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TMI Blog2021 (5) TMI 830X X X X Extracts X X X X X X X X Extracts X X X X ..... ond the scope of the jurisdiction that was vested with him u/s 154 of the Act. Withdrawal of the set-off of the brought forward unabsorbed depreciation that was earlier allowed by the A.O vide his assessment framed u/s 143(3) r.w.s 144C(1) - CIT(A) while disposing off the assessee s appeal against the order passed by the A.O u/s 154, had directed him to ascertain the assessee s claim of brought forward unabsorbed depreciation and allow set-off of the same as per law while computing its total income - CIT(A) that in case the assessee s claim for brought forward depreciation (as was claimed by the assessee vide its letter dated 14.09.2017) was not admissible, then, the A.O shall in his order give reasons as to why the said claim was not admissible. In our considered view, the CIT(A) had in all fairness directed the A.O to ascertain the assessee s claim of brought forward unabsorbed depreciation and allow set-off of the same as per law while computing its total income. A.O had been directed to give reasons in case the assessee s claim for brought forward depreciation is not found to be admissible by him. No infirmity in the aforesaid view of the CIT(A) who in context of the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... admissible by him, are not being disturbed by us. The Grounds of appeal No(s). 1 to 4 to the extent relatable to the aforesaid issue in question are dismissed in terms of our aforesaid observations. Addition of the share premium that was added by the A.O vide his order passed u/s 154, dated 16.09.2017 as an unexplained cash credit within the meaning of Sec. 68 - If the rectification in question i.e addition of the share premium that was treated as an unexplained cash credit by the A.O u/s 68 vide his reassessment order passed under Sec. 143(3) r.w.s 147 to the income of the assessee determined under the normal provisions is sustained, then, the same would result to supplementing the original assessment order that was passed by him u/s 143(3) r.w.s 144C(1) with an addition that was never made by the A.O, which we are afraid is absolutely not as per the mandate of law. If the rectification order passed by the A.O u/s 154, dated 16.09.2017 qua the addition of share premium of ₹ 32,21,48,679/- to the income of the assessee determined under the normal provisions is sustained, then, it would result to a blatant traversing or in fact invalid assumption of jurisdiction on th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d order under section 154 of the Act, as the reassessment order which was rectified vide the impugned order under section 154 of the Act, stood quashed / cancelled. 4. The CIT(A) failed to appreciate that the appeal against the impugned rectification order under section 154 of the Act, was filed on 27.10.2017, whereas the aforesaid appellate order for the AY 2009-10 was passed on 29.12.2017 and in view of this reason the ground that the aforesaid reassessment order already stood cancelled and accordingly, the impugned order under section 154 of the Act could not survive; could not be raised. 5. The Id CIT(A) failed to appreciate that when, vide his appellate order, dt.29.12.2017, against the reassessment order under section 143(3) r.w.s. 147 of the Act, for the AY 2009-10, he had allowed ground No. 4 of the appellant regarding addition of ₹ 32,21,48,679/-, under section 68 of the Act, the same could not be added by the AO in the computation of income, in the impugned order under section 154 of the Act. 6. The Id. CIT(A) grossly erred in not cancelling the impugned order of rectification on the ground that the issue involved therein was a highly debatable one, w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e securities premium account in the reserves and surplus of its balance sheet for the year in question, it was observed by the A.O that the said issue was neither discussed by the A.O in the assessment order nor in the order sheet notings. As the assessee failed to place on record any material to prove the nature and source of the share premium received during the year, the A.O, thus, considered the amount of ₹ 32,21,48,679/- as an unexplained cash credit u/s 68 of the Act. Vide his order passed under Sec. 143(3) r.w.s 147, dated 23.03.2015 the A.O added the share premium of ₹ 32,21,48,679/- to the assessee s book profit u/s 115JB of ₹ 90,99,78,259/- (as was determined in the assessment framed u/s 143(3) r.w.s 144C(1), dated 28.01.2014) and worked out the same at ₹ 123,21,26,938/-. 4. Aggrieved, the assessee assailed the reassessment order passed by the A.O under Sec. 143(3) r.w.s 147, dated 23.03.2015 before the CIT(A). It was observed by the CIT(A) that original assessment was framed by the A.O vide his order passed under Sec. 143(3) r.w.s 144C(1), dated 28.01.2014. It was further observed by him that the case of the assessee was reopened on 23 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... normal provisions determined u/s 143(3) r.w.s 144C(1), dated 28.01.2014 before allowing set-off of unabsorbed depreciation as the assessee had no unabsorbed depreciation left for set-off for A.Y 2008-09. 17,05,82,381/- Add : Disallowance u/s 68 32,21,48,679/- Total income as pr normal provisions 49,27,31,060/- Tax @33.99% 16,74,79,287/- Book Profit u/s 115JB 90,99,78,259/- Tax @10% 9,09,97,826/- 6. Aggrieved, the assessee assailed the order passed by the A.O under Sec. 154, dated 16.09.2017 before the CIT(A). It was submitted by the assessee that the mistakes, if any, in the assessment order passed under Sec.143(3) r.w.s 144C(1) were not mistakes apparent from record within the meaning of Sec. 154 of the Act. However, the said claim of the assessee did not find favour with the CIT(A). It was observed by the CIT(A) that as the A.O while framing the reassessment under Sec. 143(3) r.w.s 147, dat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of jurisdiction by the A.O under Sec. 154 on two fold grounds, viz. (i). that as the mistakes, if any, in the order passed by the A.O were not apparent from record, the same, thus, could not have been brought within the realm of rectification u/s 154 of the Act; and (ii). that as the reassessment order passed by the A.O under Sec. 143(3) r.w.s 147, dated 23.03.2015 had been quashed by the CIT(A) vide his order dated 29.12.2017, therefore, rectification of such non-existent order was beyond comprehension. 