$~21 to 34
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Date of Decision: 01.10.2018
+ W.P.(C) 4304/2018 & CM APPL.16759/2018
SURENDRA KUMAR JAIN ..... Petitioner
versus
PRINCIPAL COMMISSIONER OF INCOME TAX (CENTRAL)-III,
NEW DELHI & ANR. ..... Respondents
22
+ W.P.(C) 4305/2018 & CM APPL.16760/2018
SURENDRA KUMAR JAIN ..... Petitioner
versus
PRINCIPAL COMMISSIONER OF INCOME TAX (CENTRAL)-III,
NEW DELHI & ANR. ..... Respondents
23
+ W.P.(C) 4306/2018 & CM APPL.16761/2018
SURENDRA KUMAR JAIN ..... Petitioner
versus
PRINCIPAL COMMISSIONER OF INCOME TAX (CENTRAL)-III,
NEW DELHI & ANR. ..... Respondents
24
+ W.P.(C) 4307/2018 & CM APPL.16762/2018
SURENDRA KUMAR JAIN ..... Petitioner
versus
PRINCIPAL COMMISSIONER OF INCOME TAX (CENTRAL)-III,
NEW DELHI & ANR. ..... Respondents
25
+ W.P.(C) 4308/2018 & CM APPL.16763/2018
SURENDRA KUMAR JAIN ..... Petitioner
versus
W.P.(C) 4304/2018 & connected matters Page 1 of 15
PRINCIPAL COMMISSIONER OF INCOME TAX (CENTRAL)-III,
NEW DELHI & ANR. ..... Respondents
26
+ W.P.(C) 4309/2018 & CM APPL.16764/2018
SURENDRA KUMAR JAIN ..... Petitioner
versus
PRINCIPAL COMMISSIONER OF INCOME TAX (CENTRAL)-III,
NEW DELHI & ANR. ..... Respondents
27
+ W.P.(C) 4310/2018 & CM APPL.16766/2018
SURENDRA KUMAR JAIN ..... Petitioner
versus
PRINCIPAL COMMISSIONER OF INCOME TAX (CENTRAL)-III,
NEW DELHI & ANR. ..... Respondents
28
+ W.P.(C) 4311/2018 & CM APPL.16768/2018
VIRENDRA JAIN ..... Petitioner
versus
PRINCIPAL COMMISSIONER OF INCOME TAX (CENTRAL)-III,
NEW DELHI & ANR. ..... Respondents
29
+ W.P.(C) 4313/2018 & CM APPL.16772/2018
VIRENDRA JAIN ..... Petitioner
versus
PRINCIPAL COMMISSIONER OF INCOME TAX (CENTRAL)-III,
NEW DELHI & ANR. ..... Respondents
30
+ W.P.(C) 4314/2018 & CM APPL.16774/2018
VIRENDRA JAIN ..... Petitioner
versus
PRINCIPAL COMMISSIONER OF INCOME TAX (CENTRAL)-III,
NEW DELHI & ANR. ..... Respondents
W.P.(C) 4304/2018 & connected matters Page 2 of 15
31
+ W.P.(C) 4315/2018 & CM APPL.16781/2018
VIRENDRA JAIN ..... Petitioner
versus
PRINCIPAL COMMISSIONER OF INCOME TAX (CENTRAL)-III,
NEW DELHI & ANR. ..... Respondents
32
+ W.P.(C) 4316/2018 & CM APPL.16782/2018
VIRENDRA JAIN ..... Petitioner
versus
PRINCIPAL COMMISSIONER OF INCOME TAX (CENTRAL)-III,
NEW DELHI & ANR. ..... Respondents
33
+ W.P.(C) 4318/2018 & CM APPL.16786/2018
VIRENDRA JAIN ..... Petitioner
versus
PRINCIPAL COMMISSIONER OF INCOME TAX (CENTRAL)-III,
NEW DELHI & ANR. ..... Respondents
34
+ W.P.(C) 4319/2018 & CM APPL.16787/2018
VIRENDRA JAIN ..... Petitioner
versus
PRINCIPAL COMMISSIONER OF INCOME TAX (CENTRAL)-III,
NEW DELHI & ANR. ..... Respondents
Present: Mr.Piyush Kaushik, Adv. for petitioners, in Item Nos.21
to 34.
Mr.Ajit Sharma and Mr.Asheesh Jain, Adv. for
respondents in Item Nos.21 to 34.
