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TMI Blog2023 (8) TMI 75X X X X Extracts X X X X X X X X Extracts X X X X ..... the order so sought to be rectified by the assessee is the rectified order dated 18/03/2014 wherein the surcharge continued to be levied on the assessee besides additional interest. Therefore, the rectification application dated 01/07/2016 is well within the limitation period as so prescribed and is not barred by limitation. The surcharge is hereby directed to be deleted and the AO is directed to provide the necessary relief to the assessee. - ITA No. 26/CHD/2023 - - - Dated:- 26-5-2023 - SHRI A.D. JAIN, VICE PRESIDENT AND SHRI VIKRAM SINGH YADAV, ACCOUNTANT MEMBER For the Assessee by : Shri Sudhir Sehgal, Advocate For the Revenue by : Shri Akashdeep, JCIT, Sr. DR ORDER PER VIKRAM SINGH YADAV, A.M. This is an appeal filed by the assessee against the order of the CIT(A)-3, Gurgaon dated 31.10.2022 wherein the assessee has taken the following grounds of appeal : 1. That the Ld. CIT(A) has erred in dismissing the appeal of the assessee on the ground that application u/s 154 was not filed within four years. 2. That the finding of the CIT(A) is incorrect as he has failed to appreciate that that the assessee had filed original rectification applic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... doing that, he has considered the assessee's later application dated 17.10.2018 and has omitted to take into consideration the assessee s earlier application filed within time in the year 2016. 6. It was submitted that being aggrieved, the assessee carried the matter in appeal before the ld. CIT(A) who has confirmed the finding of the AO holding that there is no order passed by the AO dated 18.03.2014 on record and thus, taking into account the AO s order dated 5/04/2011 for counting the limitation period and has been held that the application is again barred by limitation. It was submitted that the order u/s 154 dated 18.03.2014 is very much part of the assessment record and has also been submitted before the Bench as part of assessee's Paper Book. Further the assessee places reliance on the decision of Hon'ble Supreme Court in case of Hind Wire Industries Ltd. reported in 212 ITR 639 wherein it has been held that the limitation has to be computed from the date of the later rectification order. It was, accordingly, submitted that the judgement of the Hon'ble Supreme Court in case of Vatika Township was pronounced on 15.09.2014 and the assessee moved an appl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) confirmed the findings of the AO holding that the application dated 18/10/2018 is barred by limitation for the reason that what is available on record is the consequential order passed by the AO dated 05/04/2011 and there is no copy of order passed by the AO u/s 154 dated 18/03/2014 on record. During the course of hearing, the ld AR taken us through the order passed by the AO u/s 154 dated 18/03/2014 available at APB page 7 and therefore, the existence of the said order is no more in dispute and also not being contested by the ld DR. Here, it is relevant to note that the surcharge has been levied in terms of the original order dated 05/04/2011 and thereafter, due to delay in deposit of taxes, the assessee was asked to pay interest u/s 245D(6A) and additional demand of Rs 40,321/- was raised in terms of rectification order u/s 154 dated 18/03/2014. 10. In the said factual background, the limited canvass of the dispute before us is which of the two orders of the AO is sought to be rectified by the assessee and whether the same is within the limitation period. In other words, whether the original order dated 05/04/2011 to give effect to the directions of the Settlement Commission ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d field or only with respect to a part of the matter covered by the initial assessment order. The result of reopening the assessment is that a fresh order for reassessment would have to be made including for those matters in respect of which there is no allegation of the turnover escaping assessment. As it is, we find that in the present case, the assessment orders made under s. 12A were comprehensive orders and were not confined merely to matters which had escaped assessment earlier. In the circumstances, the only orders which could be subject-matter of revision by the appellant were the orders made under s. 12A of the Act and not the initial assessment orders. In the case of J. Jaganmohan Rao vs. CIT/CEPT (1970) 75 ITR 373 (SC), this Court dealt with s. 34 of the Indian IT Act, 1922, which relates to reassessment in the case of income escaping assessment. It was held by this Court that once assessment is reopened, the previous under-assessment is set aside and the whole proceedings start afresh. Ramaswamy, J., speaking for the Court observed : Sec. 34 in terms states that once the ITO decides to reopen the assessment he could do so within the period prescribed by servi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s to the best of its judgment, the tax or licence fee payable on the turnover referred to after issuing a notice to the dealer and after making such enquiry as it considers necessary. Sec. 21 of the said Act deals, inter alia, with revisional powers of the Dy. Commissioner. Sub-ss. (2) and (3) of that section read as under : (2) The Dy. Commissioner may of his own motion call for and examine the record of any order passed or proceeding recorded under the provisions of the Act by a CTO subordinate to him and against which no appeal has been preferred to him under s. 20, for the purpose of satisfying himself as to the legality or propriety of such order or as to the regularity of such proceeding and pass such order with respect thereto as he thinks fit. (3) In relation to an order of assessment passed under this Act, the power under sub-s. (1) and (2) shall be exercisable only within a period of four year from the date on which the order was passed. While holding that the expression the date on which the order was passed in sub-s. (3) of s. 21, did not qualify the word order and hence the period of four years has to be calculated from the date of the rectif ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thstanding the repeal thereof : Provided further that any reassessment proceedings pending on the date of commencement of the MP Gen. ST (Amendment) Act, 1978 (No. 25 of 1978) be completed in accordance with the provisions in force before the date of such commencement and within a period of two calendar years from the date of such commencement. 33. Manner of assessment and reassessment and imposition of penalty. ( 1) Where (a) a registered dealer has rendered himself liable to tax and penalty under sub-s. (1) of s.14A, or (a-i) a dealer has failed to comply with a notice issued under sub-s. (1) of s. 17, or (b) a registered dealer has failed without sufficient cause to furnish prescribed returns for any period by the prescribed date as required by sub-s. (1) of s. 17, or (c) a registered dealer has rendered himself liable to best judgment assessment under cls. (a) and (b) of sub-s. (4) of s. 18, or (d) a dealer has rendered himself liable to best judgment assessment under subs. (6) or sub-s. (7) of s. 18, or (e) a dealer being liable to pay tax, has wilfully failed to apply for registration, or (f) the sale or purchase of goods by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d mean the original order of the assessment. As against this, Dr. Shankar Ghose, learned senior counsel referred us to the decisions of the Patna and Karnataka High Courts in Bihar State Road Transport Corpn. vs. CIT (1986) 55 CTR (Pat) 270 : (1986) 162 ITR 114 (Pat) and CIT vs. Mysore Iron Steel Ltd. (1985) 46 CTR (Kar) 93 : (1986) 157 ITR 531 (Kar) respectively which decisions have taken the contrary view. However, in view of the decisions of this Court referred to above, we are 'of the opinion that the view taken by the Tribunal in the present case is the correct one. We, therefore, set aside the impugned order of the High Court and restore that of the Tribunal. The appeals are allowed accordingly with no order as to costs. 12. In the instant case, as we have noted above, the assessee first moved the rectification application on 01/07/2016 and at that point in time, the AO has already passed a suo-moto rectification order u/s 154 dated 18/03/2014 and therefore, the earlier order passed by the AO dated 05/04/2011 merged into the rectification order dated 18/03/2014. In view of the same, even though the surcharge was levied in terms of the first order, the order so so ..... X X X X Extracts X X X X X X X X Extracts X X X X
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