Facts of the Case

The case arises out of search and seizure proceedings conducted under Section 132 of the Income Tax Act. Pursuant to the search, block assessments were completed on 28.03.2013.

  • The assessee challenged the assessment before the Commissioner of Income Tax (Appeals), who partly allowed the appeal.
  • The matter was further appealed before the ITAT, which remanded the case back to the Assessing Officer (AO) for fresh assessment.
  • The ITAT order was passed on 18.02.2016 and received by the departmental representative on 30.03.2016.
  • The AO passed a fresh assessment order on 22.12.2017.

The petitioners challenged the validity of this reassessment on the ground that it was barred by limitation.

Issues Involved

  1. Whether the assessment order passed on 22.12.2017 after ITAT remand was barred by limitation under Section 153(2A)?
  2. Whether the limitation period should be governed by Section 153B (special provision for search cases) or Section 153(2A)?
  3. What is the correct starting point of limitation for completing assessment after ITAT remand?

Petitioner’s Arguments

  • The petitioners contended that:
    • As per Section 153(2A), the AO had limited time (up to 31.12.2016) to complete the reassessment after remand.
    • The ITAT order was received by the Department on 30.03.2016; hence limitation began from 31.03.2016.
    • The assessment completed on 22.12.2017 was beyond the statutory period and therefore void.
    • Reliance was placed on Odeon Builders Pvt. Ltd. vs Pr. CIT (2017) 393 ITR 27 (Del.) regarding computation of limitation.

Respondent’s Arguments

  • The Revenue argued that:
    • Section 153A (with non-obstante clause) overrides general limitation provisions.
    • Section 153B provides a longer limitation period for search assessments.
    • Petitioners failed to cooperate during assessment proceedings, contributing to delay.
    • Therefore, the order was valid and within permissible time.

Court’s Findings / Judgment

The Delhi High Court held:

1. Starting Point of Limitation

  • Limitation begins when the Department receives the ITAT order.
  • Receipt by the Departmental Representative on 30.03.2016 triggered limitation.

2. Applicability of Section 153(2A)

  • Section 153(2A) specifically governs fresh assessments pursuant to remand.
  • It applies to all remand cases, including search assessments.

3. Section 153B Not Applicable to Remand

  • Section 153B governs original search assessments, not reassessments after remand.

4. Time Limit Expired

  • The last date for completing reassessment was 31.12.2016.
  • The order dated 22.12.2017 was clearly beyond limitation.

Important Clarifications by Court

  • Limitation begins from date of receipt by any authorized departmental officer, not the “concerned” Commissioner.
  • Administrative delays or internal procedures cannot extend statutory limitation.
  • Section 153(2A) is a special provision for remand cases, overriding general provisions in such context.
  • Failure to complete assessment within limitation grants a valuable right to the assessee.

Sections Involved

  • Section 153A – Assessment in case of search
  • Section 153(2A) – Time limit for fresh assessment pursuant to appellate order
  • Section 153B – Time limit for completion of search assessments
  • Section 254 – Orders of ITAT
  • Section 132 – Search and seizure

Link to download the order -

https://delhihighcourt.nic.in/app/case_number_pdf/2018:DHC:6371-DB/AKC01102018CW43042018.pdf

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