M/S CITI PLAZA, JALANDHAR V. INCOME TAX OFFICER , WARD 3(1), JALANDHAR

ITA 356/ASR/2017

AI Insights

The case revolves around the reopening of an assessment for the assessment year 2006-07 by the ITO, Ward-III(1), Jalandhar, based on the directions from the CIT(A) in an earlier appeal for AY 2005-06. The assessee, M/s Citi Plaza Rainak Bazar, contested the reopening and subsequent assessment, which included a long-term capital gain of Rs. 1,70,00,000, alleging it was based on a 'fake and unproved document'. The Tribunal examined whether the CIT(A) had the authority to direct the reopening of the case for another assessment year and whether the reopening was within the permissible time limits under the Act. The Tribunal concluded that the CIT(A) did not have the authority to direct such reopening and that the reopening was indeed time-barred, leading to the quashing of the assessment order.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 114826 (ITAT-AMRITSAR)
• Duration Of Justice: 6 year(s) 3 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-09-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 29-08-2023
• Assessment Year: 2006-2007
• Appeal Filed On: 04-06-2017
• Other Referred Cases: Rajinder Nath vs CIT, Murlidhar Bhagwan Das vs ITO, Smt. Munia Devi Jain vs CIT, Eskay Knit (India) Ltd vs DCIE, Lotus Investments Ltd vs G. Y. Wagh, Assistant Commissioner of Income Tax
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Unexplained investment; Sale consideration of property below Jantri Value; Depreciation; Period of limitation; Set aside; Capital Gains; CHAPTER XIVB
• Section: 147; 148; 2; 205; 250; 150(1); 251; 153

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH, AMRITSAR. BEFORE DR. M. L. MEENA, ACCOUNTANT MEMBER AND SH. ANIKESH BANERJEE, JUDICIAL MEMBER I.T.A. No. 356/Asr/2017 Assessment Year: 2006-07 M/s Citi Plaza Rainak Bazar, Thru S. Joginder Singh, ES 225, Makhdoom Pura, Jalandhar. [PAN:-ABOPS0558G] (Appellant) Vs. ITO, Ward-III(1), Jalandhar. (Respondent) Appellant by Sh. J. S. Bhasin, Adv. Respondent by Smt. Ratinder Kaur, Sr. DR. Date of Hearing 30.08.2023 Date of Pronouncement 13.09.2023 ORDER Per: Anikesh Banerjee, JM: The instant appeal of the assessee was filed against the order of the ld. Commissioner of Income Tax (Appeals)-2, Jalandhar, (in brevity ‘the CIT (A)’) order passed u/s 250 (6) of the Income-tax Act, 1961 (in brevity the Act) for assessment year 2006-07. The impugned order was emanated from the order of the ld. ITO, Ward-III(1), Jalandhar, (in brevity the ld. AO) order passed u/s 147/148 and 150 of the Act. I.T.A. No. 356/Asr/2017 Assessment Year: 2006-07 2 2. The assessee has taken the following grounds: “1. That the Id.CIT(A) has grossly erred to hold that in the earlier order of CIT(A) dated 13.03.2013 for AY 2005-2006, a finding or a direction was given to the ITO to reopen the case for AY 2006-07, to bring to tax the long term capital gain under dispute. 2. That while taking the above view, the ld.CIT(A) was not justified in totally ignoring the binding decision of Hon'ble Supreme Court in Rajinder Nath vs CIT (1979) 120 ITR 14 (SC), heavily relied upon by assessee, holding that 'when it is left to the option or discretion of the ITO, whether or not to take an action, it cannot be described as direction". Various other binding judicial decisions relied upon by assessee, but not considered by the ld.CIT(A), also render his order as unsustainable. 3. That having held so, the ld.CIT(A) grossly erred in upholding the assumption of jurisdiction by the ITO u/s.148, when it was clearly time barred. 4. That by any reckoning, the ld.CIT(A) was not competent to direct reopening of case for another year, while deciding an appeal before him. 5. That the long-term capital gain of Rs.1,70,00,000/-, by assuming the sale price of 'Citi Plaza' building at Rs.4 crores, based on a fake and unproved document, against the actual sale price of Rs.2,30,00,000/-, has wrongly been assessed and upheld in this case. I.T.A. No. 356/Asr/2017 Assessment Year: 2006-07 3 6. That the Id.CIT(A) was not justified in ignoring assessee's submissions that if at all the reopening was valid, the Id ITO could not have given a clean chit to other group of partners headed by Shri Jaswinder Singh Sangha, from their liability towards the firm in the present case. 7. That by any reckoning, the assessment order passed in pursuance to the purported directions of the Id.CIT(A) in his earlier appellate order for AY 2005-06, being contrary to law and facts of the case, was not sustainable.” 