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TMI Blog2019 (6) TMI 481X X X X Extracts X X X X X X X X Extracts X X X X ..... here no limitation is prescribed for completion of reassessment, such process must be completed within a reasonable time and this proposition would depend on the facts and circumstances of each and every case. In Mohamad Kavi Mohamad Amin v. Fatmabai Ibrahim [ 1996 (8) TMI 537 - SUPREME COURT] observed that where no time limit is prescribed for exercise of a power under a statute, it does not mean that it can be exercised at any time; such power has to be exercised within a reasonable time. According to the respondents, after the Commissioner had passed orders u/s 263, the Assessee had consistently changed its name on various occasions which resulted in the delay. A further vague reason has also been stated in the counter that after the original assessment order was passed, appeals came to be filed before the CIT and ITAT. Thereafter, when the Assessee sought for refund, the old files of the Assessee were retrieved. Such an explanation cannot be at any stretch of imagination deemed to be sufficient cause for the delay. Insofar as the consistent change of the Assessee's name is concerned, it is nobody's case that the PAN number of the Assessee was also undergoing a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Act'). 4. For the Assessment Year 1990-91, the petitioner filed its return of income on 31.03.1990, declaring an income of ₹ 6,65,91,820/- and an intimation under Section 143(1)(a) was issued, determining the total income at ₹ 7,24,42,000/-. Thereafter notice under Section 143(2)(1) for scrutinising the return was sent to the petitioner for making assessment under Section 143(3) of the Act. After further process, the assessment order under Section 143(3) was made on 24.03.1993 determining the petitioner's total income at ₹ 8,05,67,450/- 5. On 31.01.1995, the second respondent issued a notice under Section 263 of the Act to the petitioner, proposing to revise the assessment made on the petitioner under Section 143(3) of the Act, on the ground that the order of the Assessing Authority was erroneous and prejudicial to the interest of revenue. The petitioner had raised his objections to the proposed revisions which came to be overruled by the Commissioner by an order dated 28.02.1995. The petitioner herein had not chosen to file an appeal against the order passed under Section 263 and thus, the order became final. After about ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rtaining to the petitioner was traced and the order passed under Section 263 came to light. In view of these various factors, the delay had occurred and since there is no bar of limitation under Section 153(3) of the Act, the Writ Petition is liable to be rejected. 8. I have given my anxious consideration to the contentions put forth by both the learned counsels. 9. Insofar as the first contention of the petitioner is concerned, the crucial aspect would be to determine, as to whether the revision sought to be made under the impugned notice by the Assessing Authority, would fall under Section 153(2A) or 153(3) of the Act? 10. For the sake of convenience, the provision of Section 153 (2A) (3) as it stood in the year 1995, is extracted hereunder:- 153. Time limit for completion of assessments and reassessments:- (2A) Notwithstanding anything contained in sub-sections (1) and (2), in relation to the assessment year commencing on the 1st day of April, 1971, and any subsequent assessment year, an order of fresh assessment under section, 146 or in pursuance of an order, under section 250, section 254, section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oneous and prejudicial to the interest of revenue on the following aspects:- (i) Excess deduction u/s.35AB of ₹ 7,43,245/- (ii) Wrong allowance in respect of unascertained liability of ₹ 40,634/- in respect of tax alleged to be payable to Cantonment Board on leased property; (iii) Wrong allowance of the following three items under miscellaneous expenditure: (a) Donation ₹ 35,300 (b) Registration fee and expenses ₹ 78,139 (c) Liquidated damages ₹ 33,19,335 (iv) Excess deduction allowed u/s.80HHC ₹ 23,521 (v) Excess depreciation claim of ₹ 5,08,423 allowed wrongly on moulds which are entitled to 33 1/3% only. 13. The Commissioner of Income Tax, dealt with the above five issues in the following manner: (i) Insofar as the excess deduction in Clause (i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is findings as to how the assessment was erroneous and thereby had directed the Assessing Officer to make further enquiry and recompute the deduction respectively. 