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2015 (10) TMI 2018 - ITAT LUCKNOW

2015 (10) TMI 2018 - ITAT LUCKNOW - TMI - Revision u/s 263 - CIT(A) directed the Assessing Officer to make a fresh assessment considering the computation of income as per provisions of section 11 of the Act and adjudicate properly the issue restored back by the Tribunal with certain directions - whether the case of the assessee certainly falls under clause (ii) of sub-section (3) of section 153? - period of limitation for initiation of rectification proceedings - Held that:- In the instant case, .....

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ation of claim of exemption under section 11 of the Act and the Assessing Officer has computed the income as per the relevant provisions of the Act. Since the Assessing Officer has acted in accordance with law, the assessment order cannot be called to be illegal or irregular and that is why the Tribunal has not set aside or cancelled the assessment order. But on account of change of circumstances, the Tribunal has directed the Assessing Officer to adjudicate the issue of claim of exemption under .....

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icer was barred by limitation. But from a careful perusal of the order passed by the Assessing Officer, we find that the Assessing Officer has simply computed the quantum of refund instead of adjudicating the claim of exemption raised under section 11 of the Act in the light of grant of registration under section 12A of the Act to the assessee as per the directions of the Tribunal. While allowing benefit of section 11 of the Act, the Assessing Officer is also required to examine whether the cond .....

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e not barred by time, as no time limit is prescribed for passing an order under section 153(3)(ii) of the Act. We accordingly find no infirmity in the orders of the ld. Commissioner of Income-tax, who has rightly set aside the orders of the Assessing Officer, as it was not passed in compliance of the directions of the Tribunal. We accordingly confirm the orders of the ld. Commissioner of Income-tax in both the assessment years. - Decided against assessee. - ITA No. 824&825/LKW/2014 - Dated:- 23- .....

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under section 254 of the Act consequent to the order of the Tribunal. 2. Since common grounds, except difference in date, are raised in these appeals, we extract the grounds raised in I.T.A. No. 824/LKW/2014 as under:- 1. BECAUSE the Id. Commissioner of Income-tax has erred in law and on facts in holding that the order of Assessing Officer dated 08.08.2013, determining the refund payable to appellant for A.Y. 2001-02 passed in consequence to the remand order of the Hon'ble Income-tax Appell .....

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ch, 2009, had not set aside the impugned assessment order, therefore, period of limitation u/s 153 (2A) assumed by the A.O. was not applicable to the order dated 8.8.2013 in consequence to such remand order, but it was in the nature of a direction within the purview section 153 (3) (ii) of the Act for which there is no limitation except the Instruction of CBDT No. 1914 dated 2.12.1993 to give appeal effect within 2 weeks of receipt of the appellate order. 3. BECAUSE the Id. Commissioner of Incom .....

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mmissioner of Income-tax has erred in law and on facts in holding that the Assessing Officer has not properly carried out directions of the Tribunal for computation of income under section 11 (1) (a) of the Act; (i) without pointing out any specific errors in the refund order passed u/s 240 in consequence to the remand order of the Tribunal; (ii) without examining the record as required by 1st part of section 263, as to the computation of income u/s 11 for A.Y. 2001-02 apropos audit report in Fo .....

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f Income-tax has erred in law and on facts in not appreciating the fact that as per Instruction No. 7 of 2011 dated 24.5.2011 issued by the CBDT, assessments in consequence to the remand orders of the Tribunal are monitored by the Commissioner himself vide relevant para-5 (iv) of the Instruction, it is, therefore, beyond the purview of section 263 of the Act. 7. BECAUSE the Id. Commissioner of Income-tax has erred in law and on facts in invoking jurisdiction u/s 263 of the Act to revive the reas .....

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. C.I.T. u/s 263 of the Act since the refund order passed by A.O. u/s 240 in consequence to the order of Tribunal cannot be revised u/s 263 of the Act as it is neither erroneous since being in accordance with law nor prejudicial to the interest of revenue since being revenue neutral due to eligibility of the appellant to exemption of its income u/s 11 of the Act. 3. The facts in brief relating to the controversy involved in these appeals borne out from the record are that during the assessment y .....

