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2017 (5) TMI 1034 - AT - Income TaxRectification of mistake - depreciation on self-generated assets disallowed - period of limitation - Held that - From the facts of the case it is apparent that the assessment order was passed U/s.143(1) of the Act on 06.11.2008. Therefore the order U/s.154 of the Act has to be passed within 4 years from the end of the financial year 2008-09 i.e. before 31.03.2013. Since in the case of the assessee the assessment order U/s.154 of the Act was passed on 28.01.2014 which is well beyond 4 years from the end of the financial year in which the assessment order was passed viz. 2008-09 the order passed by the Ld.A.O is time barred and therefore requires to be quashed. Accordingly we hereby quash the assessment order passed by the Ld.AO dated 28.01.2014. Since we have quashed the assessment order by holding it to be time barred it is not necessary for us to adjudicate the merit of the case as it would be only academic. - Decided in favour of assessee.
Issues involved:
1. Time-barred assessment order passed U/s.154 of the Act. 2. Merits of the case regarding eligibility for depreciation. 3. Cross objection filed by the assessee regarding the maintainability of the appeal by the revenue. Issue 1: Time-barred assessment order passed U/s.154 of the Act: The appeal by the Revenue was against the order passed by the Commissioner of Income Tax (Appeals), where the Revenue contended that the order was contrary to law, facts, and circumstances of the case. The Revenue raised several grounds, including the argument that the order passed by the CIT(A) was beyond the scope of Section 154 of the Act. The CIT(A) held that the order passed by the AO under Section 154 was time-barred as it was passed after the prescribed time limit. The AO had not controverted or confirmed this fact, leading to the conclusion that the order was indeed beyond the statutory time limit. The Tribunal upheld this decision, quashing the assessment order passed by the AO as time-barred. Issue 2: Merits of the case regarding eligibility for depreciation: The brief facts of the case involved a private limited company engaged in research and development activities. The AO disallowed depreciation on "self-generated assets" in the assessment year 2007-08. On appeal, the CIT(A) not only held the order passed by the AO under Section 154 as time-barred but also decided the issue on merits in favor of the assessee. The CIT(A) analyzed the provisions of Section 154, emphasizing that rectification can only be made for a mistake apparent from the record within the prescribed time limit. The Tribunal concurred with the CIT(A)'s decision, stating that the matter under consideration by the AO was beyond the scope of Section 154, and the order could not be upheld under this provision. Therefore, the Tribunal dismissed the appeal of the Revenue and the Cross Objection of the assessee, as the assessment order was quashed as time-barred, making the discussion on merits academic. Issue 3: Cross objection filed by the assessee regarding the maintainability of the appeal by the revenue: The assessee filed a cross objection contending that the appeal by the Revenue was not maintainable as it was filed mechanically without proper application of mind. The cross objection highlighted the need for the Revenue to follow the binding decision of the ITAT and raised concerns about the appeal being barred by limitation. The Tribunal, after considering the arguments, dismissed both the appeal of the Revenue and the cross objection of the assessee, as the assessment order was quashed due to being time-barred, rendering further discussion on merits unnecessary. This judgment by the Appellate Tribunal ITAT Chennai dealt with the time-barred assessment order passed under Section 154 of the Act, the merits of the case regarding depreciation eligibility, and the cross objection filed by the assessee regarding the maintainability of the appeal by the Revenue. The Tribunal upheld the CIT(A)'s decision that the assessment order was time-barred and beyond the scope of Section 154, leading to the quashing of the order. Consequently, the appeal by the Revenue and the cross objection by the assessee were both dismissed.
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