IT : Since there is no limitation period provided for completion of an assessment, on a remand made under section 263, such assessment would have to be completed only within a reasonable period of time
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[2018] 89 taxmann.com 320 (Kerala) 
HIGH COURT OF KERALA 
K. V. Abdul Azeez
v.
Commissioner of Income-tax, Central, Kochi*
K. Vinod Chandran AND Ashok Menon, JJ. 
IT Appeal Nos. 56 to 62 of 2017†
DECEMBER  18, 2017 
Section 153B, read with section 263, of the Income-tax Act, 1961 - Search and seizure - Time limit for completion of assessment under section 153A (Assessment on remand u/s 263) - Assessment years 2000-01 to 2006-07 - Pursuant to search operation, an assessment order was passed under section 153A against assessee - However, Commissioner under section 263 suo motu revised assessments for six assessment years remanding matter to Assessing Officer for fresh assessment - A fresh assessment order was passed by Assessing Officer for all years - Assessee was of view that said assessment order was barred by limitation as same was to be completed within limitation period prescribed under section 153B, i.e., 21 months from date of authorization of search - Whether since limitation provided under section 153B is for completing assessment originally proposed and that no limitation is provided for completion of assessment, on a remand made under section 263, such assessment would have to be Completed only within a reasonable period of time - Held, yes - Whether, thus, impugned order passed by Assessing Officer was justified - Held, yes [Paras 15 and 20] [In favour of revenue] 
FACTS
 
■ 	 	An assessment was completed in case of assessee under section 153C read with section 153B pursuant to a search conducted in another's premises on 27-12-2007. The assessment was suo motu revised under section 263 for six assessment years i.e. 2000-01 to 2005-06 and matter was remanded to Assessing Officer for fresh consideration to the Assessing Officer by order dated 12-3-2010. A fresh assessment was made by the Assessing Officer for all the years, dated 30-12-2010.	
■ 	 	In instant appeal, the assessee had raised the question of limitation for completion of assessment, on a remand made under section 263. He contended that the said order went beyond the period of limitation. The assessee made pointed reference to section 153B, wherein limitation is provided with respect to assessments to be completed under section 153A, which also applies to the assessments under section 153C. In the instant case, a search was conducted on 24-1-2006. Though specific date of authorization was not available, it would definitely be in financial year 2005-06. Hence, 21 months was available from the end of the financial year, i.e., from 31-3-2006, till 31-12-2007. With respect to 'other person' there was a further period available, but, that need not be looked into, since, admittedly, the orders passed for six years and the one for the seventh year, were on 27-12-2007, within the period of limitation provided. The 21 month period, from the end of the financial year in which the search was authorised and the one year period, even taken from the assessment order, had expired by the time an order was passed under section 263. The Commissioner not having been conferred with the power to extend the period of limitation, ought not to have remanded the matter for fresh assessment. On remand, if limitation had already expired, then, the necessary consequence would be that the Assessing Officer would be disabled from going ahead with the assessment. It was further contended that, even on remand, the Assessing Officer had to enter a satisfaction as to the fresh assessment being made.	
