High Court Of Gauhati
CIT vs. Shyamal Bhattacharjee
Section 153(1)(a), 153(2A), 153, Expln. 1(ii)
Asst. Year 1993-94
D. Biswas & Smt. A. Hazarika, JJ.
IT Appeal No. 37 of 2004
9th January, 2007
Counsel Appeared :
U. Bhuyan, for the Revenue : Dr. A.K. Saraf, D. Baruah, Ms. N. Hawelia, K.K. Jain, S. Chetia & A. Goyal, for the Assessee
JUDGMENT
D. Biswas, J. :
This appeal by the Revenue is directed against the judgment dt. 20th June, 2003, passed by the learned Tribunal, Guwahati Bench, Guwahati, in ITA No. 173/Gau/1998. The appeal was admitted for hearing on the following questions of law :
“1. Whether, on the facts and circumstances of the case, the assessment order under s. 144 of the IT Act was barred by limitation ?
2. Whether, on the facts and circumstances of the case, the approval of the Range Dy. CIT taken by the AO vitiated the assessment proceeding and consequent thereof the assessment order issued by the AO ?”
2. We have heard Mr. U. Bhuyan, learned counsel for the appellant, and also Dr. Saraf, learned senior counsel for the respondent assessee.
3. The dispute relates to the asst. yr. 1993-94. The AO made assessment under s. 144 of the IT Act computing the total income at Rs. 19,48,296 and initiated proceedings under s. 143(1)(b). The income-tax payable on the amount assessed has been determined at Rs. 18,09,198. This order dt. 25th Feb., 1997, was passed with the previous approval of the Range Dy. CIT. On appeal the CIT(A) by the order dt. 22nd Oct., 1997, declared the assessment as void. Being aggrieved thereby the Revenue preferred ITA No. 173/Gau/1998 before the learned Tribunal. By the order dt. 20th June, 2003, the learned Tribunal dismissed the appeal affirming the decision of the CIT(A). The learned Tribunal on the question of limitation, held that the order of assessment dt. 25th Feb., 1997, is barred by limitation.
4. Question No. 1 relates to the objection on the ground of limitation. Under s. 144, on the happening of any of the contingencies enumerated in sub-s. (1), the AO is empowered to make assessment of the total income or loss to the best of his judgment in order to determine the sum payable by the assessee on the basis of such assessment after taking into account all relevant materials gathered by him and after giving the assessee an opportunity of being heard. The contention of the assessee before the CIT(A) as well as the learned Tribunal was that no order of assessment could be passed under s. 144 at any time after the expiry of two years from the end of the assessment year in which the income was first assessable for the asst. yr. 1993-94. Their case before the authorities below was that the asst. yr. 1993-94 ends on 31st March, 1994, and the period of limitation of two years as provided in s. 153(1)(a) stood extended upto 31st March, 1996. The assessment order passed on 25th Feb., 1997, was, therefore, barred by the limitation imposed under the Act. Sec. 153(1)(a) provides that no assessment could be made under s. 144 after the expiry of two years from the end of the assessment year in which the income was first assessable. Sub-s. (3) provides that the provisions of this sub-section shall not apply to assessment, reassessment or recomputation in consequence of or to give effect to any finding or direction contained in an order gassed under s. 250, 254, 260, 262, 263 or 264 or in an order of any Court in a proceeding otherwise than by way of appeal or reference under this Act. Clause (ii) of Expln. 1 to sub-s. (3) provides that the period during which the assessment proceeding is stayed by an order or injunction of any Court shall be excluded. The proviso to cl. (vii) of sub-s. (3) of s. 153 provides that after computation as above, if the period of limitation available to the AO for making an order of assessment, reassessment or recomputation as the case may be, is less than 60 days, such remaining period shall be extended to 60 days and the period of limitation shall be deemed to be extended accordingly. This is the provision of law relating to limitation for assessment, reassessment or recomputation applicable in the case at hand. As stated above, the asst. yr. 1993-94 ended on 31st March, 1994. Further period of two years was available to the AO under s. 153(1)(a) which means that the assessment could be made on or before 31st March, 1996. Admittedly, the assessment was completed on 25th Feb., 1997, i.e., after the expiry of the period of limitation as provided in s. 153(1)(a).
