TMI Blog2016 (6) TMI 458X X X X Extracts X X X X X X X X Extracts X X X X ..... facts of the present case. Respectfully following the same, we hold that the impugned order passed u/s. 263 of the Act by the CIT is barred by limitation - Decided in favour of assessee - I.T.A No. 1743/Kol/2013 - - - Dated:- 10-6-2016 - Shri M. Balaganesh, Accountant Member And Shri S. S. Viswanethra Ravi, Judicial Member For the Appellant : Shri H. Chakraborty, Ld.AR For the Respondent : Shri Niraj Kumar, CIT, Ld. Sr.DR ORDER Shri S. S. Viswanethra Ravi, JM This appeal of the assessee is arising out of the order of the CIT, Kolkata- IV, Kolkata passed u/s. 263 in Memo No. CIT, Kol-IV/263/2012-13/394-396 dated 28-03-2013/9-05-2013 for the assessment year 2008-09 against the order of assessment framed u/s. 143(3) of the Income-tax Act, 1961 (hereinafter referred to as the Act ). 2. In this appeal, the assessee has raised the following grounds of appeal:- 1. For that the order u/s. 263 passed by Ld. Commissioner of Income tax-IV, Kolkata (hereinafter referred to as Ld. CIT) is barred by limitation. 2. For that the Ld. CIT failed to substantiate his findings either in the notice u/s. 263 or in the corresponding order. 3. For that the Ld. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y, directed the AO to verify the issue afresh. It is pertinent to mention that the CIT said to have passed such order u/s. 263 on 28- 03-2013, but, it was dispatched to the assessee on 01-05-2013. To be clear, the relevant portion is reproduced hereunder:- The assessment records of the assessee were called for and perused and the following were noticed: a) The assessee claimed deduction of ₹ 81,34,56,971/- under section 80IA which includes foreign currency gain of Rs, 3,33,05,084/- due to repayment of foreign currency loan obtained earlier for acquisition of fixed assets. Out of the above gain ₹ 1,56,61,031/- was deducted for adjustment made in value of Plant and Machinery in computation of profit and gain from business ( generation and sale of power ). Thus gain of foreign currency loan of ₹ 1,76,44,053/- ( ₹ 3,33,05,084 - ₹ 1,56,61,031 ) was not profit and gains derived from business but included in the amount of deduction. Resulting in under assessment of income to the tune of ₹ 1,76,44,053/- with excess carry forward of MAT credit amounting to ₹ 59,97,214/-. This action appeared to be erroneous and prejudicial to the interest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is only making of the order within the specified time by giving a finding that the order is erroneous as well as prejudicial to the interest of the Revenue and it comes into effect forthwith and it is immaterial on what date it was dispatched to or served on the assessee for the purpose of limitation. To save limitation it shall be reckoned from date of making of order and not from the date on which date it was dispatched and the order of CIT passed U/sec 263 is within time. He further distinguished that the said Judgment of the Hon ble Kerala High Court in the case of Government Wood Works supra was not pronounced on the issue involving in Income-tax matter and the Ld. DR relied on the impugned order of the CIT and prayed to dismiss the appeal of the assessee. 8. Heard the rival submissions and perused the material available on record. The first issue involved in this appeal is as to whether the order passed by CIT u/s. 263 is barred by limitation. The sub section (2) of section 263 reveals that no order shall be made u/s. (1) of section 263 after the expiry of 2 years from the end of the financial year in which the order was passed. In the present case the AO passed the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rospectively from 1st April, 1958, imposed a liability on every dealer to pay tax on his turnover relating to purchase of copra. Section 4(1)(iv) which operated from 27th September, 1965, enabled assessments to be made within three years (extended by subsequent amendment to five years) of the date of publication of the Validation Act in cases where the tax payable on the purchase of copra had not been assessed under the General Sales Tax Act. By virtue of this provision, as amended, the assessing authority could assess the tax due on the purchases of copra within five years from 27th September, 1965, i.e., before 27th September, 1970. The assessments in question for the two years 1961-62 and 1962-63 were made on 23rd September, 1968; but the orders were served on the assessee only on 4th February, 1972. The assessee challenged the said orders before this Court, inter alia, on the ground that the orders were barred by limitation as they had been made only long after the prescribed period of five years. The matter wasdealt with in detail by this Court. Relying on the decisions in Raja Harish Chandra Raj Singh v. Deputy Land Acquisition Officer [1962] 1 SCR 676, Bachhittar Singh v. St ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , therefore, the order of the Deputy Commissioner in this case had been so issued is office within the period prescribed, it has to be held that the proceedings are by limitation. This question has not been considered by the Tribunal. The Tribunal, which passed the order, apparently did not have the benefit of the decision in Malayil Mills case (T. R. C. Nos. 15 and 16 of 1981 decided on 7th June, 1982-Kerala High Court) which, so far as we could see, remains, unreported. The matter has therefore to go back to the Tribunal for an examination of the records to ascertain whether the order of the Deputy Commissioner had been issued from his office within the period of four years prescribed in Section 35(2) of the Act. The Tribunal will adjudicate the matter in the light of the observations contained herein and in the judgment in the case of Malayil Mills (T. R. C. Nos. 15 and 16 of 1981 decided on 7th June, 1982-Kerala High Court) extracted earlier. 9. In the present case the order passed u/s. 263 of the Act by the CIT was admittedly issued only on 01-05-13 diapatched by post only on 08-05-13 and served on assessee later and it was in his custody till 01-05-2013 and was issued o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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