HELD
 
■ 	 	Section 153B provides for limitation as noticed hereinabove. Undisputed is the fact that the original order has been passed within the limitation period, i.e., on 27-12-2007, within 21 months from the end of the financial year in which the search was conducted. The period for completion of assessment, as per section 153B, going by the facts of the instant case, would have been over on 31-12-2007. When the Commissioner passed an order under section 263, remanding it to the Assessing Officer, for fresh assessment, the period of limitation under section 153B was also over. If the argument raised by the appellant is accepted that limitation has to be under section 153B itself, even for fresh assessment, the power of the Commissioner to make a remand, would be curtailed and in effective always rendering the provision otiose. [Para 12]	
■ 	 	The limitation for assessment, on search and seizure commences from the last date of the financial year, in which the authorisation for search is executed or in the case of 'other person' the materials seized are handed over to the Assessing Officer; respectively extending upto 21 months and one year respectively, whichever is later. The limitation under section 263 is two years from the date of the original assessment. Hence, invariably the order passed under section 263 would be hit by limitation under section 153B. [Para 13]	
■ 	 	The legislature having specifically conferred the power on the Commissioner to revise an order suo motu, within two years from the date of the assessment order, 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. This is especially so when the provision granting suo motu power of revision confers power to make a remand for fresh assessment, in addition to the power to make modifications or enhancement. If the 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. [Para 14]	
■ 	 	Then, the question would arise as to what should be the limitation under section 263. Under section 263, as was noticed, the limitation provided for revision of orders prejudicial to revenue, is a period of two years from the end of the financial year in which the order sought to be revised was passed. The revision could be made by the Commissioner enhancing or modifying the assessment or cancelling the assessment and directing a fresh assessment. It is true that by section 150 a carte blanche is granted to the Assessing Officer insofar as proceeding at any time to complete an assessment, re-assessment or re-computation inconsequence or to give effect to an order passed by an authority in a proceedings under this Act. Sub-section (2A) of section 153 provides for a limitation of one year to comply with an order passed under section 263. If such a provision has not been made under section 153B, then, it cannot be said that the assessment on remand being ordered by the Commissioner has to be completed within a period provided under section 153B or that provided under section 263. The limitation provided under section 153B is for completing the assessment originally proposed and that when a fresh assessment was directed, if there was no limitation provided, then it has to be completed within a reasonable time. [Para 15]	
■ 	 	The Assessing Officer in proceeding with an assessment against a third party (other person) on the basis of documents, accounts or assets seized in connection with a search and seizure in the premises of another person should be satisfied that they have a bearing on the determination of total income of that 'other person'. Therein, the satisfaction that the documents seized from the residence of the Directors, had any bearing on the income of the company, the 'other person', was not entered and the seized materials were also not transferred to the Assessing Officer of the company. [Para 16]	
■ 	 	One is not agreed to that line of defence set up by the revenue, since the question of limitation is a mixed one of law and facts and the assessee could raise it at any stage. There can also be no dispute that in proceeding to assess an 'other person' the Assessing Officer of that 'other person' has to enter satisfaction.	
■ 	 	The grounds raised on the jurisdiction of the Assessing Officer to proceed for fresh assessment are two fold and they are the baron limitation and the satisfaction having not been entered into by the Assessing Officer, which is an essential requirement. If the grounds are valid, the mere fact that it was not raised before the Assessing Officer at the first instance cannot preclude the assessee from raising it in appeal or even before this Court. The distinction is between an 'irregularity' and a 'nullity'. If the prerequisite for proceeding is the 'satisfaction', then, proceeding without entering a satisfaction would be a nullity. Likewise, if the order is passed beyond the limitation provided, then, again, it cannot be sustained. [Para 17]	
■ 	 	In the present case there was an original assessment made and the Commissioner exercising power of suo motu revision, cancelled the assessment and remanded it for fresh assessment. section 153C speaks of a satisfaction, which has to be entered into at the first point, when, on recovery of materials on a search conducted in a partnership firm's business, the 'other person', assessee, was issued with notice and there is no requirement for a further satisfaction for afresh assessment on a remand made under section 263. The Assessing Officer on the materials received, at the initial stage, had entered his satisfaction and issued notice for assessment based on the recoveries made from another person's premises. [Para 18]	
■ 	 	The assessee filed a return, as originally returned, which was accepted. The assessment stood completed without revising the original income returned by the assessee even prior to the search. Obviously, the Assessing Officer was then of the opinion that the documents seized are not material or relevant to the assessee. This opinion was revised by the Commissioner under section 263, as prejudicial to revenue. When there was a remand made under section 263, if the Assessing Officer is required to again enter satisfaction, it would result in the Assessing Officer sitting in appeal over the order of the Commissioner. Here, it is to be noticed that the assessee did not challenge the order of remand made under section 263, nor this court is considering its sustainability. [Para 19]	
