(1) Court No. 37 Case : INCOME TAX APPEAL No. 356 of 2005 Appellant : M/S U.P. State Handloom Corporation Ltd. Respondent : Commissioner Of Income Tax Counsel for Appellant : R.S. Agrawal Counsel for Respondent : S.C.,A.Kumar,A.N. Mahajan,B.J.Agarwal,D. Awasthi,G. Krishna,R.K. Upadhyay,S.Chopra Hon'ble Tarun Agarwala,J. Hon'ble Vinod Kumar Misra,J. We have heard Sri R.S. Agrawal, learned counsel for appellant and Sri Ashok Kumar, learned counsel for department. present appeal relates to assessment year 1983 84. Return was filed on 5 th September, 1985. Inspecting Assistant Commissioner after considering matter, issued order dated 4th August, 1986 directing assessee to get accounts audited under Section 142 (2A) of Income Tax Act. petitioner, being aggrieved, filed writ petition and obtained interim order dated 19 th September, 1986 staying further proceedings. Eventually, this writ petition was dismissed on 8th August, 1986. In meanwhile, statutory audit as per requirement under Companies Act was made in petitioner's books of account. petitioner made request to Assessing Officer that his statutory audited books of accounts may be considered in assessment proceeding instead of getting accounts audited under (2) Section 142 (2A) of Income Tax Act as per earlier order dated 4th August, 1986. This request was not accepted by Assessing Officer and, accordingly, petitioner filed second writ petition in which interim order staying further proceedings was passed by Court on 7th December, 1996. This writ petition was eventually dismissed on 13th January, 2000. While dismissing writ petition High Court observed as under: Commissioner will reconsider matter in light of A.O's with recommendation and pass appropriate order. Based on this direction, Commissioner of Income Tax reconsidered matter and passed order dated 25th May, 2000 accepting contention of assessee and directed Assessing Officer to consider audited books of accounts of assessee instead of getting books of accounts again audited under Section 142 (2A) of Income Tax Act. Based on said direction of CIT, assessment order was passed on 16 th June, 2000 under Section 143 (3) of Income Tax Act. assessee, being aggrieved, filed appeal contending that assessment order was barred by limitation in view of Section 153 (3) Explanation (1) (ii) of Income Tax Act and, therefore, assessment order should be set aside. appellate authority did not agree with (3) contention of assessee and rejected appeal, thereafter, second appeal was preferred before Tribunal, which was also dismissed, consequently, present appeal under Section 260 of Income Tax Act was filed and was admitted on following substantial questions of law: A. Whether on facts and in circumstances of case, Income tax Appellate Tribunal was correct in holding that assessment made by Assessing Officer on 16 th June, 2000 is not barred by limitation in terms of provisions of Section 153 sub section (1) read with Explanation 1 thereof of Act. B. Whether on facts and circumstances of case, Income Tax Appellate Tribunal was justified in holding that period of limitation available to Assessing Officer for completing assessment is to be computed from 26th May, 2000, i.e. after direction given by Hon'ble High Court reached finality vide order dated 25th May, 2000, passed by Commissioner of Income tax. contention of appellant is, that extended period of limitation to complete assessment is provided under Section 153 of Income Tax Act. relevant section is Section 153 (3) Explanation 1 (ii) which provides that period during which assessment proceeding was stayed by order or injunction of any Court in computing period of limitation would be excluded. According to appellant, extended period was two months six days to be calculated from 14th January, 2000 that is after dismissal of second writ petition by High Court, which period would come to end on 21 st March, 2000 and, therefore, assessment was required to be completed on (4) or before 31st March, 2000 whereas, in instant case, assessment was completed after period of limitation on 16th June, 2000. submissions of learned counsel for appellant appears to be attractive in first blush but on closer scrutiny, we find that appellant has no case. We are of opinion that when writ court while dismissing writ petition by judgment dated 13th January, 2000 directed petitioner to reconsider matter with regard to auditing books of accounts under Section 142 (2A) of Income Tax Act, no assessment proceeding could be completed without complying with order of Court. Commissioner passed order on 25th May, 2000. We are, therefore, of opinion that time taken by Commissioner to decide matter from 13th January, 2000 to 25th May, 2000 stood excluded while computing period of limitation. period of two months 6 days as calculated by appellant consequently, would start from date when Commissioner passed order, namely, 25th May, 2000. assessment was completed on 16th June, 2000 within extended period of 2 months 6 days. We are, consequently, of opinion that assessment order was passed during extended period of limitation as provided under Section 153(3) Explanation (1) (ii) of Income Tax Act. (5) Consequently, for reasons stated aforesaid, substantial questions of law are answered against appellant and in favour of department. appeal fails and is dismissed. Order Date : 5.11.2015 A. Pt. Singh (Vinod Kumar Misra, J.) (Tarun Agarwala, J.) M/S U.P. State Handloom Corporation Ltd. v. The Commissioner Of Income Tax