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Apeejay Shipping Ltd. Versus Assistant Commissioner of Income-Tax

2016 (2) TMI 794 - ITAT KOLKATA

Validity of assessment - rectification of mistake - barred by limitation u/s. 153(2A) - Held that:- No assessment is possible after the expiry of period of limitation, the provisions of section 153(2A) of the Act are absolute and they impose a fetter on income tax authorities to make a set-aside assessment after the expiry of periods mentioned in this sub-section. This is a statutory fetter which is not for the assessee to relax or waive or vice versa. The power to make assessment lapses complet .....

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nt afresh. This provision of section 153(3), in the given facts of the case, is subject to the provisions of section 153(2A) of the Act. In other words, if a matter falls u/s. 153(2A) of the Act i.e. if the Tribunal has set aside or cancelled the assessment, then the fresh order by the AO of assessment shall be passed within the period as prescribed u/s. 153(2A) of the Act. Here, in the present case, assessee's case clearly falls under the 2 nd proviso to section 153(2A) of the Act.

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arising out of order of CIT(A), Central-1, Kolkata in Appeal No. 197/CC-III/CIT(A)C-1/11-12 dated 21.01.2013. Assessment was framed by JCIT(OSD), Central Circle-III, Kolkata u/s. 254/143(3) & u/s. 263/143(3) of the Income tax Act, 1961 (hereinafter referred to as "the Act") for AY 2004-05 vide its order dated 08.12.2011. 2. The first issue in this appeal of assessee is against the order of CIT(A), that he has erred in holding that the assessment is not barred by limitation u/s. 15 .....

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or verification of certain facts, Ld. CIT(A) should have held the order as invalid for not following the directions of the Hon'ble Tribunal. (c) That on the facts and in the circumstances of the case, Ld. C.I.T. (A) has erred in holding that order u/s. 254/251/143(3) dated 08/12/2011 is within time and thereby dismissing ground No. 1." 3. Briefly stated facts are that the assessee company is engaged in the business of operation of ships and filed its return of income for the relevant as .....

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order dated 25.07.2008 in ITA No. 98/K/2008 set aside this issue and restored back the same to the file of the AO for deciding afresh by following ITAT's order in assessee's own case for AY 2001-02 wherein in para 9 held as under: "since from the perusal of share capital and reserve, it appears that reserve and surplus are more than twenty times of paid up share capital of assessee company, whereas section 33AC clearly debars the assessee from claiming any deduction in case the amo .....

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hereby clarify that it will be the onus of the assessee to produce relevant evidence and documents before the AO in support of its claim that the amount transferred till the financial year under consideration for the purpose of section 33AC does not exceed twice the aggregate of paid up share capital. We hold and direct accordingly and accept the ground raised by the revenue for statistical purposes." 4. The AO while giving appeal effect, framed assessment u/s. 254/143(3) & also u/s. 2 .....

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e with the Ld. AR that the provisions of section 153(2A) are attracted in this case. The order of the Hon'ble Tribunal does not suggest any de novo assessment. The issue regarding allowability of deduction u/s. 33AC required verification of certain facts, and so, this issue was restored to the file of the AO. Therefore, the contention that the order was not passed by the AO within the prescribed time limit is not correct. Ground no.1 is dismissed." Aggrieved, now assessee is in second a .....

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ads as under: "In pursuance of the Hon'ble ITAT, 'A' bench, Kolkata's order in ITA No.98/Kol/2008 dated 28.07.2008, a notice u/s. 142(1) was issued to the assessee on 16.11.2010, requiring clarification on the details of Reserves & Surplus as on 31.03.2004….." Ld. Counsel for the assessee before us stated that notice u/s. 142(1) on the assessee to give effect to the order of the Tribunal was issued on 19.08.2011 and in term of section 153(2A) i.e. the time li .....

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equent assessment year, an order of fresh assessment in pursuance of an order under section 250 or section 254 or section 263 or section 264, setting aside or cancelling an assessment, may be made at any time 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 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: .....

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ioner 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, 2005, the provisions of this sub-section shall have effect as if for the words "one year", the words "nine months"had been substituted:]" We find that recently a coordinate bench of this Tribunal Kolkata "A"Bench in the case of McNally Bharat Engineering Co. Ltd. Vs. DCIT in CO No. 12/Kol/2011, arising out of I .....

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al year in which the order under section 254 is received by the concerned Chief Commissioner or Commissioner whereas sub-section (3) of section 153 provides that where the assessment, reassessment or re-computation is to be made on the assessee or any person in consequence of or to give effect to any finding or direction contained, inter alia, in an order passed by the Tribunal under section 254, same can be completed at any time without there being any time limit specifically prescribed for the .....

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authority sets aside some of the issues to the file of the Assessing Officer, that situation would not give rise to "fresh assessment" attracting the provisions of section 153(2A) and in such case, the provisions of section 153(3)(ii) would apply. 7. We are unable to subscribe to the view taken by the ld. CIT(Appeals) in view of the various judicial pronouncements cited by the ld. counsel for the assessee wherein a contrary view is taken on a similar issue, which is in favour of the as .....

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the Tribunal that the provisions of section 153(2A) would apply and the order passed by the Assessing Officer giving effect to the order of the appellate authority beyond the period prescribed in sub-section 153(2A) was barred by limitation. A similar issue had again arose in the case of Standard Meters Mfg. Co. -vs.- Addl. CIT (ITA No. 1665/PN/2007 dated 29.11.2011) cited by the ld. counsel for the assessee and it was held by the Pune Bench of this Tribunal that the point of distinction betwee .....

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Assessing Officer for consideration afresh in accordance with law. In these facts and circumstances, it was held by the Tribunal that the order passed by the Assessing Officer giving effect to the order of the Tribunal beyond the period specified in section 153(2A) of the Act was not saved because of the extended limitation provided under section 153(3) of the Act. In our opinion, the ratio of the decision of the Coordinate Benches of this Tribunal in the case of Pooran Singh (supra) and Standa .....

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itation. Accordingly, we allow the Cross Objection filed by the assessee and cancel the order dated 31.12.2009 passed by the Assessing Officer." 6. In view of the above facts and the case law of coordinate bench, cited supra, we are of the view that no assessment is possible after the expiry of period of limitation, the provisions of section 153(2A) of the Act are absolute and they impose a fetter on income tax authorities to make a set-aside assessment after the expiry of periods mentioned .....

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