Commissioner Of Income Tax v. Ram Kishan Dass

*IN THE HIGH COURT OF DELHI AT NEW DELHI (1) ITA No. 1786/2010 + Date of Decision: May 27, 2011 % ... APPELLANT COMMISSIONER OF INCOME TAX Through: Ms. Rashmi Chopra, Advocate Versus ... RESPONDENT RAM KISHAN DASS Through: Mr. Ajay Vohra and Ms. Kavita Jha,Advocates (2) ITA No.1790/2010 % ... Appellant COMMISSIONER OF INCOME TAX Through: Ms. Rashmi Chopra, AdvocateVersus ... RESPONDENTThrcuyh: Mr. Ajay Vohra and Ms. Kavita Jha,Advocates RAM KISHAN DASS (3)[ITA No.1794/2010] % ... Appellant COMMISSIONER OF INCOME TAXThrough: Ms. Rashmi Chopra, AdvocateVersus ... RESPONDENTThrough: Mr. Ajy Vohra and Ms. Kavita Jha,Advocates RAM KISHAN DASS (4)[ITA No.170/2011] % ... AppellantThrough: Ms. Rash ml Chopra, Advocate COMMISSIONER OF INCOME TAX Versus Signature Not Verified ... RESPONDENT Digitally Signed By:AMULYACertify that the digital file andRAM KISHAN DASSphysical file have been compared andthe digital data is as per the physicalfile and no page is missing. hAs Nos: 1786/10, 1790/101794/10, 170/11, 237/11, 1350/11 & 238/11[Page 1 of 3] �� �� Through: Mr. Ajay Vohra and Ms. Kavita Jha,Advocates (5) ITA No.237/2011 % COMMISSIONER OF INCOME TAX... AppellantThrough: Ms. Rashmi Chopra, AdvocateVersusRAM KISHAN DASS.. RESPONDENTThrough:Mr. Ajay Vohra and Ms. Kavita Jha,Advocates (6) ITA No.1350/2010 % COMMISSIONER OFINCOME TAX... AppellantThrough: Ms. Rashmi Chopra, AdvocateVersus ... RESPONDENTSUNDER EXPORTSThrough:Mr. Saul Aggarwal and Mr. PrakashKumar, Advocates (7) ITA No.238/2011 % COMMISSIONER OF INCOME TAX... AppellantThrough: Ms. Rashmi Chopra, Advocate Versus ... RESPONDENTThrough: Mr. Ajay Vohra and Ms. Kavita jha,Advocates RAM KISHAN DASS CORAM:HON'BLE MR. JUSTICE A.K.SIKRIHON'BLE MR. JUSTICE !'&L.MEHTh 1.Whether the Reporters of local papersmay be allowed to see the judgment?Yesmay be allowed to see the judgment?Yes2.To be referred to Reporter or not?Yes 2.To be referred to Reporter or not? Orl 3. Vvhether tho udn;: snnU;-nporLedn the Dgst7 IFor orders, ee f42LIed as Cnr ciIYq q'c I' !C dc:ced27 ')-y 2011.iIYq q'c I' !C dc:ced27 ')-y 2011. if_i.•::: rd N ThIE 1llGll1 COURT OF ±(1) ETA No1775/2Date of Decision: May 27, 2011COMMIISSDON IE R OF AppeHantThrough:Mr. Prem Lata Bansa!, Sr. Advocatewith Mr. Deepak Ai ad, Advocates Versus BII5AN SAROOP [RAM KSHAN AGRO PVT, LTD. RESPONDENT]Through:Mr. K.P. Mall and Ms. Kavita jIia,Advocates (2)11TANoJ776I201,0 AppellantThrough:Mr. Prern Lata Bansal, Sr. Advocatewith Mr. Deepak Anad, AdvocatesVersus COMM55ONER OF IINCOME TAX WSHAN SAROOP RAM KUSHAN AGRO PVT. LTD. RESPONDENTThrough:Mr. K.P. Mall and Ms. Kavita jha,Advocates (3) 11 TAo1777/O1O % COMMIISSIIONER OF IINCOME TAXAppellantThrough:Mr. Prem Lata Bansal, Sr. Advocatewith Mr. Deepak Anad, Advocates-Versus COMMIISSIIONER OF IINCOME TAX RESPONDENTII3IISHAN SAROOP RAM KIISHAN AGRO PVT, LTDThrough:Mr. K.P. Mall and Ms. Kavita Jha,Advocates . (4) ATA NoJ965/010 % AppellantThrough:Mr. Prem Lata Bansa!, Sr. Advocatewith Mr. Deepak Anad, Advocates COMMSSDONER OF [INCOME TAX ITAs No.1775/ 2010, 1776/2010, 1777/2010,1965/2010, 2032/2010, 2033/2010, 2034/2010, 2035/2010,2036/2010, 2037/2010, 2038/2010, 2039/2010, 2046/2010 & 2047/2010 � � � VersusRESPONDENTL5;D51AN SAROOP [RAM KHSHAN AGRO PVT. LTD.]Through:Mr. K.P. Mall and Ms. IKavita jha,•Advocates COMMUSS110NER OF NCOME.TAXAppeaB1tThrough:Mr. Prern Lata Bansal, Sr. Advocatewith Mr. Deepak Anad, Advocates Versus 0 IISHA1N SAROOP RAM KIISHAN AGRO PVT LTDRESPONDENTThrough:Mr. K.P. Mall and Ms. Kavita jha,•Advocates •(6) IITA No2033/2010 COMMLSSONER OF IINCOME TAXAppeEUjntThrough:Mr. Preni ata Bansal, Sr. Advocatewith Mr. Deepak Anad, Advocates Versus . (4) ATA NoJ965/010 % AppellantThrough:Mr. Prem Lata Bansa!, Sr. Advocatewith Mr. Deepak Anad, Advocates COMMSSDONER OF [INCOME TAX ITAs No.1775/ 2010, 1776/2010, 1777/2010,1965/2010, 2032/2010, 2033/2010, 2034/2010, 2035/2010,2036/2010, 2037/2010, 2038/2010, 2039/2010, 2046/2010 & 2047/2010 � � � VersusRESPONDENTL5;D51AN SAROOP [RAM KHSHAN AGRO PVT. LTD.]Through:Mr. K.P. Mall and Ms. IKavita jha,•Advocates COMMUSS110NER OF NCOME.TAXAppeaB1tThrough:Mr. Prern Lata Bansal, Sr. Advocatewith Mr. Deepak Anad, Advocates Versus 0 IISHA1N SAROOP RAM KIISHAN AGRO PVT LTDRESPONDENTThrough:Mr. K.P. Mall and Ms. Kavita jha,•Advocates •(6) IITA No2033/2010 COMMLSSONER OF IINCOME TAXAppeEUjntThrough:Mr. Preni ata Bansal, Sr. Advocatewith Mr. Deepak Anad, Advocates Versus BIISHAN SAROOP [RAM KSHAN AGRO PVT. LTD. RESPONDENT]Through:Mr. K.P. Mall and . Ms.. IKavita jha,Advoc'tes•.[(7) ETA_No,2O34/JcflO] COMMI5SONiER OF IINCOME TA)( .•AppeHifiltThrough:Mr. Prem Lata Bansal, Sr. AdvocateWith Mr. Deepak Anad, AdvocatesVersus S DSHAN SAROOP RAM KIISHAN AGRO PVT. LTD. ,, RESPONDENTThrough:Mr. K. P. Mall and Ms. IKavita jha,Advocates i.