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It is unacceptable for adjudicating authority to pass an assessment order while overlooking obligation to communicate it in a manner recognized by law: HC

2019-TIOL-1520-HC-MAD-IT

IN THE HIGH COURT OF MADRAS

Tax Case Appeal No.429 of 2019

COMMISSIONER OF INCOME TAX
CHENNAI

Vs

MR MOHAMMED MEERAN SHAHUL HAMEED

T S Sivagnanam & V Bhavani Subbaroyan, JJ

Dated: July 03, 2019

Appellant Rep by: Mr M Swaminathan, SSC
Respondent Rep by: 
None

Income Tax – Sections 263 & 260A

Keywords – Limitation barred

THE assessee company had filed its return for the relevant AY. The assessment order was framed by the assessee on December 31, 2010. Subsequently, the CIT(A) by invoking his revisionary power passed an order u/s 263 revising the assessment order dated December 31, 2010 is barred by limitation provided u/s 263(2) by assuming that the last date for passing the assessment order is March 31, 2012 and on the ground that the order was served November 29, 2012. On second appeal, the Tribunal confirmed the order passed by the CIT(A) holding the assessment order limitation barred.

On appeal, the High Court held that,

Whether it is sufficient for the adjudicating authority to simply pass an order whilst ignoring the obligation of communicating such order in a manner known to law – NO: HC

++ the Tribunal while delivering the order took note of the decision of the Kerala High Court in the case of Government Wood Workshop Vs. State of Kerala wherein it was held that the Authority cannot pass an order and keep it on his file and should not, on his own will and pleasure, communicate the same to the person aggrieved well beyond the period of limitation stating that the date, on which, he passed the order, would be the relevant date. It is not enough that the Authority should pass the order, but it should be communicated to the aggrieved individual in a manner known to law and acknowledgment card should be obtained and the Departmental Representative, who appeared before the Tribunal could not controvert the submissions of the authorized representative of the assessee. Thus, Court find no substantial question of law.

Revenue’s appeal dismissed

JUDGEMENT

Per: T S Sivagnanam:

We have elaborately heard Mr.M.Swaminathan, learned Senior Standing Counsel for the Revenue.

2. This appeal, filed by the Revenue under Section 260A of the Income Tax Act, 1961 (for short, the Act), is directed against the order dated 04.4.2013 in ITA.No.2244/Mds/2012 on the file of the Income Tax Appellate Tribunal, Chennai ‘C’ Bench for the assessment year 2008-09.

3. The Revenue has filed this appeal by raising the following substantial question of law :

“Whether, on the facts and in the circumstances of the case, the Tribunal had applied its mind and was right in holding that the revision order of the Commissioner of Income Tax under Section 263 dated 26.3.2012 revising the assessment order dated 31.12.2010 is barred by limitation provided under Section 263(2) by assuming that the last date for passing the assessment order is 31.3.2012 and on the ground that the order was served on 29.11.2012 ? “

4. At the outset, we wish to point out that there is no substantial question of law arising for consideration in this appeal. We support this conclusion with the following reasons :

The Tribunal, by the impugned order, set aside the order under Section 263 of the Act passed by the Commissioner of Income Tax (Appeals)-10, Chennai dated 26.3.2012 not on merits, but on the ground that it was communicated beyond the period of limitation. The Tribunal considered the factual position and the letter written by the Assessing Officer enclosing the order passed under Section 263 of the Act and held that it was communicated well beyond the period of limitation prescribed under Section 263(2) of the Act.

5. The following findings rendered by the Tribunal in the impugned order would be relevant to be extracted :

“A perusal of the aforesaid letter shows that the Assessing Officer has forwarded the order of the CIT to the assessee on 26.11.2012 on the request of the assessee. In the letter, it has not been mentioned that the copy of the order has earlier been supplied to the assessee on the date on which such order was communicated to the assessee. The DR has also failed to controvert the submission of the AR. Nothing has come on record to show that impugned order was despatched to the assessee on 28.3.2012. As a matter of practice, the orders are sent to the assessees through registered post AD. Neither the dispatch register nor acknowledgment of the receipt of the order by the assessee has been placed on record. Therefore, inference has to be drawn against the Revenue that the impugned order was never communicated to the assessee. The provisions of Section 263(2) clearly state that order under Section 263(1) has to be passed within a period of two years from the end of financial year, in which, the order sought to be revised is passed.”

6. Further, the Tribunal took note of the decision of the Kerala High Court in the case of Government Wood Workshop Vs. State of Kerala [reported in 1987 1 KLT 804] wherein it was held that the Authority cannot pass an order and keep it on his file and should not, on his own will and pleasure, communicate the same to the person aggrieved well beyond the period of limitation stating that the date, on which, he passed the order, would be the relevant date. It is not enough that the Authority should pass the order, but it should be communicated to the aggrieved individual in a manner known to law and acknowledgment card should be obtained and the Departmental Representative, who appeared before the Tribunal could not controvert the submissions of the authorized representative of the assessee. Thus, we find that no substantial question of law arises for consideration.

7. Accordingly, the above tax case appeal is dismissed. The substantial question of law raised is answered against the Revenue.

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