Naresh Chand Agarwal vs Union of India and Others

Heard Sri A.P. Singh, learned counsel for the petitioner and Sri D.D. Chopra, learned counsel for opposite parties Nos. 2 to 4. The brief facts of the case are that during the assessment year under consideration (1985-86), the assessee was a partner in the partnership firm, M/s. Ajay Cotton Industries. He was also a trustee in M/s. Naresh Chandra, Children Welfare Trust.

On January 17, 1985, a search u/s 132(1) of the income tax Act was conducted at the premises of various assessees of M/s. Alok Chand Group including that of the assessee under consideration. During the course of search, certain incriminating documents were found and seized.

In these circumstances, the assessee has filed a belated income tax return on January 8, 1987. The Assessing Officer passed the assessment order dated March 24, 1988, on protective basis without prejudice to the contrary view taken, if any, in the assessment of the other assessees of the group. Finally, the matter reached to the Tribunal in the assessee''s case, where an addition of Rs. 10,06,000 was a subject matter on the basis of the entries appearing in the seized record found from the premises of M/s. Malok Chand Industries. The Tribunal, vide its impugned order dated June 27, 2002, passed in ITAT No. 152/Del/97 observed that:

the search and seizure operation u/s 132(1) of the Act took place at various premises of Malok Chand Agarwal and the group. The accountant who was looking after the case could not file the necessary evidence as he was busy in other group case also. Under the circumstances, we feel that no effective opportunity has been provided to the assessee to explain its case. We, therefore, set aside the entire assessment order and the Commissioner of income tax (Appeals) order and restored it back to the file of the Assessing Officer to pass the assessment order afresh after providing reasonable opportunity to the assessee.

With this back ground, learned counsel for the petitioner submits that in pursuance to the direction, the Assessing Officer has not passed any fresh assessment order. In the meantime, the income tax record of the assessee has been transferred from Delhi, income tax Officer to Lucknow. On August 3, 2011, the Assistant Commissioner of income tax, Lucknow (annexure 1), issued the notice u/s 143(2). Being aggrieved, the assessee has filed the instant writ petition.

After hearing both the parties and on a perusal of the record, it appears that the income tax Appellate Tribunal Delhi, has passed the order on June 27, 2002, where a direction was issued to pass the fresh assessment order, but till date, no order has been passed by the Assessing Officer. Now, after a lapse of considerable time, no assessment order can be passed as the proceedings are time barred.

It may be mentioned that in view of the provisions of section 153B proviso 2(a), the limitation for the reassessment is one year, which has already been expired as back as in the year 2003. Hence, now there is no occasion for initiation of the proceedings of reassessment/scrutiny pertinent to the assessee for the assessment year 1985-86.

In view of the above, we set aside the impugned notice dated August 3, 2011, and direct the opposite parries to give the effect of the Tribunal''s order dated June 27, 2002, against which no appeal has been filed by the Department. The refund, if any, may be issued to the assessee as per law at the earliest, say, within a period of three months after receiving the certified copy of the order. In the result, the writ petition is allowed.