TMI Blog2013 (2) TMI 903X X X X Extracts X X X X X X X X Extracts X X X X ..... years. The Assessing Officer stated that the Tribunal had given a finding that the income in question had accrued to the assessee only in the A.Y. 2002-03, when the right to receive these amounts had fructified. On this basis, the Assessing Officer reopened the assessment for A.Y. 2002-03 by issuing notice u/s. 148 of the Act dated 22.7.2008. 4. On reopening of the assessment, the assessee went in appeal before the CIT(A). The CIT(A) placed reliance on the order of the Tribunal in the case of Model Chit Corporation in ITA No. 562/Hyd/2004 dated 30.1.2007 held that the receipts in question were to be taxed only in the assessment year when the right to receive was determined. Whatever was received earlier to that time was not to be taxed in the earlier assessment year but was to be treated as a provisional receipt in the hands of the assessee as a custodian of the amount. The Tribunal held that the facts in the present case are identical. In other words, the amounts received by the assessee on account of penalties for late payment, dividend forfeited, subscription forfeited, etc., are to be taxed in the year in which the right to receive these amounts is finally determined in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h reads as under: Provided that where an assessment under sub-section (3) of section 143 or this section has been made for the relevant assessment year, no action shall be taken under this section after the expiry of four years from the end of relevant assessment year, unless any income chargeable to tax has escaped assessment for such assessment year by reason of the failure on the part of the assessee to make a return under section 139 or in response to a notice issued under sub-section (1) of section 142 or section 148 or to disclose fully and truly all material facts necessary for his assessment for that assessment year. 7. The AR submitted that as could be seen from the above proviso where an assessment was already completed u/s 143(3) such assessment cannot be reopened after the expiry of four years from the end of the relevant assessment year in which the assessment was completed. Therefore, in the assessee's case, since its assessment was completed u/s 143(3) on 18.3.2005 the same cannot be reopened after four years of the relevant assessment year in which the assessment was completed i.e., the assessment cannot be reopened beyond 31.3.2007 unless any income ch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hich was not furnished by the assessee at the time of original assessment with regard to the above issues has come on record after the assessment is completed and, therefore, reopening of assessment is only due to mere change of opinion and that too beyond the time limit as specified in the proviso to section 147 of the Act which is bad in law. The AR relied on the following cases for the proposition that assessment cannot be reopened u/s. 147 of the Act on change of opinion of the Assessing Officer when the assessee has already disclosed all the information necessary for completion of original assessment . 1. CIT v. Bhavji Lavji [79 ITR 582 (SC)] 2. CIT v. Kelvinator of India Ltd. [256 ITR 1 (Delhi)(FB)] 3. JCIT v. George Williamson (Assam) Ltd. [258 ITR 126 (Gauhati)] 4. CIT v. Rajasthan Patrika Ltd. [258 ITR 300 (Raj)] 5. Jindal Photo Films Ltd. v. DCIT [234 ITR 170 (Delhi)] 6. Garden Silk Mills (P) Ltd. v. DCIT [237 ITR 668 (Guj)] 7. General Mrigendra Shum Sher Jung Bahadur Rana v. ITO [123 ITR 329,335 (Delhi)] 8. Indian Eastern Newspaper Society v. CIT [119 ITR 966 (SC)] 9. Ram Kishan Oil Mills v. CIT [56 ITR 186 (MP)] 10. Add.CIT v. Ganeshilal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the contingent receipts accrued to the assessee for the assessment year 2002-03. Therefore, in the absence of any such finding by the ITAT, reopening the assessment and assessing the contingent receipts of ₹ 22,87,14,965 in the assessment year 200203 by the Assessing Officer is not justified. 13. The DR submitted that a plain reading of the above order of the Tribunal in assessee s own case clearly shows that the Tribunal has relied upon the decision of itself in the case of ACIT v. Model Chit Corporation cited supra, wherein it was categorically held that the receipts in question were to be taxed only in the assessment year when right to receive was determined. Whatever was received earlier to that time was not to be taxed in the earlier assessment year but was to be treated as a provisional receipt in the hands of the assessee as a custodian of the amount. The ITAT held that the facts in the present case are identical. In other words, the amounts received by the assessee on account of penalties for late payment, dividend forfeited, subscription forfeited, etc. are to be taxed in the year in which the right to receive these