TMI Blog2012 (7) TMI 694X X X X Extracts X X X X X X X X Extracts X X X X ..... ct. By way of abundant caution, it is clarified that the self-assessed tax paid by the petitioner despite no assessment having been framed, cannot be disturbed as held by the Apex Court in case of Commissioner of Income Tax, Bhopal v. M/s Shelly Products and another, (2003 (5) TMI 4 - SUPREME COURT). - Special Civil Application No.10330 of 2003 - - - Dated:- 18-6-2012 - Akil Kureshi and Harsha Devani, JJ. For Appellants: Mr S N Soparkar, Sr. Adv. Mr Bandish Soparkar Mrs Swati Soparkar For Respondent: Mrs Mauna M Bhatt, 1-3 JUDGEMENT Per: Akil Kureshi: 1. The petitioner has prayed for a refund of an amount of Rs.9,62,976/- with interest from the respondents. By way of amendment, an additional prayer was made to quash and set aside the assessment proceedings initiated by the respondents pursuant to the order of Income Tax Appellate Tribunal ( the Tribunal for short) as being barred by limitation. 2. We may notice facts in brief. The petitioner is a Company registered under the Companies Act and is regularly assessed to tax under the provisions of Income Tax Act, 1961 ( the Act for short). For the assessment year 1988-89, the petitioner filed its return of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... We order and direct accordingly. 5. Before the Tribunal passed the said order, two separate orders imposing penalties upon the petitioner, one under section 271(1)(c) of the Act and another under section 273(2) (aa) of the Act came to be passed. The Commissioner (Appeals) passed an order dated 24.1.1995 deleting penalty of Rs.5,62,365/- imposed under section 271(1)(c) of the Act. He separately passed another order also on the same date deleting penalty of Rs.44,450/- under section 273(2)(aa) of the Act. These orders were passed on the premise that the Tribunal had set aside the assessment order itself with a direction to Assessing Officer to pass fresh assessment. The Commissioner while cancelling the penalties, granted liberty to the Assessing Officer to initiate fresh proceedings for penalty in the fresh assessment order, if situation so warranted. 6. Though the Tribunal remanded the proceedings before the Assessing Officer vide order dated 5.7.1994, for a long time thereafter, the Assessing Officer did not take any steps pursuant to such an order of the Tribunal. It is the case of the petitioner that such order was also served on the Income Tax Commissioner on 3.8.1994. Ev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... its refund with interest would become relevant. 10. In this respect, learned Senior Counsel Shri Soparkar for the petitioner submitted that the assessment proceedings for the year 1988-89 have become hopelessly time-barred. After the Tribunal remanded the proceedings vide its order dated 5.7.1994, the Department took no steps to frame fresh assessment for years together. Nearly seven years passed after the Tribunal passed the said order before the petitioner filed the present petition questioning further continuation of such proceedings. In the mean time, the petitioner made series of representations. Though the order of the Tribunal was served on the Commissioner on 3.8.1994 as certified by the Assistant Registrar under his certificate dated 11th July 2000, the Assessing Officer took no steps whatsoever for framing fresh assessment. 11. Counsel drew our attention to the provisions contained in section 153 of the Act to contend that the present case would fall under sub-section (2A) of section 153 of the Act and that, therefore, the period of limitation for framing fresh assessment after the Tribunal passed the order was of one year from the end of financial year in which such ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such additions were made without offering an opportunity to the assessee to crossexamine the representatives of the two agencies whose statements were recorded and relied upon behind the back of the petitioner. Principally on this basis, the Tribunal by its order dated 5th July 1994, remitted the matter to the file of the Assessing Officer with a direction to summon those two parties again and allow the assessee to cross-examine them so that true facts emerge in relation to the payment of commission by the assessee company to those two persons. While doing so, the Tribunal also granted liberty to the Assessing Officer to probe into the matter further by way of an inquiry or investigation into the alleged payment of commission to the two parties aggregating to nearly Rs.11.27 lakhs. 16. At this stage, we may refer to the statutory provisions applicable. Section 153 of the Act pertains to time limit for completion of assessments and reassessments. Sub-section (1) thereof provides for limitation for completing assessments under section 143 or section 144. Sub-section (2) thereof provides for limit for completion of assessment, reassessment or re-computation under section 147 of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or to introduction of subsection (2A) of section 153, the Legislature provided for limitation for completion of assessments under sub-section (1) and sub-section (2) of section 153. Sub-section (3) of section 153, however, provided that the provisions of sub-sections (1) and (2) shall not apply to classes of assessments, reassessments and re-computations provided in clauses (i) to (iii) of sub-section (3) of section 153. Such classes included a case of fresh assessment made under section 146; a case of assessment, reassessment or re-computation in consequence of or to give effect to any finding or direction contained in an order under section 250, 254, 260, 262, 263 or 264, as also in case of a firm, where an assessment is made on a partner of the firm in consequence of an assessment made on the firm under section 147. 18. Prior to introduction of sub-section (2A) of section 153 of the Act, it may have been open for the revenue to contend that all cases of assessments, reassessments or re-computations made in case of the assessee or any person in consequence of or to give effect to any finding or direction of the appellate orders passed in consequences mentioned in clause (ii) th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsequence of or to give effect to any finding or direction contained in an order passed under section 250 etc. Significantly, after 1.4.1971, the provisions of sub-section (3) of section 153 of the Act are made subject to the provisions of section (2A) of section 153 of the Act. 22. Under the circumstances, the class of cases of fresh assessment to be made pursuant to order under section 250 etc. would fall under section (2A) of section 153 of the Act, and the period of limitation prescribed therein would operate. In those cases where there is no need for a fresh assessment and are not covered under section (2A) of section 153 of the Act, but are covered under clauses (i), (ii) and (iii) of section 153, the limitation prescribed under sub-section (2A) of section 153 would not apply and the expression assessment, reassessment and re-computation be completed at any time may enable the revenue to continue the proceedings of assessment even beyond the period prescribed under sub-sections (1) and (2) of section 153 of the Act and would also not be hindered by the prescription of limitation under section (2A) of section 153 of the Act. 23. We may notice that the Delhi High Court in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... allenge. The Tribunal. otherwise in law, could not have remitted the proceedings to the Assessing Officer for fresh consideration after summoning two witnesses and carrying out such probe as may be necessary. We may record that such commissions paid to the two agencies was the sole dispute between the assessee and the Department. In the original assessment, the Assessing Officer discussed only this issue and made corresponding disallowance. In essence, thus, the Assessing Officer was required to pass a fresh order of assessment which was necessary on account of an order passed by the Tribunal under section 254 of the Act cancelling the assessment framed by the Assessing Officer. The period of limitation prescribed in section 153(2A), therefore, would apply. While such an order was served on the Commissioner on 3.8.1994, within a period of two years of the end of such financial year, a fresh order of assessment had to be passed by the Assessing Officer. The same not having been done, in our view, such proceedings have become time-barred. The assessment placed before the Assessing Officer by the Tribunal's order, therefore, must be treated as having abated. In that view of the matter ..... 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