2017 (11) TMI 1081 - AT - Income Tax

Reopening of assessment - time-limit for issuance of Notice u/s 148 - Held that - If there is any specific direction contained in an order passed by the authority in any proceeding under act by way of appeal revision or by a court. In that situation time limit for issuance of notice is indefinite period. But, if at the time when the order which was subject matter of appeal or revision was passed, the time-limit for issuance of Notice u/s 148 of the Act had already expired, the Time limit of indefinite period will not apply. Hence, the assessment order which is the subject-matter of appeal was passed by the Ld ITO on 29/12/2010, and on that date the time limit for issuance of Notice u/s 148 had already expired by reason of provision of section 149 limiting the time limit to six years from the end of the relevant assessment year i.e 31/03/2010. In view of the above, in our considered opinion, the action of the Ld. CIT(A) in directing the ITO, Ward 38(3) to make fresh order u/s. 147 inspite of the facts the notice u/s. 148 was validly issued only after expiry of time limit provided u/s. 149 of the Income Tax Act is not valid, hence, the same is cancelled and appeal of the assessee is accordingly allowed.

Summary

Issues:
Jurisdiction of Assessing Officer under section 147 for assessment year 2003-04.

Analysis:
The appeal was filed against the Order dated 28.3.2013 of the Ld. CIT(A)-XXII, New Delhi concerning assessment year 2003-04. The Ld. CIT(A) annulled the assessment order passed u/s 144/148 of the I.T. Act, 1961 by the ITO, Ward 19(2), New Delhi, stating lack of jurisdiction. However, the Ld. CIT(A) directed the assessment to be made u/s 147 by the AO having jurisdiction over the case, i.e., ITO, Ward 38(3), New Delhi. The appellant contested this decision, claiming the notice u/s 148 was issued after the time limit provided u/s 149. The Ld. Counsel cited legal precedents to support the argument. On the other hand, the Department argued that the assessee deliberately filed the return in a different Ward to avoid scrutiny, questioning the claim of jurisdiction error. The Tribunal noted the conflicting arguments and examined the legal provisions.

The Tribunal reviewed the provisions of Section 150, emphasizing the exception in sub-section (2) which restricts the applicability of sub-section (1) in cases where the notice for reassessment had become time-barred at the time of the order subject to appeal. The Tribunal also analyzed Section 149(1) regarding the time limit for issuing notices u/s 148. It concluded that if the time limit for issuing the notice had expired before the order subject to appeal, the indefinite time limit provision does not apply. Therefore, the Tribunal found the direction of the Ld. CIT(A) to make a fresh order u/s 147 invalid due to the notice u/s 148 being issued after the expiry of the time limit u/s 149. The Tribunal supported its decision with a legal precedent from the Hon'ble Supreme Court of India, emphasizing the limitation on reassessment based on orders passed under any law.

In light of the above analysis, the Tribunal allowed the appeal of the assessee, concluding that the direction for a fresh order u/s 147 was not valid due to the notice u/s 148 being issued after the expiration of the time limit specified in section 149. The Tribunal's decision was supported by legal principles and precedents, emphasizing the importance of adhering to statutory limitations in reassessment proceedings.

The judgment delivered by the Tribunal on 20-11-2017 favored the assessee, setting aside the direction for a fresh assessment under section 147 due to the notice u/s 148 being issued after the prescribed time limit under section 149.