■ 	 	On the question of limitation, section 263 confers power on the Commissioner to revise orders, which are found to be prejudicial to the revenue. When such an order is made within the time provided for making such order, it cannot be said that the limitation under section 153B has to be resorted to, which would be impossible of compliance. Then, if no further extension is provided, either under section 153B or under section 263, for making a fresh assessment on the assessment being remanded to the Assessing Officer, it has to be taken that there is no limitation provided. In that context, it would have to be understood, as the statute being silent on limitation, principles of reasonableness would have to be imported. The fresh assessment then has to be completed within a reasonable time. One would not make any strait jacket stipulation as to the reasonable time, which has to be decided on the facts and circumstances of each case. In the present case, suffice it to notice that the Commissioner had passed the order cancelling the assessment and directing a fresh assessment on 12-3-2010, within the two year period provided under section 263. The fresh assessment was passed on 30-12-2010, a little more than nine months from the order of revision. Considering the fact that there was requirement for a fresh notice and a hearing, in making that fresh assessment and that too of seven years, the fresh assessment made under section 153C is within a reasonable time. [Para 20]	
■ 	 	There is no limitation provided to carry out the assessment. The fresh assessment cannot be said to be possible only within the limitation provided under section 153B, since the power to revise extends to two years while that under section 153B is far lesser. The legislature cannot be said to have conferred a power redundant, ineffective and unworkable. [Para 21]	
■ 	 	If it is held that even a fresh assessment ordered under section 263 has to be completed within the time provided under section 153B, then, the power to remand, would be rendered useless. [Para 23]	
■ 	 	It is also trite that when two interpretations are possible the Courts would lean in favour of the tax payer and against the revenue. However, the reasoning above does not warrant application of the above principles. We have read the provisions to come to a definite conclusion and there is no ambiguity which would enable us to lean in favour of the assessee. [Para 24]	
■ 	 	On the above reasoning the questions of law are answered against the assessee and in favour of the revenue, on the aspect of limitation as agitated before this Court in the aforesaid appeals. There was also no requirement for a 'satisfaction' to be entered on making the fresh assessment since it was a continuation of the earlier proceedings. Though the returns filed in tandem with the original returns were accepted, the Commissioner revised the same as prejudicial to revenue and if the Assessing Officer is directed to again enter satisfaction, the Assessing Officer will be sitting in appeal from the order under section 263. [Para 25]	
CASE REVIEW
 
Director of Inspection of Income-tax (Investigation) v. Pooran Mall & Sons [1974] 96 ITR 390 (para 22) followed.
CASES REFERRED TO
 
Superintendent of Taxes v. Onkarmal Nathmal Trust AIR 1975 SC 2065 (para 8), Manish Maheshwari v. Asstt. CIT 2007 (3) SC 794 (para 8), Director of Inspection of Income-tax (Investigation) v. Pooran Mall & Sons [1974] 96 ITR 390 (SC) (para 10) and Iswara Bhat v. Commissioner of Agricultural Income Tax [1993] 200 ITR 238/[1992] 65 Taxman 490 (Ker.) (para 10).
V.V. Asokan, (SR.), K.I. Mayankutty Mather and R. Jaikrishna, Advs.  for the Appellant. P.K. Ravindranatha Menon (SR.) Adv. and Jose Joseph, Adv. SC  for the Respondent.
JUDGMENT
 
K. Vinod Chandran, J. - The appellant, common in all the appeals, is concerned with the assessment years 2000-2001 to 2006-2007. The records reveal an assessment having been completed under Section 153C of the Income Tax Act, 1961 ('Act' for short), read with Section 153B pursuant to a search conducted in another's premises. The assessment was suo motu revised under Section 263 and remanded for fresh consideration to the Assessing Officer (A.O).
2. The assessee has raised questions of law from the order; on the question of limitation for completion of assessment, on a remand made under Section 263 of the Act. At the time of hearing an additional question was raised, of satisfaction of the A.O. being necessitated under Section 153C. Though the additional question is not raised in the instant appeals, we are inclined to consider it too, for, it strikes at the very root of the matter, being an essential requirement to initiate and proceed with the assessment; in the absence of which the proceedings stand fatally vitiated. We are re-framing the questions of law as follows:
(i)	 	Ought not the Tribunal have found that the A.O should have completed the fresh assessment, on a remand under Section 263, within the period of limitation, as provided under Section 153B of the Act?	
(ii)	 	Whether on a remand made under Section 263 the limitation provided under Section 153B would stand automatically extended, and would not that do violence to the specific period of limitation provided in the Statute?	
(iii)	 	Whether it was proper for the Commissioner to have remanded the matter for fresh assessment, when the time for assessment under Section153B stood expired; especially when the Commissioner himself had the power to make a modification or enhancement in the assessment, within two years from the date of the initial order under Section 263 of the Act?	