3. Brief facts as culled out from the records are that the assessee earned a capital gain amount to Rs.1,70,00,000/- by sale of property Rs. 4 crore thereafter assessment was completed in assessment year 2005-06. The ld. AO had wrongly assessed the income in the assessment year 2005-06. Being aggrieved on the assessment order, the appeal was filed by the assessee. The appellate authority deleted the addition and made an opinion that the said income would be under purview for A.Y. 2006-07. On that basis, the reopening was made u/s 148 and assessment was completed with addition amount to Rs.1 crore 17 lacs. The actual sale consideration as per agreement on dated 08.05.2004 was Rs.4 crore. The ld. AO deducted the cost of acquisition Rs.2.3 crore and net capital gain was assessed as taxable income amount to Rs.1crore 70 lacs. Aggrieved assessee filed an appeal before the ld. CIT(A). The ld. CIT(A) upheld the order of the ld. AO. Being aggrieved assessee filed an appeal before us. I.T.A. No. 356/Asr/2017 Assessment Year: 2006-07 4 4. The ld. AR vehemently argued and filed the written submissionswhich are kept in the record. The ld. AR invited our attention in appeal order para 4.4 of the said order is reproduced as below: “4.4 Having considered the submissions made in this regard, I find that it would be appropriate to first reproduce the directions given by the CIT(A) in the appellate order, which are reproduced as under: “I have considered the observations of the Assessing Officer as made in the assessment order as well as in the remand report. I have also considered the written submissions of the assessee as well as its counter comments on the report of the Assessing Officer. I have also considered the other material brought on record. On careful consideration of the assessment order as well as the assessment records, it has been noticed that the Assessing Officer has made the impugned addition as no explanation from the assessee side was ever filed during the course of assessment proceedings and as the order was framed ex-parte. As the agreement was executed during the F. Y. 2004- 05, the Assessing Officer has computed and taxed the Long- Term Capital Gains earned by the assessee in the year under consideration. 10.5 During the course of appellate proceedings, the assessee firm has vehemently submitted that as per terms and conditions of the agreement to sell dated 08.05.2004, the transfer of the property took place in the F.Y. 2005-06 as substantial part of I.T.A. No. 356/Asr/2017 Assessment Year: 2006-07 5 the payments and the possession of the properly was handed over to the purchaser dining the F.Y. 2005-06. It was, therefore, submitted that the Long-Term Capital Gain if any earned from the transfer of property is taxable only In the A.Y. 2006-07. The Assessing Officer also could not controvert this argument of the assessee while submitting his remand report. 10.6 On the perusal of sale deed, it has also been ascertained that the possession of the property has been handed over to the purchaser only at the time of executing sale deed on 09/10.11.2.005. Moreover, the agreement dated 08.05.2004 is also silent about handing over possession of the property. In these facts and circumstances of the case, I am also of the opinion that the property has been transferred in the F. Y. 2005- 06 and the Capital Gains arising from the transfer ofproperty under consideration if any is taxable only in the A.Y. 2006-07 and not in the year under consideration. I am therefore, having no hesitation in deleting the addition of Rs. 1,53,00,000 made by the Assessing Officer on account of Long-Term Capital Gain earned by the assessee in the year under consideration and the addition made is accordingly directed to be deleted. In the result, ground of appeal no. 6 taken by the assessee firm is allowed. 