CORAM:
HON'BLE MR. JUSTICE S. RAVINDRA BHAT
HON'BLE MR. JUSTICE A.K.CHAWLA
S.RAVINDRA BHAT, J.(ORAL)
1. In all these writ petitions, the narrow question agitated by the
assessees is that assessment order made on 22.12.2017 under Section
W.P.(C) 4304/2018 & connected matters Page 3 of 15
153A read with Section 254 of Income Tax Act, 1961 (hereinafter
,,the Act') for Assessment Year 2005-06 and subsequent years (up-to
2012-13) covered by search assessment, were barred and therefore,
needs to be quashed.
2. The brief facts necessary to decide these writ petitions are that
pursuant to search and seizure proceedings under Section 132 of the
Act, the assessment was completed for the block period on 28.03.2013
by the concerned Assessing Officer (AO). The Commissioner of
Income Tax (A) partly allowed the assessee's appeal on 14.08.2014.
The matter was carried further to the Income Tax Appellate Tribunal
(ITAT) which remitted the matter back to the AO to complete the
assessment de novo. The assessee contends that in fact the concerned
AO sought tax effect by re-computing the income under Section 153A
of the Act, in effect, following the ITAT's order of 18.02.2016.
Relying upon that order, the assessment proceedings were taken up
after remand by the AO who completed them on 22.12.2017. Relying
upon the Full Bench decision of this Court in Odeon Builders Pvt.
Ltd. vs. Pr. Commissioner of Income Tax-4, (2017) 393 ITR 27, it is
urged on behalf of the assessees that the impugned order is per se
illegal and void. It was contended that apart from the AO's order
made after the ITAT's decision (on 18.02.2016), there is other
evidence as well, in the form of reply to the assessee's ITR queries
dated 12.03.2018 where the revenue clearly admitted that the order
was served by hand to the Commissioner of Income Tax
(Departmental Representative) on 30.03.2016. Taking strength from
W.P.(C) 4304/2018 & connected matters Page 4 of 15
the then existing proviso to Section 153(2A), it is urged that time
available then to the AO in this case was only up-to 31.12.2016, for
working out of the remand and completing the assessment.
3. The revenue resisted the proceedings and urged that the
impugned order was made within the time prescribed. Firstly, it is
urged that petitioners cannot be heard to complain as they did not
attend to the queries and co-operate in an assessment proceeding
which got delayed. Learned counsel emphasized that as a result the
petitioners could not be given any discretionary relief given that the
petitioner was an entry provider/facilitator and that the search resulted
in addition of `70 crores as income in his hand. Secondly, it was
argued that the plain reading of Section 153A of the Act would reveal
that it overrides the other provisions of the Act because of the non-
obstante clause. Elaborating further, it was submitted that period of
limitation prescribed by Section 153B i.e. two years is substantial that
excludes search assessment and therefore, excludes applicability of
Section 153(2A) which is general and governs all demands other than
those concerning search assessment.
4. The question as to what would be the starting point of limitation
with respect to any proceedings which are to be initiated by the
revenue or any steps to be taken by it, was the precise issue of point of
determination by this Court in Odeon Builders (supra). The Court
then held as follows:
W.P.(C) 4304/2018 & connected matters Page 5 of 15
"28. The above decisions under Section 256 (3) are clearly
distinguishable. The limitation for the purpose of Section
256 begins to run the moment the order is communicated
to the parties. Another distinction to be drawn is that the
word used in Section 256 of the Act "served" whereas
under Section 260A it is "received". The word "received"
has to be seen in the context of the decision in CIT v.
Sudhir Choudhrie (supra), which made it mandatory for
pronouncement of the orders of the Income-tax Appellate
Tribunal. At the time of such pronouncement, apart from
the authorized representative of the assessee, the
Departmental representative is expected to remain present.
Through him the Department becomes immediately aware
of the said judgment of the Income-tax Appellate Tribunal.
The "concerned" Commissioner of Income-tax
43. Viewed differently, the contextual interpretation of the
expression "receive" would be when the parties notified of
the pronouncement are represented at that time in the open
court. When pronounced, both parties are said to receive
it. The agency which they choose for transmission to the
official or executive component to authorise an appeal is
not the concern of the judicial system.
49. Consequently, where the order is common to several
appeals, while for the assessee the starting point for
limitation will be when the assessee aggrieved by such
order first receives a copy thereof; for the Revenue, the
date when the Department representative of the
Commissioner of Income-tax (Judicial) first receives a
copy thereof will be the starting point for limitation for all
the appeals.
50. It is, therefore, not possible to accept the submission
that till a particular jurisdictional Commissioner of
Income-tax or Principal Commissioner of Income-tax has
not received the order of the Income-tax Appellate
Tribunal, the period of limitation for filing an appeal
against that order does not commence.