(iv)	 	Whether the A.O was justified in proceeding with the matter for assessment under Section 153C without entering a satisfaction as to the assessment to be made on the other person, as defined under Section 153C of the Act?	
3. We need not look into the details of the assessment made, since the questions raised are purely on law, touching upon limitation and satisfaction of the A.O. The original order of assessment was on 27.12.2007 and for convenience we refer to I.T.A. No.56/2017, wherein the order is produced as Annexure A. The Commissioner, by orders dated 12.03.2010, revised the assessments for the six year period, i.e., 2000-2001 to 2005-2006 by Annexure -B, and for the year 2006-2007 by Annexure D; both under Section 263 of the Act. A fresh assessment was made by the AO for all the years, identical so to say, by Annexure E dated 30.12.2010. The said order goes beyond the period of limitation, is the specific contention raised.
4. The learned Counsel for the appellant makes pointed reference to Section 153B of the Act, wherein limitation is provided with respect to assessments to be completed under Section 153A, which also applies to the assessments under Section 153C. By the first proviso to sub section (1) of Section 153B, from the 1st day of April, 2004, the second proviso substitutes the two year period with a 21 month period. Hence, the limitation for completion of assessment under Section 153C, as available under Section 153B, is a period of 21 months from the end of the financial year in which the last of the authorisation, for search under Section 132 or for requisition under Section 132A, was executed. Insofar as the 'other person', referred to in Section 153C, the first proviso makes a further extension of the period of limitation to run one year from the date on which the books of accounts or documents or assets seized or requisitions, are handed over under Section 153C to the A.O of that 'other person'; whichever is later.
5. In the instant case, the search was conducted on 24.01.2006. Though the specific date of authorisation is not available, it would definitely be in the financial year 2005-2006. Hence, 21 months is available from the end of the financial year, i.e., from 31.03.2006, till 31.12.2007. With respect to 'other person' there is a further period available, but, that need not be looked into, since, admittedly, the orders passed for six years and the one for the seventh year, are on 27.12.2007, within the period of limitation provided.
6. The Commissioner under Section 263 of the Act suo motu revised the assessments, after serving notice on the assessee, by order dated 12.03.2010. Under Section 263 the limitation provided, for revision of orders prejudicial to revenue, by sub section (2), is a period of two years from the end of the financial year in which the order sought to be revised was passed. The assessment order having been passed on 27.12.2007, the limitation commences from 31.03.2008 and expires only on 31.03.2010. The Commissioner passed the order within the limitation period, on 12.03.2010. Now the controversy arises as to whether the fresh assessment completed for all the years on 30.12.2010 is barred by limitation or not. If the period under Section 153B is taken definitely, limitation bars the proceeding.
7. The learned Counsel for the appellant contends that the Commissioner, under Section 263, has the power to either modify or enhance the assessment or cancel the assessment and direct a fresh assessment. The limitation for an assessment under Section 153C, as regulated by Section 153B, is 21 months from the date of authorisation. In the case of 'other person' it can be one year from the date of handing over of materials to the A.O. On a remand made under Section 263, the fresh assessment would have to be completed within that period, is the argument. The Commissioner ought to have been aware of the provisions, which bars an assessment by the A.O, beyond the limitation period, as provided under Section 153B of the Act. The 21 month period, from the end of the financial year in which the search was authorised and the one year period, even taken from the assessment order, had expired by the time an order was passed under Section 263. The Commissioner not having been conferred with the power to extend the period of limitation, ought not to have remanded the matter for fresh assessment. The Commissioner could have modified or enhanced the assessment, but, could not have remanded the matter, asserts the learned Counsel. On remand, if limitation has already expired, then, the necessary consequence would be that the A.O would be disabled from going ahead with the assessment. It is further contended that, even on remand, the AO has to enter a satisfaction as to the fresh assessment being made.
8. The learned Counsel would also place reliance on the decisions in Superintendent of Taxes v. Onkarmal Nathmal Trust AIR 1975 SC 2065, Manish Maheswari v. Asstt. CIT 2007 (3) SC 794 and two un-reported decisions: one of the Gujarat High Court and another of a Division Bench of this Court, respectively Tax Appeal No.1254/2014 and connected matters dated 09.03.2015 and I.T.A. No.419/2009 dated 20.10.2017.
