TMI Blog2004 (1) TMI 290X X X X Extracts X X X X X X X X Extracts X X X X ..... ditions on account of- (i) Alleged unexplained deposits in Bank Accounts Rs. 1,80,000 (ii) Extra profit on account of Low G.P. Rs.3,34,314 (3) That the order of the learned CIT(A) is bad in law and on the facts of the case; and (4) That the Appellant craves leave to add, alter, amend or withdraw any of the grounds of appeal at any time before or at the time of the hearing of the appeal." 4. Briefly stated facts are that search seizure operations were carried out on 28-9-1989 and 29-9-1989 at the business premises of the M.R. Group at Mainpuri which included the appellant assessee herein. Certain loose papers, diaries, challans, assets in the form of FDRs, jewellery cash etc. were found and seized partially. As a result of the search, assessments in respect of all the above mentioned assessees for the assessment years 1988-89 and 1989-90 were framed by the then Assessing Officer, the ACIT Investigation Circle, Aligarh. The assessment order for the assessment year 1988-89 in the case of the assessee was passed under section 143(3) of the Act on 31-3-1992. Aggrieved by the additions made therein, the assessee preferred an appeal before the CIT(A), Agra. The CIT(A) vide his ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4) of section 245D would become conclusive as to matters stated therein. Therefore, we feel that no purpose would be served by keeping all these matters pending before this Tribunal till the disposal of the Settlement Proceedings take place before Settlement Commission. We, therefore, allow these appeals filed both by the assessees as well as by the Department, for statistical purposes, set aside the orders of the first appellate authority and remand the matters back to the Assessing Officer with a direction that he should follow the directions of the Settlement Commission which may be given in due course of time under sections 245D(4) and (6) and dispose of the assessments of these persons (appellants before this Tribunal) accordingly." 7. The Income-tax Settlement Commission passed the order under section 245D(4) of the I.T. Act on 20-4-2000. Thereafter, the Assessing Officer proceeded to make the assessment under section 143(2)/254 of the I.T. Act and passed the assessment order on 11-3-2002. 8. On appeal, the learned CIT(A) has held thus :- "As per the directions given by Hon'ble ITAT, the Assessing Officer had no authority to examine or re-examine the issues relating to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tsoever could not be deleted suo motu without any proceedings pending before him or directions to do so, as has wrongly been contended by the appellant. To sum up the facts of the case, the additions made vide regular assessment order will obviously survive unless and until there is any relief granted by any authority subsequent to the same. In the instant case for the additions finding place in the order passed under section 143(3), read with section 254 of the Act the same have not been deleted by any superior authority viz. the learned CIT (Appeals) whose order is set aside by the Hon'ble ITAT, the Hon'ble ITAT or by the Settlement Commission before whom such additions were not even included in the application filed by Shri Chander Kumar. Hence the Assessing Officer while passing order under section 143(3)/254 of the Act had no finding direction or authority to delete those additions which were made vide the original assessment order. The order passed under section 143(3)/254 is therefore, confirmed." 9. Before us the learned counsel for the assessee has contended that the assessment order passed under section 143(3)/254 of the Act dated 11-3-2002 is barred by limitation in vi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... T v. Smt. Kamla Devi[1996] 217 ITR 330, CIT v. Escorts Farms (P.) Ltd [1989] 180 ITR 280 (Delhi), Bengal Tea Fabrics Ltd. v. Asstt. CIT [1997] 223 ITR 729 (Gau.) and Gulabchand Motilal v. CIT [1988] 174 ITR 117 (MP). Without prejudice to the contention as raised above, the learned counsel has further submitted that since CIT(A) has not gone in the merits of the addition, the proper course would, therefore, be in the interest of justice that the matter be sent back to the Assessing Officer who after providing opportunity to the assessee on merits may be directed to complete the assessments. 11. The learned D.R. in its written submission has submitted that the argument of the assessee is not legally correct because for giving effect to the order of Settlement Commission the time limit prescribed under section 153(1), 153(2) and 153(2A) are not applicable. In this connection he has referred to the provisions of section 245D(8) of the I.T. Act and submitted that in view of the statutory provisions of section 245D(8) the assessment order passed by the Assessing Officer is within the limitation and is legally correct. Since the assessment was framed within the limitation period, rati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bject to the provisions of section (2A),] be computed at any time - "(i) • • •" "(ii) Where the assessment reassessment or recomputation is made on the assessee or any person in consequence of or to give effect to any finding or direction contained in an order under sections 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)." 