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2022 (3) TMI 872 - AT - Income TaxValidity of assessment as bared by limitation - whether the AO was bound to pass the assessment order within nine months from the end of the financial year in which the order of the Hon'ble High Court was received i.e., on or before 31.12.2010? - HELD THAT - The findings of the Ld. CIT(A) are in accordance with the plain provisions of law. On the other hand, we are not convinced with the arguments of the department that the relevant provisions referred by the CIT(A) do not apply to the case of the assessee. No case law was brought to our notice by the department to rebut the arguments advanced by the Ld. counsel for the assessee. In our considered opinion, the findings of the Ld. CIT(A) are based on the provisions of law. Hence, we do not find any reason to interfere with the findings of the Ld. CIT(A). Accordingly, we allow the appeal of the appellant assessee and uphold the order passed by the Ld. CIT(A). Appeal of the Revenue is dismissed.
Issues:
1. Validity of assessment order under Income Tax Act for the assessment year 1994-95. 2. Interpretation of time limitation under section 153(3) r.w.s. 153(2)(A) and second proviso to sub section 153(2)(A) of the Act for passing assessment order. Analysis: 1. The appeal was filed by the Revenue against the order passed by the Commissioner of Income Tax (Appeals) for the assessment year 1994-95. The initial assessment order was passed under section 144 of the Income Tax Act, determining the total income at a certain amount. The CIT(A) confirmed this order, but upon a second appeal by the assessee, the ITAT directed the AO to pass a fresh assessment order ensuring the assessed income should not be less than the returned income. The assessee then filed a miscellaneous application for rectification, leading to the ITAT directing the assessed income not to exceed a specific amount. However, the High Court set aside the ITAT order, allowing the AO to assess the income without any upper or lower limit. Subsequently, the AO passed a fresh assessment order, which was challenged by the assessee on the grounds of limitation under section 153(3) of the Act. 2. The Revenue challenged the order passed by the CIT(A) on the basis that the assessment order was not barred by limitation as provided under section 153(3) r.w.s. 153(2)(A) and the second proviso. The department argued that no time limit was prescribed to give effect to the High Court's directions. On the other hand, the assessee contended that the assessment order was passed beyond the limitation period, thus justifying the CIT(A)'s decision to allow the appeal. The CIT(A) found merit in the assessee's argument, stating that the assessment orders were indeed barred by the time limitation provided under the Act. The ITAT upheld the CIT(A)'s decision, emphasizing that the findings were in accordance with the plain provisions of law and no compelling arguments were presented by the Revenue to challenge the decision. Consequently, the appeal of the appellant assessee was allowed, and the order passed by the CIT(A) was upheld, leading to the dismissal of the Revenue's appeal. In conclusion, the judgment revolved around the validity of the assessment order for a specific assessment year and the interpretation of time limitation provisions under the Income Tax Act. The decision highlighted the importance of adhering to statutory timelines and ensuring assessments are conducted within the prescribed legal framework.
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