Mr. U. Bhuyan, learned counsel for the Revenue contended that the assessment proceeding was stayed by an order passed by this Court (High Court of Guwahati in civil rule No. 653 of 1996). The stay was imposed on 14th Feb., 1996, and it continued till 14th/15th Oct., 1996, the date on which the CIT passed an order on a transfer application filed by the assessee under s. 127. According to Mr. Bhuyan, learned standing counsel, the period between 14th Feb., 1996 and 15th Oct., 1996, is to be excluded in computing the period of limitation. If it is so done, the assessment order passed by the AO would be well within the period of limitation as provided under the Act.
Dr. A.K. Saraf, learned senior counsel for the respondent assessee argued that no order of stay was as such passed by the High Court. The said civil rule under Art. 226 of the Constitution was filed by the assessee seeking appropriate direction for transfer of the proceeding from the file of Shri Dibendu Kumar Deb, ITO, Ward Karimganj, to any other officer. The assessee preferred an application under s. 127 of the IT Act seeking transfer of the case. The application was not disposed of by the CIT. The assessee then sought a direction from this Court in exercise of writ jurisdiction. This Court by the order dt. 14th Feb., 1996, disposed of the said civil rule with the direction that the proceedings initiated against the assessee shall continue, but the final order shall not be passed until the application under s. 127 is disposed of by the CIT.
It would appear from the order dt. 14th Feb., 1996, passed in Civil Rule No. 653 of 1996 that there was no order of stay of the proceeding under the IT Act. The Court directed that the proceedings shall continue but final order thereon shall not be passed until the matter is disposed of by the CIT. Therefore, the argument that the proceedings could not be completed within the period of limitation because of an order of stay passed by this Court does not hold good. In fact, there was no order of stay from this Court. Though the order was passed in the said civil rule on 14th Feb., 1996, the CIT sat over the matter and disposed of the same on 15th Oct., 1996. Whatever may be the reason for the delay in disposing of the application under s. 127, the period of limitation cannot be extended for apparent default on the part of the CIT. This Court has also no power to extend the period of limitation as provided in the Act in exercise of writ jurisdiction. The period cannot also be extended with the aid of s. 5 of the Limitation Act as well. That apart, the provisions of sub-s. (2A) of s. 153 are meant for cases specified therein, and it has also no application in the case at hand. Having regard to the provisions of law and the facts and circumstances of the case as discussed, question No. 1 is answered against the Revenue and in favour of the assessee.
10. The assessment order was passed with the previous approval of the Range Dy. CIT. This was done in view of the order passed by the CIT while disposing of the application under s. 127 that the assessment order shall be prepared under the supervision of the Range Dy. CIT. Mr. Bhuyan, learned counsel for the Revenue, submitted that the AO had acted in disposing of the proceeding merely under the supervision and guidance of the Range Dy. CIT and there is nothing on record to show that he has been influenced in his decision making by the Range Dy. CIT. Dr. Saraf, countering this contention, submitted that the powers of the AO are quasi-judicial and it cannot be subjected to any supervision, direction or approval of any higher authority. In support of this view, he has also relied upon a decision of the Hon’ble Supreme Court in Orient Paper Mills Ltd. vs. Union of India AIR 1969 SC 48. The ratio available from this judgment is that the quasi-judicial power of an authority cannot be controlled by the direction issued by any authority however high it may be. There cannot be any controversy with regard to this proposition of law. However, the factual matrix made available before this Court is not adequate enough to come to the conclusion that the approval accorded by the Range Dy. CIT was preceded by any sort of direction or control ingrained with deep seated influence in the decision making process. For this reason, it would not be possible to answer this question with authority. Moreover, the question also loses its significance in view of the decision in respect of question No. 1. We, therefore, decline to answer this question.
In the result, the appeal is dismissed.
[Citation : 290 ITR 178]
