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TMI Blog2012 (9) TMI 540X X X X Extracts X X X X X X X X Extracts X X X X ..... High Court in the assessee’s case for the said Assessment Year was not in the nature of a direction hence the provision of Sec. 150(1) of the Act will not be applicable. Decision in favour of assessee. - I.T.A. No. 722/Bang/2010 - - - Dated:- 29-6-2012 - P. Madhavi Devi And Jason P . Boaz , JJ. Appellant By : V. Chandrashekar Respondent By : B. Saravanan ORDER Per Jason P. Boaz, A.M. : This appeal by the assessee is directed against the order of the Commissioner of Income Tax (Appeals), Mangalore dated 29.03.2010 for Assessment Year 1991-92. 2. The facts of the case, in brief, are as under : 2.1 The assessee, an unregistered firm had not filed its return of income for Assessment Year 1991- 92. In the assessment order passed under section 143(3) of the Income Tax Act, 1961 (herein after referred as 'the Act') on 30.3.1992 for Assessment Year 1990-91, an amount of ₹ 4,40,653 was added back under section 41(1) of the Act to the total income of the assessee as M/s. Karnataka Bank Ltd. had written off the amount, which was payable to it by the assessee. This addition was confirmed by the CIT(A) and Tribunal. In further ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er concluded the assessment by an order under section 144 rws 147 of the Act dt.14.12.2009 bringing to tax this amount of ₹ 4,40,653 under section 41(1) of the Act in the assessee s hands. This order of the Assessing Officer was confirmed by the learned CIT(A), Mangalore by order dt.29.3.2010. The assessee, aggrieved by the order of the learned CIT(A), is now in appeal before this Tribunal. 3.1 The grounds of appeal raised by the assessee in this appeal are as under : 1. The order of the authorities below in so far as it is against the appellant, is opposed to law, weight of evidence, natural justice, probabilities, facts and circumstances of the appellant s case. 2. The appellant denies himself liable to be assessed on a total income of ₹ 4,40,653 as against the declared income of Rs. Nil under the facts and circumstances of the case. 3. The learned CIT(A) is not justified in law in upholding the order of assessment passed by the learned Assessing Officer under section 144 of the Income Tax Act, 1961 without giving the appellant a reasonable opportunity of being heard under the facts and circumstances of the case. 4. The order of re-as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reported in 229 ITR 383. ADDITIONAL GROUNDS NOT SPECIFICALLY URGED 1. The notice issued by the learned Assessing Officer under section 148 of the Act is bad in law and without jurisdiction in as much as the provisions of section 151 of the Act are not complied with and consequently the order passed by the learned Assessing Officer on an invalid notice is bad in law and void-ab-initio. 2. The appellant craves leave to add, alter, delete or substitute any of the grounds urged above. 3. In the view of the above and other grounds that may be urged at the time of hearing of the appeal, the appellant prays that the appeal may be allowed in the interest of justice and equity. 3.3 In the course of hearings, the learned counsel for the assessee had given in writing that only ground of appeal No.4 is being pressed in this appeal and all other grounds are not pressed. In this view of the matter, grounds of appeal at S.Nos.1 to 3, 5 to 9 and additional grounds at S.Nos.1 to 3 are dismissed as infructuous. 4.1 The contention of the learned counsel for the assessee is that the Assessing Officer is under the erroneous impression that the provisions of section 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... believe. (ii) It is further contended by the learned counsel for the assessee that in the reasons recorded, the Assessing Officer states that income has escaped assessment w.r.t. section 260A r.w.s. 151(3) of the Act and the same cannot be said to constitute Reason to believe u/s.147. (iii) It is also contended by the learned counsel for the assessee that the notice issued u/s.148 is barred by limitation and (iv) that the notice issued u/s.148 does not have the prior sanction of the Joint Commissioner of Income Tax as warranted u/s.151(2) of the Act. 5.0 The learned Departmental Representative supported the orders of the authorities below. He contended that the order of the High Court is a direction and further in view of the provisions laid down in section 150(1), the provisions of section 149 of the Act are not applicable. Therefore, when a notice u/s.148 is issued in consequence of or to give effect to any direction or finding contained in an appellate order, the provisions of section 149 as a whole would not be applicable. In this view of the matter, the learned Departmental Representative submitted that the time limit laid down in section 149 and the