W.P.(C) 4304/2018 & connected matters Page 6 of 15
Answers to the questions
51. The answers to the questions referred to this Court are
answered thus:
Question : (i) What is the correct interpretation to be
placed on the expression "received by the assessee or the
Principal Chief Commissioner or the Chief Commissioner
or Principal Commissioner" in Section 260A (2) (a) of the
Act ? Does it mean "received" by any of the named
officers including the Commissioner of Income-tax
(Judicial)?
Answer : The word "received" occurring in section 260A
(2) (a) would mean received by any of the named officers
of the Department, including Commissioner of Income-tax
(Judicial). The provision at present names four particular
officers i.e. the Principal Commissioner, Commissioner,
Principal Chief Commissioner, and the Chief
Commissioner of Income Tax. These are the only
designations of the officers who could receive a copy of the
order. In the absence of a qualifying prefix "concerned",
the receipt of a copy of the order of the Income- tax
Appellate Tribunal by any of those officers in the
Department including the Commissioner of Income-tax
(Judicial) will trigger the period of limitation.
Question: (ii) Does limitation begin to run for the purposes
of Section 260A (2)(a) only when a certified copy of the
order of the Income-tax Appellate Tribunal is received by
the "concerned" Commissioner of Income-tax within
whose jurisdiction the case of the assessee falls
notwithstanding that it may have been received by any
other Commissioner of Income- tax, including the
Commissioner of Income-tax (Judicial) prior thereto? Is it
open to the court to read the word "concerned" into
section 260A(2(a) of the Act as a prefix to any of the
officers of the Department named therein?
W.P.(C) 4304/2018 & connected matters Page 7 of 15
Answer : In section 260A(2) of the Act, the words
Commissioner of Income-tax, Principal Commissioner of
Income-tax or Chief Commissioner of Income-tax are not
prefixed or qualified by the word "concerned". There is no
warrant for the court to read into the provision such a
qualifying word. The Court rejects the contention of the
Revenue that limitation for the purposes of section
260A(2)(a) begins to run only when a certified copy of the
order of the Income-tax Appellate Tribunal is received by
the "concerned" Commissioner of Income-tax within
whose jurisdiction the case of the assessee falls
notwithstanding that it may have been received by any
other Commissioner of Income-tax, including the
Commissioner of Income-tax (Judicial) prior thereto.
Question : (iii) In the context of section 254 (3) of the
Act, is there an obligation on the Income-tax Appellate
Tribunal to send a certified copy of its order to a
Commissioner of Income-tax other than the one whose
details are given to it during the pendency of the appeal?
Will change in the jurisdiction concerning the case of the
respondent-assessee to another Commissioner of Income-
tax subsequent to the order of the Income-tax Appellate
Tribunal have the effect of postponing the time, from which
limitation would begin to run in terms of section
260A(2)(a) of the Act, to when such Commissioner of
Income-tax receives the order of the Income-tax Appellate
Tribunal?
Answer : As far as the obligation of the Income-tax
Appellate Tribunal under Section 254 (3) of the Act is
concerned, the said obligation is satisfied once the
Income-tax Appellate Tribunal sends a copy of an order
passed by it to the assessee as well as to the Principal
Commissioner of Income-tax or the Commissioner of
Income-tax or even the Commissioner of Income-tax
(Judicial). The Income-tax Appellate Tribunal has to be
simply go by the details as provided to it in the memo of
parties. If there is a change concerning the jurisdiction of
W.P.(C) 4304/2018 & connected matters Page 8 of 15
the Commissioner of Income-tax and it is some other
Commissioner of Income-tax who has jurisdiction, it will
not have the effect of postponing the commencement of the
period of limitation in terms of section 260A(2)(a) of the
Act. The statute is not concerned with the internal
arrangements that the Department may make by changing
the jurisdiction of its officers. It is for the officer of the
Department who first receives a copy of the Income-tax
Appellate Tribunals order to reach it in time to the officer
who has to take a decision regarding the filing of an
appeal.
Question : (iv) After the decision of this court in CIT v.
Sudhir Choudhrie [2005]278 ITR 490 (Delhi), do the
decisions in CIT v. Arvind Construction Co. (P.) Ltd.
[1992] 193 ITR 330 and CIT v. ITAT [2000] 245 ITR 659
(Delhi) require to be reconsidered, explained or
reconciled?
Answer : The decisions in CIT v. Arvind Construction Co.