�. (8) 11T,A No035/2010 IfAo.1775/ 2010, 1776/2010, 1777/2010, 1365/2010, 032/2U0, 2033/2010, 2034/2010, 2035/2010,2036/2010, 2037/2010, 2038/2010, 2036/2010, 2046/2010 & 2047/2010 Page 2 015 � � � � � Appent COMMIISSOROF•IINCOMI.TAXAppentThrough:Mr. Pre Lata Bansal, Sr. Advocatewith Mr. Deepak Anad, Advocates Versus • 13115HAN SAEROOP [RAM KSHA AGRO PVT. LTD.]RESPONDENTThrough:Mr. K.P. Mall and Ms. l(avita Jha,Advocates % COMMDS5IIOR OF fiNCOME TAXThrough:Mr. Prern Lata Bansal, Sr. Advocatewith Mr. Deepak Anad, Advocates Versus EH51AN SAROOP RAM KSNAN AGRO PVT. LTD. ,. RESPONDENTThrough:Mr. K.P. Mall and Ms. Kavita Jha,Advocates (10) IITA No,2037/2010 %COMMIISSONR OF IINCOME TAX AppeUantThrough:Mr. Prem Lata Barisal, Sr. Advocatewith Mr. Deepak Anad, AdvocatesVersus WSAN SAROOP RAM KilS HAN AGRO PVT. LTD. ,RE5PONDENTThrough:Mr. K.P. Mall and Ms. Kavita Jha,•Advocates (11) 11TA N0,203/2010 COMMIISSDONER OF IINCOME TAX •App'llOantThrough:Mr. Prem Lata Bansal, Sr. Advocatewith Mr. Deepak Anad, Advocates Versus lAs No.1775/ 2010, 1776/2010, 1777/2010, 1965/2010, 2032/2010, 2033/2010, 2034/2010, [2035/2010,]2036/2010, 2037/2010, 2038/2010, 2039/2010, 2046/2010 & 2047/2010 Page 3 of 5 � � � DSHAN SAROOP RAM KS HAN AGRO PVT. LTD. ... RESPONDENTThrough:Mr. K.P. MalL [and Ms. Kavita Jha,.]Advocates % AppeoflCQMMIISSIIONER OF [INCOME TAXThrough:Mr. Prem Lata Bansal, Sr. Advocatewith Mr. Deepak Anad, Advocates Versus BS.HAN SAROOP RAMKSII1AN AGIRO PVT. LTD.RESPONDENTThrough:Mr. K.P. Mall and Ms. Kavita Jha, Advocates % COMMIISSflONER OF hNCOME TAXAppellaoiitThrough:Mr. Preni Lata Bansal, Sr. Advocatewith Mr. Deepak Anad, Advocates Versus D5HAN SAROOP RAM KhSHAN AGRO PVT. LTD. RESPONDENTThrough:Mr. K.P. Mall and Ms. Kavita Jha, Advocates %COMMflSSflONER OF hNCOMIE TAX AppethantThrough:Mr. Prern Lata Bansal, Sr. Advocatewith Mr. Deepak Anad, Advocates Versus BIISHAN SAROOP RAM KIIShIAN AGRO PVT. LTD.RESPONDENTThrough:Mr. K.P. Mall and Ms. Kavita jha, Advocates CORAM:HON'lBLIE MR. JUJSTCE A0K51111ClRllFllONLE MR. JUSTACE MOLMEHTA 1. Whether the Reporters of local papers Yes •may be allowed to see the judgment?Yes TAS No.1775/ 2010, 1776/2010, 1777/2010, 1965/2010, 2032/2010, 2033/2010, 2034/2010, 2035/2010,2036/2010, 2037/2010, 2038/2010, 2039/2010, 2046/2010 & 2047/2010 [Yes]2. To be referred to Reporter or not?3.[Whether the judgment should be][Yes]reported in the Digest?3.[Whether the judgment should be][Yes]reported in the Digest? MLMEHTA,U9rU 1.For orders see ITA 1775 of 2010. MLM[EIHTA(WDGE)/L(•)/ •L(BCSIIKRD(jjuocE) 'May 27, 2011rdrd TAs No.1775/ 2010 1776/2010, 1777/2010, 1965/2010, 2032/2010, 2033/2010, 2034/2010, 2035/2010,2036/2010, 2037/2010, 2038/2010, 2039/2010, 2046/2010 & 2047/2010 *fiN THE Hfifi1 COURT OF DELHli AT NEW DELHI +'(1)11TANo1775/2010 1. Whether the Reporters of local papers Yes •may be allowed to see the judgment?Yes TAS No.1775/ 2010, 1776/2010, 1777/2010, 1965/2010, 2032/2010, 2033/2010, 2034/2010, 2035/2010,2036/2010, 2037/2010, 2038/2010, 2039/2010, 2046/2010 & 2047/2010 [Yes]2. To be referred to Reporter or not?3.[Whether the judgment should be][Yes]reported in the Digest?3.[Whether the judgment should be][Yes]reported in the Digest? MLMEHTA,U9rU 1.For orders see ITA 1775 of 2010. MLM[EIHTA(WDGE)/L(•)/ •L(BCSIIKRD(jjuocE) 'May 27, 2011rdrd TAs No.1775/ 2010 1776/2010, 1777/2010, 1965/2010, 2032/2010, 2033/2010, 2034/2010, 2035/2010,2036/2010, 2037/2010, 2038/2010, 2039/2010, 2046/2010 & 2047/2010 *fiN THE Hfifi1 COURT OF DELHli AT NEW DELHI +'(1)11TANo1775/2010 %Date of Decision: May 27, 2011COMMISSIONER OF fiNCOME TAXApp&fitThrough:Mr. Prem Lata Bansal, Sr. Advocatewith Mr.. Deepak Anad, Advocates Versus BSHAN SAROOP RAM KfiSHAN AGRO PVT, LTD. RESPONDENTThrough:Mr. K.P. Mail and Ms. Kavita jha,Advocates (2) IITA_Noi77/2OJLO %COMMfiSSfiONER OF ENCOME TAXAppefifientThrough:Mr. Prem Lata Barisal, Sr. Advocatewith Mr Deepak Anad, AdvocatesVersus BSHASAROOP RAM KfiSHAN .GRO PVT, LTD,RESPONDENTThrough:Mr. K.P. Mail and Ms. Kavita jha,Advocates (3) bTA NoJ777/2010 %COMMISSIONER OF fiNCOME TAXAppefifiantThrough:Mr. Prern Lata Bansal, Sr. Advocatewith Mr. Deepak Anad, AdvocatesVersus SHAN 5AKGQP RAM K5HAN AGRO PVT. LTD. RESPONDENTThrough:Mr. K.P. Mall and Ms. Kevita Iha,Advocates q- % COMMISSIONER OF fiNCOME TAXAppefifiantThrough:Mr. Prem Lata Bansal, Sr. Advocatewith Mr. Deepak Anad, AdvocateslAs No.1775/ 2010, 1776/2010, 1777/2015, 1965/2010. 2032/2010, 2533/2010, 2334/2010, 2035/2010,2036/2010, 2037/2010, 2038/2010, 2039/2010 204612010 & 2047/2010 Pagel of23 Versus• BSHAN SAROOP RAM KSHAN AGRO PVT. LTD. ,. RESPONDENTThrough:Mr. K.P. Mall and Ms. Kavita Jha,Advocates (5)TA I\lo.2032/2010 % COMMISSIONER OF INCOME TAXAppentThrough:Mr. Prem Lata Bansal, Sr. Advocatewith Mr. Deepak Anad, Advocates Versus • BSHAN SAROOP RAM KSHAN AGRO PVT LTD. .RESPONDENTThrough:Mr. K.P. Mall and Ms. Kavita jha,Advocates (6) IITA No,2033/2010 COMMISSIONER OF INCOME TAXAppeantThrough:Mr. Prem Lata Bansal, Sr. Advocatewith Mr. Deepak Anad, Advocates Versus 13ES1AN SAROOP RAM KISHAN AGRO PVT. LTD. .RESPODENTThrough:Mr. K.P. Mall and Ms. Kavita jh,Advocates (7) PTA \io.2034/2010 % COMMISSIONER OF INCOME TAX••.Appeent.Through:Mr. Prern Lata Bansal, Sr. Advocatewith Mr. Deepak Anad, Advocates •• Versus BiSHAN SAROOP RAM KSHAN AGRO PVT. LTD. . RESPONDENTThrough:Mr. K.P. Mall and Ms. Kavita -jha,SAdvocatesThrough:Mr. K.P. Mall and Ms. Kavita -jha,SAdvocates . (B) ITANo2O35/2O1O % TAs No.1775/ 2010 1776/2010, 1777/2010, 1965/2010, 2032/2010, 2033/2010, 2034/2010, 2035/2010,2036/2010, 2037/2010, 2038/2010, 2039/2010, 2046/2010 & 2047/2010 Page 2 of 23 AppeantThrough:Mr. Prem Lata Bansal, Sr. Advocatewith Mr. Deepak Anad, Advocates COMMSSONER OF 11N-COME TAX Versus BPSHAN SAROOP RAM KSHAN AGRO PVT. LTD. RESPONDENTThrough:Mr. K.P. Mall and Ms. Kavita jha,Advocates (9)TAo2036/2010 % COMMISSIONER OF 1INCOME TAXAppertThrough:Mr. Prem Lata Barisal, Sr. Advocatewith Mr. Deepak Anad, Advocates • • Versus WSHAN SAROOP RAM KS1AN AGRO PVT, LTD.RESPONDENTThrough:Mr. K.P. Mall and Ms. Kavita Jha,Advocates (10) ITA o203.7/2010 %•COMMISSIONER OF INCOME TAX App&flantThrough:Mr. Prern Lata Bansal, Sr. Advocatewith Mr. Deepak Anad, Advocates Versus B51AN SAROOP RAM KSHAN AGRO PVT, LTD. ,,, RESPONDENTThrough:Mr. K.P. Mall and Ms. Kavita Jha,Advocates (11) fl7 No,2038/20]LO %COMMISSIONER OF INCOME TAXAppeHntThrough:Mr. Prem Lata Bansal, Sr. Advocatewith Mr. Deepak Anad, Advocates . Versus TAs No.1775/ 2010, 1776/2010, 1777/2010, 1965/2010, 2032/2010, 2033/2010, 203412010, 2035/2010,2036/2010, 2037/2010, 2038/2010, 2039/2010, 2046/2010 & 204712010 1SHAN SAROOP [RAM KliSHAW AGRO ][PVT, LTD. ] Through:Mr. K.P. Mall and Ms. Kavita jha,Advocates (12) PTA No.2039/2010 %COMMISSIONER OF IINCOME TAX WSHAN SAROOP RAM KS1AN AGRO PVT, LTD.RESPONDENTThrough:Mr. K.P. Mall and Ms. Kavita Jha,Advocates (10) ITA o203.7/2010 %•COMMISSIONER OF INCOME TAX App&flantThrough:Mr. Prern Lata Bansal, Sr. Advocatewith Mr. Deepak Anad, Advocates Versus B51AN SAROOP RAM KSHAN AGRO PVT, LTD. ,,, RESPONDENTThrough:Mr. K.P. Mall and Ms. Kavita Jha,Advocates (11) fl7 No,2038/20]LO %COMMISSIONER OF INCOME TAXAppeHntThrough:Mr. Prem Lata Bansal, Sr. Advocatewith Mr. Deepak Anad, Advocates . Versus TAs No.1775/ 2010, 1776/2010, 1777/2010, 1965/2010, 2032/2010, 2033/2010, 203412010, 2035/2010,2036/2010, 2037/2010, 2038/2010, 2039/2010, 2046/2010 & 204712010 1SHAN SAROOP [RAM KliSHAW AGRO ][PVT, LTD. ] Through:Mr. K.P. Mall and Ms. Kavita jha,Advocates (12) PTA No.2039/2010 %COMMISSIONER OF IINCOME TAX TAXAppeDntThrough:Mr. Prem Lata Bansal, Sr. Advocatewith Mr. Deepak Anad, Advocates • Versus •BE BE SHAN SAROOP [RAM KSHAN AGRO PVT. LTD. ...] RESPONDENTThrough:Mr. K.P. Mall and Ms. Kavita Jha, Advocates (13) ETA No2046/2010 % COMMISSIONER OF INCOME TAX AppeaL1t Through:Mr. Prem Lata Bansal, Sr. Advocatewith Mr. Deepak Anad, Advocates Versus • BSHAN SAROOP RAM K5[1AN AGRO PVT. LTD ,RIESPONDENT]Through:Mr. KR, Mall and Ms. Kavita jha, Advocates •Through: % : :.AppeDitThrough:Mr. Prem Lata Bansal, Sr. Advocatewith Mr. Deepak Anad, AdvocatesThrough:Mr. Prem Lata Bansal, Sr. Advocatewith Mr. Deepak Anad, Advocates •COMMSSONER OF INCOME TAX: - • Versus BSLAN SAROOP RAM KIISHAN AGRO PVT. LTD. ,RESPONDENTThrough:Mr. KR. Mall and Ms. Kavita jha, Advocates CORAi:HONB.LE MR. JUSTCE A.K.SKRHONBLIE MR. JJTCE M.L.MEHTA • 1. Whether the Reporters of local papers•TM No.1775/ 2010, 1776/2010, 1771/2010, 1965/2010, 2032/2010, 2033/2010, 203412010, 2035/23J0,2036/2010,2037/201C,, 2038/2010,2039/2010, 2043/2010 & 2047/2010 AR may be allowed to see the judgment? 2.To be referred to Reporter or not? 3.Whether the judgment should bereported in the Digest? MLMETA, J. (Oral) 1.The above 14 appeals are directed against the common order ofthe Income Tax Appellate Tribunal (for short, "the Tribunal") dated 18thSeptember 2009 whereby the appeals filed by the Assessee againstthe order of CIT(A) were allowed and the cross appeals filed by theRevenue were dismissed. The following questions of law arose in allthese appeals: 1.Whether the Ld. ITAT erred in law in holding that theassessment order was barred by limitation? 11:[Whether the amendment to the proviso to Section 142(2C)]of the Income Tax Act, 1961 with effect from 01.04.2008was clrificatory and thus retrospective in nature?of the Income Tax Act, 1961 with effect from 01.04.2008was clrificatory and thus retrospective in nature? 2.The facts, as gathered from the impugned order, are that theAssessee had filed its returns for different assessment years. Therewas a search conducted by the Revenue on the Assessee on 7October 2004. The last panchnama was drawn on [6th ]December 2004.A notice under Section 153A of the Income Tax Act (for short, "theAct") was :issued upon the Assessee on [16th ]May, 2005. The assesseeTAs No.1775/ 2010, 1776/2010, 1777/2010, 1965/2010, 2032/2010, 2033/2010, 2034/2010, 2035/2010,2036/2010, 2037/2010, 2038/2010, 2039/2010, 2046/2010 & 2047/2010 2.The facts, as gathered from the impugned order, are that theAssessee had filed its returns for different assessment years. Therewas a search conducted by the Revenue on the Assessee on 7October 2004. The last panchnama was drawn on [6th ]December 2004.A notice under Section 153A of the Income Tax Act (for short, "theAct") was :issued upon the Assessee on [16th ]May, 2005. The assesseeTAs No.1775/ 2010, 1776/2010, 1777/2010, 1965/2010, 2032/2010, 2033/2010, 2034/2010, 2035/2010,2036/2010, 2037/2010, 2038/2010, 2039/2010, 2046/2010 & 2047/2010 filed return in response to this notice. On 12' December 2006, theAssessing Officer ordered for conducting special audit as per theprovisions of Section 142 (2A) of the Act and gave 90 days time i.e. upto [12th ][March 2007 to submit the report. The Auditor made a request to]the Assessing Officer for seeking extension of time for completion ofaudit stating that the Assessee did not co-operate in the proceedings.Consequently, Assessing Officer extended the time from 12th March,2007 to 2 [01h ][April, 2007. The Assessing Officer again extended the time]for completion of the special audit up to 20th May, 2007, The AD again,for the third time, extended the time for completion of special audit [Lip]to [5th ][June, 2007, The audit report under Section 142(213) of the Act]came to be submitted by the Auditor on 4° June, 2007. The AD passedthe assessment order under Section 153A and 143(3) of the Act on 3August, 2007.. 3. These appeals against the different orders of the AssessingOfficer came to be disposed of by CIT(A) vide different orders. Some ofthe issues On merits were decided by CIT(A) against the Revenue and-some against the Assessee. The issue regarding limitation offinlization of assess ment[ under Section 153A was decided against the]Revenue. The cross appeals field by the Assessee and the Revenueagainst the order of CIT(A) were disposed of by the Tribunal videimpugned order only on the issue of limitation. Since the issue oflimitation of finalization of assessment was decided against theTAs No.1775/ 2010, 1776/2010,.1777/2010, 1965/2010, 2032/2010, 2033/2010; 2034/2010, 2035/2010,2036/2010, 2037/2010, 2035/2010, 2039/2010, 2046/2010 & 2047/2010 Page 6 of 23 revenue, the Tribunal did not choose to decide the other issues raisedon merits. 