TMI Blog2022 (11) TMI 540X X X X Extracts X X X X X X X X Extracts X X X X ..... e issues and one is missed for the purpose of making any addition or disallowance. Subsequently, by resorting to section 154 addition/disallowance cannot be made on the one issue which was missed in the assessment proceeding completed, once the time limit to pass the assessment order has expired. It is an issue of assumption of jurisdiction and not a mistake apparent from record since provisions of section 263 requires the Ld. Pr. CIT to apply his mind by calling for and examining the records and giving the assessee an opportunity of being heard and thereafter, forming an opinion/consideration to pass an order by holding it as erroneous in so far as it is prejudicial to the interest of revenue. In the present case, we hold that the impugned order u/s. 263 by way of rectification is time barred and liable to be quashed. Also, we hold that the original order u/s. 263 has already been quashed on the two issues raised under the first show cause notice by the coordinate bench. There cannot be any occasion for rectification u/s. 154 of the Act for that order which has already been quashed. Accordingly, grounds taken by the assessee are allowed. - ITA No. 154/Kol/2022 - - - Dated: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ara 2 above, the aforesaid observations, as per law and after giving an opportunity of being heard to the assessee. [emphasis supplied by us by bold and underline] 3.1. In the course of hearing of appeal in ITA No. 184/Kol/2021, supra, the bench had sought a clarification from the Ld. CIT, DR in respect of discrepancy which came to the notice of the Bench as the matter was relegated by the Ld. Pr. CIT on the issues raised in only one of the show cause notices of 12.03.2021 while the matter was pending before the Co-ordinate Bench of ITAT, Kolkata in the said appeal. Instead of providing any clarification, Ld. Pr. CIT passed rectification order u/s. 154 read with section 263 of the Act dated 07.03.2022 by which paragraph 13 (reproduced above) of the original order u/s. 263 was modified. The modified paragraph under the impugned order u/s. 154 read with sec. 263 of the Act reads as under: On careful examination, I find that there is mistake in para 13 of the order u/s. 263 dated 31.03.2021 which is apparent from record. Now the order u/s. 263 is rectified u/s. 154 and please read para 13 in the order u/s. 263 as follows: In the result, the assessment order u/s. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ections for the assessing officer. One way to appreciate this situation would be that he might be satisfied with the explanation offered by the assessee and did not give any direction. The other way to appreciate the situation would be that he has passed an order u/s 154 of the Act. Therefore, in the present case it is neither advisable nor desirable on our end to express any opinion on those points. The scope of Section 154 is very limited. The rectification order has to be judged in an independent appeal within the parameter of such scope. Therefore, we resist ourselves from making any observation on the points contained in the other two show cause notices. The observations made by us for explaining the issues u/s 154 of the Act or on the other two show cause notices will not impair or injure the case of the revenue nor it will cause any prejudice to the defence/explanation of the assessee. 20. It is also pertinent to note that if the impugned order is quashed on account of some jurisdictional error then probably there could not be any rectification u/s. 154. For example if the impugned order is time barred and it is quashed then there will not be any consequential proceedi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been quashed on the two issues raised by the Ld. Pr. CIT by way of first show cause notice on 12.03.2021. We find that in the present facts and circumstances, the legal maxim sublato fundamento cadit opus is applicable, meaning thereby a foundation being removed, the superstructure falls . Once the basis of a proceeding is gone, the action taken thereon would fall to the ground. Thus, in the absence of such foundation, exercise of a suo motu power is impermissible. It should not be presumed that initiation of power under suo motu revision is merely an administrative act. It is an act of a quasijudicial authority and based on formation of an opinion with regard to existence of adequate material to satisfy that the decision taken by the Assessing Officer is erroneous as well as prejudicial to the interests of the revenue. 8. We further find that sub-section (2) of section 263 of the Act provides for limitation for passing an order u/s. 263 which reads as under: 2. No order shall be made in sub-section (1) after the expiry of two years from the end of the financial year in which the order sought to be revised was passed. 8.1. Considering this sub-section, the limit ..... X X X X Extracts X X X X X X X X Extracts X X X X
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