9. The learned Counsel for the appellant would also specifically refer to Section 153(2A) of the Act, which, by a non obstante clause, provides extension of period of limitation with respect to instances wherein a fresh assessment is necessitated in pursuance of an order under Sections 250, 254, 263 or 264. Section 150 also provides for an assessment, re-assessment or re-computation in consequence of or to give effect to an order passed by any authority in any proceeding under this Act, by way of appeal, reference or revision, at any time, subject only to sub-section (2). There was no difficulty in making such a provision, extending the limitation under Section 153B, in the event of a remand under Section 263. The same having not been provided, there is no ground for permitting the assessments beyond the limitation period as provided under Section 153B.
10. The learned Senior Counsel, Government of India (Taxes), submits that since there is no limitation provided for completion of an assessment, on a remand made under Section 263 of the Act, there could be no specific time indicated, and then, it would have to be completed only within a reasonable period of time. It is also contended that the appellant had waived his right to rely on the ground of limitation, since he conceded to the fresh assessment at the hands of the A.O; before whom, he never raised the specific objection. The learned Senior Counsel would rely on Director of Inspection of Income-Tax (Investigation) v. Pooran Mall & Sons [1974] 96 ITR 390 (SC) to contend that when an assessment order is revised suo motu within two years from its date, and there is specific power so conferred on the Commissioner to remand the assessment, it cannot be said that the limitation has to be related back to that available for initial, original assessment. Reliance is placed on a Division Bench decision of this Court in Iswara Bhat v. Commissioner of Agricultural Income-Tax [1993] 200 ITR 238/[1992] 65 Taxman 490 (Ker.) to contend that in the absence of a time limit provided, the only rigour would be insofar as the initiation and completion should be within a reasonable time.
11. We have given anxious consideration to the issues raised to answer the questions of law as framed by us.
12. Section 153B of the Act provides for limitation as noticed herein above. Undisputed is the fact that the original order has been passed within the limitation period, i.e., on 27.12.2007, within 21 months from the end of the financial year in which the search was conducted. The period for completion of assessment, as per Section 153B, going by the facts of the instant case, would have been over on 31.12.2007. When the Commissioner passed an order under Section 263, remanding it to the A.O, for fresh assessment, the period of limitation under Section 153B was also over. If we accept the argument raised by the appellant that limitation has to be under Section 153B itself, even for fresh assessment, the power of the Commissioner to make a remand, would be curtailed and ineffective always rendering the provision otiose.
13. The limitation for assessment, on search and seizure commences from the last date of the financial year, in which the authorisation for search is executed or in the case of 'other person' the materials seized are handed over to the A.O; respectively extending upto 21 months and one year respectively, whichever is later. The limitation under Section 263 is two years from the date of the original assessment. Hence, invariably the order passed under Section 263 would be hit by limitation under Section 153B.
14. The legislature having specifically conferred the power on the Commissioner to revise an order suo motu, within two years from the date of the assessment order, 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. This is especially so when the provision granting suo motu power of revision confers power to make a remand for fresh assessment, in addition to the power to make modifications or enhancement. If the 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.
15. Then, the question would arise as to what should be the limitation under Section 263 of the Act. Under Section 263, as was noticed, the limitation provided for revision of orders prejudicial to revenue, is a period of two years from the end of the financial year in which the order sought to be revised was passed. The revision could be made by the Commissioner enhancing or modifying the assessment or canceling the assessment and directing a fresh assessment. It is true that by Section 150 a carte blanche is granted to the A.O insofar as proceeding at any time to complete an assessment, re-assessment or re-computation in consequence or to give effect to an order passed by an authority in a proceedings under this Act. Sub section (2A) of Section 153 provides for a limitation of one year to comply with an order passed under Section 263. If such a provision has not been made under Section 153B, then, it cannot be said that the assessment on remand being ordered by the Commissioner has to be completed within a period provided under Section 153B or that provided under Section 263. The limitation provided under Section 153B is for completing the assessment originally proposed. When a fresh assessment is directed, if there is no limitation provided, then it has to be completed within a reasonable time.