4. The Tribunal held that the AO could not have extended the timefor auditor's report on his own inasmuch as this power of the AO toextend the time of audit report suo motu under Section 142(2C) came15t April,to be inserted by way of an amendment with effect from 2008. Consequently, he held the assessment made under Section 153Aof the Act in respect of the assessment years in question to be barredby limitation. It is this impugned order that has been challenged by. theRevenue by way of these appeals. 5. There is no dispute with regard to the dates. The only issue iswith regard to interpretation of provisions of Section [142(2A), ][(2C) and]15313(1) Explanation (ii). For better understanding these Sections arereproduced hereinbelow: 142 Enquiry before assessment() For thepurpose of making an assessment under this Act, theAssessing Officer may see on any person who hasn7adë a return under Section 1151ND or Section 139oin whose case the time allowed under sub-section(1) of section 139 for furnishing the return hasexpired a notice requiring him, on a date to betherein specified, - xxx [(2A) If, at any stage of the proceedings before him,the Assessing Officer], having regard to the natureand complexity of the accounts of the assessee andthe interests of the revenue, [Is ][of the opinion that it]is [necessary so to do, he may; with the previouS]TAs No.1775/ 2010, 1776/2010, 1777/2010, 1965/2010, 2032/2010, 2033/2010, 2004/2010, 2035/2010,2036/2010, 2037/2010, 2038/2010, 2039/2010, 2046/2010 & 2047/2010 Page 7 of Z3 142 Enquiry before assessment() For thepurpose of making an assessment under this Act, theAssessing Officer may see on any person who hasn7adë a return under Section 1151ND or Section 139oin whose case the time allowed under sub-section(1) of section 139 for furnishing the return hasexpired a notice requiring him, on a date to betherein specified, - xxx [(2A) If, at any stage of the proceedings before him,the Assessing Officer], having regard to the natureand complexity of the accounts of the assessee andthe interests of the revenue, [Is ][of the opinion that it]is [necessary so to do, he may; with the previouS]TAs No.1775/ 2010, 1776/2010, 1777/2010, 1965/2010, 2032/2010, 2033/2010, 2004/2010, 2035/2010,2036/2010, 2037/2010, 2038/2010, 2039/2010, 2046/2010 & 2047/2010 Page 7 of Z3 approvalof the[Chief Commissioner orCommissioner] direct the. assessee to get theaccounts audited by an accountant, as defined in theExplanation below sub-section (2) of section 288,nominated by the [Chief Commissioner orCommissioner] in this behalf and to furnish a reportof such audit in the prescribed form duly signed andverified by such acCountant and setting forth suchparticulars as may be prescribed and such otherparticulars as the [Assessing Officer] may require; [Provided that the Assessing Officer shall not directthe assessee to get the accounts so audited unlessthe assessee has been given a reasonableopportunity of being heard.] [(2B)[The provisions of sub-section (2A) shall have]effect notwithstanding that the accounts of theassessee have been audited under any other law forthe time being in force or otherwise.] [(2C)[Every report under sub-section (2A) shall be]furnished by the assessee to the [Assessing Officer]within such period as may be specified by the[Assessing Officer]: Pro vided[ that the Assessing Officer may, Suo motu,]or on an application made in this behalf by theassessee and for any good and sufficient reason,extend the said period by such further period orperiods as he thinks fit; so, however, that theaggregate of the period originally fixed and the• period or periods so extended shall not, in any case,exceed one hundred and eighty days from the dateon which the direction under sub-section (2A)isreceived by the assessee. 153/8. [(1) Notwithstanding anything contained in]section 153, the Assessing Officer shall make anorder of assessment or reassessment,— (a) in respect of each assessment year falling within sixassessment years referred to in clause (b) of [sub-section (1) of section 153A, within a period of twoyears from the end of the financial year in which the) . last of the authorisations for search under section132 or for requisition under . section 132A was executed; ITAs No.1775/ 2010, 177612010, 1777/2010, 1965/2010, 2032/2010, 2033/2010, 2034/2010, 2035/2010,2036/2010, 2037/2010,2038/2010, 2039/2010, [2046/2010 & 2047/2010] - (b) in respect of the assessment year relevant to theprevious year in which search is conducted undersection 132 or requisition is made under section1324, within a period of two years from the end ofthe financial year in which the last of theauthorisations for search under section 132 or forrequisition under section 132A was executed: [Provided that in case of other person referred to insection 153C, the period of limitation for making theassessment or reassessment shall be the period asreferred to in clause (a) or clause (b) of this sub-section or one year from the end of the financial yearin which books of account or documents or assetsseized or requisitioned are handed over undersection 153C to the Assessing Officer havingjurisdiction over such other person, whichever islater:] - (b) in respect of the assessment year relevant to theprevious year in which search is conducted undersection 132 or requisition is made under section1324, within a period of two years from the end ofthe financial year