10.6 I would like to make it clear that in view of my decision to hold that the capital gains in the case of assessee if any is taxable only in the A. Y. 2006-07, the Assessing Officer is free I.T.A. No. 356/Asr/2017 Assessment Year: 2006-07 6 to take action against the assessee to tax the Long-Term Capital Gains in the A.Y. 2006-07. " (Emphasis supplied) 4.1 The ld. AR placed that reopening u/s 148 for A.Y. 2006-07 was initiated on basis of the opinion found by the ld. CIT(A) in his appeal order for A.Y. 2005-06 on that opinion the assessment was reopened u/s 148 r.w.s. 150 (iii) and the notice was served to the assessee on 06.03.2014. The assessee filed the return alongwith objection filed before the ld. AO against the jurisdiction for issuance of notice u/s 148 which is itself time barred as per section 149(1) (b) of the Act. The notice is supposed to within 31.3.2013 but it was served on 06.03.2014. 4.2 The ld. AR invited our attention in the objection placed before the ld. AO which is reproduced as below:- I.T.A. No. 356/Asr/2017 Assessment Year: 2006-07 7 I.T.A. No. 356/Asr/2017 Assessment Year: 2006-07 8 4.3 The ld. AR further argued and placed the written submission which is reproduced as below: “ON LEGAL GROUND NO. 1 to 4 "That the first four grounds of appeal, collectively assail the most cryptic, vague and perfunctory findings of the CIT(A), starting from para 4.4 and as culminate in para 4.7 of the order wherein, he says that " Now when the issue has been set aside by the Hon'ble ITAT, the ground has been taken by the appellant that no direction had been given by the CIT(A) in appellate order that for taxing the capital gains if any, in AY 2006-07. Hon'ble Supreme Court has categorically held in a number of cases that order has to be read as a whole and there cannot be a selective reading of I.T.A. No. 356/Asr/2017 Assessment Year: 2006-07 9 certain portion of the order." Thereafter, in para 4.6, he has upheld the assessment in terms of sections 149, 150(1) and 150(2). SUBMISSIONS BEFORE THE BENCH 1. The ld.CIT(A) in his above findings, has apparently detracted from the core issue, which he was required to adjudicate by the Bench. In para 4.4 he has reproduced the entire findings of his predecessor as given in appellate order for AY 205-06, wherein it was concluded that in the given facts of the case the impugned capital gain was not at all assessable in AY 2005-06, since the substantial payment with execution of registered sale deed had taken place in the later year i.e. AY 2006-07. In para 4.6, he has alleged that the assessee has chosen only the selective words to say that no finding was given by CIT(A) while deleting the addition in earlier year. Then he has tried to interpret the words " if any" used by his predecessor, to justify that a clear-cut finding was given by CIT(A). The core issues raised by the assessee, were as follows: i) That when the ld.CIT(A) in para 10.6 of his observations, had not given any clear directionbut left it to the discretion of AO to assess the capital gain in AY 2006-07, was it still a direction/finding for the AO in terms of sec 153(3)(ii) r.w.s.150(1) and not contrary to the binding decision of Hon'ble Apex Court in the case of Rajinder Nath Vs. CIT (1979) 120 ITR 14 (SC), followed in host of decisions by various High Courts. ii) That there being no direction given by CIT(A), the reopening u/s.148 had become barred by time u/s. 149(1)(b). I.T.A. No. 356/Asr/2017 Assessment Year: 2006-07 10 iii) That whether the ld.CIT(A) was competent, while deciding a case before him, to give direction to reopen a case for another year, not before him. 3. Rather than specifically addressing the above legal issues, the ld.CIT(A), in his impugned order, has taken a generic view that since the assessee had himself claimed that the capital gain, if any was assessable in AY 2006-07, which claim had been accepted by his predecessor to delete the addition made in AY 2005-06, now the contentions raised by assessee were totally misleading and contrary to facts. 