TMI Blog2022 (1) TMI 633X X X X Extracts X X X X X X X X Extracts X X X X ..... 1. The order of the Commissioner of Income Tax passed under sec.263 of the Act is contrary to law, erroneous and unsustainable on the facts of the case. 2. The CIT erred in passing the impugned order under sec.263 dated 22.3.2020 with a direction to the officer to re-do the assessment. 3. The CIT ought to have seen that the impugned proceedings are barred by limitation as the issue emanates from the order u/s.143(3) r.w.s. 147 dated 28.3.14, which assessment was ipso facto accepted in the subsequent order dated 22.6.18. 4. The CIT failed to appreciate that the capitalization of tax and interest as per the order under sec.245D(4) of the ITSC was carried out in the return filed on 30.3.2013 and the assessment completed on 28.3.14 and that the later order passed u/s.147 dated 22.6.18 had accepted the income returned and determined in the earlier order of the officer and hence the present proceedings u/s.263 are clearly barred by limitation and hence are to be annulled. 5. The CIT failed to appreciate that the order of the assessing officer is neither erroneous nor prejudicial to the interests of the revenue and the officer having considered the issue whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... justice. 4. The learned DR, on the other hand, fairly agreed that delay period noticed by the Tribunal is covered under general exemption granted by the Hon'ble Supreme Court for extending limitation for various proceedings, including appellate proceedings before the Tribunal and thus, delay may be decided on merits. 5. Having heard both the sides and considered petition filed by the assessee for condonation of delay, we find that the assessee has received order passed by the learned PCIT on 15.04.2020 and the last date for filing of appeal before Tribunal was on 15.06.2020. The assessee has filed present appeal on 01.04.2021. Therefore, the Registry has intimated delay of 291 days in filing appeal. We have gone through delay noticed by the Registry in light of petition filed by the assessee and find that delay noticed by the Registry falls within the period of general exemption granted by the Hon'ble Supreme Court in computing period of limitation for any suit, appeal, application or proceedings and thus, we are of the considered view that there is no delay in filing present appeal and hence, appeal filed by the assessee is admitted for hearing. 6. Brief fa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ues were not examined by the Assessing Officer in the assessment proceedings completed u/s.143(3)r.w.s. 147 of the Act, dated 22.06.2018 and thus, opined that assessment order passed by the Assessing Officer is erroneous, insofar as prejudicial to the interests of revenue and thus, called upon the assessee to explain as to why assessment order passed by the Assessing Officer cannot be set aside. 8. In response, the assessee submitted that proposed revision proceedings u/s.263 of the Act, is barred by limitation, because issues taken up by learned PCIT for revision proceedings were not emanating from reassessment order passed by the Assessing Officer u/s.143(3) r.w.s. 147 dated 22.06.2018 and thus, period of limitation for above two issues should be reckoned from first reassessment order passed by the Assessing Officer dated 28.03.2014. Therefore, if we consider period of two years for revision of assessment order by the learned PCIT from the date of first reassessment order, i.e. 28-03-2014, then the learned PCIT ought to have issued show-cause notice on or before 28.03.2016 and hence, the show-cause notice issued u/s.263 dated 04.03.2020 is clearly barred by limitation and co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , dated 22.06.2018, but issues on which revision proceedings was initiated by the learned Principal CIT was either part of reassessment proceedings and further, any discretion by the Assessing Officer on the issues. Therefore, for the purpose of limitation prescribed u/s.263 of the Act, date of original order should be considered and if said date is considered, then the learned PCIT ought to have completed revision proceedings on or before 28.03.2016. Therefore, show cause notice issued by the learned PCIT dated 04.03.2020 and subsequent order passed on 23.03.2020 is clearly barred by limitation. Therefore, he submitted that order passed beyond prescribed limit cannot be sustained. In this regard, he relied upon decision of the Hon'ble Supreme Court in the case of CIT Vs Alagendran Finance Ltd. (2007) 293 ITR 001 (SC). 10. The learned DR, on the other hand, supporting order of the learned PCIT submitted that once case is reopened and assessment is framed, then earlier proceedings gets wiped out and the Assessing Officer shall have powers to assess / reassess total income including income escaped from assessment. Therefore, when there is subsequent assessment order which is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s 143(3) rws 147 of the Act, on 22.06.2018. In the said reassessment order, the AO had considered the issues of reconciliation of gross receipts as compared to the Form 26AS and ITR filed and details of cash deposits in to the Bank accounts and source of cash deposits. The issues of tax credit claimed by the assessee as per settlement commission and reduction of pre- due receipts from income of AY 2011-12 is neither subject matter of reopening of assessment nor considered by the AO during reassessment proceedings. Therefore, it is necessary to examine validity of 263 order passed by the PCIT in light of limitation prescribed under sub section (2) and the issues considered for revision of assessment. 13. It is a well settled principle of law by various courts that PCIT/CIT can exercise revision powers u/s 263 of the Act on the issue which was subject matter of assessment/reassessment proceedings whether or not said issue was discussed by the Assessing Officer. In this case, the learned PCIT has taken up revision proceedings on two issues i.e. (i) claim of credit for taxes paid on undisclosed income offered before Settlement Commission for assessment years 2004-05 to 2010-11 at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at when a notice u/s.263 raises new issues, which are not subject matter of reassessment proceedings, then two years period contemplated under sub-section (2) of section 263 would begin to run from date of original assessment.. 14. We also find that the co-ordinate Bench of this Tribunal had considered an identical issue in ITA No.979/Chny/2020 dated 17.09.2021 in the case of M/s. Seyad Shariat Finance Ltd. and held as under:- 7. We have heard both the parties, perused material available on record and gone through orders of the authorities below. The provisions of section 263 of the Income Tax Act, 1961 empowers Pr.CIT / CIT to revise assessment order passed by the Assessing Officer, if PCIT satisfies that assessment order passed by the Assessing Officer is erroneous insofar as it is prejudicial to the interests of revenue. Sub-section (2) of section 263 prescribes time limit for passing revision order, as per which no order shall be made under sub-section (1) after expiry of two years from the end of financial year in which order sought to be revised was passed. If a combined reading of subsection (1) and (2) of section 263 of the Act, it is very clear from the provisi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Hon ble Kerala High Court in the case of M/s.Skyline Builders Vs. CIT (supra), where under identical set of facts, the Hon ble High Court held that where no revisional order was passed by CIT at the time of completion of original assessment, limitation period for passing order u/s.263 had to commence from first order of assessment. The Hon ble Madras High Court in the case of Indira Industries Vs. PCIT (2018) 95 taxmann.com 103 (Mad), had considered an identical issue and held that when a notice u/s.263 raises new issues, which are not subject matter of reassessment proceedings, then two years period contemplated under sub-section (2) of section 263 would begin to run from date of original assessment. The Hon ble Madras High Court while considering the issue had followed decision of the Hon'ble Supreme Court in the case of CIT Vs.Alagendran Finance Ltd. (293 ITR 1) (SC), where a similar view had been taken by the Hon'ble Supreme Court. As regards case law relied upon by the learned DR in the case of M/s.Canara Housing Development Co. Ltd. Vs. DCIT (supra) and other case law, we find that those case laws rendered under different set of facts and has no application to the fa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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