in which the last of theauthorisations for search under section 132 or forrequisition under section 132A was executed: [Provided that in case of other person referred to insection 153C, the period of limitation for making theassessment or reassessment shall be the period asreferred to in clause (a) or clause (b) of this sub-section or one year from the end of the financial yearin which books of account or documents or assetsseized or requisitioned are handed over undersection 153C to the Assessing Officer havingjurisdiction over such other person, whichever islater:] [Provided further that in the case where the lastof the authorisations for search under section 132 orfor requisition under section 132A was executeddurihg the financial year commencing on the 1t dayof April, 2004 or any subsequent financial year,-(i)the provisions of clause (a) or clause (b) of thissub-section shall have effect as if for the words "twoyears" the words "twenty-one months" had beensubstituted; . (ii)the period of limitation for making the assessmentor reassessment in case of other person referred toin section 153C, shall be the period of twenty-onemonths from the end of the financial year in whichthe last of the authoriations for search under section132 or for requisition under section 132A wasexecuted or , nine months from the end of [the]financial year in which books of account ordocuments or assets seized or requisitioned arehanded over under section 153C to the AssessingOfficer having jurisdiction over such other person,whichever is later:] Provided also that in case where the last of theauthorisations for search under section 132 or for• requisition under section 132A was executed duringthe financial year commencing on the 1st day ofApril, 2005 or any subsequent financial year and IT1s No.1775/ 2010, 1776/2010, 1777/2010, 1965/2010, 2032/2010, 2033/2010, 2034/2010, 2035/2010,2036/2010, 2037/2010, 2033/2010, 2039/2010, 2046/2010 & 2047/2010 during the course of the proceedings for theassessment or reassessment of total income, areference under sub-section (1) of section 92CA- (i)was made before the 1st day of June, 2007 butan order under sub-section (3) of section 92CA hasnot been made before such date; or (ii)is made on or after the 1st day of June, 2007, the period of limitation for making the assessment orreassessment in case of such other person shall,notwithstanding anything contained in clause (ii) ofthe second proviso, be the period of thirty-threemonths from the end of the financial year in whichthe last of the authorisations for search under section132 or for requisition under section 132A wasexecuted or twenty-one months from the end of thefinancial year in which books of account ordocuments or assets seized or requisitioned arehanded over under section 153C to the AssessingOfficer having jurisdiction over such other person,whichever is later.] Explanation—In computing the period of limitationfor the purposes of this section,-(i)the period during which the assessment proceedingis stayed by an order or injunction of any court; or(ii) the period commencing from the day or) which the -Assessing Officer directs the assessee to get hisaccounts audited under sub-section 2A) of sectionrequired to furnish -a report of such audit under thatsub-section; or - • 142 and ending on the day on which the assessee is xxxxx (2) The authorization referred to in clause (a) andclause (b) bfub-section (1) shall be deemed to havebeen executed. (a)in the case of search, on the conclusion ofsearch as recorded in the last panchnama, drawn inrelation to any person in whose case the warrant ofauthorization has been issued; (b) in he case of requisition under Section 132A, onthe actual receipt- of the books of account or otherdocuments or assets by the Authorized Officer.] - • 142 and ending on the day on which the assessee is xxxxx (2) The authorization referred to in clause (a) andclause (b) bfub-section (1) shall be deemed to havebeen executed. (a)in the case of search, on the conclusion ofsearch as recorded in the last panchnama, drawn inrelation to any person in whose case the warrant ofauthorization has been issued; (b) in he case of requisition under Section 132A, onthe actual receipt- of the books of account or otherdocuments or assets by the Authorized Officer.] 6.. Section 142 provides the procedure for the enquiry that isrequired before making assessment. Sub-section (2A) provides forconducting special audit during the proceedings of assessment. Thissub section provides that if at any stage of the proceedings, theAssessing Officer was of the opinion, having regard to the nature andcomplexity of the accounts of the Assessee and in the interest ofrevenue so to do, he may direct the Assessee to get the accountsaudited by the Accountant in the manner prescribed therein. Subsection (2C) provides that every audit report under sub section (2A) isto be furnished by the Assessee to the Assessing Officer within suchperiod as may be specified by the Assessing Officer. It was submittedby the learned counsel for the Assessee that the assessment orderpassed under Section 153A on [3rd ][August, 2007 was barred by]limitation insofar as the order of special audit was made by theAssessing Officer on [12th ][December 2006 and the special audit was to]be conducted on or before [12th ][March, 2007. He submitted that the]Assessing Officer did not have inherent power to extend time undersub Sections (2A) or (2C) of Section 142 of the Act and the time couldonly be extended at the request of the Assessee and consequently the•[limitation as per Explanation (ii) to Section 1313(1) for the purpose of]computing assessment expired on [111h ][May, 2007. He also submitted]that the power to suo motu [extend the period for special audit under] Section 142(2A) has been provided in the proviso to section 142(2C) byITA5 No.1775/ 2010, 1776/2010, 1777/2010, 1965/2010, 2032/2010; 2033/2010, 2034/2010, 2035/2010,2036/2010, 2037/2010, 2038/2010, 2039/2010, 2046/2010 & 2047/2010 the Finance Act, 2008 with effect from. 11[t] April, 2008 and the samebeing prospective in nature, the AO was not empowered to extend thetime for audit report of his own. The learned counsel alto placedreliance upon the Memorandum explaining the provisions of financebill, 2008 and also the circular No.1 issued by CBDT dated [271h ][March,]2009. The said Memorandum and Circular shall be referred to a litterlater. 