4. The assessee had relied upon a plethora of under noted cases, wherein the findings/directions were elaborately explained qua the relevant provisions of law, which the ld.CIT(A) has conveniently skipped, while choosing to endorse the view taken by his predecessor: i) Order of Hon'ble Apex Court in the case of Rajinder Nathvs CIT (1979) 120 ITR 14 (SC) wherein it was held thus: "Reassessment under s. 147(a)—Limitation—Scope and applicability of s. 153(3)(ii)—A finding' for purposes of s. 153(3)(ii) must be a finding necessary, and not incidental, for the disposal of the particular case, in respect of particular assessee and in relation to the particular assessment year and a "direction" for that purpose must be an express direction for the disposal of the case which the authority is empowered to give while deciding the case— AAC having held that the cost of construction of the property having been debited to the co- owners, the firm was not the owner of the property and the excess over disclosed cost of construction could not be added in the assessment of the firm; and further that the ITO I.T.A. No. 356/Asr/2017 Assessment Year: 2006-07 11 "is free to take action" against the co-owners, there was neither a "finding" against co-owners nor a "direction" to assess the co-owners within the meaning of s. 153(3)(ii) and the provision did not apply. Hon'ble Apex Court in Hope Textile vs. UOI (1994) 205 ITR 508(SC)" held thus: "A writ of mandamus can be issued to a statutory authority to compel it to perform its statutory obligation. It cannot issue to compel him to pass an order in violation of a statutory provision. The ITO had no power to make a reassessment beyond the period prescribed by sub-s. (2), unless the case fell under any of the other sub-sections under s. 153 or other provision extending the said period of limitation. No such provision is brought to notice. The only provision relied upon is cl. (ii) in sub-s. (3). Clause (ii) contemplates a situation where certain orders have to be passed in consequence of or to give effect to any finding or direction contained in any order passed under the provisions referred to therein or in an order of any Court in a proceeding otherwise than by way of appeal or reference under the Act. This sub-clause cannot be understood as empowering the High Court to give a direction to the authority under the Act to ignore the period of limitation prescribed in the Act. —Vithaldas vs. ITO (1969) 71 ITR 204 (All) distinguished; Order dt. 1st March, 1982, of the Madhya Pradesh High Court in CWP No. 574 of 1981 affirmed". Hon'ble Madras High Court in CiT vs. T A Krishnaswami (2008)2 DTR (Mad) 143, wherein their Lordships held that CIT(A) has no power to direct reopening of case for another year. In this case, assessments for the asst. yrs. 1994-95 to 1997-98 were reopened under s. 147 and were completed on 11th March, 2002. The assessee filed an appeal before the CIT(A) against that order. The CIT(A) allowed the appeal and gave direction to the AO to reopen the assessment for the asst. yr. 1998-99 to I.T.A. No. 356/Asr/2017 Assessment Year: 2006-07 12 look into the source of investment afresh in the property of 4 plots in VGP Golden Beach as the investments had come out of unexplainable source. In appeal, the ITAT held that CIT(A) could not give direction to reopen case for another year. On revenue's appeal, the Hon'ble Court dismissed the appeal, confirming the order of ITAT. Hon'ble Bombay High Court in Eskay Knit (India) Ltd vs. DCIE (2014) 110 DTR 126 (Bom), under identical facts, comprehensively held as under: "16. Therefore, the issue for our examination is whether there is any finding in the order of the Tribunal dated 25th October, 2002 which is being given effect to and/or as consequence thereof, the impugned notice has been issued. It is only when the answer to the above question is in the affirmative i.e. there is a finding that the issue of impugned notice would be saved from the bar of limitation by virtue of Section 150(1) of the Act. 17. The issue of what is a 'finding' in an adjudicatory/ appellate order is no longer res integra. The Supreme Court while dealing with a provision similar to Section 150 of the Act found in Section 34(3) of the Income Tax Act, 1922 in ITO v/s. Murlidar Bhagwan Das 52 ITR 335 has explained the meaning of finding' thus:- A finding', therefore, can be only that which is necessary for the disposal of an appeal in respect of an assessment of a particular year. The Appellate Assistant Commissioner may hold, on the evidence, that the income shown by the assessee is not the income for the relevant year and thereby excludethat income from the assessment of the year appeal. The finding in that context