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TMI Blog2018 (5) TMI 1689X X X X Extracts X X X X X X X X Extracts X X X X ..... d the following grounds of appeal :- 1. Under the facts and circumstances of the case and in law, the ld. CIT (Appeals) has erred in not holding the assessment order dated 30.03.2016 as bad in law, without jurisdiction and illegal. 2. Under the facts circumstances of the case and in law, the ld. CIT (Appeals) has erred in :- a. Upholding the validity of reassessment proceedings initiated by the ld. AO in the case of the appellant u/s 147/148 of the Income Tax Act, 1961 ( Act ); b. Confirming the action of the ld. AO of invoking Section 150(1) of the Income Tax Act, 1961 in the case of the Appellant without appreciating the fact that finding or direction contained in an order passed by any authority must relate to the assessee only and not to a third party; c. Upholding the action of the ld. AO of not considering the provisions of Section 150 of the Income Tax Act, 1961 in totality. 3. Under the facts circumstances of the case and in law, the ld. CIT (Appeals) has erred in not considering the actual stamp duty value of land of ₹ 1,35,22,275/- and adopting the stamp duty value of ₹ 1,50,35,218/- on the basis of order passed by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he IT Act. In support of his contention, he has relied upon the following decisions :- Ramesh Chand Soni HUF vs. ITO 89 taxmann.com 71 (Jaipur Trib.) Praveen Kumari vs. CIT 237 ITR 339 (P H) Lotus Investments Ltd. vs. G.Y. Wagh, ACIT 162 Taxman 241 (Bom.) ITO vs. M/s. Neetee Clothing (P) Ltd. (ITA No. 267/Del/2013) Gauri Shankar Choudhary vs. Addl. CIT 234 ITR 865 (Pat.) Vijay Kumar Sarda vs. DCIT 40 taxmann.com 113 (Mumbai Trib.) Citing the findings of the above decisions, the ld. A/R has contended that when the limitation for reopening the assessment in the case of the assessee had already expired on 27th February, 2014 when the AO passed the assessment in case of Ms. Brijendra Sethi, then the notice issued by the AO under section 148 on 3rd March, 2015 is barred by limitation. 2.1 On the other hand, the ld. D/R has submitted that the limitation has to be considered on the date of notice issued by the AO under section 148 in the case of Ms. Brijendra Sethi and not on the date when the assessment order was passed. Thus the ld. D/R has submitted that the AO has taken a wrong decision of assessing the said income in the hands of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... than six years, have elapsed from the end of the relevant assessment year unless the income chargeable to tax which has escaped assessment amounts to or is likely to amount to one lakh rupees or more for that year. Explanation.-In determining income chargeable to tax which has escaped assessment for the purposes of this sub-section, the provisions of Explanation 2 of section 147 shall apply as they apply for the purposes of that section. ( 2) The provisions of sub-section (1) as to the issue of notice shall be subject to the provisions of section 151. ( 3) If the person on whom a notice under section 148 is to be served is a person treated as the agent of a non-resident under section 163 and the assessment, reassessment or recomputation to be made in pursuance of the notice is to be made on him as the agent of such non-resident, the notice shall not be issued after the expiry of a period of two years from the end of the relevant assessment year. It is clear that no notice U/s. 148 shall be issued in any case after the expiry of 6 years, however, the limitation provided U/s. 149 is applicable in a situation where the AO on its own on the basis of fresh ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot unlimited for making assessment, reassessment or re-computation of income of the assessee but the same is subject to the conditions as prescribed Sub-section (2) of Section 150 of the Act. Sub-section (2) puts a condition that unlimited time period provided Under sub-section (1) shall not apply in a case where such assessment, reassessment or re-computation relates to an assessment year in respect of which assessment, reassessment or re-computation could not have been made at the time of the order which was subject matter of appeal, reference or revision as the case may be due to the other provisions of prescribing the limitation within which such assessment, reassessment or re-computation may be made. In other words as per Sub-section (2) of Section 150 the assessment, reassessment or re-computation in consequence of the directions of the appellate, revisional authority or the directions of the court can be made if such assessment, reassessment or re-computation could have been made at the time the order which was subject matter of appeal revision or reference and not hit by the limitation provided U/s. 149 of the Act at that point of time. Now, the question arises whether in c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on