Commissioner Of Income Tax, Gujarat Central v. Saurasthra Cement & Chem. Industries Ltd

Section: CONCLUSION COMMISSIONER OF INCOME TAX, GUJARAT CENTRAL v. SAURASTHRA CEMENT & CHEM. INDUSTRIES LTD. (Civil Appeal No. 2984 of2008) MAY02,2016 [A.K. SIKRI AND ROHINTON FALi NARIMAN, JJ.J Income Tax Act, 1961 - ss.124, 125A, 144B and 153 -Limitation for completion of assess111ent - Computation of- Exclusion of the period, fro111 the date of draft order uls. 144B{I) sent by ITO to Inspecting Assistant Commissioner (IAC), to the date ITO receives direction fro111 IAC u/s 144B(4) - Whether the exclusion period is applicable when the IAC is conferred concurrent jurisdiction as ITO u/s. 125A - In the present case, plea of assessee that 1AC having been conferred with power of JTO approval of IAC was not applicable and hence the assessment order was time-barred - Held: Mere confer111ent of power of ITO on JAC would not denude the IAC of his power u/s 144B - Power of IAC u/s 1448 would not apply only when the IAC exercises the powers or performs the functions of an ITO in pursuance of order uls. 125 or s.125A -!AC had not exercised the powers or performed the fimction of an JTO - Therefore, the period during which the draft assessment order · was pending with hi111, would be excluded from li111itation period -Thus, the assessment order is not ti111e-barred. Allowing the appeal of the Revenue and dismissing that of the assessee, the Court HELD: 1. From the reading of Section 153 of Income Tax Act, 1961, the period (not exceeding 180 days) commencing from the date on which the ITO forwards the draft order under sub-Section (1) of Section 144B of the Act to the assessee and ending with the date on which the ITO receives the directions from the IAC under sub-Section (4) of Section 144B, is to be excluded while computing the period of limitation. [Para 11) [875-E] 2.1 A bare reading of sub-Section(4) of Section 125A of the Act provides that where: (a) an order is made under sub-section (1), and (b) the Inspecting Assistant Commissioner exercises the powers or performs the functions of an Income-tax Officer in relation to any area, or persons or classes of persons, or incomes or classes of income, or cases or classes of cases, - (i) references in this Act or in any rule made thereunder to B the Income-tax Officer shall be construed as references to the Inspecting Assistant Commissioner, and (ii) any provision of this Act requiring approval or sanction of the Inspecting Assistant Commissioner will not be applicable. [Para 14] [879-C-E) c 2.2 Hence, the provision of the Act requiring the approval the Act requiring the approval 2.2 Hence, the provision of the Act requiring the approval the Act requiring the approval or sanction of the Inspecting Assistant Commissioner (IAC) will not be applicable only in those cases where both the aforementioned conditions (a) and (b) are satisfied. It would mean that, even though an order is made under section 125A(l) D empowering the Inspecting Assistant Commissioner to perform the functions of an Income-tax Officer, yet if he has not exercised the power or performed the function of an Income-tax Officer, the provisions requiring approval or sanction of the Inspecting Assistant Commissioner will be applicable. Sub-section (4) nowhere provides that, if some directions by the IAC are issued E as provided under sub-section (2), then provisions requiring approval or sanction of the IAC will not be applicable. [Para 15) [879-E-G) 2.3 Even when the IAC is given the same powers and