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TMI Blog2016 (6) TMI 334X X X X Extracts X X X X X X X X Extracts X X X X ..... and in this case the AO has passed rectification order u/s 154 on 30-03-2009 is barred by limitation as it is beyond four years from the original assessment order dated 30.03.2001. Therefore, we are of the opinion that the impugned order dt: 30-03-2009 passed by the AO is held to be invalid by treating the same as barred by limitation - Decided in favour of assessee. - I.T.A No. 341/Kol/2010 - - - Dated:- 8-6-2016 - Shri M. Balaganesh, Accountant Member And Shri S. S. Viswanethra Ravi, Judicial Member For the Appellant : Shri S.K. Tulsiyan, Advocate, Ld. AR For the Respondent : Md. Ghayas Uddin, JCIT, Ld. Sr.DR ORDER Shri S. S. Viswanethra Ravi, JM This appeal of the assessee is arising out of the order of the CIT(A), Central-I, Kolkata in Appeal No. 06/CC-XI/CIT(A),C-I/09-10 dated 04-11-2009 for the assessment year 1998-99 against the order of assessment framed u/s. 143(3)/251/154/154/251/251/154 of the Income-tax Act, 1961 (hereinafter referred to as the Act ). 2. In this appeal, the assessee has raised the following grounds of appeal:- 1 For that in view of the facts and circumstances the Ld. CIT (A) was wholly wrong and unjustified in dismissi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... charging interest and confirmation of the same by the Ld. CIT(A) were wholly unreasonable, uncalled for and bad in law. 4. For that your petitioner cranes the right to put additional grounds and/or to alter/amend/modify the present grounds before as at the time of hearing. 3. The brief facts of the case are that the assessee company filed its return for the A.Y 1998-99 on 30.11.1998 showing total income of Rs. Nil after adjustment of brought forward unabsorbed business loss of earlier years as per the normal provisions of the Act and ₹ 29,96,795/- u/s l15JA of the Act. The total income determined at ₹ 2,22,82,421/- by an assessment order dt: 30.03.2001 u/s 143(3) the Act. No income was determined and assessed by the A.O u/s 115JA of the Act in the said assessment order u/s 143(3) nor any reference made therein u/s 115JA. All the grounds above are raised questioning the validity of assessment where the AO made computation of income under book profit U/Sec 115JA of the Act, therefore, with the consent of parties, grounds above are read and heard together as one issue and answer the same collectively. 4. On appeal preferred by the assessee, the Ld. CIT(A), Ce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed the proceeding u/s 154 initiated by the A.O and held the A.O's order u/s 143(3)1251/154/154 dt.28.02.2005 as invalid by relying on an order of the Chandigarh Bench of Tribunal in the case of ACIT vs. Varinder Agro Chemicals Ltd reported in (2007) 107 TTJ (Chd) 842, thereby, to that effect an order dt: 22.05.2008 was passed u/s 143(3)/251/154/154/154/251/251/254 assessing the total income again at ₹ 8,11,970/- as was the same income that as determined under the normal provisions of the Act. The Revenue challenged the order dt.11.04.2008 of B-Bench, Kolkata Tribunal before the Hon ble High Court Of Calcutta wherein the Hon ble High Court was pleased to dismiss the same being low tax effect. 8. Again the AO issued a fresh notice u/s 154 dt.16.02.2009 proposing to rectify the order u/s 143(3) /251/154 dt: 22.05.2008 on the ground that there was mistake in calculation of tax interest U/S 115 JA of the Act. The assessee sought the complete details of the alleged mistake and the nature of the rectification vide its letters dt: 05.03.2009, dt. 07-03-2009, 16-03-2009 and 17- 03-2009 in response to which the AO issued letter dt:23-03-2009 stating that to rectify the order d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rd we shall again draw your kind attention to the decisions of the Apex and other Courts as discussed in detail in herein above and hence in view of the facts and in the circumstances the entire order u/s. 154 dated 30.03.2009 as barred by limitation and is wholly bad, illegal and void abinitio and in view of the facts and in the circumstances it is liable to be quashed / cancelled and in view of the case and in the circumstances it may kindly be held accordingly. . (b) Finding of the CIT-A is as under: 4: I have carefully considered the submission of the L.d A.r . There is no dispute that in the case under consideration return of Income was filed on 31.11.1998 disclosing NIL income under normal provision and book profit under section 115JA was calculated at ₹ 29,96,795/- and tax was paid accordingly. The assessment was completed u/s 143(3) on 30.03.2001 at total income of ₹ 2,22,82,420/-. Since the tax on the normal provision was more than the book profit, tax was held payable accordingly. However after giving effect to the C.I.T (A) order and subsequent rectification order dt.18.02.2005 allowing set-off of the brought forward loss the income under the normal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that