Rakesh Garg, J. - (1.) THE Revenue has filed the present appeal under Section 260A of IT Act, 1961 (hereinafter referred to as the 'Act') against the order dt. 6th July, 2005 passed by the Tribunal, Delhi Bench 'A', New Delhi in ITA No. 4075/Del/2003 for the asst. yr. 1998 -99 raising the following substantial questions of law: 1. Whether on the facts and circumstances of the case, the Tribunal was right in upholding the finding of the learned CIT(A) quashing the assessment framed under Section 143(3)/147 by interpreting the main Section 153(2) of the IT Act, 1961 by reading the proviso in such a manner so as to ascribe a particular meaning to the main provision without appreciating that the proviso only gives an exemption/different interpretation in case a particular circumstance exists and since in the instant case, the notice under Section 148 was not served on a date between 1st April, 1999, and 1st April, 2000, the proviso is not attracted and is irrelevant to the interpretation of ambit in Section 153(2) of the IT Act, 1961?
(2.) WHETHER on the facts and circumstances of the case, the Tribunal is right in dismissing the Departmental appeal without appreciating that the amended provision of Section 153(2) operating from 1st June, 2001 is effective only in respect of notices under Section 148 served on or after 1st June, 2001 and is prospective in nature? 2. The assessee filed return of income on 31st Oct., 1998 declaring an income of Rs. 46,440 and an agricultural income of Rs. 84,286. The return was processed under Section 143(1)(a) of the Act on 18th May, 1999. Subsequently, action under Section 147 of the Act was initiated and a notice under Section 148 of the Act was issued on 8th Jan., 2001 and the same was served upon the assessee on 11th Jan., 2001. In respect thereto, the assessee filed a return of income on 28th Feb., 2001 declaring the same income as shown in the original return and this return was also processed under Section 143(1)(a) of the Act on 30th March, 2001 accepting the returned income. Thereafter, notices were issued under Section 143(2) and Section 142(1) of the Act and the assessment under Section 143(3) r/w Section 147 was completed on 14th Feb., 2003 on a total income of Rs. 17,01,235. Various additions and disallowances were made in this assessment. Being not satisfied with the order of the AO, the assessee filed an appeal before the CIT(A) and besides contesting the disallowances made in the assessment, took up a ground that the assessment was time barred in view of Section 153(2) of the IT Act and, therefore, the same should be quashed. It was contended that under Section 153(2), the assessment proceedings have to be completed within one year from the end of the financial year in which the notice under Section 148 was served, it was pointed out that the notice was served on the assessee on 11th Jan., 2001, which is a day which fell before 1st June, 2001 and, therefore, in such a case, the assessment ought to have been completed on or before 31st March, 2002. Since it was completed only on 14th Feb., 2003, the assessment, it was contended was beyond the period of limitation.
(3.) THE CIT(A) held that since Section 153(2) was amended w.e.f. 1st June, 2001 to reduce the time limit available for completion of the assessment from two years to one year from the end of the financial year in which the notice under Section 148 was served, the amended provision would operate in the present case, notwithstanding that the notice was served before 1st June, 2001, and therefore the assessment ought to have been completed on or before 31st March, 2002 and since it was completed only on 14th Feb., 2003, it was beyond the period of limitation. Thus, the CIT(A) applied the amended Section 153(2) to restrict the time limit available to the AO to complete the assessment. The appeal of the assessee was allowed vide order dt. 20th June, 2003.;