9911796707
TMI Blog2018 (5) TMI 1689X X X X Extracts X X X X X X X X Extracts X X X X ..... t without appreciating the fact that finding or direction contained in an order passed by any authority must relate to the assessee only and not to a third party; c. Upholding the action of the ld. AO of not considering the provisions of Section 150 of the Income Tax Act, 1961 in totality. 3. Under the facts & circumstances of the case and in law, the ld. CIT (Appeals) has erred in not considering the actual stamp duty value of land of Rs. 1,35,22,275/- and adopting the stamp duty value of Rs. 1,50,35,218/- on the basis of order passed by the predecessor ld. CIT (A) in the case of Brijendra Sethi. 4. Under the facts and circumstances of the case and in law, the ld. CIT (Appeals) has erred in maintaining the interest liability u/s 234B, 234C & 234D of the Income T4ax Act, 1961. 5. The appellant craves to alter, amend and modify and ground of appeal." Ground Nos. 1 & 2 are regarding validity of reopening on the ground that the notice issued by the AO under section 148 is barred by limitation. 2. The ld. A/R of the assessee has submitted that the assessee is a partnership firm and engaged in the business of timber on wholesale basis. The assessee firm purchased land at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed the assessment in case of Ms. Brijendra Sethi, then the notice issued by the AO under section 148 on 3rd March, 2015 is barred by limitation. 2.1 On the other hand, the ld. D/R has submitted that the limitation has to be considered on the date of notice issued by the AO under section 148 in the case of Ms. Brijendra Sethi and not on the date when the assessment order was passed. Thus the ld. D/R has submitted that the AO has taken a wrong decision of assessing the said income in the hands of the partner by issuing the notice under section 148 which is the relevant date for the purpose of computing the limitation. She has also referred to the provisions of section 150(1) of the Act and submitted that the AO has power to assess or reassess the income of a person based on the orders passed by the appellate authority and, therefore, the reopening of the assessment is well within the powers and jurisdiction of the AO. She has relied upon the orders of the authorities below. 3. We have considered the rival submissions as well as the relevant material on record. The AO has reopened the assessment by issuing notice under section 148 on 3rd March, 2015 by recording the reasons that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment or recomputation to be made in pursuance of the notice is to be made on him as the agent of such non-resident, the notice shall not be issued after the expiry of a period of two years from the end of the relevant assessment year." It is clear that no notice U/s. 148 shall be issued in any case after the expiry of 6 years, however, the limitation provided U/s. 149 is applicable in a situation where the AO on its own on the basis of fresh material or information forms an opinion that the income assessable to tax as escaped assessment. Section 150 of the I.T Act provides the assessment or reassessment in pursuant to an order of appeal, revision or reference and therefore, the limitation provided U/s. 149 for reopening of the assessment is not per se applicable when the reopening is based on the directions of the appellate or revisional authority or as per the directions of the Court. Section 150 of the IT Act is reproduced as under:-- "150. Provision for cases where assessment is in pursuance of an order on appeal, etc. (1) Notwithstanding anything contained in section 149, the notice under section 148 may be issued at any time for the purpose of making an assessme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessment, reassessment or re-computation in consequence of the directions of the appellate, revisional authority or the directions of the court can be made if such assessment, reassessment or re-computation could have been made at the time the order which was subject matter of appeal revision or reference and not hit by the limitation provided U/s. 149 of the Act at that point of time. Now, the question arises whether in case of directions of second appellate authority the order which was subject matter of appeal would be 'assessment order' or the order of the ld. CIT (A) for the purpose of considering the point of time when the limitation period for reassessment has to be counted. Sub-section (2) relaxes the limitation period as provided u/s. 149 to be counted from the end of the assessment year till the date of the order which was the subject matter of appeal instead of the date of the notice issued under section 148 of the Act. Hence, for the purpose of limitation for reassessment as prescribed Sub-section (2) of Section 150 the limitation provided u/s. 149 has to be counted from the end of the assessment year till the date of the order which is subject matter of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which