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ed the matter back to the Assessing Officer to adjudicate the issue raised through grounds No.4, 5 and 6 relating to the claim of exemption under section 11 of the Act afresh keeping in view exemption available under section 11 of the Act due to grant of registration under section 12A of the Act to the assessee, vide its order dated 30.1.2009. 4. Following the said order of the Tribunal during assessment year 2001-02, the Tribunal has issued similar directions to the Assessing Officer while disp .....

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Officer to examine the claim of exemption under section 11 of the Act, but the Assessing Officer, instead of making compliance of the directions of the Tribunal, has recomputed the amount of refund. The ld. Commissioner of Income-tax accordingly issued show cause notice to the assessee and in response thereto, the assessee has taken a stand that the order passed by the Assessing Officer under section 254 of the Act is barred by limitation, as he was required to pass consequential order within a .....

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ng Officer is required to pass an order pursuant to the order of the Tribunal, provisions of section 153(2A) of the Act would not apply, rather the Assessing Officer is required to pass an order under section 153(3)(ii) of the Act, for which no time limit is prescribed. It was observed by the ld. Commissioner of Income-tax that wherever assessment is set aside, cancelled or annulled by the appellate forum and the matter is restored to the Assessing Officer, the provisions of section 153(2A) of t .....

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the Act in the light of the fact that registration under section 12A of the Act is granted with retrospective effect. Therefore, the provisions of section 153(3)(ii) of the Act would apply and not the provisions of section 153(2A) of the Act. The relevant observations of the ld. Commissioner of Income-tax in I.T.A. No. 824/LKW/2014 are extracted hereunder for the sake of reference:- 4.1 The main contention of the assessee is that no order of fresh assessment was made by the A.O. in pursuance of .....

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e Hon'ble ITAT neither cancelled nor set-aside the Assessment made u/s 143(3) on 31.03.2004, but partly allowed the appeal of the assessee and thereby directed the Assessing Officer to recompute the income in accordance with the provisions of section u/s 11 of the I.T. Act amongst other issues. Some other grounds raised by the assessee in appeal before the Hon'ble ITAT were also dismissed by it. Thus, the Hon'ble ITAT vide its order dated 30.01.2009 neither cancelled nor annulled or .....

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n'ble ITAT can be completed at any time, if the entire assessment has neither been cancelled nor set-aside. The provisions of section 153(2A) and 153(3) (ii) of the Act provide as under: 153[(2A] Notwithstanding anything contained in sub-sections (1) 17 [, (1A), (1B) and (2), in relation to the assessment year commencing on the 1st day of April, 1971, and any subsequent assessment year, an order of fresh assessment in pursuance of an order under section 250 or section 254 or section 263 or s .....

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utation which may, [subject to the provisions of Section (2A),] be computed at any time- (i)……… (ii) Where the assessment reassessment or recomputation is made on the assessee or any person 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 for in an order of any court in a proceeding otherwise than by way of appeal or reference under this Act)". A bare reading of the above provisions makes .....

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section 153(3)(ii) of the Act. The A.O. passed an order u/s 254 of the I.T. Act on 08.08.2013 and the order so passed was not hit by any statutory limitation. However, the A.O. failed to recompute the income of the assessee in accordance with the directions of Hon'ble ITAT. It is this lapse, on the part of A.O., which rendered the order to be erroneous and prejudicial to the interest of revenue. 4.2 The reliance placed by the assessee on the decisions viz., {CIT Vs Shelly Prducts (2003) 261 .....

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hed by the assessee..." Thereby, the Hon'ble Courts allowed the claim of refund as per section 240 of the Act. However, in the proceedings before me, the facts are entirely different. The Hon'ble ITAT had not set-aside or nullified/cancelled the original assessment made by the AO but certain issues were restored back to the file of A.O for fresh adjudication in view of exemption available u/s 11 of the Act. Accordingly, the provisions of section 153(2A) regarding the limitation were .....

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t; On a conjoint reading of Sections 143, 144B, 251 and 1531 of the Act, it becomes abundantly clear that if an assessment .is set aside by the appellate authority, the extended time-limit is available for making a fresh ^assessment in pursuance of the direction of the appellate authority, but in the case of annulment, no such extended time is available. 4.4 It may be mentioned that provisions of Section (2A) of Section 153 envisage a situation where a fresh assessment is to be made after earlie .....

