9911796707
TMI Blog1991 (10) TMI 117X X X X Extracts X X X X X X X X Extracts X X X X ..... 1984 partners 1, 3 and 5 above retired from that partnership. From 1-1-1985 all the remaining partners described as continuing partners in the retirement deed formed on new partnership, two of the retiring partners along with the third partner formed another new partnership and the third retiring partner remaining as sole proprietor of a business. Each of these partnership firms and the sole proprietor took over some of the business activities of the old partnership. Under section 143(1), in the first assessment of the firm, the ITO had granted investment allowance for certain amount which he reduced by an order under section 154 dated 7-4-1986. Thereafter by an order dated 22-2-1990 under section 155(4A) read with section 32A(5), the ITO w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... General Products [1985] 22 TTJ (Mad.) 581, D.K. Trivedi Sons v. ITO [1989] 33 TTJ (Jp.) 63. Secondly he submitted that the action of the ITO under section 145(4A) was time barred because the time limit therein set out was four years from the end of the previous year in which the transfer took place. In support of his contention he pointed out that the action under section 154 would be taken in the case error apparent from record whereas action under section 155 was based on different ground and so the time limit under section 154 would not apply. He also said that since this issue was debatable whether there was a transfer or not section 154 was not applicable which also implied that the time limit therein was not applicable. 5. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er under section 143(1) could not be rectified under section 154 and that it could be rectified only under section 143(2)(b). Therefore since the first assessment in this case was under section 143(1) it could not be altered as was done in this case. 6. On the question of transfer we are of the view that the decision in the case of Malabar Fisheries Co. would support the assessee's case. That was also a case where the firm's business run by five partners earlier was taken over by two of those partners. Secondly if as laid down in that there was no transfer of the assets in the case of dissolution of the firm much less it would be a transfer when there is only a reconstitution of the firm. 7. On the question of limitation the relevant pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... period of four years in sub-section (7) is made only in order to make it clear that that period is regarding time limit. It is to be noticed that under sub-section (7) of section 154 there is a positive provision that the amendment is not to be made after the time limit set out in that sub-section. In order that a time limit may be applicable a positive provision that a particular action cannot be taken beyond that time limit has to be made. Now, that is absent in sub-section (4A) but it is present in said sub-section (7) of section 154 and that is brought in by reference to section 154 in sub-section (4A). The mention of period of four years in sub-section (7) identifies that period as the period which lays down the time limit in sub-secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e has arisen. So far as section 155(4A) is concerned the fact that earlier assessment order was made under section 143(1) will not matter for the simple reason that all the situations contemplated in clauses (a), (b) and (c) above sub-section (4A) are developments subsequent to the passing of that order which could not be present at the time of assessment. Reference to section 154(7) in the said sub-section (4A) and the fact that both deal with amendment of the assessment order creates a confusion that both the sections deal with the same subject matter. Further, while making the assessment the ITO is bound to come to know about the transfer and so the limit under section 155(4A) starts from the time of the transfer. The ITO is bound to mak ..... X X X X Extracts X X X X X X X X Extracts X X X X
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