this unlimited power of AO Sub-section (2) is inserted in the statute which stipulates the time limit for such assessment or reassessment by considering the hypothetical situation that if at the time of framing the assessment at the wrong hand and subsequently the appellate or revisional authority passed the direction to assess in the right hand then the limitation for such reassessment has to be considered on the date when such order of assessment in the wrong hand is passed instead of the assessment in the right hand. If the AO was having the power and jurisdiction to assess the said income in the right hand instead of wrong hand as per the limitation provided U/s. 149 then the time taken in the proceedings before the appellate or revisional authority which passed the directions will not take away the jurisdiction and power of the Assessing Officer which was very much available with the AO on the date when the assessment was made in the wrong hand. In other words if the Assessing Officer could have assessed the same income in the hands of the assessee instead of assessing the same in wrong hand then the limitation for reassessment of the said income is still available with th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nal's order. According to us, when the Tribunal hold that only interest that accrued for the year 1980-81 can be assessed for that year, it becomes clear that rest of the interest is spread over to various years and this gives a right to the AO under s. 147(b) to start proceedings for escaped assessment read with s. 150(1) of the Act. Sec. 150(1) says that, notwithstanding anything contained in s. 149, the notice under s. 148 may be issued at any time for the purpose of making an assessment or reassessment or recomputation in consequence of or to give effect to any finding or direction contained in an order passed by any authority in any proceedings under this Act by way of appeal, reference or revision. Thus, the limitation under s. 149 does not apply to s. 150(1). But sub-s. (2) of s. 150 says that the provisions of sub-s. (1) shall not apply in any case where any such assessment, reassessment or recomputation as is referred to in that sub-section relates to an assessment year in respect of which an assessment, reassessment or recomputation could not have been made at the time the order which was the subject-matter of appeal, reference or revision as the case may be, was made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... date of the order which was the subject-matter of appeal. In this case, the second appeal in which the finding was recorded arose from the order of the AAC dt. 6th Oct., 1972. The question is, whether on that date the initiation of reassessment proceedings is barred by any provision of law ? According to s. 149(1)(b) reassessment proceedings cannot be initiated after the expiry of four years from the end of the relevant assessment year. Four years therefrom would expire on 31st March,1971. Thus, the impugned initiation of proceedings under s. 147 by a notice issued on a date subsequent to 9th Sept., 1974, would be clearly barred. But in that case, the Court found that even if the date is construed as referring to the original order of assessment, the proceedings will be barred. Another decision relied on by the Department is ITO v. Eastern Coal Co. Ltd. (1975) 101 ITR 477 (Cal.) : TC 51R.947. In that case, there is no discussion regarding this aspect. But, it is assumed there that, date mentioned is the date of the original order. According to us, the words at the time the order which was the subject-matter of appeal, reference or revision, as the case may be, was made . . ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sidered on the date when the ld. CIT (A) passed the order in case of M/s. Tirupati Automobiles Pvt. Ltd. which was subject matter of appeal before the Tribunal in which the Tribunal passed the directions on 26.03.2010. There is no dispute that the ld. CIT (A) in case of M/s. Tirupati Automobiles Pvt. Ltd. passed the order on 15.07.2009 and on that date the limitation for reassessment for the assessment years 2001-02 2002-03 already expired as 6 years from the end of the relevant assessment years expired on 31.03.2008 and 31.03.2009 respectively. Therefore, the limitation as on the date of the order passed by the ld. CIT (A) dated 15.07.2009 was not available for reassessment of this income for these two assessment years. Accordingly, the reopening of the assessment is barred by limitation as provided u/s. 149 r.w.s. 150(2) of the Act. Since the reopening is barred by limitation, therefore, the consequent reassessed is not sustainable and the same are quashed. When the reassessments itself are quash being void and barred by limitation then the ground No. 2 raised by the assessee on the merits of the addition becomes infructuous. Therefore, we do not propose to go into the said gro ..... 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