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hen provisions of Section 153(3)(ii) would apply and such assessment, reassessment or recomputation could be made at any time. The distinction between section 153(3) and 153(2A) is that provisions of section 153(3) are to operate only in a situation where assessment, reassessment, or re-computation is necessary to give effect to any finding or direction contained in an appellate order. The extended period is available only in a case where the Assessing Officer acts upon "finding or directio .....

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completed at any time and the time limitation prescribed under other sub-sections of section 153 do not apply to this class of re assessment. Had the Hon'ble ITAT simply set-aside or cancelled the assessment in the case of the appellant u/s 254 of the Act, the time limits for completion of fresh assessment as provided in sub-section (2A) of section 153 read with its second proviso would have been applicable. In that case the fresh assessment order should have been passed by 31st December, 20 .....

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in any manner he likes. Instead the Hon'ble ITAT mandated the A.O. by its categorical directions and left nothing to the discretion of the A.O. The order passed u/s 254 by the Hon'ble ITAT thus falls in the category specified in sub section (3) of section 153. The intention behind not prescribing any time limit for the categories of assessment or re-assessment specified in sub-section (3) of section 153 is obvious since no time limit is logically required to be prescribed when the A.O. i .....

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on necessary for the disposal of the case before the authority or court. Similarly, "finding" given in an appeal, revision or reference arising out of an assessment must be a finding necessary for the disposal of the particular case. It has been held by various courts including the Hon'ble Supreme Court (refer Rajinder Nath Vs. CIT (1979) 120 ITR 14, 18-19) that section 153(3)(ii) is not a provision enlarging the jurisdiction of the authority or Court. It is a provision which merel .....

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el.) & M/s Basu Distributors Pvt. Ltd Vs Income Tax Officer 292 ITR 29 (Delhi HC), it was held that in a case where the Appellant Asstt. Commissioner/ITAT set-aside the assessment and intended the income Tax Officer to do a fresh assessment on the lines indicated in the order, there was a clear direction to that effect. In view of above, it is held that the purpose of section 153(3) is to lift the bar of limitation to make an effective order of assessment. In the instant case, there was a cl .....

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jected. 5. The assessee further contends that the order dated 08.08.2013 passed u/s 254 of the Act by the A.O. was not a fresh assessment order but an order u/s 240 proviso (a) determining the refund payable to the assessee and the A.O was denuded of power to make fresh assessment since no such fresh assessment as required u/s 153(2A) was admittedly passed within the period of limitation. 5.1.The above contentions raised by the assessee are not tenable in view of the provisions of section 153(3) .....

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TAT and simply revised the assessed income at Nil. The said order passed u/s 254 by the A.O. on 08.08.2013 was bad in law and erroneous in so far as it was prejudicial to the interest of revenue. 6. The assessee further contends that the exemption of its income on computation of its income u/s 11 in Form-10B is a fait accompli as per law. Reliance in this regard was placed on the judgment of Hon'ble Supreme Court in the case of CIT Vs Krishi Utpadan Mandi Samiti 348 ITR 566 (SC). 6.1 The abo .....

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fficer while passing the order u/s 254 of the Act on 08.08.2013, should have computed the income of the assessee in accordance with the provisions of section 11 of the I.T. Act and should have given effect to the findings & directions of Hon'ble ITAT as given it its order dated 31.01.2009. 7. The assessee has raised further objection that the Commissioner cannot initiate proceedings u/s 263 of the Act with a view to starting fishing and roving inquiries in the matters or orders which had .....

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9;ble ITAT vide order dated 31.01.2009 had given certain findings and directions to the Assessing Officer to recompute the income of the assessee in accordance with exemption available u/s 11 of the I.T. Act and, therefore, the A.O. while passing the order u/s 254 of the Act dated 08.08.2013 ;has, without application of mind, revised the income at Nil. Such order passed by the A.O. u/s 254 dated 8.8.2013 was, therefore, erroneous as the A.O did not adjudicate the issue of exemption u/s 11 of the .....

