Section 147 of the Income Tax Act, 1961- Reassessment - The limitation provided under Section 153 (2) pertains to the issuance of the order of assessment, reassessment or re-computation and the Explanation 1 (ii) of Section 153 provides that the period during which the assessment proceedings is stayed by an order or injunction of any court shall be excluded for the purpose of computing the period of limitation-  The proviso to subsection (2) of Section 143, as it stands today provides that no notice shall be served on the assessee after the expiry of six months from the end of the financial year in which the return is furnished which the revenue failed to issue in the case of assessee.[2019] 52 ITCD 41 (DEL)
Facts: The petitioner/applicant contends that the re-assessment notice dated 30.03.2018 impugned in these proceedings is arbitrary. It contends that the "reasons to believe" has wholly ignored the circumstances that the reasons cited for re-assessment i.e. alleged unexplained entries in the petitioner's books were in fact replied in detail by during the scrutiny assessment for the A.Y. 2011-2012. Despite having an interim order in his favour in respect of the passing of the final assessment order, the Petitioner is not satisfied and his grievance is that the Assessing Officer has misinterpreted the aforesaid order to impute that the court had only granted stay from passing the final assessment order and not the stay of the entire reassessment proceedings. Learned counsel for the Petitioner contends that based on this interpretation, the Assessing Officer has recommended the assessment proceedings by issuing notice dated 27.09.2019 under Section 143 (2).
Held, that the proviso to subsection (2) of Section 143, as it stands today provides that no notice shall be served on the assessee after the expiry of six months from the end of the financial year in which the return is furnished. We are informed that the return in the present case was filed on 12.09.2018. Accordingly, the six months envisaged under the proviso to Section 143 (2) would expire on 30.09.2019 and thus the notice was necessarily required to be issued under the said provision prior to the said date. In the present case, a notice under Section 143 (2) had already been issued prior to the filing of the present petition, and if another notice has been issued, we do not see any reason to stay the same. No law has been shown which restricts the issuance of more than one notice. The issuance of the notice under Section 143 (2) is essential for the Assessing Officer to embark upon scrutiny assessment, however it does not mean that once a notice has been issued, another notice could not be issued thereafter. Certainly, after 30.09.2019, the Respondents cannot issue a fresh notice. The limitation provided under Section 153 (2) pertains to the issuance of the order of assessment, reassessment or recomputation. The Explanation 1 (ii) of Section 153 provides that the period during which the assessment proceedings is stayed by an order or injunction of any court shall be excluded for the purpose of computing the period of limitation. Further, Section 153 (2) read with First proviso to Explanation 1 provides that immediately after the exclusion of the aforesaid period, where the period of limitation available to the assessing officer for making an order of assessment, reassessment or recomputation is less than sixty days, then such remaining period shall be extended to sixty days and the period of limitation shall be deemed to be extended accordingly. In the present case, the reassessment proceedings had to be concluded before 31.12.2018. However, before the expiry of the said period, on 12.12.2018, the Court had restrained the Respondents from passing the final order. Thus in case the Petitioner was not to succeed in the present case, the Respondents would then have to complete the reassessment proceedings in terms of Section 153(2) read with First proviso to Explanation 1 within a period of sixty days from the date of the final decision of the writ petition, assuming the same is against the Petitioner. However, this does not mean that the Respondents are granting themselves endless time for completion of reassessment proceedings. The stay order has been granted by this Court pursuant to request made by the Petitioner. If the Petitioner would not have pressed for the same, the Respondents would have been bound to pass the order within the statutory period prescribed under Section 153. The stay is operating against passing of the final assessment order. That does not mean that the continuation of the reassessment proceedings, in the mean time would be contrary to the statute. Needless to say, if the Petitioner were to succeed, such proceedings would be infructuous and the same are being conducted at the risk and peril of the Respondents. Accordingly, we also do not see any prejudice being caused to the Petitioner in any manner. For the foregoing reasons, we do not find any merit in the present application and the same is dismissed.