Assessment: Limitation: Section 158BC: Block Period ending on 14-09-2002: Exclusion of period during which assessment stayed by Court: Limitation resumes on date of vacation of stay and not from date of receipt of order by Department: Assessment barred by limitation:

On 14-09-2002, search was conducted at the assessee’s premises and a notice u/s. 158BC was issued on 29-04-2003. The assessee filed the return on 16-06-2003. The assessee filed writ petition and challenged the validity of search. By order dated 12-02-2004, the High Court stayed the assessment proceedings. The stay was vacated on 26-08-2009 and the copy of the order was received by the Assessing Officer on 09-11-2009. The Assessing Officer passed the assessment order on 22-06-2010. The Tribunal held that the limitation resumes on the date of vacation of the stay and accordingly the assessment was barred by limitation.

In appeal, the Revenue contended that the limitation resumes from the date of receipt of the order by the Department i.e. 09-11-2009 and accordingly the assessment was within the limitation period. The Allahabad High Court upheld the decision of the Tribunal and held as under:

“i) The provisions of the Act for filing of the appeal from the date of service of the order would not be attracted to calculate the period of limitation to complete the assessment. This was not a case of a particular act to be performed, but the arrest of the limitation by an interim order passed by the High Court.

ii) As soon as the order was vacated, the limitation would restart and exhaust itself on the period of limitation provided under the Act. The assessment was clearly barred by limitation.”