TMI Blog2007 (4) TMI 313X X X X Extracts X X X X X X X X Extracts X X X X ..... ourt. In the common order dated 2-4-2004 the issue was adjudicated vide para 2: "We heard the learned standing counsel for the Income-tax and Mr. Ramachandran, learned senior counsel appearing for the respondents. Having regard to the facts and circumstances of the case and the admitted fact position that no reasons have been given for issuing the notices for reopening of the assessment, we confirm the order of the learned Single Judge. We make it clear that the said order shall not preclude the authority from issuing a fresh notice assigning reasons and then affording opportunity to the respondents writ petitioners to face the proceedings." The Assessing Officer, treating the above order of the Hon'ble High Court as direction of the High Court, issued a fresh notice under section 148 of the Income-tax Act. The assessee raised objection against this notice which were rejected by the Assessing Officer. Aggrieved by that order, the assessee filed an appeal before the learned Commissioner of Income-tax (Appeals). Before the CIT(A), it was mainly contended that more than six years have lapsed and hence notice under section 148 was barred by limitation. On the basis of this main ple ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... strongly relied on the grounds of appeal. He submitted that the order of the Hon'ble High Court was clearly a direction for issuance of notice under section 148. According to him when the High Court passed the order dated 2-4-2004, already six years had lapsed and, therefore, High Court was aware that time has lapsed but still preferred to permit the department to issue notice which would mean that it was basically a direction to issue notice. He further submitted that amendment made to the original order in consequence of the order of the Supreme Court or High Court will not be subject to the limitation prescribed under section 147(b) or section 154. In this regard he relied on the decision of the Madras High Court in the case of L. Alagusundaram Chettiar v. CIT [1994] 210 ITR 614. He also relied on the decision of the Grindlays Bank Ltd. v. ITO [1980] 122 ITR 55 (SC). 6. On the other hand, learned A.R. carried us through the order of the High Court and submitted that the observation, "the said order shall not preclude the authority from issuing fresh notice assigning reasons" would not amount to issue of direction. He relied on the decision of the Supreme Court in the case of R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... connected W.P.M.Ps are closed." 9. Against this the Department preferred an appeal and vide para 2 of the order of Hon'ble High Court, it was held as under: "We heard the learned standing counsel for the income-tax and Mr. Ramachandran, learned senior counsel appearing for the respondents. Having regard to the facts and circumstances of the case and the admitted fact position that no reasons have been given for issuing the notices for reopening of the assessment, we confirm the order of the learned Single Judge. We make it clear that the said order shall not preclude the authority from issuing a fresh notice assigning reasons and then affording opportunity to the respondents writ petitioners to face the proceedings." 10. From the above para it becomes clear that when basically the Hon'ble High Court has confirmed the order of the learned Single Judge, still preferred to make this observation that, 'We make it clear that the said order shall not preclude the authority from issuing a fresh notice assigning reasons'. It. We are of the view that this observation cannot be called a direction. Normally a direction would mean issue of order to do something or not to do something b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... question." Under these facts, the Hon'ble Supreme Court held as under: "That the observation that the ITO was 'free to take action' to assess the excess in the hands of the co-owners could not be described as a 'direction'. A direction by a statutory authority was in the nature of an order requiring positive compliance. When it was left to the option and discretion of the ITO whether or not to take action it could not be described as a direction." 12. Thus the observation, 'free to take action' cannot amount to a direction. Similarly observation that the 'authority is not precluded from issuing fresh notice' cannot amount to a direction. We also find in the case of Grindlays Bank Ltd. that original assessment proceedings for completion of which time was already available was stayed and later on the Hon'ble High Court allowed the assessment to be completed on a specific date. Since there is a specific provision for exclusion of the period during the stay, therefore, the assessments were held to be not time-barred and this decision cannot be applied to the present case. Similarly the Hon'ble Madras High Court in the case of L. Alagusundaram Chettiar, the Madras High Court was ..... X X X X Extracts X X X X X X X X Extracts X X X X
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