TMI Blog2007 (2) TMI 245X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment of the assessee was completed originally under section 143(3) vide order dated 30-1-1980. There was a controversy in respect of the issue relating to the power charges amounting to Rs. 5,58,598. The assessee had offered the said amount in its income in the assessment year 1979-80. While completing the assessment for the assessment year 1977-78, the Assessing Officer included that amount of power charges in the said year as according to the Assessing Officer, the said amount was liable to be taxed in the assessment year 1977-78. As the amount was included in the assessment year 1977-78, the amount declared by the assessee in the income for the assessment year 1979-80 was excluded by the Assessing Officer. As far as the assessment year 1977-78 was concerned, the assessee carried the matter in appeal before the CIT (Appeals) who confirmed the order of the Assessing Officer. The assessee carried the matter further before the ITAT and by way of reference to the High Court. The Hon'ble Jurisdictional High Court vide judgment dated 22-5-1998 in ITR No. 86 of 1984 held that the amount of power charges of Rs. 5,58,598 cannot be brought to tax in the assessment for the assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ficer to initiate assessment or reassessment proceedings under section 147. The ld. DR supported the order of the CIT(A). 6. We have heard the rival submissions of the parties. We have also carefully considered the facts of this case. The controversy before us is limited. The assessee has offered the refund of power charges as its income while filing the return for the assessment year 1979-80. The Assessing Officer was of the opinion that the said amount was taxable in the assessment year 1977-78. Hence, the amount of refund of power charges included by the assessee in its income for the assessment year 1979-80 was excluded. The assessee contested the matter up to the High Court and the Hon'ble High Court of Kerala in Travancore Chemical Mfg. Co. Ltd.'s case reframed the following three questions for its opinion:- "1. Was the Appellate Tribunal justified in holding that the amount of Rs. 5,58,697 received by the assessee by way of refund of electricity charges in the subsequent year is taxable in the year under consideration under section 41(1) of the Income-tax Act, 1961? 2. Was the Appellate Tribunal justified in its view that the Supreme Court decision rendered during th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issue notice under section 149. The ld. counsel submitted that section 147 is a machinery provision and section 149 regulates the time-limit for issuing notice under section 148. It is further argued that once the time-limit is over for any reason, except as provided in section 150(1), the Assessing Officer has no power to issue notice under section 148. It is argued that as far as section 149 is concerned, the maximum time-limit is six years which is applicable when the notice under section 148 was issued by the Assessing Officer. He further submitted that though section 150 is having overriding effect, it removes the barriers of limitation on the Assessing Officer to issue notice under section 148 only for the limited purpose if there is any specific finding or direction contained in an order passed by any authority in any proceedings under the Income-tax Act or under any other law, but the crux of the matter is that the direction or finding should be specific. The ld. counsel also referred to the judgment of Hon'ble High Court in assessee's own case in Travancore Chemical Mfg. Co. Ltd. and submitted that there is no finding given by the Hon'ble High Court that this amount is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ect or in consequence of said finding or direction the Assessing Officer can issue notice under section 148. As we have already stated, there is no specific finding or direction by the Hon'ble High Court of Kerala that the said amount is taxable in the assessment year 1979-80. 8. In the case of K.M. Sharma, the Hon'ble Supreme Court has incorporated the scope of provisions of section 150 in the context of sub-section (2) of section 150 and held as under:- "We do not find the above reasoning of the High Court is sound. The plain language of sub-section (2) of section 150 clearly restricts the application of sub-section (1) to enable the authority to reopen assessments which have not already become final on the expiry of the prescribed period of limitation under section 149. As is sought to be done by the High Court, sub-section (2) of section 150 cannot be held applicable only to reassessments based on orders "in proceedings under the Act" and not to orders of court "in proceedings under any other law". Such an interpretation would make the whole provision under section 150 discriminatory in its application to assessments sought to be reopened on the basis of orders under the In ..... X X X X Extracts X X X X X X X X Extracts X X X X
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