7. This was not in dispute that the word 'suo motu' came to heinserted by way of an amendment with effect from [15t ][April, 2008.]However, it was contended by learned counsel for the Revenue thatthe Assessing Officer had the power to extend the time of audit reportunder Section 142(2C) of the Act since the word "and" appearingbefore the words [["for any good and sufficient reasons" ]][[was to be read]]as 'or' In other words, the submissions of the learned counsel was thatthe Assessing Officer sun motu [had the power to direct the assessee to]get audit report and also to extend the time for submission of auditreport. Learned. counsel relied upon cases of Jagjit [Sugar Nulls Co.]Ltd.vs. CIT1210 ITR 468 (Punj.b & H:aryana); UT v PuthuthotarnEstates Ltd. 127 ITR 481 (Madras), P.V.. Devassy v CIT [1972] 84ITR 502 (Kerala) arid UT v Gangaram Chapollia, 103 1TR 613(Orissa) under Section 142(2C) of the Act since the word "and" appearingI before the words [["for any good and sufficient reasons" ]][[was to be read]] under Section 142(2C) of the Act since the word "and" appearingI before the words [["for any good and sufficient reasons" ]][[was to be read]] 8.In JayjIt Sugar Mills Co Ltd [(supra), the Hon'ble High Court of]Punjab and Haryana had treated the word "and" [appearing between]the words "application made by the assessee" [and ]["for any good and]sufficient reasons" [under Section 142 (2C) as "or" and had held that]period for submission of report by the Special Auditor is extendable bythe Assessing Officer, even without an application in this regard by theassessee. 9.In case of CIT [v Puthuthotam Estates Ltd. ][(supra) it was held]that, "The Circumstances under which the word "and" may he'construed as "or" and vice versa should be some what rare. Otherwiseif the two are taken to be interchangeab l[e terms, then it would result]in Parliament throwing into, the statute the two expressionsindiscriminately and leave them to the courts to sort out the meaning.In ordinary usage 'and" is conjunctive and "or" is disjunctive". 10.In the case ofP.V. Devas y v. CIT [(supra), it was held as under:] "An assessee is required to file the return within thetime allowed and in the manner prescribed in orderthat the lnccrne Tax Officer may complete theassessment within the period specified in the IncomeTax Act. If the return is not filed in time or, if filed in 1F,3[,s No.1775/ 2010, 1776/2010, 1777/2010, 1960/2010, 2032/2010, 2033/2010, 2034/2010, 2035/2010,]2036/2010, 2037/2010, 2038/2010, 2039/2010, 2046/2010 & 2047/2010 • time, it does not contain all the particulars required, itwill not be possible for the Income Tax Officer tocomplete the assessment within the period specifiedin the Act. In other words, the object of the legislaturein insisting upon the assessee filing the return withinthe time and in the manner prescribed is to enablethe Income Tax Officer to complete the assessmentwithin a period of four years as specified in the Actand that object will be frustrated unless the assesseefiles the return within the time allowed and in themanner prescribed. To carry out the object of the• legislature, it is necessary to attach a sanction for thefailure to fulfill any of the two conditions. If the objectis clear, we do not think the use of the conjunctive• word "and" in the sub section is conclusive. The word"and" has generally a cumulative sense, and is thusthe antithesis of disjunctive "or"; but occasionally it ispermissible to read "and" as "or" if the context sorequires. In isfiwar Singh Bindra v. State ofit is observed; • legislature, it is necessary to attach a sanction for the • "And has generally a cumulative sense, requiring thefulfillment of all the conditions that it joins together and herein it is the antithesis of or. Sometimes,ITAs No.1775/ 2010, 1776/2010, 1777/2010, 1965/2010, 2032/2010, 2033/2010, 2034/2010, 2035/2010,2036/2010, 2037/2010, 2038/2010, 2039/2010, 2046/2010 & 2047/2010 however, even in such a connection, it is, by force ofa context, reads as or. Sometimes to carry out theintention of the legislature it is found necessary toread the conjunctions 'or' and 'and' one for the.other" In Maxwell on the Interpretation of Statutes, 12thedition,- at page 232, it is observed, "In ordinaryusage, 'and' is conjunctive and 'or' disjunctive. But tocarry out the intention of the legislature it may henecessary to read 'and' in place of the conjunction'or' and vice versa." 