2008 (2) TMI 52 - HC - Income Tax

Earlier in assessee s appeal (being aggrieved by assessment) CIT restored the matter to file of AO so that one more opportunity could be given to assessee to file evidence pursuant to this decision AO issued notice u/s 143(2) for fresh assessment now assessee contend that this assessment notice is time barred u/s 153(2A) assessment order to the extent that it didn t give opportunity to assessee was set aside by CIT so sec. 153(2A) is applicable not 153(3)(ii) assessment is time barred

Summary

Issues:
1. Interpretation of provisions of section 153(2A) and section 153(3) (ii) of the Income-tax Act, 1961.
2. Applicability of time limit for making fresh assessment.
3. Validity of the assessment order.

Analysis:
1. The judgment dealt with the interpretation of provisions of section 153(2A) and section 153(3) (ii) of the Income-tax Act, 1961. The court analyzed the applicability of these provisions in the context of setting aside or cancelling an assessment order. The court emphasized that the operative words in section 153(2A) are crucial, specifically focusing on the phrase "an order setting aside or cancelling an assessment." The court noted that even if the order does not explicitly mention setting aside the assessment, if the appeal is allowed in part, it implies that the assessment order was set aside to that extent. Consequently, the court concluded that in the present case, section 153(2A) was applicable due to the directions given by the Commissioner of Income-tax (Appeals) to grant the assessee another opportunity to present evidence, effectively setting aside or cancelling the assessment order to that extent.

2. The issue of the time limit for making a fresh assessment arose in the judgment. The court discussed the contention raised by the assessee regarding the notice issued by the Assessing Officer under section 143(2) being barred by limitation as per section 153(2A) of the Act. The court examined the provisions of section 153(2A) related to the time limit for making a fresh assessment in specific circumstances, emphasizing that an order of fresh assessment following certain specified orders could be made within a prescribed time frame. The court considered the assessee's lack of cooperation with the Assessing Officer and the subsequent framing of the assessment, ultimately leading to a detailed analysis of the applicability of the time limit provisions in the given context.

3. The judgment also addressed the validity of the assessment order, focusing on the actions taken by the Assessing Officer following the directions of the Commissioner of Income-tax (Appeals). The court reviewed the Commissioner's order, which directed the Assessing Officer to provide the assessee with an additional opportunity to present evidence and subsequently pass an order under section 144 of the Act. The court concluded that the assessment order, to the extent that it did not allow the assessee to present evidence, was effectively set aside or cancelled by the Commissioner of Income-tax (Appeals). This analysis led to the dismissal of the appeal, with the court determining that no substantial question of law arose for consideration in the given circumstances.

In summary, the judgment provided a detailed analysis of the interpretation of relevant provisions of the Income-tax Act, 1961, regarding setting aside assessment orders, the time limit for fresh assessments, and the validity of assessment orders in light of directions from appellate authorities. The court's thorough examination of these issues resulted in a clear determination of the applicability of the provisions and the dismissal of the appeal based on the specific facts and legal principles involved.