is that that income does not belong to the relevant year. He may incidentally find that the income belongs to I.T.A. No. 356/Asr/2017 Assessment Year: 2006-07 13 another year, but that is not a finding necessary for the disposal of an appeal in respect of the year of assessment in question." The aforesaid meaning to the word 'finding' was rendered in the following contextual facts: - Income Tax Office had issued a re-opening notice, seeking to reopen assessment for the Assessment Year 1949-50. Consequently, the Assessment Order was also passed. In appeal, the Appellate Assistant Commissioner held that addition of interest made for the Assessment Year 1949-50 was incorrect and if at all it had to be included in the Assessment Year 1948-49. It was consequent to the aforesaid order of the Appellate Authority that notice for reopening were for 1948-49 on 5th December 1957. The assessee therefore filed a Petition under Article 226 of the Constitution of India on the ground that the notice dated 5th December 1957 seeking to re-open the assessment for Assessment Year 1948-49 is time barred under Section 34 of the Income Tax Act, 1922. The revenue contended that the Appellate Authority in his order for the Assessment Year 1949-50 had given a finding that the interest is chargeable to tax for Assessment Year 1948-49. This was not accepted by the Supreme Court on the basis of the meaning of finding given by it i.e. it was not necessary for the disposal of the appeal for Assessment Year 1949-50 to give a finding that the income is chargeable to tax in Assessment Yearl948-49. The Supreme Court also made the following further observations with regard to the words 'in consequence of or to give effect to' which was in Section 34 of the Income Tax Act, 1922 and even incorporated in Section 150 of the Act as under:- "............. Therefore, the expression finding' as well as the expression 'direction' can be given full meaning, namely, that the finding is a finding I.T.A. No. 356/Asr/2017 Assessment Year: 2006-07 14 necessary for giving relief in respect of the assessment of the year in question and the direction is a direction which the appellate or revisional authority, as the case may be, is empowered to give under the sections mentioned therein. The words 'in consequence of or to give effect to' do not create any difficulty for they have to be collated with, and cannot enlarge, the scope of the finding or direction under the proviso. If the scope is limited as aforesaid, the said words also must be related to the scope of the findings and directions." 18. Our attention was also invited to the decision of this Court in Lotus Investments Ltd., v/s. G. Y. Wagh, Assistant Commissioner of Income Tax and Others - [2007] 288 ITR 459. In this case, the Revenue had issued notice on 30th March 2006, seeking to re-open assessment for the Assessment Year 1988-89 to 1999-2000 i.e. beyond a period of six years from the end of the relevant Assessment Year. So far as the Assessment Years 1988-89 to 1999-2000 is concerned, the revenue relied upon the order of the CIT(A) dated 24th December 2004 wherein it was observed as under:- "The Assessing Officer is free to look into and consider these disallowances under section 148 of the Income-tax Act, in the relevant assessment years in terms of section 150(1) read with Explanation 2 of section 153 in respect of deletion of both amounts made in this order." The Assessing Officer relied upon the aforesaid observations to support the notices issued on the ground that there were finding/ directions given by the CIT(A). This Court followed the Apex Court's decision in I.T.A. No. 356/Asr/2017 Assessment Year: 2006-07 15 Murlidhar Bhagwan Das (supra) to hold that there was no finding given in the CIT(A) order. So far as directions were concerned, this Court followed the decision in Rajinder Nath v/s. CIT120 ITR 14 to hold that the above observations were not directions to issue a notice but merely allowed the Assessing Officer to take a look into the issue and decide. This is different from directions. In view of the above, this Court held that the notice for re-opening are beyond the period provided under Section 149 of the Act and Section 150 of the Act would have no application as the CIT(A) had not given any finding