9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2023 (7) TMI 179 - HC - Income TaxRectification u/s 154 - rectification beyond the period of 4 years - To give effect to ITAT s order in department s appeal - HELD THAT - The settled position is that the AO, while giving effect to the ITAT s order cannot go beyond the directions of the ITAT and since in this case, the issue of calculation of book profit qua diminution in the value of an asset was not the subject matter of the appeal, the Revenue was not justified in contending that the order is within the time limit. We say this because u/s 154(1A) of the Act, the AO can rectify the order in respect of a matter other than the matter which has been considered and decided by the appellate/revisional authority. In the instant case, since the issue of diminution in value of an asset for calculating book profit was not a subject matter of appeal or revision, the original order u/s 143(3) of the Act dated 27/02/2004 is the order which can be rectified by the AO and since the order passed in 2004 cannot be rectified after a period of 4 years, the order passed under Section 154 of the Act dated 29/03/2014 is barred by Section 154(7) of the Act.
Issues involved:
The appeal by the Principal Commissioner of Income Tax against the order of the Income Tax Appellate Tribunal dismissing the appeal of Revenue. Issue 1: Assessment and Rectification Process The assessee filed its return of income for Assessment Year 2001-02, which was processed under Section 143(1) of the Income Tax Act, 1961. The case underwent scrutiny, resulting in various additions and deletions by the Assessing Officer. The CIT(A) partly allowed the appeal, which was further appealed by both the respondent and Revenue before the ITAT. The ITAT disposed of the appeals by giving partial relief. Subsequently, orders were passed determining the total income and book profit, with further rectifications made under Section 154 of the Act, leading to disputes regarding the rectification process and its time limitations. Issue 2: Rectification Order and Time Limitation The Assessing Officer rectified the order by redetermining the book profit due to a retrospective amendment introduced by the Finance Act, 2009. The respondent challenged this rectification, arguing that it was barred by limitation. The CIT(A) allowed the appeal on the grounds of time limitation, a decision upheld by the ITAT. The ITAT held that the rectification order was not permissible as the issue rectified was not the subject matter of the appeal before it, following precedent and interpreting the relevant provisions of the Act. Issue 3: Interpretation of Legal Provisions The substantial questions of law raised included the justification of the ITAT's decision regarding the rectification order under Section 154 of the Act, the time limitation for such rectification, and the distinction made by the ITAT in comparison to relevant legal precedents. Arguments were presented regarding the correct interpretation of the law, including the provisions of Section 154(7) of the Act and the applicability of time limitations based on the original assessment order. Conclusion: The High Court upheld the decisions of the lower authorities, emphasizing that the Assessing Officer cannot go beyond the directions of the ITAT when giving effect to its order. It was determined that the rectification order was not valid due to being beyond the time limit specified in Section 154(7) of the Act. The Court found no reason to interfere and dismissed the appeal, affirming the decisions regarding the rectification process and time limitations.
|
