD THAT 25 ITA NO. 2256 TO 2261/DEL /2005 21. IN VIEW OF FOREGOING DISCUSSION THAT THE AMEND MENT WHEREBY THE WORD SUO MOTU WERE INSERTED IN SUB SECT ION (2C) OF SECTION 142 OF THE ACT WAS TO BE APPLICABLE WITH EF FECT FROM 1 ST APRIL, 2008 ONLY, THE AMENDMENT CANNOT BE SAID TO B E CLARIFICATORY OR RETROSPECTIVE IN NATURE. THE AMEN DMENT WAS PROSPECTIVE AND WAS TO BE APPLICABLE WITH EFFECT FR OM 1 ST APRIL, 2008 ONLY. ACCORDINGLY, WE ANSWER QUESTION NO. 2 A GAINST THE REVENUE. 8. IN VIEW OF THE ABOVE, DISCUSSION, WE HAVE NO HES ITATION IN HOLDING TO HOLD THAT THE EXTENSION OF TIME FRAMED B Y THE A.O FOR SUBMISSION OF AUDIT REPORT U/S 142 (2C) OF THE ACT VIDE ORDER DATED 28 TH JUNE, 2004 IS BAD IN LAW. CONSEQUENTLY THE ASSESSI NG OFFICER WOULD NOT GET EXTENSION OF TIME FOR COMPLETION OF A SSESSMENT IN TERMS OF EXPLANATION 1 (III) TO SECTION 153 FOR THE PURPOSE OF COMPUTATION OF LIMITS. HENCE, THE ASSESSMENTS ARE B ARRED BY LIMITATION AS PER THE TABLE GIVEN AT PARA 7 OF THE ORDER. THE ASSESSMENT FOR THE A.Y 1996-97 WAS TO BE COMPLETE O N OR BEFORE 31/3/2004 AND THE ASSESSMENT ORDER FOR THE ASSESSME NT YEAR 1997-98 TO 2000-01 HAD TO BE COMPLETED ON OR BEFORE 22/9/2004 AND THE ASSESSMENT FOR THE A. Y 2001-02 HAD TO BE C OMPLETES ON OR BEFORE 23/8/2004, BUT ALL THESE ASSESSMENTS WERE CO MPLETED ON 27/9/2004, WHICH IS BEYOND THE PERIOD OF LIMITATION SPECIFIC IN THE ACT. HENCE THEY ARE BAD IN LAW. 8.1. AS WE HAVE HELD THAT ALL THESE ASSESSMENTS ARE BARRED BY LIMITATION, WE DO NOT ADJUDICATE THE OTHER ARGUMENT S AND LEGAL 26 ITA NO. 2256 TO 2261/DEL /2005 ISSUES RAISED BY BOTH THE PARTIES, AS IT WOULD BE A N ACADEMIC EXERCISE. 9. IN RESULT, ALL THE APPEALS OF THE ASSESSEE ARE A LLOWED. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 9 TH OF DECEMBER 2015. SD/- SD/- (J. S. REDDY) (SU CHITRA KAMBLE) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 09/12/2015 *R. NAHEED* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI DATE 1. DRAFT DICTATED ON 17.09.2015 & 30/11/2015 PS 2. DRAFT PLACED BEFORE AUTHOR 17.09.2015 PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER 18.09.2015 JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. JM/AM 27 ITA NO. 2256 TO 2261/DEL /2005 5. APPROVED DRAFT COMES TO THE SR.PS/PS 0 8 .12.2015 PS/PS 6. KEPT FOR PRONOUNCEMENT ON PS 7. FILE SENT TO THE BENCH CLERK 09.09.2015 PS 8. DATE ON WHICH FILE GOES TO THE AR 9. DATE ON WHICH FILE GOES TO THE HEAD CLERK. 10. DATE OF DISPATCH OF ORDER.