2011 (5) TMI 1110 - AT - Income Tax

Summary

Issues involved: Appeal against the order of the CIT (Appeals) in ITA No.26/CIT (A)/LTU/09-10 dated 30.8.2010 for the A.Y. 1996-97.

Ground No.2 - Impugned reassessment barred by limitation:
The assessee challenged the assessment as barred by limitation u/s. 153(2A) of the Act. The CIT (Appeals) held that the reassessment order was not barred by limitation as the ITAT did not set aside the entire assessment for a de novo examination but only directed the AO to look into certain aspects. The Tribunal's decision was not a fresh assessment order, hence not barred by limitation u/s. 153(2A). The ld. AR contended that the Tribunal's order was received by the CIT well before the time limit for reassessment, making the reassessment order passed on 15.12.2009 barred by limitation.

Ground No.3 & 4 - Depreciation on leased assets:
The original assessment order determined the total income with differences in depreciation on pollution control equipment and interest advanced to Madhya Pradesh State Electricity Board. The CIT(A) partly allowed the appeal, and the matter was sent back to the AO by the ITAT for reexamination. The AO passed an assessment order complying with the Tribunal's decision. The assessee argued that the order was passed beyond the time limit provided u/s. 153(2A) and hence not maintainable. The Revenue contended that the order was within the time limit u/s. 153(3) as the Tribunal had passed the order with certain directions.

Conclusion:
The Tribunal held that the order passed by the AO was beyond the period of limitation u/s. 153(2A) of the Act, making it barred by limitation. As the issue of limitation was decided against the Revenue, the Tribunal allowed the appeal of the assessee without delving into the merits of the case.