Bombay High Court: Onus Not on Assessee to Oversee that Principal Commissioner/Commissioner Receives Copy of ITAT order
Bombay High Court: Onus Not on Assessee to Oversee that Principal Commissioner/Commissioner Receives Copy of ITAT order
The Bombay High Court by its two member judges bench comprising of Justices Kamal Khata and Dhiraj Singh Thakur observed that the onus is not on the assessee to oversee that the Principal Commissioner or Commissioner, as the case may be, receives the copy of the Income Tax Appellate Tribunal (ITAT) order. The Court held that a period receiving the order must be 'reasonable.'
The petition was filed by the legal heir of Late Mr. Lakhpatrai Agarwal who sought to challenge the inaction on the part of the respondents- Assistant Commissioner of Income Tax (ACIT) and others in complying with the direction and order dated 18th February, 2010 passed by the ITAT by not completing assessment in time as per the provisions of the Income Tax Act, 1961 (for short 'the Act') and consequently not issuing the refund and the jewellery seized in the course to the petitioner.
The learned counsel for the petitioner submitted that Section 153(3) of the Income Tax Act, 1961 provides that any order of fresh assessment in pursuance of an order under Section 254, 263 or 264 should be made within a period of 9 months from the end of the financial year in which the order is received consequently, the Assessing Officer (AO) now seeking to give effect to the said order of the ITAT dated 18th February 2010 was time barred.
He further relied upon the decision of the Kerala High Court at Ernakulam in the case of Dr. R. P. Patel vs. Assistant Commissioner of Income Tax, Circle - 1 which held that even if one issue has been remanded back to file for AO's consideration, the limitation entailed under the provisions of Act would apply. Further, submitted that by not giving a chance for cross examining the bank manager and completing the assessment within the stipulated time provided under Section 153(3) for which the matter remanded back to the AO, led to the action of the AO being contrary to the provisions of the Act and violated of principles of natural justice.
He submitted that in view of the inaction on the part of the AO for a considerable period of time beyond stipulated period and not granting refund to the petitioner is ex-facie contrary to Articles 265A and 300 of the Constitution of India.
The Learned Counsel for the Respondent relied on upon paragraph 3 of the letter dated 30th May 2022 annexed at page 138 of their reply dated 28th September 2022 to contend that the ITO has not 'received' the order dated 18th February 2010 therefore the time period prescribed by Section 153(3) of the Act will not commence and consequently their action was within the time prescribed and was required to be completed on or before 30th September 2023. The Learned Counsel further contended that receipt of the letter dated 6th March 2018 would not entitle the Petitioner to contend commencement of the limitation period.
The Court disagreed with the respondent's Counsel's contention that they had not received the order dated 18th February 2010.
"The Section 254 (3) itself provides for ITAT to send a copy of the order to both the assessee and to the Commissioner; therefore, the onus would lie on the respondent to prove that they had not received the said order. If we had to accept the contention of the Respondent it would have led to extending the time for compliance with the order dated 18th February 2010 for almost 12 years at least in this case. Further, it would lead to shifting the onus on the assessee to oversee that the Principal Commissioner or Commissioner, as the case may be, receives the copy of the order. We don't agree as it does not appear to be the intention of the legislature," observed the bench.
The Court rejected the contention of the respondent to construe the words "is received" in section 153(3) to mean "till its received" and thereby extend the limitation in perpetuity. It has to be a reasonable period of time especially when the respondents are a party to the proceeding, opined the bench.
The bench was of the considered view that the respondents who were party to the proceedings could have requested for a copy of the order from the ITAT at least a month after the order was passed on 18th February 2010.
Having failed to take steps to comply with the order dated 18th February 2010 and even within 9 months after receipt of the letter addressed by the Petitioner on 6th March 2018, the Court directed the respondents to issue a refund of Rs. 7,39,083 plus additional interest (under section 244A of the Act) till date of payment to the Petitioner and to release the jewellery seized.