and/or directions to re-open the assessment. In any case, in the present case the revenue has pegged its case only on a finding in the order of the Tribunal dated 250ctober 2002 for the issue of the impugned notice. We are not concerned with the meaning and scope of the word 'directions' in the present case. 19. In view of the above and particularly the law laid down by the Apex Court in MurlidharBhagwan Das (supra), it is very clear that the Tribunal in its order dated 25th October 2002 was concerned with an appeal from orders passed in block Assessment and held that the ambit/ scope for assessment for the block period under Chapter XIVB is only to assess the undisclosed income for the block period and not for the total income or loss suffered in the previous year which is subject matter of regular assessment. The only finding of the Tribunal in its order dated 25th October 2002 is that the extent of claim for depreciation made by the assessee/ petitioner would not be a subject matter of enquiry in the block assessments. This is for the reason that the claim for higher depreciation cannot be said to be undisclosed income for the purpose of block assessment. The Tribunal had in its order dated 25th October 2002 while dealing with order passed in a block assessment had no occasion to examine whether or not the depreciation as claimed was permissible. It I.T.A. No. 356/Asr/2017 Assessment Year: 2006-07 16 may also be pointed out that the Tribunal in its order dated 25th October 2002 has recorded a finding of fact that no material was found during the course of search to establish that the claim for depreciation made was incorrect. Therefore, we are of the view that there is no finding given by the Tribunal in the order dated 25th October 2002 which would enable the Assessing Officer to extend the period of limitation as provided under Section 150 of the Act for the purpose of issuing impugned notice in respect of Assessment Year 1993-94. On this ground alone, the impugned notice is not sustainable as it is clearly time barred. 22. In view of the aforesaid reasons, the impugned notice dated. 26 March, 2003 is quashed and set aside and Petition is allowed." (Emphasis added) 4.4 The ld. AR relied on the catena of judgment which is reproduced as below:- Supreme Court of India Rajinder Nath v. Commissioner of Income-tax, [1979] 2 Taxman 204 (SC). The relevant paragraphs are reproduced as below: - “13. It is also not possible to say that the order of the AAC contains a direction that the excess should be assessed in the hands of the co-owners. What is a "direction" for the purposes of section 153(3)(ii) of the Act has already been discussed. In any event, what ever else it may amount to, on its very terms, the observation that the ITO "is free to take action" to assess the excess in the hands of the co-owners cannot be described as a "direction". A direction by a I.T.A. No. 356/Asr/2017 Assessment Year: 2006-07 17 statutory authority is in the nature of an order requiring positive compliance When it is left to the option and discretion of the ITO whether or not to take action, it cannot, in our opinion, be described as a direction. 14. Therefore, in our judgment the order of the AAC contains neither a "finding" nor a "direction" within the meaning of section 153(3)(ii) of the Income-tax Act in consequence of which, or to give effect to which, the impugned assessment proceedings can be said to have been taken. 15. Reliance was placed by the Revenue on CIT v. Vadde Pullaiah & Co. [1973] 89 ITR 240 (SC). In that case, there were two appeals before the AAC, an appeal by the firm and another by Pullaiah, a partner of the firm, filed in his individual status. The question was whether the business was the business of the firm or that of Pullaiah. In order to decide the appeal of the firm as well as that of Pullaiah, the AAC had to decide whether the business was that of the firm or that of Pullaiah. In finding that the business was that of the firm and not of Pullaiah, the AAC had necessarily to inquire into a matter which covered the subject-matter of both the appeals. 16. In the circumstances, differing from the High Court, we held that the provisions of section 153(3)(ii) of the Income-tax Act are not applicable to the instant case. The question is answered in favour of the assessees and against the Revenue. 