- (1.) BY The Court' This appeal under section 260A of the Income Tax Act, 1961 (the Act) has been filed by the Department aggrieved against the order dated 10.05.2004 passed by the Income Tax Appellate Tribunal, Jodhpur Bench, Jodhpur (the Tribunal), whereby, the appeal filed by the assessee was allowed and it was held that the assessment framed by the assessing officer (assessing officer) on 31.03.1989 was barred by limitation.
(2.) THIS Court while admitting the appeal on 24.05.2005 framed the following substantial question of law: - - (i) Whether in the facts and circumstances, the Tribunal was justified in holding the assessment framed on 31st March, 1989 for the assessment year 1985 -86 was barred by Limitation under section 153(1)(a) and it was not a case governed by Section 153(1)(b)?
(3.) THE facts in brief may be noticed that a search was conducted under section 132 of the Act on 24.08.1984; the accounting year of the assessee closed on 31.10.1984 and the due date for filing return was 30.06.1985; the assessee sought extension of time for filing the return vide application dated 24.06.1985, which was granted till 30.09.1985; the assessee filed its return of income declaring loss of Rs. 6,28,696/ - on 31.10.1985; the first assessment was framed on 31.03.1989 on an income of Rs. 5,50,82,560/ -; the assessee challenged the validity of the assessment before the Commissioner of Income Tax (Appeals), Udaipur (Commissioner (Appeals)), which was decided vide order dated 09.01.1990, though and the ground for challenging the validity was rejected, however, the assessment was set aside; the assessing officer framed second assessment vide order dated 10.03.1992 on an income of Rs. 5,38,14,438/ -, which was again set aside by the Commissioner (Appeals) vide order dated 28.10.1992; consequently, third assessment was framed by assessing officer on 27.03.1995 at an income of Rs. 20,62,263/ -, which was again challenged by the assessee before the Commissioner (Appeals), who decided the same vide order dated 21.08.1995. The assessee approached the Tribunal against the orders of the Commissioner (Appeals) i.e. 09.01.1990 and 21.08.1995. Before the Commissioner (Appeals), a preliminary objection was raised by the assessee that the assessment in question has become barred by limitation and the same was beyond the time available under the provisions of Section 153(1)(a) of the Act; it was, inter alia, submitted that the so called notice dated 17.03.1988 for initiating the penalty proceedings under section 271(1)(c) of the Act was in fact served on one Mr. S.K. Khandelwal on 10.03.1989 and not on 17.03.1988 as the said Mr. Khandelwal was not at Jodhpur on that day and, as such, the service of the letter on him on 17.03.1988 was factually incorrect, however, the Commissioner (Appeals) came to the conclusion that as the acknowledgment bears the date of 17.03.1988 and there was no material on record to show that the notice in connection with the initiation of concealment etc. proceedings was not served on 17.03.1988, the plea regarding the assessment being barred by limitation was negated in view of the provisions of Section 153(1)(b) of the Act.;