Facts of the Case

The petitioner, Indian Renewable Energy Development Agency Ltd., filed income tax returns for Assessment Years (AY) 1998–99 to 2009–10 under Section 139 of the Income Tax Act, 1961. These were scrutinized and assessment orders were passed under Section 143(3).

Subsequently:

  • Appeals were filed and the matter reached the High Court.
  • The High Court remanded the matter to the Tribunal.
  • The Tribunal, via orders dated 21.11.2014 and 29.05.2015, further remanded the case to the Assessing Officer (AO) for fresh assessment.

The AO issued notices in 2016 and later on 19.07.2018 to proceed with reassessment.

The petitioner challenged this action, contending that the limitation period for passing fresh assessment orders had already expired.

Issues Involved

  1. Whether the Assessing Officer had jurisdiction to pass fresh assessment orders after the expiry of limitation under Section 153 of the Income Tax Act.
  2. Whether reassessment proceedings pursuant to Tribunal remand orders were time-barred.
  3. Applicability of amended vs old provisions of Section 153 regarding limitation.

Petitioner’s Arguments

  • The limitation period prescribed under Section 153 had expired, thus the AO lacked jurisdiction.
  • Even after Tribunal remand, fresh assessments must be completed within statutory timelines.
  • Notices issued in 2018 were invalid as proceedings had become time-barred.
  • The petitioner also demanded acceptance of returned income and grant of consequential refunds.

Respondent’s Arguments

  • The Revenue attempted to justify continuation of assessment proceedings based on Tribunal remand orders.
  • It was implied that limitation should be computed considering service of Tribunal orders and amended provisions.
  • However, no clear evidence was provided regarding the date of service of Tribunal orders.

Court’s Findings / Order

  • Regardless of whether old Section 153(2A) or amended Section 153(3) applies, limitation had expired.
  • The AO had no jurisdiction to pass fresh assessment orders after expiry of limitation.
  • The reassessment proceedings for AY 1998–99 to 2009–10 were declared time-barred.
  • The AO was directed to:
    • Accept the returned income
    • Process returns and grant refunds accordingly

The writ petition was allowed in favour of the petitioner.

Important Clarifications by Court

  • Limitation provisions under Section 153 are mandatory and jurisdictional.
  • Even remand by appellate authorities does not extend limitation indefinitely.
  • The burden lies on Revenue to prove compliance with limitation timelines.
  • Absence of proof of service of Tribunal orders weakens Revenue’s case.


Link to download the order -  https://delhihighcourt.nic.in/app/showFileJudgment/RAS08122023CW83132018_152312.pdf

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