- (1.) THE assessee is engaged in the execution of various contracts awarded by the Government Department. For the Assessment Year 2006 -07 the assessee filed his return showing total income at Rs.6,57,120/ -. Subsequently, the case was picked up for scrutiny and, it is alleged, that an assessment order dated 26.12.2008 under Section 143(3) of the Income Tax Act (hereinafter referred to as the "Act") was passed and the income was enhanced to Rs.36,12,240/ -. The assessee, being aggrieved, filed an appeal, which was allowed on the ground that the assessment order was barred by time, inasmuch as, the assessment order was not completed before the expiry of the period of limitation. The Department, being aggrieved, filed an appeal before the Tribunal, which was dismissed. Consequently, the present appeal under Section 260 -A of the Act was filed by the department before this Court.
(2.) WE have heard Sri Shambhu Chopra, the learned counsel for the appellant and Sri Ashok Trivedi, the learned counsel for the assessee.
(3.) UNDER Section 153 of the Act, the time limit for completion of the assessment for the relevant year was 21 months from the end of the assessment year. Consequently, in the instant case, the time limit for completion of the assessment was till 31.12.2008. The order sheet indicates that the case was discussed on 26.12.2008 and the order was reserved. The record which was produced before the appellate authorities indicates that the intimation of demand was served upon the assessee on 12.1.2009. Section 143 of the Act contemplates that when a return has been made under Section 139 or in response to a notice sub -Section (1) of Section 142 of the Act, such return would be processed and the total income would be determined and the tax and interest, if any, shall be computed. Further, an intimation shall be prepared or generated and sent to the assessee specifying the sum determined to be payable or the amount of refund due to the assessee. Section 156 of the Act provides that where any tax, interest, penalty, fine or any other sum is payable in consequence of an order passed under the Act, the assessing officer shall serve upon the assessee a notice of demand in the prescribed form specifying the sum so payable. Rule 15 of the Income Tax Rules read with Rule 38 of the Income Tax Rules provide that notice of demand under Section 156 of the Act is required to be served upon the assessee.;