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TMI Blog2010 (10) TMI 247X X X X Extracts X X X X X X X X Extracts X X X X ..... - 8-10-2010 - ORDER N.V.Vasudevan, J.M. This is appeal by the assesses against the order dated28/10/2005of CIT(A)-IV, Mumbai relating to assessment year 1995-96. The grounds of appeal raised by the assessee read as follows: On the facts and circumstances of the case, the Ld, Commissioner of Income Tax (Appeals), Central IV, Mumbai erred in passing the order u/s 250 of the Act for AY 1995-96 against the order u/s 154 dated 24.01.2000 passed by the Deputy Commissioner of Income Tax, Central Circle 39, Mumbai on the following among other grounds: ( a ) The CIT(A) erred in holding the views that the order u/s 154 passed by the AO on 24.1.2000 was valid without considering your appellant s submission which were also supported by the AO s remand report dated 19.9.2005 that the aforesaid order u/s 154 passed by the AO on 24.1.2000 was not served within the reasonable period of time from passing of the said order hut your appellant was provided a copy of the same only on 4.5.2005 and that too, when your appellant asked for the same vide letter dated 20,04.2005. Even the said copy of the order which was provided on 4.5.2005 was without the Notice of Demand u/s 156 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of the assessee with regard to mistake pointed in the decision rendered on Ground No.(a). The Tribunal, however, held that the Tribunal had not adjudicated the other grounds of appeal raised by the assessee in its ground of appeal and to the limited extent of adjudication of the said grounds the miscellaneous application was allowed. In the meantime the assessee had field an appeal against the original order of the Tribunal dated4/5/2009 before the Hon ble Bombay High Court. The Hon ble Bombay High Court by its order dated16/12/2009 in 1TA 3164 of 2009 directed that the entire appeal to be heard afresh. Thus the entire appeal was heard afresh. 3. Facts and circumstances giving rise to the present appeal by the assessee are as follows. The assessee is engaged in the business of leasing, hire purchase, issue management underwriting commission and also deals in shares and debentures. The Assessing Officer had made an assessment under section 143(3) for the year under appeal at an income of Rs. 1,95,96,500/- as against the returned income of Rs.39,88,680/-, The assessee had filed appeal against the additions to the CIT(A) and subsequently to the Tribunal. However, in the meanti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tice of demand in ITNS 150 on record. There was only calculation sheet (ITNS 150A) on record. The CIT(A) however upheld the order under section 154 of the Act. The ground raised by the assessee before CIT(A) were as follows : 1. The appellant objects to the order u/s 154 of the Income tax Act, 1961 dated 24.01.2000 passed by the Deputy Commissioner of Income Tax, Central Circle 29, Mumbai on the following among other grounds. 2. The Assessing Officer erred in completing the assessment u/s 154 of the Income Tax Act, 1961 on the income of Rs.2,01,49,580/- as against the returned income of Rs.39,88,680/-. 3. The Assessing Officer erred in making an addition on account of disallowance of depreciation of Rs.5,53,080/-on Plant Machinery without considering the fact that the assessment made u/s 143(3) on 30-03,1998 was the subject matter of appeal before the Commissioner of Income Tax, Central II, Mumbai, The AO also failed to issue notice u/s 154 of the Act to your appellant while passing the order u/s 154 of the Act on 24.01.2000. 4. The Assessing Officer also erred in charging interest u/ss 234A, 234B and 234C of the Act without considering the fact that the order u/s 154 da ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is dated24/01/2000, it is the submission of the learned counsel for the Assessee that the following circumstances would go to show that the order purported to have been passed on24/01/2000 was in fact not passed on the said date: ( a ) The said order was not served on the Assessee till4/5/2005. ( b ) There was no notice of demand u/s.156 ever served on the Assessee nor available on the record of the AO. The provisions of section 154 (6) provides that where any amendment u/s.154 has the effect of enhancing the assessment, the AO shall serve on the Assessee a notice of demand in the prescribed form specifying the sum payable and such notice of demand shall be deemed to be issued u/s.156 and the provisions of the Act shall apply to such notice. ( c ) There is a tax calculation sheet in Form No. ITNS 150 which purports to have been signed by the AO but is not dated. The said calculation sheet was given to the Assessee first on6/6/2005 when it was insisted by the CIT(A) that a copy should be given to the Assessee. ( d ) Despite a huge demand, no steps were ever taken to recover the demand. 