2008 (5) TMI 338 - AT - Income Tax

Summary

Issues Involved:
1. Whether the order of AO passed u/s 143(3) r/w s. 254 is barred by limitation prescribed u/s 153(2A).
2. Whether learned CIT(A) is right in not going into merits of the case.

Summary:

Issue 1: Limitation u/s 153(2A)

The assessee contended that the AO's order was barred by limitation as per s. 153(2A) of the IT Act. The AO issued notices u/s 143(2) after the Tribunal upheld the CIT(A)'s order. The AO completed the assessment on 10th March 2004 and 12th March 2004 for the respective years, which the assessee argued was beyond the prescribed time limit. The learned Departmental Representative argued that the time limit under s. 153(3)(ii) applied, which does not prescribe a time limit for orders passed to give effect to Tribunal decisions. The Tribunal clarified that s. 153(2A) applies to fresh assessments required by orders setting aside or canceling assessments, while s. 153(3)(ii) applies to assessments made to give effect to findings or directions without a time limit, subject to s. 153(2A). The Tribunal concluded that the AO's orders for 1990-91 and 1991-92 were barred by limitation as they were not passed within the prescribed period.

Issue 2: Merits of the Case

The CIT(A) did not address the merits of the additions for the assessment year 1989-90, and for 1990-91, the assessment was completed at nil income. For 1991-92, the CIT(A) confirmed the additions made by the AO. The Tribunal noted that since the assessment orders were quashed on the ground of being barred by limitation, there was no need to go into the merits of the additions made.

Conclusion:

The appeals of the assessee for all three years were allowed, with the Tribunal quashing the assessment orders for being barred by limitation.