17. The High Court did not enter into the first question formulated for its opinion, that is to say, whether the provisions of section 147(a) of the Income- tax Act were applicable for the assessment years 1955-56 and 1956-57. It is agreed by the parties that if section 153(3)(ii) of the Act cannot be invoked by the Revenue, it is necessary to decide the first question formulated by the Tribunal. In view of the opinion expressed by us on the application of section I.T.A. No. 356/Asr/2017 Assessment Year: 2006-07 18 153(3)(ii) of the Act, the case must go back to the High Court for its opinion on the first question. 18. The appeals are allowed, the judgment, dated September 17, 1971, of the High Court governing the cases of the different assessees for the assessment years 1955-56 and 1956-57 is set aside. The provisions of section 153(3)(ii) of the Income-tax Act, 1961 are not applicable to the instant case. Accordingly, the second question is answered in favour of the assessees and against the Revenue. The cases are remanded to the High Court for its opinion on the first question formulated by the ITAT. The assessees are entitled to their costs of these appeals.” High Court of Allahabad Commissioner of Income-tax, Agrav.Smt. Munia Devi Jain, [2008] 170 Taxman 574 (Allahabad). The relevant paragraphs are reproduced as below: - “41. The Gujarat High Court in the case of New Jehangir Vakil Mills Co. Ltd. (supra) and the Karnataka High Court in the case of T.M. Kousali (supra) has held that if an order has been made by the Civil Court in land acquisition proceeding, it would operate to remove the bar of limitation in reassessment proceeding in view of Clause (ii) of sub-section (3) of section 153 of the Act. However, this Court in the case of Foramer (supra) has drawn a distinction regarding applicability of section 153. It has specifically held that it relates to passing of an order of assessment and it does not relate to issuance of notice under section 147/148 of the Act. We are in respectful agreement with the view taken by this Court in the aforesaid case. The provision of Clause (ii) of sub-section (3) of section 153 of the Act would not be attracted. It will be attracted I.T.A. No. 356/Asr/2017 Assessment Year: 2006-07 19 only when the notices under section 147 of the Act has been issued to initiate proceeding under section 147 within the period prescribed under section 149 read with section 150 of the Act. We are fortified in our view by a decision of the Apex Court in the case of K. M. Sharma v. ITO [2002] 254 ITR 772 wherein the Apex Court had considered the amendment made in sub-section (1) of section 150 of the Act by the Direct Tax Laws (Amendment) Act, 1987 with effect from 1-4-1989. The Apex Court has held as under:- "Section 149 of the Act prescribes a maximum period of four or seven years depending upon the quantum of tax as mentioned in the said section for initiating reassessment proceedings. Section 150(1) states that the period of limitation prescribed in section 149 is not applicable, if the reassessment is proposed on the basis of any order passed by any 'authority in any proceedings under the Act by way of appeal, reference or revision' or 'by a Court in any proceeding under any other law'. Sub-section (2) of section 150, however, makes it clear that reassessment permissible under sub-section (1) of section 150 would not be available to the Department where the period of limitation for such assessment or reassessment has expired at the time it is proposed to be reopened. In sub-section (1) of section 150 by the Direct Tax Laws (Amendment) Act, 1987, with effect from 1-4-1989, the words 'or by a Court in any proceeding under any other law' were inserted which are shown in brackets with underline in the section reproduced above. The main question that has been raised on behalf of learned counsel appearing for the Parties is whether the provisions of sub- section (1) of section 150 as amended can be availed of for reopening assessments, which have attained finality and could not be reopened due to bar of limitation, that was attracted at the relevant time to the proposed reassessment proceedings under the provisions of section 149 of the Act." (p. 