the section 115JA is substantive and independent to other provisions of the Act and it has overriding effect. The Ld. Counsel for the assessee submits that the tax effect is higher in section 115JA and the same is to be adopted by the AO. If it is higher in normal proceeding u/s. 143(3) of the Act, the AO has to adopt the same. The impugned order passed by the AO rectifying the mistake, he did not mention a whisper about computation under the section 115JA. Therefore, the AO cannot modify such order u/s. 154 of the Act. 13. In reply, the Ld. DR submits the limitation is saved to rectify the order and the revenue has an opportunity to rectify the order u/s. 154 of the Act. The AO did not take into consideration the computation u/s. 115JA from the first instance onwards. Further, the AO did not find the same while passing the demand notice. He also submits that Judgment dt:21-12-2005 of the Hon ble Jurisdictional Calcutta High Court in appeal filed against the order dt: 11-04- 2008 of Tribunal not taken into consideration the merits of the case as it was dismissed by the Hon ble High Court being low tax effect. 14. Heard the rival submissions and perused the material ava ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee one more opportunity of hearing, a letter Dtd. 05-03- 2009 was issued fixing the case for hearing on 13-03-2009. On 09-03- 2009 a letter was received from the assessee. The assessee sought details of such proposed rectification. No one appeared on behalf of the assessee on hearing date. A fresh letter dtd.23-03-2009 was issued and served upon the assessee in which entire detail and proposition of the department with regard to rectification sought was mentioned. The case was again fixed on 27-03-2009.0n said date of hearing the assessee filed a letter in the department but no one appeared to explain the contention of the assessee. In it's letter, the assessee without raising any substantial objection has contended that the department has already filed appeal against the ITAT order and that mistake pertained to 143(3) order and which could not be rectified now. However, No substantial point is raised against the proceedings in question and No case law is relied upon by the assessee. The above narration would clarify that ample opportunity of hearing has been granted to the assessee. The issue in hand is a neither debatable nor any contention lies agai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st time 19. In this regard, we may refer to the order dated 24-06-2011 of the ITAT Kolkata, B Bench, Kolkata in the case of Brook Bond Lipton (I) Ltd vs. DCIT, Kolkata Relevant portion of finding is reproduced herein below:- 7.7. And also on Hon'ble Bombay High Court in the case of Ashoka Buildcon Ltd. vs ACIT (2010) 325 ITR 574; 191 Taxman 29 has held as under :- 10. The submission which has been urged on behalf of the Revenue is that when several issues are dealt with in the original order of assessment and only one or more of them are dealt with in the order of reassessment passed after the assessment has been reopened, the remaining issues must be deemed to have been dealt with in the order of reassessment. Hence, it has been urged that the omission of the AD, while making an order of reassessment to deal with those issues under s. 143(3) r/w s. 147 constitutes an error which can be revised in exercise of the jurisdiction under s. 263. The submission cannot be accepted either as a matter of first principle, based on a plain reading of the provisions of ss. 147 and 263, nor is it sustainable in view of the law laid down by the Supreme Court. The Supreme Court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e present case, was under a bar of limitation since limitation would begin to run from the date on which the original order of assessment was passed. We must however clarify that the bar of Limitation in this case arises because the revisional jurisdiction under s. 263 is sought to be exercised in respect of issues which did not form the subject-matter of the reassessment proceedings under s. 143(3) r/w s. 147. In respect of those issues, limitation would commence with reference to the original order of assessment. If the exercise of the revisional jurisdiction under s. 263 was to be in respect of issues which formed the subject-matter of the reassessment, after the original assessment was reopened, the commencement of limitation would be with reference to the order of reassessment. The present case does not fall in that category. 7.8. Keeping in view of the above decisions, we are of the view that the mistake, if any, is occurring in the original assessment order passed u/s. 143(3) of the Act dated 29.03.1995 and though AO has passed subsequent rectification orders he has not made any corrections on the said issue but he resorted to rectify the mistake while passing the su ..... X X X X Extracts X X X X X X X X Extracts X X X X
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