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2007 (5) TMI 280 - AT - Income TaxReopening of assessment u/s 147 - Validity of Direction of CIT(A) u/s 150 - period of limitation - limitation provided u/s 149 - HELD THAT:- Respectfully following the decision of Supreme Courtin the case of Rajinder Nath vs. CIT[1979 (8) TMI 3 - SUPREME COURT], in the instant case, it can be safely held that the learned CIT(A) has not given any direction to the AO to initiate reassessment proceedings for the asst. yr. 1997-98. Therefore, the notice issued under s. 148 on 16th Nov., 2004 is beyond the time limit as per IT Act, 1961, therefore, reassessment order dt. 13th March, 2006 is not tenable in law. In the instant case, initiation of reassessment proceedings was barred by other provision of the Act on 10th June, 2004 when the appellate order for asst. yr. 1998-99 was passed. It is observed that the asst. yr. 1997-98 has ended on 31st March, 1998. Reopening of the assessment for asst. yr. 1997-98 was permissible under the IT Act upto 31st March, 2004. However, the appellate order, on the basis of which reassessment was initiated, has been passed on 10th June, 2004. On the said date initiation of reassessment for asst. yr. 1997-98 was prohibited by law, and hence reassessment proceeding initiated after 31st March, 2004 is clearly barred by limitation in view of the decision of Hon'ble High Court of Karnataka. The Hon'ble Karnataka High Court further held that sub-s. (2), however, is again in the nature of a proviso to sub-s. (1). It says that the provisions of sub-s. (1) shall not apply where, by virtue of any other provision limiting the time within which action for assessment, reassessment or recomputation may be taken on the date of the order which is the subject-matter of the appeal, reference or revision in which the finding or direction is contained. In view of the judgment of Hon'ble Karnataka High Court in the case of Spences Hotels (P) Ltd. vs. Dy. CIT [2003 (6) TMI 18 - KARNATAKA HIGH COURT] also, the reassessment proceeding initiated, vide notice u/s 148 dt. 16th Nov., 2004, is barred by limitation. Viewed from any angle, the reassessment proceeding order framed by the AO is time barred by limitation and, therefore, the same is quashed. No findings are required on merits since I have already quashed the assessment order - In the result, the appeal is allowed.
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