amounts is finally determined in the hands ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee was liable to pay the interest to the subscribers. It all depended on the final verdict of the High Court in the writ appeal. Therefore, it can be said that it was a contingent receipt and would attain the nature of income only when the issue of the right to receive the amount is adjudicated. In this case, the issue was decided in the year 2002 and therefore in our opinion, it accrued to the assessee in 2002-2003 when its right was determined. It is taxable in the relevant assessment year. In this view of the matter, we do not see any reason to interfere with the order of the CIT(A) and we confirm the same. 15. The Assessing Officer taken a clue from this order and reopened the assessment for the A.Y. 2002-03. 16. The contention of the assessee is that the Assessing Officer cannot reopen the assessment on the basis of the above findings of the Tribunal. The primary contention of the AR is that the reopening notice u/s. 148 is barred by limitation. Section 147 defines the power and jurisdiction for making an assessment or reassessment of so called income. Section 148 provides for issue of notice for opening of an assessment. It is an accepted position that pursuant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eference under the Act. 17. In the facts of the present case, it is the case of Revenue that notice under s. 148 has been issued for the purpose of making a reassessment to give effect to the finding contained in the order of the Tribunal cited supra. Hence, in view of the provisions of s. 150 r/w s. 153(3) of the Act and Expln. 2 thereto, the notice has been issued within the period of limitation. The question that, therefore, arises for consideration is as to whether the impugned notice satisfies the requirements of s. 150 r/w s. 153(3) of the Act. 18. Sec. 150, as was in force at the relevant time, reads thus : (1) Notwithstanding anything contained in s. 149, the notice under s. 148 may be issued at any time for the purpose of making an assessment or reassessment or recomputation in consequence of or to give effect to any finding or direction contained in an order passed by any authority in any proceeding under this Act by way of appeal, reference or revision. (2) The provisions of sub-s. (1) shall not apply in any case where any such assessment, reassessment or re-computation as is referred to in that sub-section relates to an assessment year in respect of which a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y finding or direction contained in an order, under ss. 250, 254, 260, 262, 263 or 264 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 s. 147. . . . (iv) Explanation 2.-Where, by an order referred to in cl. (ii) of sub-s. (3), any income is excluded from the total income of the assessee for an assessment year, then, an assessment of such income for another assessment year shall, for the purposes of s. 150 and this section, be deemed to be one made in consequence of or to give effect to any finding or direction contained in the said order. 21. On a plain reading of sub-s. (3) of s. 153 of the Act, it is apparent that the same lifts the bar of limitation laid down under sub-s. (1) and sub-s. (2) thereof in respect of the classes of assessments, reassessments or re-computations enumerated thereunder. Thus, in the light of the provisions of s. 153(3)(ii) the normal time-limit for completion of assessments or reassessments, as contained in s. 153(1) or s. 153(2), shall have no applicat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is that there is no direction from the Tribunal to reopen the assessment as envisaged u/s. 150(1) and 153(3) of the Act. In our opinion, the contention of the assessee is misconceived. There is a specific finding by the Tribunal that the income was accrued to the assessee in AY 200203. So that the Tribunal has consequently left it open to the Assessing Officer to bring the impugned receipt to tax in AY 2002-03. 24. Another contention raised on behalf of the petitioner is that a finding in terms of s. 150 of the Act can only be that which is necessary for the disposal of an appeal in respect of an assessment of a particular year. The expressions finding as well as direction can be only in the context of a finding necessary for giving relief in the assessment of the year under consideration. That an order made in relation to a particular assessment year cannot be made the basis for reopening the concluded assessment of an earlier assessment year. However, the said contention loses sight of Expln. 2 below s. 153 which provides that where, by an order referred to in cl. (ii) of subs. (3), where any income is excluded from the total income of the assessee for an assessment year, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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