13. On a plain reading of sub-section (2A) of section 153 would show that order of fresh assessment in pursuance of order passed by Appellate/ Revisional Authority setting aside or cancelling an assessment, may be made at any time before the expiry of the prescribed time limit under section 153(2). Section 153(3)(ii) authorize the completion of assessment at any time if the purpose is to give an effect to the direction or finding contained in order passed under any of sections mentioned in the said sub-section. Thus, sub-section (3) deals with the exceptional circumstances where no time limit apply for completion of assessments or reassessments or recomputations. But the provisions of this sub-section are expressly made "subject to sub-section (2A)". It means that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessment" and the time limit for malting fresh assessment in pursuance to the order setting aside the assessment. The Court has held thus :- "In an appeal against an order of assessment, the first appellate authority under section 251 of the Act has the power to "affirm, reduce, enhance or annul the assessment" or to set aside the Assessment and refer the case back to the Assessing Officer for making a fresh assessment according to the directions given by him. In the case of an appeal against an order of penalty, the power is to "affirm or cancel such order" or vary it so as either to enhance or reduce the penalty. The Legislature has thus used different expressions, such as, "annulling the assessment", "setting aside the assessment" or "cancelling the order of penalty". The expression "cancellation of assessment" has been used in section 146 of the Income-tax Act, 1961 which deals with the power of the Assessing Officer to reopen a best judgment assessment under section 144 of the Act. It is thus clear that the Legislature has consciously and deliberately used the expression "annulment of assessment" in section 251 of the Act. There is a material distinction between setting asid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lement Commission which may be given in due course of time under section 254D(4) and (6) and dispose of the assessments of the persons accordingly. The directions given by the ITAT as aforesaid clearly fall within the purview of section 254(1) of the Act wherein the Tribunal has been empowered to pass such order as it think fit. Thus, directions given by the ITAT is duly empowered by the law. Further the said directions in the facts and circumstances of the case were necessary to pass for disposal of the pending appeals before the Tribunal. The directions given by the Tribunal leave no scope to the Assessing Officer save and except to pass order following the directions of the Settlement Commission. It may be mentioned that provision of section (2A) of section 153 envisages a situation where a fresh assessment is to be made after earlier assessment as a whole is set aside or cancelled and not to a situation where specific directions have been given by the Appellate Authority as in the instant case. 17. The case of Smt. Kamla Devi relied upon by the learned A.R. is distinguishable on facts as in the said case the CIT under section 263 set aside the assessment order and directed to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n it has been commented upon the decision of Madhya Pradesh High Court in the case of Gulab Chand Motilal and expressed the view that this decision requires reconsideration as the same has been decided by applying the deeming provisions contained in Explanation 2, which are not applicable to a case covered by section 153(2A). The other two decisions relied upon by the learned counsel for the assessee are distinguishable on facts. The reliance made by the learned D.R. to section 245D(8) in support of his contention that the assessment order is within time is not correct inasmuch as the Settlement Commission has not passed order dated 20-4-2000 under section 245D(4) of the Act in the case of the assessee but the same has been passed in case of other assessee. Thus, the said section cannot be relied upon to find out as to whether the assessment order has been passed in time or not in the instant case. 19. In view of what has been discussed above, we are of the view that the assessment order passed in pursuance to the direction of the Tribunal is not barred by time. Thus, the first ground of appeal raised by the assessee fails. We, however, agree with the alternative submission of th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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