16. Onkarmal Nathmal Trust is pressed into service to refute the argument of the department that, in submitting to the fresh assessment at the hands of the A.O the appellant waived the ground of limitation. Tax Appeal No.1254/2014 also was a case in which the notice issued under Section 158BC did not contain the specific name of the various assessees who were before Court. The ground of lack of jurisdiction raised as an additional ground, was found to be permissible though not raised before the lower authorities. The assessments were also set aside on that ground. Manish Maheswari has been relied on, as a decision rendered on identical facts, to urge the necessity of the A.O' s satisfaction in proceeding with an assessment on an 'other person'. The A.O in proceeding with an assessment against a third party (other person) on the basis of documents, accounts or assets seized in connection with a search and seizure in the premises of another person should be satisfied that they have a bearing on the determination of total income of that 'other person'. Therein, the satisfaction that the documents seized from the residence of the Directors, had any bearing on the income of the Company, the 'other person', was not entered and the seized materials were also not transferred to the A.O of the Company.
17. Even we are not agreeable to that line of defence set up by the Revenue, since the question of limitation is a mixed one of law and facts and the assessee could raise it at any stage. There can also be no dispute that in proceeding to assess an 'other person' the A.O of that 'other person' has to enter satisfaction. Hence, elaboration of the principle of waiver, as dilated upon by the Hon'ble Supreme Court, in the cited decision, would not be necessary. The grounds raised on the jurisdiction of the A.O to proceed for fresh assessment are two fold and they are the bar on limitation and the satisfaction having not been entered into by the A.O, which is an essential requirement. If the grounds are valid, we are of the opinion that, the mere fact that it was not raised before the A.O at the first instance cannot preclude the assessee from raising it in appeal or even before this Court. As has been held in Tax Appeal No.1254/2014, the distinction is between an 'irregularity' and a 'nullity'. If the prerequisite for proceeding is the 'satisfaction', then, proceeding without entering a satisfaction would be a nullity. Likewise, if the order is passed beyond the limitation provided, then, again, it cannot be sustained.
18. In the present case there was an original assessment made and the Commissioner exercising power of suo motu revision, cancelled the assessment and remanded it for fresh assessment. Section 153C speaks of a satisfaction, which has to be entered into at the first point, when, on recovery of materials on a search conducted in a partnership firm's business, the 'other person', the appellant, was issued with notice. There is no requirement for a further satisfaction for a fresh assessment on a remand made under Section 263. The A.O, on the materials received, at the initial stage, had entered his satisfaction and issued notice for assessment based on the recoveries made from another person's premises.
19. The assessee filed a return, as originally returned, which was accepted. The assessment stood completed without revising the original income returned by the assessee even prior to the search. Obviously, the A.O was then of the opinion that the documents seized are not material or relevant to the assessee. This opinion was revised by the Commissioner under Section 263, as prejudicial to revenue. When there is thus a remand made under Section 263, if the A.O is required to again enter satisfaction, it would result in the A.O sitting in appeal over the order of the Commissioner. Here, we have to notice that the assessee did not challenge the order of remand made under Section 263, nor are we considering its sustainability.
20. On the question of limitation, Section 263 confers power on the Commissioner to revise orders, which are found to be prejudicial to the revenue. When such an order is made within the time provided for making such order, it cannot be said that the limitation under Section 153B has to be resorted to, which would be impossible of compliance. Then, if no further extension is provided, either under Section 153B or under Section 263, for making a fresh assessment on the assessment being remanded to the AO, it has to be taken that there is no limitation provided. In that context, it would have to be understood, as the statute being silent on limitation, in which event, the principles of reasonableness would have to be imported. The fresh assessment then has to be completed within a reasonable time. We would not make any strait-jacket stipulation as to the reasonable time, which has to be decided on the facts and circumstances of each case. In the present case, suffice it to notice that the Commissioner had passed the order cancelling the assessment and directing a fresh assessment on 12.03.2010, within the two year period provided under Section 263 of the Act. The fresh assessment was passed on 30.12.2010, a little more than nine months from the order of revision. Considering the fact that there was requirement for a fresh notice and a hearing, in making that fresh assessment and that too of seven years, we are of the opinion that the fresh assessment made under Section 153C is within a reasonable time.