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the instant case, the Commissioner noted that the ITO passed the order of nil assessment without application of mind. Indeed, the High Court recorded the finding that the ITO failed to apply his mind to the case in all perspective and the order passed by him was erroneous. .........On these facts, the conclusion that the order of the ITO was erroneous is irresistible. We are, therefore, of the opinion that the High Court has rightly held that the exercise of the jurisdiction by the Commissioner .....

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nity of being heard and after making or causing to be made such inquiry as he deems necessary, pass such order thereon as the circumstances of the case justify, including an order enhancing or modifying the assessment, or cancelling the assessment and directing a fresh assessment. The object of the provision is to correct an erroneous order prejudicial to the interest of revenue, as the department has no right to file an appeal against the order of the Assessing Officer. While the power is not m .....

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vision cannot be invoked to correct each and every type of mistake or error committed by the Assessing Officer. It is only when an order is erroneous that the section will be attracted. An incorrect assumption of facts or an incorrect application of law will satisfy the requirement of the order being erroneous. In the same category fall orders passed without applying the principles of natural justice or without application of mind… . The Division Bench of the High court of Madras in Venka .....

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icial to the interests of Revenue Administration. (emphasis supplied). The reliance is also placed on various judgments of Hon'ble courts where the action of Commissioner of Income Tax in exercising jurisdiction under section 263 of the I.T. Act have been upheld as under: (i) CIT vs. Jawahar Bhattacharjee [2012] 341 ITR 367 (Gauhati) (HC) (FB) Non application of mind to relevant material or an incorrect assumption of facts or an incorrect application of law will satisfy the requirement of or .....

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iction under section 263 of the I.T. Act when any order passed by the Assessing Officer is erroneous and prejudicial to the interest of revenue. The plea of the assessee to drop the proceedings under section 263 of the Act is, therefore, rejected. 8. Since, the Assessing Officer has passed an order under section 254 dated 8.8.2013 without application of mind and without giving effect to the directions of Hon'ble ITAT in as much as the Assessing Officer failed to compute the income of the ass .....

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me as per the provisions of section 11 of the Act and adjudicate properly the issues restored back by the Hon'ble Tribunal with certain directions in accordance with law after providing fair and reasonable opportunity to the assessee. 8. Similar order was passed by the ld. Commissioner of Income-tax for assessment year 2005-06 also. 9. Having set aside the order of the Assessing Officer, the ld. Commissioner of Income-tax directed the Assessing Officer to make a fresh assessment considering .....

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order pursuant to the directions of the Tribunal within the period prescribed as per provisions of section 153(2A) of the Act and since the Assessing Officer has not passed an order within the specified period, the order passed by the Assessing Officer under section 254 of the Act on 8.8.2013 in both the years are not valid orders and has no legal sanctity. Therefore, no cognizance of the same can be taken by the ld. Commissioner of Income-tax to initiate action under section 263 of the Act. 11 .....

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rder passed by the Assessing Officer is barred by limitation and has no legal sanctity, no cognizance of the same can be taken by the ld. Commissioner of Income-tax. Therefore, the orders passed by the ld. Commissioner of Income-tax under section 263 of the Act deserve to be set aside. 12. On the point of limitation, the ld. counsel for the assessee has placed reliance upon the following judgments:- 1. CIT vs. Shelly Products and Another, 261 ITR 367(SC). 2. Harihar Nath Agarwal P. Family Trust .....

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83 (All). 12. CIT vs. Krishi Utpadan Mandi Samiti, 348 ITR 566 (SC). 13. The ld. D.R., besides placing reliance upon the orders of the ld. Commissioner of Income-tax, has invited our attention to certain judgments referred to by the assessee and the relevant provisions of the Act with the submission that the provisions of section 153(2A) of the Act would apply only in those cases where an order for fresh assessment in pursuance of an order under section 250 or section 254 or section 263 or secti .....

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is made on the assessee or any person 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 or in an order of any court in a proceeding otherwise than by way of appeal or reference under this Act, provisions of sub-section (3) (ii)of section 153 of the act would apply and no time limit is prescribed for completing the assessment, reassessment or recomputation, pursuant to the directions. 14. In the instant case, the Tri .....

