9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2023 (12) TMI 644 - AT - Income TaxRectification application u/s. 154 - Period of limitation - DR submitted that the assessee did not file rectification application before the AO as per section 154(7) of the Act which is within four years from the date of intimation u/s.143(1) - HELD THAT - Relying on the judgment of the Hon ble Supreme Court in the case of Hindware Industries Ltd. 1995 (1) TMI 415 - SUPREME COURT we uphold the order of the CIT(Appeals) that the rectification application filed by the assessee is within time as per section 154(7) of the Act. For determining the limitation period u/s. 154(7), the AO has adopted the date of the order u/s. 143(1) as his starting point. He has however ignored the fact that the final response from the CPC is dated 04-12-2018 which was in turn in response to objection raised by the assessee against the demand. We further note that the CIT(Appeals) has remitted the issue back to the AO for verifying the claim of assessee of brought forward losses and allow the same. We find no infirmity in the order of the CIT(Appeals). Appeal by the revenue is dismissed.
Issues:
The judgment involves the interpretation of section 154(7) of the Income-tax Act, 1961 regarding the time limitation for filing a rectification application and the eligibility of the assessee for set off of unabsorbed depreciation from the income of the current year. Interpretation of Section 154(7) - Time Limitation for Rectification Application: The assessee filed objections against the order of the CPC, which were disposed of on 04.12.2018. Subsequently, the assessee filed a rectification application u/s. 154 on 26.09.2022, which the AO rejected as time-barred. The CIT(Appeals) held that the rectification application was within time as per section 154(7) of the Act, considering the final response from the CPC as the relevant date. The CIT(Appeals) emphasized that the AO erred in adopting the date of the original order u/s. 143(1) as the starting point for the limitation period, instead of the final response date from the CPC. Citing the judgment in Hindware Industries Ltd. v. CIT (1995) 80 Taxman 79 (SC), it was decided that the four-year limitation period should be counted from the last order, not the original order. The ITAT upheld the decision of the CIT(Appeals) on this issue, dismissing the appeal by the revenue. Eligibility for Set Off of Unabsorbed Depreciation: The assessee had claimed set off of brought forward unabsorbed depreciation against income from other sources, which was initially disallowed by the CPC. The assessee filed objections, and upon disposal on 04.12.2018, a rectification application u/s. 154 was submitted on 26.09.2022. The AO rejected the application as time-barred, but the CIT(Appeals) allowed the appeal, stating that the set off of unabsorbed depreciation is available to the assessee on merits. The ITAT concurred with the CIT(Appeals), upholding that the rectification application was filed within the prescribed time limit as per section 154(7) of the Act. The CIT(Appeals) directed the AO to verify the claim of the assessee for brought forward losses and allow the same, finding no fault in the decision of the CIT(Appeals.
|
