The Delhi High Court has ruled that the authority to extend the time for submitting audit reports under section 142(2c) exclusively lies with the Assessing Officer (AO) and cannot be exercised by the Commissioner of Income Tax (CIT).
Title: P.R. COMMISSIONER OF INCOME TAX CENTRAL-02 versus B.L. KASHYAP AND SONS LTD.
+ ITA 455/2022
Decided on: 11.12.2023
CORAM: HON’BLE MR JUSTICE RAJIV SHAKDHER,
HON’BLE MR JUSTICE GIRISH KATHPALIA
Facts:
The appellant seeks to challenge the common order dated 30.09.2020 (“impugned order”) passed by the Income Tax Appellate Tribunal (“Tribunal”) wherein the Assessing Officer has granted extension of time under the Section 142(2C) of Income tax act, 1961.
Laws Involved:
Section 142(2C) of Income tax act, 1961
(2C) Every report under sub-section (2A) shall be furnished by the assessee to the [Assessing Officer] within such period as may be specified by the [Assessing Officer]:
Provided that the [Assessing Officer] may, [suomotu, or on an application] made in this behalf by the assessee and for any good and sufficient reason, extend the said period by such further period or periods as he thinks fit; so, however, that the aggregate of the period originally fixed and the period or periods so extended shall not, in any case, exceed one hundred and eighty days from the date on which the direction under sub-section (2A) is received by the assessee.
Issue framed by court:
1. Whether, in the present case, the Assessing Officer has granted an extension of time under the proviso to Section 142(2C) of the Income Tax Act, 1961?
Courts Judgement and Analysis:
Court in this case observed that the answer to the substantial question of law lies in ascertaining the authority in which the legislature has invested statutory discretion.
The Commissioner of Income Tax (“CIT”) had no role in extending the timeframe as the Assessing Officer (“AO”) was in seisin of the assessment proceedings. Therefore, the assessment proceeding is a part of the judicial process.
They emphasized that It is important to note that the decision relied upon by the appellant/revenue in the matter of Yum Restaurant has been disapproved in Rajesh Kumar’s case.
Notwithstanding the observation made in this regard, the Court in Sahara India, has emphasized that because there are civil consequences, the distinction between quasi-judicial and administrative functions is obliterated.
Therefore, it is evident that even a purely administrative order which entails civil consequences must be consistent with the rules of natural justice.
Accordingly, the argument was rejected and it was held that since an order under Section 142(2A) does entail civil consequences, the rule audi alteram partem is required to be observed. The appeal was disposed of in the aforesaid terms.
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Written by- Aditi