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e limit. Therefore, the order passed under section 254 of the Act by the Assessing Officer is not barred by limitation and the ld. Commissioner of Income-tax can take cognizance of the same while initiating action under section 263 of the Act. Undisputedly, the Assessing Officer has not passed an order in terms of the directions issued by the Tribunal; rather he has computed the quantum of refund. Therefore, the ld. Commissioner of Income-tax has rightly held the order passed under section 254 o .....

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ppeal, registration under section 12A of the Act was granted to the assessee and the Tribunal has directed the Assessing Officer to adjudicate the issue of grant of exemption under section 11 of the Act keeping in view the exemption available under section 11 of the Act and registration under section 12A of the Act is granted to the assessee. For the sake of reference, we extract the directions given by the Tribunal to the Assessing Officer as under:- 28. Regarding these grounds, the common cont .....

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uired to adjudicate the issue of grant of exemption under section 11 of the Act keeping in view the registration granted under section 12A of the Act, but the Assessing Officer instead of acting as per the directions of the Tribunal, has computed the quantum of refund. Therefore, there is no iota of doubt in our mind to hold that the Assessing Officer has not acted in accordance with the directions of the Tribunal and has computed the quantum of refund. Therefore, the order of the Assessing Offi .....

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cognizance of the same can be taken for initiating action under section 263 of the Act in view of the provisions of section 153(2A) of the Act, which prescribes time limit for passing an order consequent to the directions of the appellate forum; whereas the Revenue s stand is that the order is to be passed by the Assessing Officer pursuant to the directions of the Tribunal as per provisions of section 153(3)(ii) of the Act, in which no time limit is prescribed for passing an order. Therefore, no .....

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the income was first assessable; or (b) one year from the end of the financial year in which a return or a revised return relating to the assessment year commencing on the 1st day of April, 1988, or any earlier assessment year, is filed under sub-section (4) or sub-section (5) or section 139, whichever is later. Provided that in case the assessment year in which the income was first assessable is the assessment year commencing on the 1st day of April, 2004 or any subsequent assessment year, the .....

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ne, 2007 but an order under sub-section (3) of that section has not been made before such date ; or(ii) is made on or after the 1st day of June, 2007, Provided also that that in case the assessment year in which the income was first assessable is the assessment year commencing on the 1st day of April, 2009 or any subsequent assessment year and during the course of the proceeding for the assessment of total income, a reference under sub-section (1) of section 92CA is made, the provisions of claus .....

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the financial year in which the notice under section 115WH was served. (2) No order or assessment, reassessment or recomputation shall be made under section 147 after the expiry of 1one years from the end of the financial year in which the notice under section 148 was served: Provided that where the notice under section 148 was served on or before the 1st day of April, 1999, but before the 1st day of April, 2000, such assessment, reassessment or recomputation may be made at any time up to the 3 .....

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eference under sub-section (1) of section 92CA Provided also that where the notice under section 148 was served on or after the 1st day of April, 2010 and during the course of the proceeding for the assessment or reassessment or recomputation of total income, a reference under sub-section (1) of section 92CA is made, the provisions of this sub-section shall, notwithstanding anything contained in the second proviso, have effect as if for the words one year , the words two years had been substitut .....

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is received by the Chief Commissioner or Commissioner or, as the case may be, the order under section 263 or section 264 is passed by the Chief Commissioner or Commissioner : Provided that where the order under section 250 or section 254 is received by the Chief Commissioner or Commissioner or, as the case may be, the order under section 263 or section 264 is passed by the Chief Commissioner or Commissioner, on or after the 1st day of April, 1999 but before the 1st day of April, 2000, such an o .....

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where the order under section 254 is received by the Chief Commissioner or Commissioner or, as the case may be, the order under section 263 or section 264 is passed by the Commissioner on or after the 1st day of April, 2006, and during the course of the proceedings for the fresh assessment of total income, a reference under sub-section (1) of section 92CA-(i) was made before the 1st day of June, 2007 but an order under sub-section (3) of section 92CA has not been made before such date ; or(ii) .....