11. In the case of [CIT vs. Gangairam Chapolla ][(supra), it was held],-as under: "(ii) [The conjunctive "and" in the second clause of]section 271(i)(a) should be constiued as "or".Therefore, even if the return of the assessee hadbeen filed in the manner prescribed, as it was notfiled within the time allowed under section 139(1),and as such one of the two conditions prescribed insection 271(1)(a) hadnot been fulfilled, the assesseewould be liable to penalty." -S !Ts No.1775/ 2010, 1776/2010, 1777/2010, 1965/2010, 2032/2010, 2033/2010, 2034/2010, [2035/2010,]2036/2010, 2037/2010, 2038/2010, 2039/2010, 2045/2010 & 2047/2010- - 11. In the case of [CIT vs. Gangairam Chapolla ][(supra), it was held],-as under: "(ii) [The conjunctive "and" in the second clause of]section 271(i)(a) should be constiued as "or".Therefore, even if the return of the assessee hadbeen filed in the manner prescribed, as it was notfiled within the time allowed under section 139(1),and as such one of the two conditions prescribed insection 271(1)(a) hadnot been fulfilled, the assesseewould be liable to penalty." -S !Ts No.1775/ 2010, 1776/2010, 1777/2010, 1965/2010, 2032/2010, 2033/2010, 2034/2010, [2035/2010,]2036/2010, 2037/2010, 2038/2010, 2039/2010, 2045/2010 & 2047/2010- - 12.It is a cardinal principle for interpreting a fiscal statute that, ataxing statute has to b construed very strictly and has to be readwithout amending or altehng the provisions. The intention of thelegislature in a taxation statute is to be gathered from the language ofthe provisions particularly where the language is plain andunambiguous. 13.The Supreme Court in the case of [Mathuram Aggarwall v State]of Madhya Pradesh, 8 5CC 667[199 9[] held that,] "In a taxing Act it is not possible to assume anyintention or governing purpose of the statute morethan what is stated in the plain language. It is not theeconomic results sought to he obtained by makingthe provision which is relevant in interpreting a fiscalstatute. Equally impermissible is an interpretation- which does not follow from the plain, unambiguOuslangua ge of the statute. Words cannot be added toor substituted so as to give a meaning of the statutewhich will serve [the spirit and intention of the]legilature The statute should clearly andunambiguously convey the three components of thetax law, i.e., the subject of the tax, the person who is liable to pay the tax and the rate at iihich the tax isITAs No.1775/ 2010, 1776/2010, 1777/2C10, 1965/2010, 2032/2010, 2033/2010, 203/2010, 2035/2010,2036/2010, 2037/2010, 2038[1][2010, 2033/2010, 2046/2010 C 2047/201C1] Page 16 of 23 I to be paid\. If there is any ambiguity regarding anyofthese ingredients in a taxation statute then there isno tax in law. [Then it is for the legislature to do the]needful in the matter" 14. in the case of [NasiruddIn and others v Site Ram Agarwal ][2]SCC 577 (2003), it is held: "37. The court's judsdiction to interpret a statutecan be invoked when the same is ambiguous. It iswell known that in a given case the court can iron outthe fabric, but is cannot change the texture of thefabric. ii: cannot enlarge the scope of legislation orintention when the language of provision is plain andunambiguous. It cannot add or subtract words to astatute or read something into it which is not there. It- cannot re-write or recast legislation. It is alsonecessary to determine that there exists apresumption that the legislature has not used anysuperfluous words. It is well settled that the realintention of the legislation must be gathered fromthe language used. It may be true that use of theexpression "shall" or may" is not decisive for arrivinga finding as to whether statute is directory ormandatory. But the intention of the legislature mustbe found out from the scheme of the Act. It is alsoequally well settled that when negative words areused, the courts will presume that the intention of ITAs No.1775/ 2010, 1776/2010, 1777/2010, 1965/2010, 2032/2010, 2033/2010, 2034/2010, 2035/2010,2036/2010, 2037/2010, 2038/2010, 2039/2010, 2046/2010 & 2047/2010 the Jegislature was that the provisions should hemandatory in character." 15. With these principles of interpretation, we may note that theprovisions as existing in sub section (2C) of the Act before 1 April,2008 did not empower the Assessing Officer to [suo motu ][extend the]time for submission of audit report under sub section (2A). This is alsoclear from the fact that the Memorandum explaining the provisions ofgranting power to the Assessing Officer to extend time for completionof special audit under sub section (2A) of Section 142 mentions aboutthe reasons in the said Memo which reads as under: - ITAs No.1775/ 2010, 1776/2010, 1777/2010, 1965/2010, 2032/2010, 2033/2010, 2034/2010, 2035/2010,2036/2010, 2037/2010, 2038/2010, 2039/2010, 2046/2010 & 2047/2010 the Jegislature was that the provisions should hemandatory in character." 15. With these principles of interpretation, we may note that theprovisions as existing in sub section (2C) of the Act before 1 April,2008 did not empower the Assessing Officer to [suo motu ][extend the]time for submission of audit report under sub section (2A). This is alsoclear from the fact that the Memorandum explaining the provisions ofgranting power to the Assessing Officer to extend time for completionof special audit under sub section (2A) of Section 142 mentions aboutthe reasons in the said Memo which reads as under: - "Granting of power to the Assessing Officer to extendthe time for dompletion of special audit under sub-section (2A) of section 142 Sub-sections (2A) to (2D) of section 142 deal withpower of Assessing Officer to orde[r][ a special audit.]Such power is required to be exercised by theAssessing Officer having regard to the nature andcomplexity of the accounts of the assessee and theinterest of the Revenue. • Sub-section (2C) of the said section specifies theperiod within which the audit report is to befurnished. The proviso to said sub-section empowersthe Assessing Officer to extend this period