8. Per Contra, the ld. Departmental Representative (for short D.R ) relied on the orders of the lower authorities. 9. We have heard the authorised representatives for both the parties, perused the orders of the lower authorities and the material available on record, as well as considered the judicial pronouncements that have been pressed into service by them to drive home their respective contentions. Admittedly, it is only where an order passed by an A.O is found to be suffering from a mistake which is glaring, apparent, patent and obvious from record that the same renders it amenable for rectification. As held by the Hon ble Supreme Court in the case of T.S Balaram ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5JB of the Act. 11. We have given a thoughtful consideration to the issue in question and concur with the view taken by the CIT(A) that as the omission on the part of the A.O to add the unexplained cash credit u/s 68 of ₹ 32,21,48,679/- to the assessee s income under the normal provisions of the Act and instead wrongly adding the same to the book profit of the assessee u/s 115JB of the Act was a mistake which was glaring, apparent, patent and obvious from record, the A.O, thus had rightly rectified the same by invoking the powers vested with him u/s 154 of the Act. We are unable to comprehend as to on what basis it is claimed by the ld. A.R that the issue in question being a debatable one would fall beyond the realm of the jurisdiction vested with the A.O u/s 154 of the Act. Be that as it may, in our considered view as the A.O remaining well within the scope of his jurisdiction had rectified the aforesaid mistake, thus, principally he cannot be held to have traversed beyond the scope of the jurisdiction that was vested with him u/s 154 of the Act. As regards the withdrawal of the set-off of the brought forward unabsorbed depreciation that was earlier allowed by the A.O ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e and does not merit acceptance. The Ground of appeal No. 6 is dismissed. 12. We shall now deal with the claim of the ld. A.R that as the reassessment order passed by the A.O u/s 143(3) r.w.s 147, dated 23.03.2015 was thereafter quashed by the CIT(A) by treating the same as void ab initio, therefore, no rectification of the said non-existent order could have been carried out. We would not hesitate to observe that the aforesaid claim of the ld. A.R at the first blush appeared to be very convincing, but then, we are afraid the same having two facets cannot be accepted in toto. Admittedly, the reassessment order passed by the A.O u/s 143(3) r.w.s 147, dated 23.03.2015 was quashed by the CIT(A), vide his order dated 29.12.2017. We may herein observe that the reassessment order was quashed by the CIT(A) for invalid assumption of jurisdiction by the A.O u/s 147 of the Act and the addition u/s 68 of unexplained cash credit of ₹ 32,21,48,679/- was not commented upon by him on merits. At this stage, it would be relevant to point out that the aforesaid reassessment order was preceded by an original assessment that was framed by the A.O vide his order passed u/s 143(3) r.w.s 144C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the reassessment order passed by the A.O u/s 143(3) r.w.s 147, dated 23.03.2015. We, thus, are of the considered view that as the issue pertaining to allowing of set-off of unabsorbed depreciation of ₹ 11,49,85,610/- by him vide the assessment order passed u/s 143(3) r.w.s 144C(1), dated 28.01.2014 had not merged in the reassessment order, the A.O, thus, was well within his jurisdiction in rectifying the mistake as regards allowing of set-off of unabsorbed depreciation of ₹ 11,49,85,610/- vide his order passed under Sec. 143(3) r.w.s 144C(1), dated 28.01.2014 as the assessee had no unabsorbed depreciation left for set-off for A.Y 2008-09. Accordingly, we uphold the order passed by the A.O to the extent he had rectified his mistake as regards allowing of set-off of unabsorbed depreciation of ₹ 11,49,85,610/- vide his original assessment order passed u/s 143(3) r.w.s 144C(1), dated 28.01.2014. However, we may herein observe that the directions given by the CIT(A) to the A.O, viz. (i). to ascertain the assessee s claim of brought forward unabsorbed depreciation and allow set-off of the same as per law while computing the assessee s total income; and (ii). to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... share premium of ₹ 32,21,48,679/- as an unexplained cash credit under Sec.68 to the assessee s income under the normal provisions of the Act could not have survived on a standalone basis. To sum up, now when the reassessment order on the basis of which the share premium of ₹ 32,21,48,679/- was treated by the A.O for the very first time as an unexplained cash credit within the meaning of Sec. 68 of the Act was quashed by the CIT(A) vide his order dated 29.12.2017, thus, the order of rectification passed u/s 154, dated 16.09.2017 to the extent relatable to the aforesaid issue in question, as a corollary thereto, could not have subsequent to quashing of such reassessment order survived and have an existence on a standalone basis. At this juncture, we may herein observe that if the rectification in question i.e addition of the share premium that was treated as an unexplained cash credit by the A.O u/s 68 vide his reassessment order passed under Sec. 143(3) r.w.s 147, dated 23.03.2015 to the income of the assessee determined under the normal provisions is sustained, then, the same would result to supplementing the original assessment order that was passed by him u/s 143(3) r ..... X X X X Extracts X X X X X X X X Extracts X X X X
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