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ntained in the second proviso, have effect as if for the words one year the words two years had been substituted. (3) The provisions of sub-sections 4(1), (1A), (1B) and (2) shall not apply to the following classes of assessments, reassessments and recomputations which may, subject to the provisions of sub-section (2A) be completed at any time- (ii) where the assessment, reassessment or recomputation is made on the assessee or any person in consequence of or to give effect to any finding or dire .....

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an opportunity to the assessee to be reheard under the proviso to section 129, or (ii) the period during which the assessment proceeding is stayed by an order or injunction of any court, or (iia) the period commencing from the date on which the Assessing Officer intimates the Central Government or the prescribed authority, the contravention of the provisions of clause (21) or clause (22B) or clause (23A) or clause (23B) or sub-clause (iv) or sub-clause (v) or sub-clause (vi) or subclause (via) .....

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sessee is required to furnish a report of such audit under that sub-section ; or(b) where such direction is challenged before a court, ending with the date on which the order setting aside such direction is received by the Commissioner, or (iv) the period commencing from the date on which the Assessing Officer makes a reference to the Valuation Officer under sub-section (1) of section 142A and ending with the date on which the report of the Valuation Officer is received by the Assessing Officer, .....

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made and ending with the date on which the order under sub-section (1) of section 245D is received by the Chief Commissioner or Commissioner under sub-section (2) of that section, or shall be excluded. (vi) the period commencing from the date on which an application is made before the Authority for Advance Rulings under sub-section (1) of section 245Q and ending with the date on which the order rejecting the application is received by the Commissioner under sub-section (3) of section 245R, or (v .....

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tion 90A and ending with the date on which the information requested is last received by the Commissioner or a period of one year, whichever is less, (ix) the period commencing from the date on which a reference for declaration of an arrangement to be an impermissible avoidance arrangement is received by the Commissioner under sub-section (1) of section 144BA and ending on the date on which a direction under sub-section (3) or sub-section (6) or an order under sub-section (5) of the said section .....

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on - 2. Where, by an order referred to in clause (ii) of sub-section (3), any income is excluded from the total income of the assessee for an assessment year, then, an assessment of such income for another assessment year shall, for the purposes of section 150 and this section, be deemed to be one made in consequence of or to give effect to any finding or direction contained in the said order. Explanation - 3. Where, by an order referred to in clause (ii) of sub-section (3), any income is exclud .....

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s notwithstanding anything contained in sub-sections 4(1), (1A), (1B) and (2), in relation to the assessment year commencing on the 1st day of April, 1971, and it prescribes time limit for passing an order for fresh assessment in pursuance of an order under section 250, 254 or section 263 or section 264, setting aside or cancelling an assessment. The time limit is before the expiry of one year from the end of the financial year in which the order under section 250 or section 254 is received by t .....

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give effect to any finding or direction contained in an order under section 250, 254, 260, 262, 263 or 264 or in an order of any court in a proceeding otherwise than by way of appeal or reference under this Act at any time and no time limit is prescribed. Meaning thereby, wherever an order is passed consequent to the findings or the directions of the appellate forum without setting aside or cancelling the assessment, there is no time limit for compliance of the directions or findings of the app .....

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from that used in sub-section (3) inasmuch as sub-section (2A) refers to an order of fresh assessment in pursuance of an order, under section 250 , 254 , 263 or 264 , setting aside or cancelling an assessment, whereas clause (ii) of sub-section (3) uses the expression assessments, reassessments, or recomputation made 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 of the Act . Their Lordships have further held .....

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, after April 1, 1971, the provisions of sub-section (3) of section 153 of the Act are made subject to the provisions of sub-section (2A) of section 153 of the Act. 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. 21. In the case of CIT vs. Bhan Textile Pvt. Ltd. (supra), the Hon'ble Delhi High Court has he .....

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rbing the assessment order. 22. Again in the case of CIT vs. S. P. Mishra (supra), the Hon'ble jurisdictional High Court has held that section 153 of the Act, provides the limitation during which the reassessment order can be made, if the case is covered by the provisions of sub-section (1) and sub-section (2) . Sub-section (3) of section 153 of the Act excludes the applicability of the period of limitation in the circumstances more precisely indicated in clauses (ii) and (iii) thereof. Havi .....

