(2016) 25 J.K.Jains Vat Reporter 111-- SC case of Shreyans Indus Ltd. Etc.

Assessment--"Scope of powers of Commissioner for extending limitation period for completing the assessments--Power to extend the time limit is to be exercised before the normal period of limitation for assessment expires."

Relevant paras of judgment:

24. If one is to go by the aforesaid dicta, with which we entirely agree, the same shall apply in the instant cases as well. In the context of the Punjab Act, it can be said that extension of time for assessment has the effect of enlarging the period of limitation and, therefore, once the period of limitation expires, the immunity against being subject to assessment sets in and the right to make assessment gets extinguished. Therefore, there would be no question of extending the time for assessment when the assessment has already become time barred. A valuable right has also accrued in favour of the assessee when the period of limitation expires. If the Commissioner is permitted to grant the extension even after the expiry of original period of limitation prescribed under the Act, it will give him right to exercise such a power at any time even much after the last date of assessment. In the instant appeals itself, when the last dates of assessment were 30.4.2004, 30.4.2005, 30.4.2006 and 30.4.2007, order extending the time u/s 11(10) of the Act were passed on 17.8.2007, 17.8.2007, 17.8.2007 and 25.5.2007 respectively. Thus, for the Assessment Year 2000-2001, order of extension is passed more than three years after the last date and for the Assessment Year 2001-2002, it is more than two years after the last date. Such a situation cannot be countenanced as rightly held by the High Court. When the last date of assessment in respect of these Assessment Years expired, it vested a valuable right in the assessee which cannot be lightly taken away. As a consequence, S.10(11) has to be interpreted in the manner which is equitable to both the parties. Therefore, the only way to interpret the same is that by holding that power to extend the time is to be exercised before the normal period of assessment expires. On the aforesaid interpretation, other arguments of Mr. Ganguli lose all significance. Argument of learned senior counsel for the appellants based on section 148 of the CPC would be of no consequence. This section categorically states that power to enlarge the period can be exercised even when period originally fixed has expired. Likewise, reliance        u/s 139(2) of the Income Tax Act is misconceived. That provision is made for the benefit of the assessee which empowers the Assessing Officer to grant an extension of time for filing of the return of income and, therefore, obviously will have no bearing on the issue at hand. Moreover, this Court in Ajantha Electricals’s case (supra), which is relied upon by the learned counsel for the appellant, held that the time can be extended even after the time allowed originally has expired on the interpretation of the words “it has not been possible” occurring in S.133(2) of the Act. The Court, thus, opined that the aforesaid expression would mean that the time can be extended even after original time prescribed in the said provision has expired. Same is our answer to the argument of Mr. Ganguli predicated on section 28 of the Arbitration Act, 1940 as that provision was in altogether different context.

25. We, thus, do not find any error in the impugned judgments of Punjab and Haryana High Court and as a consequence, dismiss all these appeals. Parties are, however, left to bear their own cost.