· Assessment was completed in assessee’s case u/s 153C pursuant to a search conducted in another premises on 27.12.2007.
· Thereafter, assessment was suo motu revised by the CIT u/s 263, and the matter was remanded to AO for fresh consideration, vide order dated 12.03.2010.
· In consequence to above, fresh assessment was made by AO for all the years, vide its order dated 30.12.2010.
· The assessee contended that order was passed by the AO beyond the period of limitation. In this regard, assessee further referred to the provisions of section 153B, wherein limitation is provided w.r.t. assessments to be completed u/s 153A and 153C of the Act.
· The assessee argued that the 21 month period from the end of the F.Y. in which the search was authorized had expired by the time an order was passed u/s 263 by the CIT. It was further contended that on remand, if the limitation had already expired, then the AO would be disabled from going ahead with the assessment.
· The Court, in this regard, observed as under:
(a) The original order was passed within the limitation period, i.e. on 27.12.2007, within 21 months from the end of the F.Y. in which the search was conducted (which would have been over on 31.12.2007).
(b) If the argument of the appellant is accepted that limitation has to be u/s 153B itself, even for fresh assessment, the power of the CIT to make a remand would be curtailed and ineffective always, rendering the provision useless.
(c) The legislature having specifically conferred the power on the CIT to revise an order suo motu within 2 years from the date of assessment, it cannot be said that when such a remand is made, the fresh assessment also has to be completed within the limitation period as provided for the original assessment.If this argument is accepted, then there could be no remand, and it can only be understood as the legislature having conferred a power, which is ineffective and unworkable, which cannot be.
(d) If the limitation provisions have not been made u/s 153B, then, it cannot be said that the assessment on remand being ordered by the CIT have to be completed within a period provided u/s 153B or that provided u/s 263.
(e) The limitation provided u/s 153B is for completing the original assessment and as regards the fresh assessment directed by the CIT, if there is no limitation provided, then it has to be completed within a reasonable time.
· The Court further took note of the fact that the fresh assessment order was passed on 30.12.2010, a little more than 9 months from the order of revision passed by CIT. Considering the fact that there was requirement for a fresh notice and hearing, and that too of 7 years, the Court was of the opinion that the fresh assessment made u/s 153C was within reasonable time.
For further reading, refer the attachment.