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re must be disposal of a particular case in respect of a particular assessee and in relation to the particular assessment year. 23. Similar views were expressed by the Visakhapatnam Bench of the Tribunal in the case of Raghava Health Care Ltd. vs. DCIT (supra), in which it was held in the light of the judgment of the Hon'ble Apex Court in the case of Murlidhar Bhagwan Das, 52 ITR 335 that there is a fine distinction between the application of section 153(2A) and section 153(3)(ii) of the Act .....

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ction 153(2A), and there is no time limit for passing such order under section 153(3)(ii) of the Act. The relevant observations of the Tribunal are extracted hereunder for the sake of reference:- There is a fine distinction between the application of section 153(2A) and section 153(3)(ii) of the Income-tax Act, 1961. Section 153(2A) of the Act would apply when a fresh assessment is required to be made in pursuance of an order under section 250 or 254 or 263 or 264 , setting aside or cancelling a .....

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ection 153(2A), the fresh assessment order has to be passed on the same assessee for the same assessment year, whereas under section 153(3)(ii) of the Act, the assessment, reassessment or recomputation may be passed for any assessee and also for any assessment year. This proposition becomes clear on a combined reading of Explanations 2 and 3 to section 153 and section 153(3)(ii) of the Act. The provision of section 153(3) of the Act is subject to section 153(2A) , and where the assessment or rea .....

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authority sets aside one or some of the issues to the file of the Assessing Officer, that situation would not give rise to a fresh assessment and in that case section 153(3)(ii) of the Act would apply. 24. This issue was also examined by the Hon'ble M.P. High Court in the case of Gulabchand Motilal vs. CIT (supra), in which it was held that prior to the insertion of sub-section (2A) in section 153 of the Act by the Taxation Laws (Amendment) Act, 1970, where an assessment was set aside or ca .....

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cing a time limit and by virtue of subsection (2A) of section 153 of the Act, assessments covered by subsection (2A) of section 153 of the Act have to be completed within the time limit prescribed by that provision. In order to give full effect to the fiction introduced by Explanation 2 to section 153 of the Act, and to the object of insertion of sub-section (2A) in section 153 of the Act, it must be held that where fresh assessment is being made for a particular assessment year, in pursuance of .....

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nd we find that they are not directly on the issue in dispute. We, therefore, now proceed to adjudicate the issue in dispute in the light of the aforesaid various judicial pronouncements. 26. From a careful reading of the judgments referred hereinabove, we find that there is a fine distinction between the application of section 153(2A) and 153(3)(ii) of the Act. Section 153(2A) of the Act would apply to those cases where fresh assessment is required to be made in pursuance of an order of the app .....

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assessee or any person 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 of the Act or in an order of any court in a proceeding otherwise than by way of appeal or reference under this Act, no time limit is prescribed for passing such order by the Assessing Officer. The main distinction in these provisions are that for invoking the provisions of sub-section (2A) of section 153 of the Act, earlier assessment which was .....

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mputation of the income of the assessee in terms of the directions without setting aside or cancelling the assessment which is subject matter of appeal before them. Under this sub-section, any order or direction of a court in proceedings otherwise than by way of appeal or Reference under this Act is also required to be complied with by the Assessing Officer not only relating to the assessment year in dispute, but also for other assessment years. The language used in both the sub-sections are dif .....

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r cancelling the assessment order. It is also obvious from the record that when original assessment was framed, registration under section 12A of the Act was not available to the assessee, therefore, there was no question of adjudication of claim of exemption under section 11 of the Act and the Assessing Officer has computed the income as per the relevant provisions of the Act. Since the Assessing Officer has acted in accordance with law, the assessment order cannot be called to be illegal or ir .....

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e certainly falls under clause (ii) of sub-section (3) of section 153 of the Act and for this subsection, no time limit is prescribed under the Act. Therefore, it cannot be said that the order passed by the Assessing Officer was barred by limitation. But from a careful perusal of the order passed by the Assessing Officer, we find that the Assessing Officer has simply computed the quantum of refund instead of adjudicating the claim of exemption raised under section 11 of the Act in the light of g .....

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