TMI Blog2016 (5) TMI 324X X X X Extracts X X X X X X X X Extracts X X X X ..... ere was no finding or direction given thereon. The tribunal remitted the assessment for determining afresh the issues raised by the Learned AO in the assessment appealed against. Since there were no other additions or issues in dispute except the two additions ( i.e addition on account of gross profit and bogus purchases) made in the earlier assessment, the order asking for deciding the issues afresh and recomputing the total income repeating the procedure of assessment correctly amounts to a fresh assessment. We hold that the assessment means in the context of the scheme of the Act the determination of the total income to be brought to the charge of tax. The total income is the sole object of the whole exercise commencing from assessee’s filing of return and ending with the completion of assessment. Now looking at the impugned issue from this perspective, when the tribunal asked the Learned AO to determine the total income by re-deciding the issues involved in the additions made therein, it implies indisputably a mandate for fresh determination of the total income. When the order of the Tribunal nullifies the total income assessed or determined in the original order of an assessm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er was passed by the Learned AO on 25.3.2009 repeating the same additions as were made in the original assessment. It was argued by the Learned AR that the fresh assessment pursuant to ITAT s order should have been framed by the Learned AO on or before 31.12.2008 in terms of section 153(2A) of the Act and since the assessment is framed on 25.3.2009, the same is barred by limitation. This plea was also taken by the Learned AR before the assessing officer itself vide his letter dated 18.2.2009. However, the Learned AO did not consider this preliminary objection of the assessee and proceeded to make the same old additions (i) on account of gross profit amounting to ₹ 1,19,177/- and (ii) on account of bogus purchases amounting to ₹ 42,81,239/-. The assessee contested the fresh assessment before the Learned CITA both on limitation as well as on merits. The preliminary objection raised by the assessee on limitation before the Learned CIT(A) was subjected to remand proceedings by the Learned CIT(A). In the remand proceedings, the Learned AO stated that the tribunal had only restored the assessment to the file of the Assessing Officer and not set aside the same. According to h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e :- 6. We have given our careful consideration to the rival submissions made before us and have perused the orders of tax authorities. We have also considered the paper book filed by the ld. Counsel for the assessee. The assessee has disputed the order of authorities below in estimating the gross profit stating that comparable cases relied by the AO were not confronted to it for rebuttal. The assessee has also disputed the order of Id. CIT(A) in confirming the addition of ₹ 37,39,701l- on account of cash credit from one M/s. Krishna Trading Co. and has contended that though the assessee made all possible efforts to adduce evidence and explanation before the A.O., the same could not be made as the concerned A.O. was not available in his chamber. We also find that the Id. counsel for the assessee -has prayed for one more opportunity to enable the assessee to explain his case in case of both the grounds raised by him. The Revenue has also stated that the ground raised by it should be restored back to the file of A.O. as the same relates to the connected ground no. 2 of assessee's appeal. We, therefore, after considering the facts and circumstances of the case find that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 263 or section 264 is passed by the [ Principal Commissioner or] Commissioner on or after the 1st day of April, 2005 [ but before the 1st day of April 2011], the provisions of this sub-section shall have effect as if for the words one year , the words nine months had been substituted:] (3) The provisions of sub-sections (1) [, (1A), (1B)] and (2) shall not apply to the following classes of assessments, reassessments and recomputations which may, 96 [subject to the provisions of sub-section (2A),] be completed 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 1 [or in an order of any court in a proceeding otherwise than by way of appeal or reference under this Act] ; (iii) where, in the case of a firm, an assessment is made on a partner of the firm in consequence of an assessment made on the firm under section 147. 2.5.2. From the aforesaid provisions, if the assessee s case falls under section 153(2A) of the Act, then the last date for completio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... limitation of time for completion of such assessment. This necessitated the introduction of limitation to end this potential mischief. If the Learned AO s pleading is taken as correct, in that case it would virtually mean that the orders of the Tribunal passed u/s 254 of the Act for the most part if not universally, remain outside the scope of section 153(2A) because rarely the whole assessment order on all its counts come in for challenge before the Tribunal in appeals. All appeals, so to say, relate to some components of the total income assessed out of many. More often than not, it happens that the Tribunal s order , while asking the Assessing Officer to redo the assessment on those limited scores, may contain guidelines for the fresh assessment to be made. That does not mean that the assessment redone is not a fresh assessment order. Hence the view as canvassed by the Learned AO cannot be tenable in the face of the fact that even nullifying a component or a few components of total income in the assessment order under appeal means nullifying the assessment because any exercise, by the import of section 143(3), for determining the total income of an assessee is assessment. When ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... together different from the situation in an order of the Tribunal requiring the Learned AO to re-determine the total income. He again reiterated that may be, the Tribunal while nullifying a decision of the Learned AO may indicate some procedural guidelines or the needful focus of attention in making such fresh assessment but that cannot be equated with the specialized meaning of the words finding or direction occurring in sub-section (3). We are in agreement with the said arguments of the Learned AR and hold that the said words finding or direction in sub-section (3) refers to the situation where the Tribunal s order has come to a particular finding in relation to some other year or years or in relation to the assessment of another person or persons. It is only in that situation the assessment to be made in accordance with such finding or direction is immune from limitation u/s 153(2A) of the Act. But where the direction for re-determining the total income of the assessee is in relation to the grounds of appeal for a particular assessment year before the Tribunal, the case attracts sub-section (2A) and not sub-section (3) of section 153 of the Act. We find that this construction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... did not set aside the assessment and resultantly the fresh assessment is immune from the limitation u/s 153(2A) of the Act. We find that the Learned AO infact had understood the word restored as meaning set aside because he withheld the refund of the tax collected before the Tribunal s order by placing reliance on section 240 of the Act together with its proviso. This act of withholding the refund pending the fresh assessment in the case is concession on the part of the Learned AO that the Tribunal s order is one setting aside the order for assessment de novo. Thus we find that the Learned AO had self repudiated by stating that the Tribunal had not set aside the order. 2.5.11. We find that the following decisions relied on by the Learned AR are very well placed and which are squarely applicable to the facts of the instant case:- (a) Decision of Hon ble Delhi High Court in the case of CIT vs Bhan Textile P Ltd reported in (2008) 300 ITR 176 (Del) , wherein it was held that :- ASSESSMENT LIMITATION COMMISSIONER (APPEALS) DIRECTING ASSESSING OFFICER TO PASS AN ORDER UNDER SECTION 144 AND GIVE ASSESSEE OPPORTUNITY TO FILE ITS EVIDENCE ASSESSMENT MUST BE TAKEN TO ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 August 3, 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 timebarred. 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, the declaration prayed for by the petitioner must be granted. 26. In the result, the petition is allowed. The assessment proceedings for the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 39;set aside' is defined in Webister 3rd New International Dictionary as to put to one side, to discard, to set apart for a purpose, overrule. Going to the order of the CIT(A) relating to the ground Nos. 7 and 8, we find that the CIT(A) noted that the AO has not given credit of the instalment received by the assessee for working out the total investment made in moneylending business, therefore, he directed the AO to give allowance for the same for working out the total investment an a so directed that for this purpose peak credit should be worked out and allowance must be given for the past savings made by the assessee. For working out the interest income, CIT(A) directed that the rate of 24 per cent should be applied and the business expenditure for earning such income should be deducted for working out the net income from interest. Thus direction was given that the interest income should be worked out only after working out the total investment. These directions are not the ones which can be followed by the AO without calling the assessee and without appreciating the various evidences/documents which are required for working out instalments received by the assessee, peak c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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