TMI Blog2022 (7) TMI 75X X X X Extracts X X X X X X X X Extracts X X X X ..... d necessary by the assessing officer on the issues on which reassessment proceedings are resorted to, it cannot be open to him to make any other additions also. Therefore by allowing PCIT extended time limit of 2 years will amount to allow revenue to do something indirectly which act prohibits directly. Thus the order under Section 263 of the Act dated 23rd March, 2021 is held barred by limitation and hence, quashed. - Appeal of assessee allowed. - ITA No. 1217/Mum/2021 - - - Dated:- 21-6-2022 - SHRI PRASHANT MAHARISHI, AM AND MS. KAVITHA RAJAGOPAL, JM Assessee by : Shri Subodh Ratnaparkhi, AR Revenue by : Ms. Dr. Pal lavi Darade, CIT DR ORDER Per Prashant Maharishi, AM 1. This appeal is filed by the assessee against the order passed by the Principal Commissioner of Income Tax, Thane- 1 (PCIT) for assessment year 2011-12 passed on 23rd March, 2021 under Section 263 of the Income Tax Act, 1961 (the Act) holding that order passed by the learned Assessing Officer under Section 147 read with Section 143(3) of the Income Tax Act, 1961 (the Act) dated 25th September, 2018, is erroneous so far as it is prejudicial to the interest of the revenue. 2. The as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (3) of the act is erroneous and prejudicial to the interest of the revenue for not making the above two additions. Hence, he set-aside the assessment with a direction to examine these issues and redo the same. Such order was passed u/s. 263 of the act on 23/3/2021. 8. Assessee is aggrieved with that order and has preferred this appeal before us. 9. Assessee contested that the order passed by the learned principal Commissioner of income tax to revise the assessment order passed u/s. 147 read with Section 143 (3) of the act dated 25/9/2018 wherein the proceedings initiated u/s. 147 vide issue of notice u/s. 148 dated 27/3/2018 were dropped. He therefore stated that when the assessing officer did not find anything to make an addition based on the reasons recorded for reopening of the assessment, if the learned principal Commissioner of income tax wanted to revise the order, the time limit would run from the original assessment order completed u/s. 143 (3) of the act on 28/2/2014. Therefore it was stated that the time limit has been taken by the learned principal Commissioner of income tax from the date of order passed on 25/9/2018 and, therefore, order u/s. 263 of the Act dated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te bench in case of R K Steel Syndicate Vs. Income Tax Officer in ITA number 316/M/2005 dated 2nd April 2007. The facts and in that case was that assessment u/s. 143 (3) of the Act was completed on 14th February, 2000. This assessment was reopened by issue of notice under section 148 of the Act on 15th of March 2002. Subsequently the reassessment proceedings, no addition was made and returned income was assessed. Subsequently, the Commissioner of income tax exercised power under Section 263 of the Act on 6th January, 2003, which culminated into an order passed under Section 263 of the Act. Therefore, the coordinate Bench was concerned that whether the order dated 28th of August, 2002 passed by the assessing officer is to be viewed as a 'reassessment order' or is to be viewed as an order dropping the reassessment proceedings. And further from which date the time limit of 2 years should be reckoned with for passing an order under Section 263 of the Act. In that particular decision the coordinate Bench considered that in case no additions are considered necessary by the assessing officer on the issues on which reassessment proceedings are resorted to, it cannot be open to him ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... question in an appellate proceeding; it is well-settled in law that it is only an aggrieved party which appeal against the order. The assessee could not have had the clairvoyance to know that this order can cause prejudice to him. The prejudice was caused to the assessee by the reassessment proceedings only when the impugned revision order was passed because it was admittedly as a result of this reassessment order that the Commissioner claimed to have a right to exercise his revisionary powers even beyond 31st March, 2002; but for the fact of the reassessment order, the Commissioner could not have even claimed the existence a lawful right to do so. Undoubtedly, section 254(1) of the Act provides that the Tribunal shall, after giving both the parties to an appeal opportunity of being heard, pass such orders thereon as it thinks fit and Hon'ble Supreme Court, in the case of Hukumchand Mills Ltd. v. CIT [1967] 63 ITR 232, viewed this provision as restricting the jurisdiction of the Tribunal to the subject-matter of appeal , but the question then is what is 'subject-matter of appeal' in the case before us. The subject-matter of appeal before us is validity of the revisio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s on which reopening was done. The question then arises whether it was open to the Assessing Officer to make in respect of any other income, in a situation in which he does not consider it necessary to make any additions in respect of the incomes which were said to have escaped assessment and for which reason reassessment proceedings were resorted to. The answer is firmly in negative. It is by now well-settled in law that in case no additions are considered necessary by the Assessing Officer on the issues on which reassessment proceedings are resorted to, it cannot be open to him to make any other additions also. The question of other additions can only arise when additions are made in respect to at least one of the issues on which reassessment proceedings are initiated. For this reason, it is not the reassessment order passed by the Assessing Officer which can be said to be erroneous for not having made on account of lower gross profit, but that error, even if that be so, can be said to exist in the original order, i.e., order dated 14th February, 2000, passed by the Assessing Officer. 9. It is also difficult to comprehend as to how can a Commissioner, in the garb of exercisi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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