Limitation period not prescribed but assessment order must be served within reasonable time – ITAT

Limitation period not prescribed for service of assessment order but it must be served within reasonable time as held by the various high courts – ITAT

ABCAUS Case Law Citation:
ABCAUS 2715 (2019) (01) ITAT

Important Case Laws Cited/relied upon:
CIT Vs. Subrata Roy,(2014(7) TMI42)
ACIT Vs. Orissa Stevedores Ltd
State of Andhra Pradesh Vs. Khetmal Parekh & M.Ramakishtaiah and Co.

The instant appeal was filed by the assessee against the order of the Commissioner of Income Tax (Appeals) on the issue of validity of the assessment order passes u/s 143(3) of the Income Tax Act, 1961 (the Act).

In this case, the assessment was completed u/s 143(3) but the assessment order was served on the assessee with inordinate delay of 9 months from the date of its passing.

Therefore, the assessee contended that the assessment order passed u/s 143(3) was ante dated and it was passed after the limitation period specified in the Act, therefore, contended that the order passed u/s 143(3) was invalid

On appeal, the CIT(A) upheld the validity of the assessment order stating that the assessment order was passed within the limitation period and there is no time limit specified in the Act for serving the assessment order.

Before the Tribunal, the assessee contended that the inordinate delay in serving the assessment order, gave presumption that the said assessment order was not passed before the time limit allowed under the Act and it was ante dated. Hence, the assessment order required to be annulled.  

The Tribunal observed that as per the Department, the assessment order and demand notice was served through the departmental notice server. However no evidence was placed to establish the date when the assessment order infact was passed.

The Tribunal opined that though the limitation period is available for passing the assessment order, but not for service of the assessment order and demand notice, the order must be served on the assessee within the reasonable time as held by the various high courts.

The Tribunal observed that in the instant case, there was no default or refusal from the assessee to accept the order, therefore, the contention of the department that there was a reasonable cause for delay of 9 months in the service of the demand notice and the assessment order was not acceptable.

In the absence of any evidence to establish that the order was passed within the time limit allowed u/s 143(3) and failure of the department to explain the delay of nine months, the Tribunal declined to accept the purported date of passing of the assessment order.

Accordingly, the Tribunal held that the assessment order passed u/s 143(3) was barred by limitation and the same was quashed.

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