21. I.T.A No. 419 of 2009, was concerned with Chapter XIVB, Special Procedure For Assessment Of Search Cases, applicable prior to 2003 (31.05.2003) and Section 251. There pursuant to a search, assessment was completed under Section 158 BC. On first appeal, under Section 251, favouring the assesses contention that the assessment ought to have been under Section 158BD, the matter was remanded. Section 251 did not confer the Appellate Authority with any power to remand the matter; which power was earlier available but specifically taken away by amendment. The fresh assessment was beyond the period of limitation as provided under Section 158BE. What distinguishes the instant case is the specific power of remand, in Section 263, evident from the words: 'cancellation of the assessment and directing fresh assessment'. As is found by us, there is no limitation provided to carry out the assessment. The fresh assessment cannot be said to be possible only within the limitation provided under Section 153B, since the power to revise extends to two years while that under Section153B is far lesser. The legislature cannot be said to have conferred a power redundant, ineffective and unworkable.
22. In taking this view we are fortified by the decision of the Hon'ble Supreme Court in Pooran Mall & Sons. Pursuant to a search under Section 132, as it then existed, an inquiry was conducted under sub-section (5) and a prima facie order passed by the Income-tax Officer. The order directed retention of the assets seized, for appropriation against the tax dues, which liability could be determined finally, only in a regular assessment. The assessee filed a writ petition, from that order, challenging the constitutional validity of Section 132 and the legality of the search and seizure. Both the grounds were negatived and later in yet another writ petition on grounds of violation of principles of natural justice, on consent, the matter was restored to be considered afresh under sub-section (5). The order passed on remand was set aside by the High Court on the ground that it was beyond the limitation provided in sub-section (5).
23. Sub-section (5) of Section 132 provided for a summary enquiry to estimate the undisclosed income and the probable amount of dues that may arise and retain the assets seized to the extent of satisfying such dues. This exercise had to be completed within 90 days of the seizure. An order so passed could also be challenged under sub-section (12), within 30 days. On the question of limitation as also the effect of a remand made under Article 226, the Court held so:
"Even if the period of time fixed under Section 132(5) is held to be mandatory that was satisfied when the first order was made. Thereafter if any direction is given under Section 132(12) or by a court in writ proceedings, as in this case, we do not think an order made in pursuance of such a direction would be subject to the limitations prescribed under Section 132(5). Once the order has been made within ninety days the aggrieved person has got the right to approach the notified authority under Section 132(11) within thirty days and that authority can direct the Income Tax Officer to pass a fresh order. We cannot accept the contention on behalf of the respondents that even such a fresh order should be passed within ninety days. It would make the sub-sections (11) and (12) of Section 132 ridiculous and useless. It cannot be said that what the notified authority could direct under Section 132 could not be done by a court which exercises its powers under Article 226 of the Constitution. To hold otherwise would make the powers of courts under Article 226 wholly ineffective."
The dictum squarely applies here and the argument raised on limitation on behalf of the assessee fails. If we hold that even a fresh assessment ordered under Section 263 has to be completed within the time provided under Section 153B, then, we would render the power to remand, useless.
24. The learned Counsel would also refer to the principle as to strict interpretation of taxing statutes and no interpretation being commended of creating an additional burden on the assessee. It is also trite that when two interpretations are possible the Courts would lean in favour of the tax payer and against the Revenue. However the reasoning above does not warrant application of the above principles. We have read the provisions to come to a definite conclusion and there is no ambiguity which would enable us to lean in favour of the assessee.
25. On the above reasoning the questions of law are answered against the assessee and in favour of the revenue, on the aspect of limitation as agitated before this Court in the aforesaid appeals. There is also no requirement for a 'satisfaction' to be entered on making the fresh assessment since it is a continuation of the earlier proceedings. Though the returns filed in tandem with the original returns were accepted, the Commissioner revised the same as prejudicial to revenue and if the A.O is directed to again enter satisfaction, the A.O will be sitting in appeal from the order under Section 263.
The appeals stand rejected. No orders as to costs.
tanvi 

*In favour of revenue.
†Arising out of order of ITAT in ITA No. 432/Coch/2015, dated 10-11-2016.