TMI Blog2005 (5) TMI 266X X X X Extracts X X X X X X X X Extracts X X X X ..... 999) 231 ITR 174 (SC), reversed the judgment of the Hon'ble A.P. High Court and held that the assessee is not entitled for investment allowance under s. 32A and deductions under ss. 80HH, 80HHA. 80-I, and 80J of the Act. The AO issued notices under s. 154 and overruling the objections of the assessee, passed orders under s. 154 withdrawing the allowance/deduction granted earlier. The CIT(A) having confirmed the orders of the AO under s. 154, the assessee is in appeal before the Tribunal. The first ground in all these appeals is that the order of the CIT(A) is bad in law in upholding the order of the AO passed under s. 154 disallowing deduction/allowance pursuant to apex Court's decision in the assessee's case reported in (1999) 153 CTR (SC) 105 : (1999) 237 ITR 174 (SC) (dt. 24th March, 1999) for asst. yrs. 1978-79 and 1981-82. Summary of the other grounds is as follows: (i) Allowability of deduction under s. 80J was a debatable issue-ITA Nos. 461, 462,463, 464, 465 and 466/Hyd/2001. (ii) Allowability of investment allowance under s. 32A was a debatable issue- ITA Nos. 463,464, 465, 466, 467, 468 and 469/Hyd/2001. (iii) Allowability of deduction under ss. 80HH and 80-I was a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he period of limitation of four years referred to in sub-s. (7) of s. 154 is only modified by the provisions of s. 155 and sub-s. (4) of S. 186. If the legislature had intended that the provisions of sub-s. (3) of s. 153 were to apply to orders passed under S. 154, an appropriate provision to that effect would have been made either in S. 154 or in sub-s. (3) of S. 153. In the absence of such a provision, the learned counsel submitted, the reliance on sub-s. (3) of s. 153 is completely misplaced and the impugned orders must be held to be bad in law. 4. The learned counsel further submitted that sub-s. (1) of S. 154 permits an IT authority to amend an order passed by it with a view to rectify any mistake apparent from the record. Sub-s. (1A) statutorily enacts the principle of merger and provides that where a matter has been considered and decided in any proceeding by way of appeal or revision relating to an order referred to in sub-s. (1), the authority passing such order may amend the order under the sub-section in relation to any matter other than the matter which has been so considered and decided. He submitted that it would thus follow that a matter which has been considered o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the present case, the provisions of cl. (ii) of sub-s. (3) of S. 153 would have no application whatsoever. He submitted that by virtue of these provisions, the period of limitation is extended if an order is passed inconsequence of, or to give effect to a finding or direction in inter alia, a judgment of the Hon'ble Supreme Court. He submitted that the Hon'ble Supreme Court in the assessee's case for asst. yrs. 1978-79 and 1980-81, has nowhere given any finding or direction that the assessment made for the other years, where identical issues were involved to those that were there before the Hon'ble Supreme Court, can be modified so as to bring such assessments in consonance with the judgment of the Hon'ble Supreme Court. He submitted that the nature of the finding or direction that is contemplated is borne out by the provisions of Explns. 2 and 3 to S. 153. Thus, if a Court decides that income which is assessed in the hands of one person should be assessed in the hands of another, then, an assessment may be made for the other year or on such other person to give effect to finding or direction of the Court. But, merely because a particular issue, which may be common in several y ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . (2005) 193 CTR (MP) 43 : (2005) 273 ITR 201 (MP), and Hon'ble Bombay High Court in the case of CIT vs. Sudhir S. Mehta (2003) 183 CTR (Bom) 592 : (2004) 265 ITR 548 (Bom). He further submitted that though other High Courts have taken a contrary view, in view of the two permissible views available, the view in favour of the assessee should be applied. 9. With respect to asst. yrs. 1987-88 to 1990-91, the learned counsel submitted that the order that was sought to be rectified arose pursuant to the reassessment proceedings, which are separately under challenge and that in the event of the reassessment proceedings being held to be bad in law, the rectification orders must also, on that score alone, be cancelled. 10. The learned Departmental Representative vehemently controverted the arguments of the learned counsel for the assessee. He submitted that the orders in fact are under sub-s. (3) of S. 153. He vehemently contended that an assessment, reassessment or recomputation can be in consequence of, or to give effect to, any finding or direction. He contended that Hon'ble Supreme Court in the case of the assessee, reported in (1999) 153 CTR (SC) 105 : (1999) 237 ITR 174 (SC) had ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... igh Court in the case of Alipurduar Tea Co. Ltd. vs. Agrl. ITO 1976 CTR (Cal) 350 : (1978) 112 ITR 878 (Cal), specifically at 883, where it was held that though there was no machinery provided for rectification of the order under the agricultural income-tax after the appellate or revisionary authority passed an order under the IT Act, the AO should modify his order and that there was no time-limit for passing rectification order under s. 154. The proposition canvassed by the learned Departmental Representative is, whenever a legally correct act has to be done, the law of limitation has no application. He further submitted that the jurisdictional High Court has, in the case of B. V.K. Seshavataram vs. CIT (1995) 124 CTR (AP) 332 : (1994) 210 ITR 633 (AP), clearly held that a subsequent decision of the Hon'ble Supreme Court can form the basis for rectification under s. 154. For the proposition that the limitation for order of rectification should be counted as four years from the date of the last order, he relied on the decision in the case of Walji Ltd. vs. CIT (1997) 138 CTR (SC) 219 : (1997) 223 ITR 163 (SC). On the denial of deduction for brought forward losses of earlier year by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mstances of the case, we are of the considered opinion that the assessee should succeed in these appeals for the reasons given hereinbelow. 15. The undisputed fact in all these cases is that the order under s. 154 was passed beyond the period of 4 years, i.e., in violation of s. 154(7). The Revenue contends that this is an order passed under s. 153(3). This, to our mind, is not legally correct, as no order is contemplated to be passed under s. 153(3). Sec. 153 of the Act relates to time-limit for completion of assessment and reassessment in certain cases. Sub-s. (3) of s. 153 provides that the limit specified in sub-ss. (1) and (2) shall not apply to certain classes of assessment, reassessment and recomputation. This is not a provision under which an authority under the IT Act could pass an assessment order or a reassessment order de hors S. 154 or s. 143{3) or s. 147, etc. This is the reason why the AO had issued notice under s. 154 and disallowed certain claims of the assessee in an order under s. 154. If a contrary view is to be taken, the appeal is not maintainable, as no appeal is provided against an order passed under S. 153. We derive strength from the judgment of the Hon' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aning of the words of the provisions appear to be the only safeguard. Maxwell in Interpretation of Statutes 7th Edition p. 9 also says it is the primary rule of interpretation of statutes that where the language is plain and admits of but one meaning, the task of interpretation can hardly be said to arise. Interpretation of statutes is not to be collected from any notions which may be entertained by the Court as to what is just and expedient. Words are not to be construed as embracing or excluding cases merely because no good reasons appear why they should not be embraced or excluded and that 'It has been repeatedly decided at law that the statutes of limitation which enacted such action should not be brought after the lapse of a certain period of time from the accrual of the cause of action barfed actions brought after the time so limited, even though the cause of action was not discovered, nor was practicably discoverable, by the injured party at the date of accrual, even though it was fraudulently concealed by the wrongdoer until the expiry of the statutory period." 17. No doubt the Hon'ble jurisdictional High Court has categorically stated in the case of B. V.K. Seshavataram ..... X X X X Extracts X X X X X X X X Extracts X X X X
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