By TIOL News Service

CHENNAI, APRIL 26, 2018: THE ISSUE IS - Whether when section 11 of Act, 2015 provides outer time limit to pass final order by authorities the Court can insist on forthwith passing of order in matter when pursuance of notice u/s 10 (1) information has been submitted by assessee. NO IS THE ANSWER.

Facts of the case:

The assessee is an Individual. The Revenue received information that assessee had made certain investments in acquiring assets abroad and also sold some assets outside India but had not disclosed the Foreign assets and Foreign interests fully in Schedule FA of the return of income filed by him for the relevant AY. The Revenue issued a notice to the assessee u/s 10(1) of the Black Money (Undisclosed Foreign Income and Assets) and Imposition of Tax Act, 2015 (Act 2015). The assessee replied that, foreign remittance for purchase of the foreign asset was through normal banking channels, as per RBI guidelines. The assessee submitted relevant documents also and prayed for withdrawal of the notice u/s 10(1) of the Act, 2015. But Revenue issued summon u/s 8(1) of the Act, 2015. The assessee submitted that, there were three conditions i) Undisclosed income; ii) Undisclosed investments; and iii) Non-disclosures in the Income Tax Returns which were required to be satisfied by the Officer to invoke provisions of the Act, 2015. It was further submitted by assessee that when he had disclosed income, investments/source and also the ITRs, the order u/s 10(3) should not be passed. It was submitted that, there was no material available in the hands of the Revenue for initiating proceeding under the provisions of Act of 2015. The assessee on the other hand also submitted that in spite of the receipt of the documents, the Revenue was yet to pass orders u/s 10(3) of the Act. The 9 months had expired of furnishing relevant details to the Revenue but no order was passed u/s 10 (3) of the Act. Aggrieved assessee filed writ petition in the High Court and sought a direction upon the Revenue to pass an order forthwith u/s 10(3) of the Act, 2015.

High Court held that,

++ the statute prescribes an outer time limit, within which, the Authority is entitled to pass final orders. Therefore, to compel the Authority to pass final orders well before the time stipulated in the statute is not feasible of consideration. When the statute prescribe an outer time limit, the Court, while exercising its power under Article 226 of the Constitution should not interfere with the said power, i.e., either by reducing the time limit prescribed under the statute or by increasing the time limit. In so far as Act, 2015 was concerned, time given for completion of assessment and reassessment was only in terms of Section 11 of the Act. Section 11 (1) of the Act states that, no order of assessment or reassessment shall be made under Section 10, after the expiry of two years from the end of the financial year, in which, the notice under sub-section (1) of Section 10 was issued by the AO. Thus, the prayer sought for by the assessee in the Writ Petitions, to direct the Revenue to forthwith pass orders under Section 10 (3) of the Act, if acceded to, it would be contrary to the statutory provisions under Section 11(1) of the Act. Therefore, such a positive direction cannot be issued.

(See 2018-TIOL-784-HC-MAD-IT)