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TMI Blog2021 (9) TMI 325X X X X Extracts X X X X X X X X Extracts X X X X ..... 2014 was to quash the order of assessment passed by the respondent-Revenue dated 24.10.2014, under Section 143(3) read with Section 147 of the Income Tax Act, 1961 (hereinafter referred to as "the Act") along with a notice of demand under Section 156 and notice under Section 247 read with Section 271(1)(c) of the Act for the assessment year 2007-08. 5.The learned Single Bench dismissed both the writ petitions and in W.P.No.28434 of 2014, granted liberty to the assessee to file statutory appeal against the order of the assessment dated 24.10.2014. 6.The assessee is a company incorporated under Section 25 of the Indian Companies Act, 1956. The assessee filed their returns of income for the assessment years 2005-06, 2006-07, 2007-08 and 2008-09 and the assessments were completed by orders dated 19.12.2007, 26.12.2008 and 29.12.2009 under Section 143(3) of the Act and 11.12.2010 under Section 143(1) of the Act. 7.The assessee would contend that in the course of assessment proceedings, the Assessing Authority had considered all the issues arising out of the returns of income filed and the computation of tax, there upon had sought various particulars from the assessee, which were furn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iled originally be treated as a return in response to the notice under Section 148 of the Act and requested for furnishing the reasons for reopening and by communication dated 30.05.2011, the reasons for reopening were furnished. Along with the reasons for reopening, the respondent issued notice under Section 143(2) of the Act. The assessee would contend that this procedure is incorrect, as the assessee was entitled to file their objections to the reopening of the assessment pointing out that the income from interest has been offered to tax under the head 'business' by the assessee whereas, the Assessing Officer brought it under the head 'income from other sources', which was affirmed by the CIT(A) and the alternate submission made by the assessee was considered and relief was granted to the assessee and therefore, there is no escapement of income, as the issue, proposed to be reassessed, was already part of the assessment order passed at the first instance. 11.With regard to the second issue, pertaining to the receipt of lease rent amounting to Rs. 3.9 Crores, the assessee stated that a specific query was raised by the Assessing Authority at the first instance and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dated 17.09.2014 has been pre-dated. On 24.10.2014, the assessee addressed the Assessing Officer stating that the notice is beyond the period of limitation as prescribed under Sections 153(2), 153(4), Explanation (ii) and the proviso thereunder. This was explained by the assessee stating that the time limit for completion of assessment of 60 days had expired and therefore, the proceedings are barred by limitation. The respondent did not accept the stand taken by the assessee and by order dated 24.10.2014, completed the assessment stating that the copy of the order passed by the Court was received by the Department only on 28.08.2014 and was communicated to the respondent-Assessing Officer only on 04.09.2014. The assessment was also completed on merits and this order of assessment dated 24.10.2014 was impugned in W.P.No.28434 of 2014. Since the challenge to the reassessment proceedings is the substantive challenge, the arguments were advanced on either side largely on the grounds, which were raised in W.A.No.1912 of 2021 as well as as to how the order rejecting the objections of the assessee dated 11.01.2013, is not in accordance with law. 14.Mr.R.V.Easwar, learned Senior Counsel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8.06.2014 and that the writ petition was dismissed on 04.07.2014. 18.It is further submitted that the assessee, in the writ petition, had also challenged the reassessment proceedings on merits and referred to the order passed by the CIT(A) dated 28.03.2012 and the remand report, which was called by the CIT(A), dated 15.02.2012 and submitted that the reassessment is a change of opinion, which is impermissible in law. Similar is the submission with regard to the issue of assessability of interest as well as the lease income of M/s.DLF Properties Ltd. Further, it is submitted that the Assessing Officer not brought on record any material to justify that the reassessment proceedings are nothing but review. Further, it is submitted that the proposed assessment amount of Rs. 3.9 Crores under the head 'other sources' would not result in any escapement of Revenue even if the income is assessed under the head 'other sources' and therefore, there was no occasion to invoke Section 148 of the Act. Further, it is submitted that the order dated 28.03.2012 passed by the CIT(A) had attained finality and the proceeding, reopening the assessment, has the effect of reviewing the order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the objections raised by the assessee for the reopening had been properly construed by the Assessing Officer and a speaking order has been passed on 11.01.2013 and thereafter, reassessment proceedings were commenced and concluded by order dated 24.10.2014 and therefore, the assessee cannot, now, question the order rejecting the objections to the reopening proceedings and therefore, nothing survives for adjudication in W.A.No.1913 of 2021. 24.It is further submitted that the objections raised by the assessee were properly dealt with by the Assessing Officer by stating that once the income from lease rental is assessed under the head 'income from other sources', as the same does not fall either under the head 'business' or under the head 'income from property', along with interest income, the loss incurred by the assessee on account of conducting of horse races cannot be set off against these income in view of the provisions of Section 74A of the Act, although the loss from the racing activity can be carried forward for four subsequent years to be set off against any income from the same activity. Further, the Assessing Officer pointed out that the Lease Deed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n where contempt proceedings may be initiated and therefore, it was submitted that the intention of the legislature as laid down in the proviso should be understood as 60 days from the date of receipt of the Court's order not on the date on which the Court order was pronounced. 