9. His further submission was that u/s.143(3) of the Act, the AO after co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Act. Such notice would indicate the tax demanded. It is, therefore, apparent that the rectification of an assessment order would include rectification of computation of income as also rectification of computation of tax earlier made during the regular assessment and such rectification of mistake would take effect from the date the demand notice under section 156 is served on the assessee. 10. He also relied on the decision of the Hon ble Supreme Court in the case of Kalyankumar Ray v. CIT 191 ITR 634 (SC) wherein the Hon ble Supreme Court has held that Assessment is one integrated process involving not only the assessment of the total income but also the determination of the tax. According to him, in the case of the Assessee, the non service of either the order u/s.154 or the calculation of tax as per Form No. ITNS 150 (this is a tax/refund calculation sheet based on which Notice of Demand u/s.156 is raised) on or before the period of limitation specified u/s. 154(7) can lead to only one conclusion that the order u/s.154 was not passed as required by law or before the period of limitation specified in Sec. 154(7) of the Act. 11. He again referred to the decis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Hon ble Supreme Court in the case of State of Andhra Pradesh v. M. Ramakishtaiah Co. 93 STC 406 wherein it was held that where an order passed by the Deputy Commissioner of sales Tax under the A.P. General Sales Tax Act, 1957 revising the order of assessment, was served on the Assessee after substantial delay and where there was no explanation for the delay, it can be presumed that the order was not made on the date it purports to have been made and further could be presumed to have been made after the expiry of the period of limitation. Further reliance was also placed on the decision of the Hon ble Rajasthan High Court in the case of Peeru Lal, Mohan Lal v. CIT 257 ITR 198 (Raj) wherein it was held that the process of assessment means assessment of income as well as determination of tax and both are necessary for completion of assessment. Where both the processes are not completed within the period of limitation the same is barred by limitation. It was further held that where an assessment is time barred, section, 292B of the Act cannot come to the rescue of the revenue. 13. The learned D.R, on the other hand submitted that the order u/s.154 is dated 34-01-2000. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t. Notwithstanding the letter dated7/7/1999, the Assessee has been agitating the issue regarding excess claim of depreciation. In the given circumstances, the only presumption that needs to be drawn is that the order u/s.154 had not been passed on24/01/2000 but on or after the period of limitation set out in section 154(7) of the Act. 15 . We have considered the rival submissions. In the decision of Kalyankumar Ray ( Supra ), the Hon ble Supreme Court has held that an order of assessment becomes complete only when the order of assessment is passed in writing and the tax payable pursuant to such order is also computed within the period of limitation for passing of the order of assessment. There is no dispute that rectification formed part of assessment and where pursuant to a rectification order tax is payable by an Assessee then the requirement of an order in writing and determination of tax liability of the Assessee within the period of limitation in the same manner as is required u/s. 143(3) is necessary. The crucial question in this case is as to whether the order u/s. 154 and the tax payable pursuant thereto i.e., the calculation of tax in Form No. ITNS 150 had been passed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation. If the order u/s.154 was passed on the basis of admission of the Assessee, there is no explanation as to why the order was passed only on 24/01/2000 i.e., after a period of more than 6 months, even without referring to any of the other correspondence on the issue between the Assessee and the AO. All the above circumstances clearly go to show that the order u/s.154 was not passed on 24/01/2000. The above circumstance also shows that there no evidence to show that the tax calculation in Form No. ITNS 150 was in fact made within the period of limitation. The revenue has not been able to bring any other circumstance which will go to show that the order u/s. 154 was in fact passed on 24/01/2000. In these circumstances, we have no hesitation in coming to the conclusion as laid down by the Hon ble supreme Court in the case of State of Andhra Pradesh v. M. Ramakishtaiah Co. ( supra ) that the order u/s.154 was not made on the date it purports to have been made and further could be presumed to have been made after the expiry of the period of limitation. In that view of the matter, we hold that the order u/s.154 is not legal as the same has been passed beyond the period of limit ..... X X X X Extracts X X X X X X X X Extracts X X X X
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