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2013 (11) TMI 812 - AT - Income TaxLimitation u/s 149 – Violation of section 150(1) of the Income tax act – Re-opening of assessment u/s147 of the Income tax act after the period of 6 years - Notice for re-opening issued u/s 148 of the Income tax Act - The facts are that the original assessment for the assessment year under consideration was made under section 143(3) of the Act. Further, the assessment was made under section 143(3) of the Act for assessment year 2005-06 making addition of Rs.80,84,380/- on the ground that sundry creditors amounting to Rs.80,84,380/- were bogus – Held that:- There is no such direction given by the ld. CIT(A) vide order dated 28.08.09 while deciding the appeal for assessment year 2005-06 for reopening the assessment. For the purpose of sec. l50, so as to enable the AO to issue the notice u/s 148 at any time without being curtailed by the time limit prescribed u/s 149, there must be satisfaction of either of the two ingredients under sub-section (1) of sec. 150. The first ingredient is that the reopening must have been done for the purpose of giving effect to any 'finding' contained in any order passed by any authority in any proceedings under the Act by way of appeal, reference or revision or by a Court in any proceeding under any other law. The second ingredient is that the reopening must have been done for the purpose of giving effect to any 'direction' contained in the order passed by any authority. Assessment was reopened u/s 147 on 6/11/2009, while as per the provisions of sec. 149, no notice u/s 148 could have been issued to the assessee beyond 31/03/2008. A cursory look at the order of the Ld. CIT(A) for the A. Y. 2005-06 would reveal that no such "finding" or "direction" was contained therein which would justify raising the bar of limitation of making the assessment u/s 147 - No proceedings u/s 147 could have been initiated by the AO u/s 147 to give effect to a finding contained in the appellate order of CIT(A) for the A.Y. 2005-06. Ld. CIT(A) has not given any directions to make the assessment of the purchases or sundry creditors in question as income in the A.Y. 2001-02 - He has merely stated that the AO was free to examine the purchases, albeit within the four corners of law. The four corners of law prohibits the Assessing Officer from conducting any enquiries in respect of time-barred matters. Notice u/s 148 could not have been issued for making an assessment or reassessment or recomputation in consequence of or to give effect to any "finding" or "direction" contained in the order passed by the Ld. CIT(A) for the A.Y. 2005-06 since there was no such "finding" or "direction" as contemplated in sec.150(1). As per the provisions of sec. 149(1), no assessment can be reopened beyond a period of 6 years from the end of the relevant assessment year. In the present case the notice u/s 148 was issued beyond the period of 6 years from the end of the relevant assessment year. Hence, the said notice was barred by limitation and was without jurisdiction. Therefore, the reassessment completed by the Assessing Officer was without jurisdiction. For reaching this conclusion, reliance is also placed on the decisions of the Hon'ble Bombay High Court in the cases of Lotus Investments Ltd. [2006 (11) TMI 115 - BOMBAY HIGH COURT] and Rakesh N. Dutt [2007 (10) TMI 285 - BOMBAY HIGH COURT] – Decided in favor of Assessee.
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