(P) Ltd. (supra) and CIT v. ITAT (supra) were rendered in
the context of Section 256 of the Act (and not Section
260A(2)(a) of the Act) and also prior to the decision in CIT
v. Sudhir Choudhrie (supra). While the former decisions
may not require reconsideration, they require to be
reconciled with the latter decision in CIT v. Sudhir
Choudhrie (supra). The decisions in CIT v. Arvind
Construction Co. (P) Ltd. (supra) and CIT v. ITAT (supra)
are of no assistance to the Revenue in its interpretation of
Section 260A(2)(a) of the Act.
Question : (v) After the change of procedure where orders
of the Income-tax Appellate Tribunal are pronounced in
the open, is it incumbent on the Department through its
Departmental representative or Commissioner of Income-
tax (Judicial) to apply for a certified copy of the order of
the Income-tax Appellate Tribunal and should limitation
for the purposes of Section 260A(2)(a) be computed from
the date on which such certified copy is made ready for
delivery by the Income-tax Appellate Tribunal?
W.P.(C) 4304/2018 & connected matters Page 9 of 15
Answer : While there is no requirement for the
Departmental representative or the Commissioner of
Income-tax (Judicial) to apply for a certified copy of the
Income-tax Appellate Tribunal, in any event under the
extant Income-tax Appellate Tribunal Rules, a copy of the
order is sent to the Commissioner of Income-tax (Judicial).
In the context of Section 260A(2)(a) of the Act, once an
order is listed for pronouncement in the Income-tax
Appellate Tribunal, the Departmental representative or the
Commissioner of Income-tax (Judicial) should be taken to
be aware of the order. From that point, it is a purely an
internal administrative arrangement as to how the
Departmental representative or Commissioner of Income-
tax (Judicial) obtains and further communicates the order
to the officer who has to take a decision on filing the
appeal. It is possible that immediately after
pronouncement, the authorized representative or the
Departmental representative or both may apply for a
certified copy of the order of the Income-tax Appellate
Tribunal. In that case, the time taken for the certified copy
to be readied for collection by the applicant will be
excluded while computing limitation. But here again, if
earlier to such date, a copy is received by a party from the
Income-tax Appellate Tribunal, then such earlier date will
be the starting point for limitation.
Question : (vi) Whether the receipt of a certified copy of
the order of the Income-tax Appellate Tribunal by the
Commissioner of Income-tax (Judicial) is sufficient to
trigger the commencement of the limitation period under
Section 260 A (2) (a) of the Act?
Answer : The receipt of a certified copy of the order of the
Income-tax Appellate Tribunal by Commissioner of
Income-tax (Judicial) would trigger the commencement of
the limitation period under Section 260 A (2) (a) of the
Act.
W.P.(C) 4304/2018 & connected matters Page 10 of 15
Question : (vii) In the context of a common order of the
Income-tax Appellate Tribunal covering several appeals,
whether limitation for all the appeals would begin to run
when the certified copy is received first by either the
Commissioner of Income-tax (Judicial) or any one of the
officers of the Department mentioned in Section 260 A (2)
(a) or only when the Commissioner of Income-tax
"concerned" receives it? Where the same Commissioner
of Income-tax has jurisdiction over more than one assessee
in the batch, will limitation begin to run for all such
appeals when such Commissioner of Income-tax receives
the order in either of the assessee's cases?
Answer : Where there, is a common order of the Income-
tax Appellate Tribunal covering the several appeals,
limitation would begin to run when a certified copy is
received first by either the Commissioner of Income-tax
(Judicial) or one of the officers of the Department and not
only when the Commissioner of Income-tax "concerned"
receives it. When the same Commissioner of Income-tax
has jurisdiction for more than one assessee, the limitation
begin to run for all from the earliest of the dates when the
Departmental representative of Commissioner of Income-
tax (Judicial) or any Commissioner of Income-tax first
receives the order in any of the cases forming part of the
batch disposed of by the common order. If there are four
separate orders passed, then the limitation begins to run
when such separate orders are received first by any officer
of the Department.
Question: (viii) Whether administrative instructions issued
by the Department for its own administrative convenience
can have the effect of altering the time from which
limitation will begin to run for the purposes of Section 260
A(2) (a) of the Act?
Answer : Instructions issued by the Department for its
administrative convenience cannot alter the time when
limitation would begin to run under Section 260A (2) (a) of
the Act. To reiterate these administrative instructions are
W.P.(C) 4304/2018 & connected matters Page 11 of 15
for the administrative convenience of the Department and
will not override the statute, in particular, Section 260A
(2) (a) of the Act."