15. Thus, pursuant to the orders of the Commissioner under Section 263, the task that awaits the Assessing Officer to be carried out, in the aforesaid 7 clauses, are as follows: Clause (i): The Assessing Officer is required to comply with the direction to withdraw the excess deduction under Section 35AB of ₹ 7,43,245/-, in view of the findings in para 4 of the order under Section 263. Clause (ii): The Assessing Officer is required to comply with the direction to disallow a sum of ₹ 40,634/- in view of the findings rendered in para 5 of the order under Section 263. Clause (iii): The Assessing Officer is required to comply with the direction to disallow the sum of ₹ 35,300/- in view of the findings rendered in para 6 of the order under Section 263. Clause (iv): The Assessing Officer is required to comply with the direction to disallow the sum of ₹ 78, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction (2A) will not apply in such cases. In other words, where findings are rendered or directions given to the Assessing Officer for the purpose of reassessment or recomputation, Section 153(3) alone would be applicable. Otherwise, on the bare fact that the issue is being sent back to the Assessing Officer for reassessment, if construed to fall under Sub Section (2A), would render Sub Section (3), redundant. 19. The learned counsel for the petitioner placed reliance on two decisions reported in (1) in the case of Nokia India (P.) Ltd. v. Dy. CIT [2017] 407 ITR 20 (Delhi) in the case of CIT v. Smt. Kamaladevi [1997] 227 ITR 701 (Mad.) on these propositions. 20. In Nokia's Ind (P.) Ltd. case (supra), among the seven issues raised therein, the assessment in respect of five were set aside and the issues remanded for fresh determination . In these circumstances, the Court held that in view of the fact that a fresh assessment order was required to be made on remand after setting aside some of the issues in the earlier assessment, the time limit for completing such an exercise would be governed under Section 153 (2A) of the Act. Likewise, in Smt. Kama ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... esumed that the respondent is empowered to continue even after lapse of several years. By holding so, this Court had held that the delay of six years for initiating proceedings under Section 153(3) was inordinate and unexplained. In K. Iswara Bhat v. Commissioner of Agricultural Income Tax [1993] 200 ITR 238 (Ker), the Division Bench of the Kerala High Court held that statutory powers must be exercised bona-fidely, reasonably, without negligence and the purpose in which they were conferred. By placing reliance on various decisions, the Kerala High Court held that if Suo moto revisional proceedings can be invoked only within a reasonable time, by the same logic, proceedings can be rendered only within a reasonable time. In view of the inordinate delay in that case, it was held that the statutory authority acted arbitrarily and unreasonably. In CIT v. Goyal M.G. Gases (P.) Ltd. [2009] 316 ITR 303 (Delhi), it was held that non specification of the period of limitation does not mean that the Assessing Officer can wait interminably or for an infinite period before passing a consequential order. A period of 3 years and 8 months was held to be unreasonable in that case. Since various othe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and 7 months without any reasonable explanation whatsoever, it can be termed as 'inordinate'. 27. By applying the well laid down ratios of several decisions cited above and by applying the facts to the present case in hand, I am of the view that the proceedings initiated under Section 143(3) dated 18.09.2003 after an inordinate delay, is illegal and opposed to the several well laid down decisions cited supra. Though there is no limitation prescribed under section 153(3) for reassessment or recomputation, in view of the unreasonable delay in initiating the proceedings, the impugned notice dated 18.09.2003 is liable to be set aside. 28. For all the foregoing reasons, this Court, holds that the impugned notice which seeks to give effect to an order under Section 263 for revision under Section 143(3) falls under Section 153(3) of the Act. However, the delay of 8 years and 7 months in initiating such proceedings is inordinate and therefore fatal to the Department. Accordingly, the impugned notice passed by the first respondent in GIR No.AXI-061/90-91 dated 18.09.2003 is set aside. Consequently, the first respondent shall refrain from initiating any ..... X X X X Extracts X X X X X X X X Extracts X X X X
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