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2017 (12) TMI 663 - AT - Income TaxReopening of assessment - Time limit for notice - period of limitation - assessment barred by limitation - Held that - Hon ble kerala High Court in case of CIT Vs. Vaikundam rubber Co. Ltd. (2000 (11) TMI 52 - KERALA High Court ) and accordingly hold that the limitation for reassessment has to be considered on the date when the ld. CIT (A) passed the order in case of M/s Tirupati Automobiles Pvt. Ltd. which was subject matter of appeal before the Tribunal in which the Tribunal passed the directions on 26.03.2010. There is no dispute that the ld. CIT(A) in case of M/s Tirupati Automobiles Pvt. Ltd. passed the order on 15.07.2009 and on that date the limitation for reassessment for the assessment years 2001-02 & 2002-03 already expired as 6 years from the end of the relevant assessment years expired on 31.03.2008 and 31.03.2009 respectively. Therefore, the limitation as on the date of the order passed by the ld. CIT(A) dated 15.07.2009 was not available for reassessment of this income for these two assessment years. Accordingly, the reopening of the assessment is barred by limitation as provided u/s 149 r.w.s. 150(2) of the Act. - Decided in favour of assessee.
Issues Involved:
1. Validity of Reassessment Proceedings under Section 147/148 of the IT Act. 2. Addition under Section 69 of the IT Act for unexplained difference in cash book. Detailed Analysis: 1. Validity of Reassessment Proceedings under Section 147/148 of the IT Act: The primary issue in these appeals is the validity of the reassessment proceedings initiated by the Assessing Officer (AO) under Sections 147/148 of the Income Tax Act, 1961. The assessee, an HUF and proprietor of M/s Tirupati Automobiles, had filed its return of income for the A.Y. 2001-02 on 31.03.2003, which was processed under Section 143(1). The case was reopened under Section 147/148, and the assessment was completed under Section 143(3) read with Section 147 on 20.03.2003. This was based on a survey under Section 133A at the business premises of M/s Tirupati Automobiles Pvt. Ltd., where the Karta of the assessee HUF was a director. A printout of the cash book revealed an excess payment of ?11,44,658, leading to an addition in the hands of the company, which was later deleted by the Tribunal, directing the income to be assessed in the hands of the assessee HUF. The AO initiated the reassessment proceedings based on the Tribunal's order dated 26.03.2010, issuing a notice under Section 148 on 30.07.2010. The assessee filed objections, arguing that the notice was barred by limitation under Sections 149 and 150(2) of the Act. The AO rejected these objections, and the reassessment was completed on 01.12.2011. The assessee's appeal before the CIT(A) was unsuccessful. The Tribunal considered the rival submissions and relevant material. It was noted that the notice under Section 148 was issued beyond the six-year limitation period provided under Section 149. However, Section 150(1) allows for reassessment beyond this period if it is in consequence of an appellate or revisional order. Section 150(2) restricts this by stating that such reassessment cannot be made if it was already time-barred at the time of the appellate or revisional order. The Tribunal held that the relevant date for computing the limitation is the date of the order which was the subject matter of appeal, which in this case was the CIT(A) order dated 15.07.2009. Since the limitation for reassessment for the A.Y. 2001-02 and 2002-03 had expired on 31.03.2008 and 31.03.2009 respectively, the reopening was barred by limitation. 2. Addition under Section 69 of the IT Act for unexplained difference in cash book: Given that the reassessment itself was quashed as being void and barred by limitation, the Tribunal did not address the merits of the addition under Section 69 of the IT Act. The ground raised by the assessee regarding the addition of ?2,90,213 for the unexplained difference in the cash book was rendered infructuous. Conclusion: The Tribunal allowed the appeals of the assessee, quashing the reassessment orders as barred by limitation. The reassessment proceedings initiated under Sections 147/148 were found to be invalid due to the expiration of the limitation period as prescribed under Section 149 read with Section 150(2) of the IT Act. Consequently, the Tribunal did not address the merits of the addition under Section 69 of the Act. The order was pronounced in the open court on 08/12/2017.
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