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2017 (8) TMI 529

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..... the order of reassessment u/s. 143(3) / 147 but a part of an assessment done earlier under the Act, that the contention that in the case of bogus bills and non-genuine purchases, i.e., where the State is being defrauded the limitation as provided u/s. 263 be ignored could not be accepted for the reason that neither the Tribunal nor in the appellate jurisdiction, could ignore the mandate of limitation provided under the Act. This was an issue which would fall within the domain of Parliament so as to make suitable amendment to the law after considering the various competing interests. - See CIT v/s M/s. Lark Chemicals Ltd.[2013 (9) TMI 959 - BOMBAY HIGH COURT] - Decided in favour of assessee. - I.T.A./3244/Mum/2017 - - - Dated:- 4-8-2017 - .....

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..... nary proceedings. 2 . 1 . In response to the notice, the assessee filed submissions on 25/03/2016 and 08/11/2016. Referring to various case laws, including Malabar Industrial Co. Ltd(243ITR83)and the provi - sions of section 263, the CIT held that the assessee was owner of 25% shares in the company during the year under consideration, that transaction of ₹ 10.48 lakhs related to riches of aluminium bars, that the assessee was beneficial owner of the shares, that the company had accumulated profits and had advanced loan/deposits to the assessee, that the provisions of section 2(22)(e)were applicable, that the issue before him was not debatable. Finally, he held that the opening balance as on 01/04/2008t was 20,13,469/-, that th .....

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..... e rival submissions and perused the material before us. Before proceeding further, in our opinion, we should deal with the jurisdictional issue. As per the provisions of section263(2) no order can be passed under sub-section (1) after the expiry of two years from the end of initially of in which the order sought to be revised was passed. In this case return was processed and an intimation u/s.143(1) was issued on 04/05/ 2010. Reassessment proceedings were completed on 09/02/2015 and the CIT passed the revisionary order, u/s. 263, on 22/03/ 2017. In our opinion, to decide the issue of time limit, the case of Lark Chemicals Ltd. (supra) of the Hon ble Bombay High Court will be helpful. Facts of the matter were that the assessee, for the AY.20 .....

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..... )r.w.s.147 and that the CIT would have no jurisdiction to initiate proceeding u/s. 263 on those issues. Therefore, the Tribunal held that the jurisdiction u/s. 263 was barred by time. On appeal the Hon ble Court held as under: .. there was no dispute that except the issue of non - genuine purchases all other issues dealt with by the Commissioner were not the subject matter of the reassessment order . All the other issues on which the Commissioner sought to exercise the jurisdiction u / s . 263 were concluded by virtue of an intimation u / s . 143 ( 1 ) which admittedly was done beyond a period of two years prior to the notice issued u / s . 263 . Section 263 ( 2 ) provides that no order would be made .....

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..... ted. Thereafter orders of reassessment were initiated in respect of three other items but not the item relating to LEF. Later on the CIT, by an order, dated 29/03/2004, initiated revision proceedings only in relation to the item LEF. The Tribunal held that the revision proceedings were barred by limitation, as they were initiated more than four years after the original assessments;and the High Court dismissed the appeal therefrom. Deciding the matter, the Hon ble Supreme Court, confirm - ed the order of the Hon ble Bombay High Court. Considering the above discussion and peculiar facts and circumstances of the case under appeal, we hold that the revisionary order of the CIT, was not passed within the time limit prescribed by the provision .....

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