5. It is quite evident from the decision in Odeon Builders (supra)
that limitation begins (for any purpose under the Act) from the point
of time when the departmental representative receives the copy of a
decision or an order of the ITAT. The evidence on record in this case
clearly establishes that the concerned DR (a Commissioner ranking
officer) nominated by the revenue received a copy of the ITAT order
dated 30.03.2016. The Starting point of limitation therefore was
31.03.2016.
6. The next question is whether the non-obstante clause under
Section 153 of the Act, which prescribes a specific period of
limitation to complete a search assessment for the block period
concerned, could override the general period of limitation. In this
context, the Court notices that Section 153 of the Act generally talks
of various periods of limitation. It prescribes that no order of
assessment shall be made either under Section 143 or Section 144 of
the Act any time after expiry of twenty one months from the end of
the assessment year in which the income was first assessable. The
exception carved by way of Section 153(2) relates to reassessment
and states that in cases covered by it, the period is reduced to nine
months from any of financial year in which the notice for re-
assessment is served. The relevant provision which applies at that
point of time for purpose of this case, reads as follows:
W.P.(C) 4304/2018 & connected matters Page 12 of 15
"(2A) Notwithstanding anything contained in sub-
sections (1), (1A), (1B) and (2), in relation to the
assessment year commencing on the 1st day of April,
1971 and any subsequent assessment year, an order of
fresh assessment in pursuance of an order under Section
250 or section 254 or section 263 or section 264, setting
aside or cancelling an assessment, may be made at any
time before the expiry of one year from the end of the
financial year in which the order under Section 250 or
section 254 is received by the Principal Chief
Commissioner or Chief Commissioner or Principal
Commissioner or Commissioner or, as the case may be,
the order under Section 263 or Section 264 is passed by
the Principal Chief Commissioner or Chief
Commissioner or Principal Commissioner or
Commissioner "
7. During the relevant period when the assessment was completed,
the period prescribed was nine months (on account of substitution
carried out by the amendment). The special provision under Section
153B of the Act in the opinion of the Court carves out a special period
of limitation without which search/block assessments would not be
completed. The entire provisions under Chapter XIV relating to block
assessment, have been termed by the Supreme Court to be a complete
code. At the same time, a specific period of limitation prescribed is
for completion of original block assessments for the search and
seizure proceedings. The period for issuing notice and completion of
block assessment for all the concerned years (7 years) is within two
years. Now, in the opinion of the Court, to apply that general two
years limitation, the block reassessment proceeding after remand is
not a feasible proposition. In the judgments in Nokia India (P) Ltd.
W.P.(C) 4304/2018 & connected matters Page 13 of 15
vs. Deputy Commissioner of Income Tax, (2017) 85 Taxmann.com
291 (Del.) as well as Commissioner of Income Tax vs. Bhan Textile P.
Ltd., (2008) 300 ITR 176 (Del.) are relevant authorities. In Principal
Commissioner of Income Tax vs. PPC Business and Products P. Ltd.,
(2017) 398 ITR 71 (Del.), this Court emphasized the need to initiate
the proceedings wherever the revenue wished to proceed further in
case of search and seizure within the time and underlined that in case
the assessments are not initiated and completed within the time
prescribed, the valuable right accrues to the assessee.
8. The general provision of two years, in the opinion of the Court,
has been provided with one important objective i.e. to cater to a
specific situation where upon search and seizure operation, if new
material is found, already completed assessments are revisited. Had
Parliament not prescribed such a specific period of limitation,
possibly, the assessee's concern would have successfully urged that
search and seizure proceedings would be confined only to the
concerned year in which the search operation took place. It was
proposed to tide over such situation. The only provision that
prescribed a period of limitation in respect of remands at the relevant
time at least in this case is Section 153(2A). In that sense, that period
of limitation prescribed for completion of remand (nine months)
constituted a special provision, which applies to every class of remand
regardless whether they originate from assessments/re-
assessments/revisions or search and seizure assessments. In these
circumstances, completion of the assessment proceedings for the
W.P.(C) 4304/2018 & connected matters Page 14 of 15
block period by the impugned order dated 22.12.2017 was clearly
beyond the period of limitation. As noticed earlier, the last date by
which the remand order could have been worked out validly was
31.12.2016.
9. For the forgoing reasons, the petitions have to succeed. The
impugned order pursuant to the remand dated 22.12.2017 and all
consequential orders and actions are hereby quashed. The writ
petitions are allowed. All the pending applications stand disposed of.
S. RAVINDRA BHAT
(JUDGE)
A.K.CHAWLA
JUDGE)
OCTOBER 01, 2018
ssc
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