2018 (8) TMI 1642 - AT - Income Tax

Rectification of mistake - Application of Section 153(2A) - assessee is aggrieved as there is no case for the Revenue, if Section 153(2A) of the Act is applied, orders passed by the AO, pursuant to the setting aside order of the Tribunal, were within time limit - Held that - What we find is that argument taken by the assessee all along was that the applicable Section was Section 153(2A) and not Section 153(3)(ii) of the Act. Ld. Commissioner of Income Tax (Appeals) had accepted this contention. As per the ld. Commissioner of Income Tax (Appeals), the Section that ought have been applied was Section 153(2A) of the Act and not Section 153(3)(ii) of the Act. Observation of the Tribunal is clear in that order of AO, if it was passed within the limit specified in Section 153(2A) of the Act, will be valid. If ld. Assessing Officer takes a view that the order, if construed as passed u/s.153(2A) of the Act, is within the time limit mentioned therein based on the available records, in our opinion he cannot be faulted. In the circumstances, we do not find any mistake in the order of the Tribunal, much less any mistake which is glaring and apparent on the face of the record. - Decided against assessee

Summary

Issues Involved:
Interpretation of Section 153(2A) and Section 153(3) of the Income Tax Act, 1961 regarding the time limit for passing orders by the Assessing Officer after the setting aside of the original assessment order.

Analysis:
The Appellate Tribunal ITAT Chennai considered a Miscellaneous Petition where the Assessee sought the deletion of a portion of the impugned order related to the application of Section 153(2A) of the Income Tax Act. The Assessee argued that there was no need for a finding that the Revenue had no case under Section 153(2A). The Tribunal's observation was challenged on the grounds that it might influence the Assistant Commissioner of Income Tax to believe that the order passed was within the time limit. The Departmental Representative contended that there were no errors in the Tribunal's order requiring rectification.

Upon examination, the Tribunal reiterated its earlier decision regarding the application of Section 153(2A) after the setting aside of the original assessment order. It clarified that Section 153(3) must be construed subject to subsection (2A). The Tribunal emphasized that the applicable law for determining the time limit should be tested against Section 153(2A) first. The Tribunal rejected the argument that its original order was merely a direction to the Assessing Officer, affirming that the order was indeed set aside. Consequently, the Tribunal found no fault in the order of the Assessing Officer if it was passed within the time limit specified in Section 153(2A).

Ultimately, the Tribunal dismissed the Miscellaneous Petition filed by the Assessee, upholding the validity of the order passed by the Assessing Officer within the specified time limit under Section 153(2A) of the Act. The decision was pronounced in an open court session in August 2018 in Chennai.