sanc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the ITO whether or not to take action, it cannot, in our opinion, be described as a direction. The implication of the above observation by the Hon'ble Apex Court on the instant case of the assessee can be understood by analyzing paras 9 and 11 of the Hon'ble High Court order in the assessee s case for Asst. Year 1990-91. In regard to question No.2 is concerned, admittedly the assessee has admitted the amount written off by the Karnataka Bank. According to the assessee considering the date of written off by the Bank, the said amount has to be disclosed by the assessee not in the current year but for the subsequent year. When the assessee has clearly stated that these amounts are to be disclosed in the subsequent assessment order, we are of the opinion that the Assessing Officer did not consider the case of the assessee properly. In the circumstances, we answer question No.2 in favour of the assessee giving liberty for the assessee to show the said amount of ₹ 4,40,653 in the subsequent years. If the same is not shown by the assessee for the subsequent years, it is open for the Revenue to take action in accordance with law. In the result, we a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , revision or reference arising out of an assessment must be a finding necessary for the disposal of the particular case, that is to say, in respect of a particular assessee and in relation to that particular assessment year. In the instant case, the finding given by the Hon'ble High Court is in respect of disposing off the appeal for Assessment Year 1990-91 by holding that the sum of ₹ 4,40,653 is not taxable in Assessment Year 1990-91 but in the subsequent years. It is, therefore, certain that this amount is not taxable in Assessment Year 1990-91 but the Hon ble Court has not given a finding that it is exigible to tax in Assessment Year 1991-92. There is no finding by the Hon'ble High Court that the said income forms part of the income for Assessment Year 1991-92. As per the operative portion of the order of the Hon'ble High Court para 11 thereof reads as under : 11. In the result, we allow the appeal-in-part directing the Assessing Officer to delete the addition of ₹ 22 lakhs and ₹ 4,40,653 respectively, granting liberty for the Assessing Officer to examine whether ₹ 4,40,653 has been shown by the assessee for the subsequent assessm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 345 thereof, observe d as under : the words in consequence of or to give effect to do not create any difficulty, for they have to be collated with, and cannot enlarge the scope of the Finding or Direction under the proviso. If the scope is limited, as aforesaid, the said words must be related to the scope of the Finding and Directions. In view of the above definition given by the Hon'ble Apex Court, there necessarily has to be a finding or direction in respect of a particular assessment year and consequential action if any must be in respect of that assessment year alone and cannot extend to an earlier or subsequent assessment year. As regards the instant case, as there is no finding or direction for Assessment Year 1991-92, the provisions of section 150(1), of the Act cannot come into play. 10. Peico Electronics and Electricals Ltd. Vs. DCIT 210 ITR 991 (Cal) The Hon'ble Calcutta High Court, relying on the decision of the Hon'ble High Court of Karnataka (supra) has held that in order to attract the provisions of section 150(1) of the Act, it is necessary that the finding or direction must be in respect of the assessment year in question ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iven by the ITAT that a particular income formed part of the income of Assessment Year 1985-86 and that the said income belonged to the partnership firm. It was based on this clear finding of the appellate authority that the impugned income belonged to the impugned assessee and the impugned assessment year that the Assessing Officer resorted to the provisions of section 150 of the Act and brought the said income to tax in the hands of the firm for Assessment Year 1985-86. 13.2 In the case of Spences Hotels Pvt. Ltd Vs. DCIT reported in 289 ITR 145 (Kar), it is evident from the facts of the case that the Tribunal had clearly given a finding that the impugned amount constituted income of Assessment Year 1996-97. It was based on this finding that the Assessing Officer took recourse to the provisions of section 150(1) of the Act, which action was held to be valid by the Hon'ble High Court. 13.3 In the instant case of the assessee, there is no specific finding or direction given by any of the appellate authorities that the amount of ₹ 4,40,653 sought to be taxed, formed the income in the period relevant to Assessment Year 1991-92. The only clear finding by the Hon ..... X X X X Extracts X X X X X X X X Extracts X X X X
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