passed the directions will not take away the jurisdiction and power of the Assessing Officer which was very much available with the AO on the date when the assessment was made in the wrong hand. In other words if the Assessing Officer could have assessed the same income in the hands of the assessee instead of assessing the same in wrong hand then the limitation for reassessment of the said income is still available with the AO irrespective of the time consumed in the appeal proceedings and date of the directions passed by the appellate or revisional authority. In nut shell Sub-section (2) of Section 150 excludes the time consumed in the proceeding before appellate or revisional authority wherein such directions are passed from the limitation prescribed U/s. 149 of the Act. 6-7. As regards the date of order on which the limitation has to be considered whether it is assessment order or the order of first appellate authority in case the directions are passed by the Tribunal we are of the considered opinion that it makes no difference whether the directions are passed by the first appellate authority or in the second appellate proceedings by this Tribunal as the time consumed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1). But sub-s. (2) of s. 150 says that the provisions of sub-s. (1) shall not apply in any case where any such assessment, reassessment or recomputation as is referred to in that sub-section relates to an assessment year in respect of which an assessment, reassessment or recomputation could not have been made at the time the order which was the subject-matter of appeal, reference or revision as the case may be, was made by reason of any other provision limiting the time within which any action for assessment, reassessment or recomputation may be taken. The question is what is the meaning of subject-matter of appeal. While the Department contends that subject-matter of appeal refers to order or assessment passed for the year 1980-81, i.e., 27th Jan., 1983; the assessee would contend that assessment order passed on 27th Jan., 1983, was subjected to appeal before the CIT (A) and that appeal was dismissed and against that order, an appeal before the Tribunal was filed. It is the Tribunal which passed the order on 19th Feb., 1988. So, according to the assessee, it is the order of the CIT (A) which was subject-matter of appeal, before the Tribunal which is relevant. That date is 1st Marc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... barred. Another decision relied on by the Department is ITO v. Eastern Coal Co. Ltd. (1975) 101 ITR 477 (Cal.) : TC 51R.947. In that case, there is no discussion regarding this aspect. But, it is assumed there that, date mentioned is the date of the original order. According to us, the words "at the time the order which was the subject-matter of appeal, reference or revision, as the case may be, was made . . . . . " in s. 150(2) are significant. It is because of the word "appeal" that, it is contended that the subject-matter should be construed as the original order. There are two tiers of appeals from the assessment order; one to the CIT (A) and another to the Tribunal. But, the next word is reference. Reference is made under s. 256(1) of the Act. What is referred is the subject-matter of the order of the Tribunal. Can we say that when the Tribunal refers the matter to the High Court, the order that was considered by the Tribunal is the order of the AO?. No. It is the order of the Tribunal that is being referred. For example, in this case, where there is a reference to the High Court against the order of the Tribunal, it will be order of the Tribunal that will be material. Further ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itation as provided u/s. 149 r.w.s. 150(2) of the Act. Since the reopening is barred by limitation, therefore, the consequent reassessed is not sustainable and the same are quashed. When the reassessments itself are quash being void and barred by limitation then the ground No. 2 raised by the assessee on the merits of the addition becomes infructuous. Therefore, we do not propose to go into the said ground of the assessee's appeal." Therefore, it is now settled proposition of law on the point that section 150(1) is an exception to the limitation provided under section 149 for the purpose of issuing a notice under section 148. However, the limitation relaxed under section 150(1) is also not unlimited but subject to the conditions and restrictions as provided under sub-section (2) of section 150 of the Act. The limitation, accordingly, has to be counted on the date of assessment order passed by the AO assessing the income in the wrong hands and, therefore, if the AO could have assessed the same income in the hands of the right person instead of a wrong hand then the limitation for reassessment of the said income is available to the AO irrespective of the time consumed in the ap ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
