Background
The Income Tax Appellate Tribunal (ITAT) Delhi Bench ‘D’, presided over by Shri G. S. Pannu, President, and Shri Challa Nagendra Prasad, Judicial Member, delivered a remarkable judgment on 25 September 2023, in the case of Little Fairy Limited, Nicosia, Cyprus, vs ACIT, Circle International Tax. 2(2)(1), New Delhi. This case, bearing the number ITA 1512/DEL/2022, was for the assessment year 2016-17.
The Appeal
Little Fairy Limited filed the appeal against the orders of the Commissioner of Income Tax (Appeals) for the assessment years 2015-16 and 2016-17, raising significant legal issues concerning the timing and validity of assessment orders under sections 143(3) and 144C of the Income Tax Act, 1961.
Legal Grounds and Tribunal’s Analysis
The appellant, Little Fairy Limited, challenged the assessment order on the grounds that it was barred by limitation. The appellant’s counsel argued that the assessment orders for both assessment years were issued beyond the statutory deadline, rendering them invalid. The Tribunal considered previous judgments, notably the National Thermal Power Co. Ltd. vs. CIT and Jute Corporation of India Ltd vs. CIT, which established the Tribunal’s jurisdiction to admit additional grounds of appeal purely on legal questions arising from the facts on record. The Tribunal accepted the additional grounds of appeal, focusing on whether the assessment orders were passed within the stipulated time.
Conclusion and Implications
The Tribunal concluded that the assessment orders for the assessment years 2015-16 and 2016-17 were indeed barred by limitation. This decision was supported by reference to similar cases and the provisions of the Income Tax Act. Consequently, the appeals filed by Little Fairy Limited were allowed, setting a precedent on the importance of adhering to procedural timelines in the issuance of assessment orders.
Key Takeaways
This judgment underscores the critical nature of procedural laws in taxation, the Tribunal’s powers in considering additional legal grounds at the appellate stage, and the impact of such legal nuances on the outcomes of tax disputes. The case serves as a significant reference point for future disputes involving similar legal and procedural questions.
