Ita/19/2021 Of Principal Commissioner Of Income Tax, (Central) v. M/S. Improve Traders (P) Ltd

Order No. 02. IN THE HIGH COURT OF ORISSA AT CUTTACK ITA No. 19 of 2021 ….Principal Commissioner of Income Tax Appellant (Central) Mr. Radheyshyam Chimanka, Senior Standing CounselAlong with Mr. A. Kedia, Junior Standing Counsel-versus- ….M/s. Improve Traders (P) Ltd. RespondentNone CORAM: THE CHIEF JUSTICE JUSTICE M.S. RAMAN ORDER 31.01.2023 1. This the Revenue’s appeal against an order dated 14[th] December, 2020 passed by the Income Tax Appellate Tribunal (ITAT), Cuttack Bench, Cuttack in IT(SS)A Nos.188/CTK/2019 and IT(SS)A Nos.56-58/CTK/2018 for the Assessment Years (AYs) 2012-13, 2014-15 and 2015-16. 2. One of the questions urged for consideration is whether the ITAT erred in upholding the decision of the CIT(A) that the Revenue’s case was barred by limitation since the Assessing Officer (AO) did not pass the assessment order on or before 18[th] October, 2016 in terms of Section 153B read with Section 142A(6) of the Income Tax Act, 1961. 3. Relevant to the above question, the brief facts are that a search and seizure operation under Section 132 of the Act was conducted in the business and the residential premises of the Respondent-Assessee’s Promoters/Directors on 24[th] October, 2013. 4. Notice thereafter was issued under Section 153A of the Act on 9[th]March, 2015. The Assessee filed returns of income on 5[th] January, 2016 showing a total income of NIL. The AO then made a reference to the Valuation Cell for determining the cost of investment/construction in the property at Bhubaneswar. The Valuation Report was asked to be submitted on or before 5[th] March, 2016 since the case was going to be barred by limitation on 31[st]March, 2016. 5. Admittedly, the AO received the Valuation Report only on 3[rd]October, 2016 by Post and by e-mail on 27[th] September, 2016. Thereafter, he issued the statutory notices and completed the assessment for the aforementioned years by the assessment order dated 25[th] November, 2016. 6. Both the CIT(A) and the ITAT have found that by virtue of the amendment to Section 153B of the Act, the assessment had to be completed within a period of 24 months from the end of the year in which the search was made. 7. With the search having been conducted on 24[th] October, 2013 the assessment had to be completed by 31[st] March, 2016. The contention of the Revenue is that if the AO chose to make a reference to the Valuation Officer and under Section 142A of the Act, the Valuation Officer had six months’ time to submit a report, S. Behera then that period could not be counted for computing the period of 24 months from 1[st] April, 2014. 8. There is nothing in Section 153B that envisages the exclusion of any period during which a reference was made to the Valuation Officer. Taking Section 153B of the Act as it presently reads, it is plain that the assessment has to be completed within 24 months from the end of the period when the search is completed. The assessment in the present case was not completed within 24 months of the end of the year in which the search was conducted, i.e., on or before 1[st] April, 2016. The assessment was completed only on 25[th]November, 2016. 9. Consequently, neither the CIT (A) nor the ITAT was in error in holding in favour of the Assessee and against the Revenue on the above aspect. 10. Thus, no substantial question of law arises. The appeal is dismissed. (Dr. S. Muralidhar) Chief Justice (M.S. Raman) Judge