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TMI Blog2021 (8) TMI 677X X X X Extracts X X X X X X X X Extracts X X X X ..... rom 31.3.2007 and the two years' period would come to an end on 31.3.2009. As it is not in dispute that the proceedings u/s 263 of the Act were initiated well beyond the said date, exercise of such power has to be held to be without jurisdiction and barred by limitation. Decided against the Revenue - Tax Case Appeal No.64 of 2015 - - - Dated:- 10-8-2021 - Honourable Mr.Justice T.S.Sivagnanam And Honourable Mr.Justice Sathi Kumar Sukumara Kurup For the Appellant : Mrs.R.Hemalatha, SSC For the Respondent : Mr.R.Vijayaraghavan for M/s.Subbaraya Aiyer Padmanabhan JUDGMENT T.S.SIVAGNANAM, J. This appeal has been filed by the Revenue under Section 260A of the Income Tax Act, 1961 ('the Act' for brevity) challenging the order dated 08.8.2014 passed by the Income Tax Appellate Tribunal, Madras 'B' Bench, Chennai (the Tribunal for brevity) made in I.T.A.No.1384/ Mds/2014 for the assessment year 2004-05. 2. The above appeal was admitted on 03.11.2015 to consider the following substantial questions of law: 1. Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the order passed under Sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee submitted their reply dated 13.9.2006. Thereafter, the assessment was completed by order dated 30.12.2011 under Section 143(3) read with Section 147 of the Act. The Assessing Officer, after taking into consideration the reply given by the assessee, held that no disallowance was required to be made in respect the prior period expenses. In other words, the explanation offered by the assessee was found to be satisfactory by the Assessing Officer. 7. Thereafter, the Commissioner of Income Tax (Large Tax Payer Unit) [for short, the CIT] issued a notice under Section 263(1) of the Act stating that the assessment proceedings were erroneous and prejudicial to the interest of Revenue. The case was discussed by affording an opportunity of personal hearing. The assessee objected to the exercise of power under Section 263(1) of the Act on the ground of limitation as well as on merits. However, by order dated 26.3.2014, the objections raised by the assessee were rejected by the CIT, the reassessment order dated 30.12.2011 was set aside and the matter was sent back to the Assessing Officer for de novo consideration with regard to the claim of business loss of ₹ 72.75 Crores. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or depreciation on investment account and that the provision made in each year towards depreciation on investments was added back and offered to tax. Therefore, it was submitted that when the non recoverable investments were written off by debit to the provision account, the same had to be allowed as deduction in computing the total income. 14. Thus, the explanation offered by the assessee was found to be acceptable by the Assessing Officer and the assessment was completed under Section 143(3) of the Act by order dated 28.12.2006. This aspect of the matter has not even been referred to by the CIT when the notice was issued under Section 263(1) of the Act. 15. The question as to whether the date, on which the order under Section 147 of the Act was passed should be reckoned as the starting point of limitation, considering the facts and circumstances of the case, has been dealt with by several decisions of the Hon'ble Supreme Court and the earliest of such decisions is in the case of CIT Vs. Alagendran Finance Limited [reported in (2007) 293 ITR 1] wherein it was held that in respect of an issue, which was not subject matter of reassessment, limitation under Section 263( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .75 Crores, which was not one of the issues in the re-assessment proceedings, but was an issue, which was raised by the Assessing Officer in the original assessment under Section 143(3) of the Act, in which, a show case notice was issued, the assessee submitted their explanation and thereafter, the assessment was completed. 19. For all purposes, if, according to the CIT, the decision on the claim of business loss was erroneous and prejudicial to the interest of Revenue, then the proceedings under Section 263 of the Act ought to have commenced before 31.3.2009. Therefore, by applying the above decisions, the only conclusion that can be arrived is to hold that the proceedings are barred by limitation. 20. The learned Senior Standing Counsel appearing for the appellant Revenue has placed reliance on the decision of the Bombay High Court in the case of CIT-3 Vs. ICICI Bank Ltd. [ITA.No.6375 of 2010 dated 08.2.2012]. 21. In the decision of the Bombay High Court in the case of ICICI Bank Ltd., the substantial question of law framed for consideration was as to whether, in the circumstances of the case, the Tribunal was right in holding that the order of the CIT passed u ..... X X X X Extracts X X X X X X X X Extracts X X X X
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