Pentamedia Graphics Limited Vs ACIT Media Circle-1 Chennai
WP No 28836 & 28837 of 2014
Date-20th July 2021
Forum -Madras High Court
Sub- whether the period of limitation u/s 153 for the purpose of passing order u/s 148 in a case where proceedings are stayed by a court are to be counted from the date of pronouncement of the judgement in the court or from the date of receipt of the order by the Income-tax department and also whether simply filing SLP in Supreme Court can warrant stay of proceedings

The Madras High court in this case was considering reassessment notices u/s 148 of the Income-tax Act,1961 for the AY 2005-06 and 2006-07 in the case of this software company which was challenged in a writ court and finally the writ court dismissed the writ petitions and thereafter the order was passed by the AO. However, the order so passed was challenged by the company again on account of limitation where the assessee contended that the limitation period for passing the order has to be counted from the date of pronouncement in the court of law where the department counsel was present and not from the date of receipt of order by the department. However, the department contended otherwise that the date of official communication with seal of the court was important . Both sides relied on several judgements.

However, the Madras hIgh court relying on the decision of the Supreme Court in the case of Housing Board Haryana Vs Housing Board Colony (2015) 5 SCC 672(SC) ignored the decisions quoted by the assessee and dismissed the writ petitions by observing that the order must be signed, sealed, dated and communicated to the parties, enabling them to understand the reasons and the spirit of the order.

Also the court held that mere filing of an appeal before the High Court or Hon’ble Supreme Court would not preclude the competent authorities from exercising their powers, which is otherwise conferred under the provisions of the Act. Unless any interim order or otherwise is communicated to the authorities, they are bound to proceed under the provisions of the Act, in the manner known to law and therefore, mere filing of the case before the Hon’ble Supreme Court is not a ground to raise that the petitioner was not afforded with opportunity.

This being an order of Single bench, the matter will definitely travel before the division bench and this important law point will be of huge interest in coming days.

Ramesh Patodia
31-07-2021