27.The Assessing Officer further stated that the order of the Court was received in the office of the CIT(Judicial) on 28.08.2014, which was communicated to the office of the respondent on 04.09.2014 and in this regard, referred to the seal fixed by the Registry of this Court in the certified copy of the order. It is submitted that the copy application was filed on 04.07.2014, i.e., the date on which the order was passed, the copy was made ready on 26.08.2014 and delivered to the counsel on 27.08.2014 which in turn was received by the office of the CIT(Judicial) on 28.08.2014 and received by the Assessing Officer on 04.09.2014. 28.The learned Senior Standing Counsel referred to the scanned copy of the endorsement in the certified copy of the order, which was reproduced in the assessment order. Further, the Assessing Officer pointed out that it is not practicably possible for an order to be passed on 03 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t time barred. After referring to the finding on the aforementioned two points, the Assessing Officer proceeded to complete the assessment under Section 143(3) read with Section 147 of the Act on merits. 34.So far as the challenge to the order of reassessment on the ground of merits is concerned, consistently the Hon'ble Supreme Court and this Court has been slow to exercise its jurisdiction under Article 226 of the Constitution of India by examining the order of assessment/reassessment on the merits of the case as objected by the assessee, as it has been found that the remedy by way of appeal before the CIT(A) is not only an effective, but efficacious remedy. Furthermore, it has been pointed out that the first appellate authority is entitled to re-appreciate the facts and he is entitled to call for a remand report from the Assessing Officer, he is also entitled to admit additional documents after following the procedure under the Act. Thus, the assessee would have an effective remedy before the CIT(A) which authority will not only be entitled to examine the aspect as to whether the Assessing Officer was right on facts, but also as to whether the Assessing Officer was right on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dras)] shows that there were writ appeals as well as writ petitions, which were heard as a batch by the Hon'ble Division Bench. In the preamble of the said order, the category of cases have been spelt out from which, we find that the writ petitions were filed challenging the assessment order, those filed challenging the notice issued under Section 148 of the Act or speaking order or show cause notice issued under Section 143(2), there were cases where writ petitions were filed challenging the assessments completed pursuant to intimation under Section 143(1) and reassessment notices issued within 4 or 6 years. The other category of cases were challenging the notices issued for reassessment within 4 years from the relevant assessment years where assessment orders were passed under Section 143(3)/147 of the Act. The next category of cases were those filed challenging the speaking orders of reassessment issued after 4 years, but within 6 years. The writ appeals filed by the Revenue challenging the interim orders granted in the writ petitions were also tagged along with the batch. Thus, we find that there are six category of cases, which were clubbed together and heard by the Hon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of the interim orders granted in the writ petitions to be decided by the Hon'ble Division Bench, but also the maintainability of the writ petitions. Therefore, it would be impermissible for the assessee to take a stand that the interim orders granted in the writ petitions stood expired on 08.06.2014 and beyond that, there was no interim order and therefore, limitation commenced from the said date is an argument, is not tenable. 40.The cases referred to by the learned Senior Counsel for the assessee more particularly, in the case of Chandra Bhan Bansal (supra) and Saheb Ram Om Prakash Marketing (P.) Ltd. (supra) are all individual cases, where the Court was called upon to interpret the period of limitation. The litigation before us is quite distinct and different. We say so because the Hon'ble Division Bench was dealing with a batch of cases of which, there were three writ appeals and more than 51 writ petitions, which were filed during 2012, 2013 and 2014. 41.As mentioned above, the writ appeals were intra-court appeals before the Hon'ble Division Bench against the interim order granted in the writ petitions. On a perusal of the judgment/order passed by the Hon' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s granted, which shall continue till the disposal of the writ petitions before the High Courts. The appeals are allowed in the aforesaid terms." 43.To be noted that the Hon'ble Supreme Court had observed that during the pendency of the appeal before it, stay of reassessment was granted, which was directed to be continued till the disposal of the writ petitions before the High Court. Assuming the learned Senior Counsel for the appellant is correct, after the order was passed by the Hon'ble Supreme Court, the order of stay stood revived, which would mean that even after, the order of stay was not extended beyond 08.06.2014, which is deemed to have been extended from 09.06.2014 pursuant to the judgment/order of the Hon'ble Supreme court dated 08.12.2016. In fact, the assessee was basking under the said interim order and therefore, it would not lie in the mouth of the assessee to now contend that the proceedings are barred by limitation. That apart, the stay petition filed by the assessee in W.P.No.3005 of 2013 was pending on the file of the Hon'ble Division Bench and only by order dated 04.07.2014, the miscellaneous petitions were closed. The learned Single Bench ha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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