offurnishing of audit report. Further, it is also providedthat the aggregate of the originally fixed period andthe period(s) so extended shall not exceed 180 daysfrom the date of issuance of direction of specialaudit.Further, such extension can be made onlywhen an application is made in this behalf by theassessee and there are good and sufficient reasonfor such extension. , it is proposed to amend the said proviso so as to alsoallow the Assessing Officer to extend this period ofTS No;1775/ 2010, 1776/2010, 1777/2010, 1965/2010, 2032/2010, 2033/2010, 2034/2010, 2035/2010,2036/2010, 2037/2010, 2038/2010, 2039/2010, 2046/2010 & 2047/2010 furnishing of audit report suo motu. Hence, while theAssessing Officer shall continue to have power togrant extension on an application made in this behalfby the assessee and when there are good andsufficient reasons for such extension, he can alsogrant such extension on his own.The amendment will take effect from 1 April, 2008. 16. Further, the circular No.1. of CBDT dated 271h March, 2009 has also clarified on the issue of applicability of the aforesaid amendmentin sub section (2C) with effect from [11t ][April, 2008. The said circular]reads as under:- "Direct Tax Circular No.1 dated [27th ][March, 2009]Explanatory Notes to the Provisions of the FinanceAct, 2008. 1. Introduction: . 1.1 The Finance Act, 2008 (hereafter referred to as the Act) as passed by the Parliament, received theassent of the President on the 10 day of May, 2008and has been enacted as act No.18 of 2008. Thiscircular explains the substance of the provisions ofthe Act relating to direct taxes. 27. Granting of power of the Assessing Officer toextend the time for completion of special audit undersub-section (2A) of section 142. 27.1 Sub-sections (2A) to (21D) of section 142 withpower of Assessing Officer to order a special audit.Such power if required to be exercised by theAssessing Officer having regard to the nature andcomplexity of the accounts of the assessee and theinterest of the revenue. 27.2 Sub-sections (2C) of the said section specifiesthe period [within which the audit report is to be]furnished. The proviso to said sub-section empowersthe Assessing Officer to extend this period offurnishing of audit report. Further, it is also providedthat the aggregate cf the originally fixed period and the period(s) so extended shall not exceed 180 daysITAsp.1775! 2010, 1776/2010, 1777/2010, 1965/2010, 203;d2010, 2033/2010, 2034/2010, 2035/2010,2036/2010, 2037/2010, 2038/2010, 2039/2010, 2046/2010 & 2047/2010 P;ge 19 of 73 27.1 Sub-sections (2A) to (21D) of section 142 withpower of Assessing Officer to order a special audit.Such power if required to be exercised by theAssessing Officer having regard to the nature andcomplexity of the accounts of the assessee and theinterest of the revenue. 27.2 Sub-sections (2C) of the said section specifiesthe period [within which the audit report is to be]furnished. The proviso to said sub-section empowersthe Assessing Officer to extend this period offurnishing of audit report. Further, it is also providedthat the aggregate cf the originally fixed period and the period(s) so extended shall not exceed 180 daysITAsp.1775! 2010, 1776/2010, 1777/2010, 1965/2010, 203;d2010, 2033/2010, 2034/2010, 2035/2010,2036/2010, 2037/2010, 2038/2010, 2039/2010, 2046/2010 & 2047/2010 P;ge 19 of 73 from the date of issuance of direction of specificaudit. Further, such extension can be made onlywhen an appJication is made in this behalf by theassesse and there are good and sufficient reasonsfor such extension. 27.3, With a view to rationalize the said proviso so asto also allow the Assessing Officer to extend thisperiod of furnishirfg of audit report suo motu, the saidproviso has been amended. Hence, while theAssessing Officer shall continue to have power togrant extension on an application made in this behalfsufficient reasons for such extension, he can alsogrant such extension on his own. • • by the assessee and when there are good and 27.4 Applicability - This amendment has been madeapplicable with effect from 1-4-2008. Hence, fromthis date and onwards, the Assessing Officer shallalso have power to extend the period of furnishing ofaudit report suo motu". (Emphasis supplied) 17.The Memo explaining the provisions of Finance Bill, 2008 andalso Circular No.1 dated 27 [th ][March, 2009 of CBDT as reproduced]hereinabove wouid clearly bring out that sub section (2A) to (21D) ofSection 142 deal with the powers of the Assessing Officer to order forspecial -audit and the same was to be exercised by him having regardto the nature and complexity of the account of the assessee and theinterest of the revenue. 18.The word "and" [appearing before the words ]["for any good and]sufficient reasons" [in the proviso to sub section (2C) by any stretch of]interpretation could not be read as "or". The fact that the words ["suo]motu" [have been added by way of an amendment with effect from]01,04.2008 would show the legislative intention in the proviso as motu" 0 existed before the amend ment[ which is that the Assessing Officer prior]lAs No.1775/ 2010, 1776/2010, 1777/2010, 1965/2010, 2032/2010, 2033/2010, 2034/2010, 2035/2010,2036/2010, 2037/2010, 2038/2010, 2039/2010, 2045/2010 & 2047/2010 to amendment had no power to extend the period of furnishing auditreport of his own. 18.The word "and" [appearing before the words ]["for any good and]sufficient reasons" [in the proviso to sub section (2C) by any stretch of]interpretation could not be read as "or". The fact that the words ["suo]motu" [have been added by way of an amendment with effect from]01,04.2008 wou