2020 (4) TMI 23 - AT - Income Tax

Reopening of assessment u/s 147 - more than 6 years lapsed - reopening barred by limitation - HELD THAT - In this case, the re-assessment order for this assessment year, i.e 2010-11, was passed on 29.12.2016. By the time, more than 6 years had lapsed from the end of the assessment year 2009-10 and hence, in accordance with the decision ofPARVEEN KUMARI VERSUS COMMISSIONER OF INCOME-TAX AND ANOTHER 1998 (12) TMI 72 - PUNJAB AND HARYANA HIGH COURT and relied upon by the Ld. A.R., no re-assessment could be directed under Section 150(1) of the Act. Therefore, the directions issued by the learned CIT(A) is not in accordance with law. Hence, we quash the direction issued by the learned CIT(A) for reopening the assessment for the assessment year 2009-10, which was barred by the limitation under Sections.150(2) of the Act and allow the appeal of the assessee.

Summary

Issues:
Assessment year 2010-11 - Delay in filing appeal - Reopening of assessment for assessment year 2009-10 under Section 150(1) of the Act.

Analysis:
1. The appellant, a firm engaged in fabrication works, filed an appeal against the Commissioner of Income Tax (Appeals) order for the assessment year 2010-11 with a delay of 5 days, which was condoned after hearing both parties.

2. The assessment for the appellant for the assessment year 2010-11 was re-assessed along with four others, determining the total income. The CIT(A) dismissed the appeal for 2010-11 with an enhancement and directed the Assessing Officer to reopen the assessment for the assessment year 2009-10 under Section 150(1) of the Act, to assess the amount received as business income instead of capital gains. The appellant appealed against this order.

3. The appellant argued that the direction to reopen the assessment for 2009-10 was unsustainable in law as Section 150(2) of the Act excludes such action if re-assessment could not have been ordinarily made on the date of the original order due to the time limit specified in Section 149 of the Act. The appellant relied on a judgment of the Hon'ble Punjab Haryana High Court to support this argument.

4. The Departmental Representative supported the orders of the lower authorities, but the Tribunal found in favor of the appellant. The Tribunal noted that more than 6 years had lapsed from the end of the assessment year 2009-10 when the re-assessment order for 2010-11 was passed, making the direction to reopen the 2009-10 assessment invalid. The Tribunal quashed the CIT(A)'s direction and allowed the appeal of the assessee.

5. The Tribunal pronounced the order in open court on 13th February 2020 in Chennai, allowing the appeal of the assessee against the direction to reopen the assessment for the assessment year 2009-10.