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2019 (12) TMI 989 - HC - Income TaxValidity of reopening u/s 147/148 - issue of limitation - HELD THAT - The legislature has designedly not placed any time limit under Section 150, and reading a period of limitation into it, would be incorrect approach. In the present case, the date relevant for deciding the question of limitation in terms of Section 150(2), and the observations in Praveen Kumari 1998 (12) TMI 72 - PUNJAB AND HARYANA HIGH COURT would be the date of the order of the CIT (A), which was passed on 05.10.2011 and was the subject matter of appeal. Thus, the limitation of six years under Section 149, must be alive on the date of passing of the order of CIT (A). In the present case since, as on 05.10.2011, the time limit for reopening of assessment for A.Y. 2009-10 had not lapsed, the order of the ITAT was well within the limitation. In view of the forgoing decision, we are of the view that the reopening of the assessment under Section 147, read with Section 150, was within the period of limitation. Needless to say that during the reassessment proceedings, the Asseessee will be entitled to lead fresh material and evidence to prove his entitlement to claim deduction under Section 80-IC for the AY 2009-10, before the AO, and this order does not in any way abrogate or limit his rights to justify his claim before the AO. The present petition is dismissed in the above terms.
Issues Involved:
1. Jurisdiction of the Assessment Officer (AO) to issue the notice beyond six years. 2. Applicability of Section 150 of the Income Tax Act, 1961. 3. Validity of reopening the assessment under Section 147/148 of the Act. 4. Limitation period for reopening the assessment. Issue-wise Detailed Analysis: 1. Jurisdiction of the AO to Issue Notice Beyond Six Years: The petitioner challenged the notice dated 25.03.2017, arguing that the AO lacked jurisdiction to issue the notice beyond six years from the end of the relevant assessment year (AY 2009-10), as per Section 149 of the Act. The petitioner contended that the maximum time limit for issuing such a notice had expired on 31.03.2016. 2. Applicability of Section 150 of the Income Tax Act, 1961: The petitioner argued that Section 150, which allows reopening of assessments to give effect to any finding or direction contained in an appellate order, could not be invoked in this case. The petitioner claimed that the ITAT's order for AY 2008-09 did not contain any finding or direction that applied to AY 2009-10. The petitioner emphasized that each assessment year is a distinct and independent proceeding, and findings from one year should not automatically apply to another. The respondent countered that the ITAT's order, which disallowed the petitioner’s claim for deduction under Section 80-IC for AY 2008-09, was binding for AY 2009-10 as well. The respondent argued that Section 150(1) and 153(3) clearly empower the Revenue to reopen assessments to give effect to appellate orders, and that the ITAT's findings necessitated the reopening of AY 2009-10. 3. Validity of Reopening the Assessment Under Section 147/148 of the Act: The court noted that the petitioner did not address arguments regarding the merits of the AO's assumption of jurisdiction under Sections 147/148. The court confined its scrutiny to the issue of limitation and the applicability of Section 150. The court referred to the reasons provided for reopening the assessment, which indicated that the petitioner’s deduction claim under Section 80-IC for AY 2009-10 was initially allowed based on the CIT (A)'s order for AY 2008-09. However, the ITAT later reversed the CIT (A)'s order for AY 2008-09, disallowing the deduction. The court observed that the petitioner had agreed during the AY 2009-10 proceedings that the ITAT's order for AY 2008-09 would be binding. 4. Limitation Period for Reopening the Assessment: The court examined whether the reopening of the assessment for AY 2009-10 was within the permissible time frame. It referred to Section 150(1), which allows reopening at any time to give effect to an appellate order, and Section 150(2), which restricts reopening if the assessment was already time-barred when the appellate order was passed. The court noted that the CIT (A)'s order for AY 2008-09 was passed on 05.10.2011, and the six-year limitation period for reopening AY 2009-10 had not lapsed by that date. Thus, the reopening of AY 2009-10 was within the permissible period. Conclusion: The court concluded that the reopening of the assessment for AY 2009-10 under Section 147, read with Section 150, was valid and within the limitation period. The court dismissed the petition, allowing the AO to proceed with the reassessment. The petitioner was granted the opportunity to present fresh material and evidence during the reassessment proceedings to justify the deduction claim under Section 80-IC for AY 2009-10. The interim order dated 8th May 2019 was vacated.
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