TMI Blog1986 (6) TMI 69X X X X Extracts X X X X X X X X Extracts X X X X ..... espect of films released in the assessment years 1970-71 and 1971-72, the ITO had allowed as deduction the cost of films to the tune of Rs. 8,77,000 in the assessment year 1972-73. Similarly, in the assessment year 1973-74, the ITO had allowed a sum of Rs. 1,08,200 as deduction in respect of a film released in the assessment year 1971-72. This was the position in the original assessments made by the ITO for the assessment years 1972-73 and 1973-74. The assessee had gone on appeal in the assessment years 1070-71 and 1971-72 to the Tribunal claiming that the entire cost of the films released in those years should have been allowed as deduction. Originally, the Tribunal had rejected the claim of the assessee. However, on a miscellaneous applic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ents for the years 1972-73 and 1973-74, the ITO took action under section 147 of the Income-tax Act, 1961('the Act') in order to withdraw those allowances in the assessment years 1972-73 and 1973-74. In the reassessments made for those years, the ITO withdrew the aforesaid allowances as they had already been allowed in the earlier years of release. The ITO completed the reassessments accordingly. 3. The assessee appealed to the Commissioner (appeals) and contended that the ITO erred in his decision. It was urged that the ITO did not take permission of the Commissioner before taking action under section 147 and so the orders of ITO were bad. Secondly, it was urged that the assessments were barred by limitation because of the provisions of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e did not conceal any particulars necessary for its assessment. The notice was issued more than four years after the end of the previous years under consideration. Section 151(2) empowers the issue of a notice after four years provided prior permission of the Commissioner or the Board is taken in this regard. As no such permission has been taken, the orders of the ITO were bad in law. Next, he referred to the Explanation 2 to section 153(3) of the Act and urged that it was not open to the department to take the help of the same because it speaks of exclusion of income whereas the Tribunal was dealing with the allowance of expenses. Further, according to him, there was no direction or finding given by the Tribunal in their order dated 3-9-19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ance which had been allowed in the subsequent years and which reduced the income of the subsequent years had to be withdrawn as a consequence for while giving effect to the order of the Tribunal dated 3-9-1982. Hence, the aforesaid Explanation did apply to the facts of the case and so the limitation did not apply because of section 150(1). For the same reason, he urged that the necessity to take prior permission of the Commissioner has been dispensed with. In this connection, he referred to the decision in the case of B. A. R. Abdul Rahman Saheb v. ITO [1975] 100 ITR 541 (AP) wherein it has been held that in a case to which section 150 applies the necessity for taking sanction of the Commissioner does not apply. 6. We have considered the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... certain extra expenses that had been allowed by the ITO in the subsequent years. It is evident that the Tribunal directed the ITO to allow more expenses and thus excluded the same from the total income. In out opinion, this order of the Tribunal amounted to a direction within the meaning of section 150(1) read with Explanation 2 to section 153. When the entire expense has been allowed in the earlier years, the same could not again be allowed in a subsequent year. The withdrawal of the expenses in the subsequent years was directly connected with the consequence of the direction given in the order dated 3-9-1982. Hence we come to the conclusion that the order of the Tribunal dated 3-9-1982 and contain a direction. The orders of reassessment ..... X X X X Extracts X X X X X X X X Extracts X X X X
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