776) I.T.A. No. 356/Asr/2017 Assessment Year: 2006-07 20 ITAT KOLKATA BENCH-C ITO vs. Sri Biswajit Chatterjee ITA No. 565/Kol/2013 dated 10.11.2017.The relevant paragraphs are reproduced as below: - “11. Now the Revenue has agitated before us that Ld. CIT(A) erred in not giving direction to reopen the case of earlier years of the assessee in which investments were made. In this regard, we find that Ld. CIT(A) has been given power u/s. 251 of the Act to confirm the order of AO reduce, enhance or annul assessment order under the provision of Act there is no power available to Ld. CIT(A) to give direction to AO for reopening the case of other years. The Income Tax Act provides different schemes wherein the AO is empowered to assess or re-assess the income which has escaped assessment. So at the most, if the Revenue wishes to tax the escapement of income then it has followed the scheme provided under the Act. The relevant provisions for taxing the escape income are given u/s 147/263 of the Act. In holding so, we find support and guidance from the judgment of Hon'ble Supreme Court in the case of ITO vs. Murlidhar Bhaghubabu reported in 52 ITR 335 (SC). The relevant extract of the judgment is reproduced below: - “Section 33(4) of 1922 Act only refers to a finding or direction made by an appellate authority and does not itself confer any power on an appellate authority to make a finding or direction. Indeed, section 34 of 1922 Act deals with entirely a different aspect, that of empowering an ITO to bring to assessment escaped income, and has no concern with the powers of an appellate authority. The provision which deals with the powers of an appellate authority is section 31 of 1922 Act.” Respectfully following the judgment of Hon'ble Supreme Court in the case of Murlidhar Bhaghubabu (supra) we conclude that Ld. CIT(A) has no power under the provision of law for giving any direction to AO for reopening of assessment. The appeal before Ld. CIT(A) is confined to the particular I.T.A. No. 356/Asr/2017 Assessment Year: 2006-07 21 assessment year which is before him. Thus, in view of the above proposition, we dismiss the ground of Revenue’s appeal. Consequently, Revenue’s ground is dismissed. 5. The ld. DR vehemently argued and relied on the order of ITAT Bangalore Bench in the case of Mrs. Suvina Krupal vs. ITO Ward 1, Madikeri ITA No. 336 & 337/Bang/2014 date of order 29.06.2015. The relevant paragraph is extracted as below:- “5.3.4 From the above, in our view, it is evident that the learned CIT (Appeals) has given a clear finding that the unexplained investment in the residential property fall in three years relevant to Assessment Years 2003-04 to 2005-06. The learned CIT (Appeals) has also rendered a finding that the addition to be made on account of unexplained investment in the said property may be divided among the three assessment years and had also held that the relevant portion of the unexplained investment i.e. Rs.12,15,417 is taxable in Assessment Year 2005-06. In view of the above, we agree with the learned CIT (Appeals) that the facts of the assessee's case are distinguishable from the decisions cited by the assessee; that the learned CIT (Appeals) had rendered a clear ‘finding’ in the matter and that, therefore, in the facts and circumstances of the case on hand, the Assessing Officer has correctly assumed jurisdiction under Section 147 of the Act by invoking the provisions of section 150(1) of the Act. Consequently the grounds raised at S.Nos.1 to 5 for both assessment years 2003-04 and 2004-05 are dismissed.” 6. We heard the rival submission and considered the documents available in the record. Considering the argument first, we adjudicate the limitation for service of notice U/s 148 on dated 06/03/2014 by violation of section 149(1)(b) I.T.A. No. 356/Asr/2017 Assessment Year: 2006-07 22 of the Act. The assessee had declared the primary fact accordingly assessment was completed for AY 2005-06. Later, in pursuing appeal order for AY 2005-06 the proceeding U/s 148 was initiated for AY 2006-07. Section 150(1) dealing with the provision providing time limit for issue of notice u/s 148 also refers to a "direction contained in an order passed by any authority in any proceeding under this act by way of appeal". In this manner while providing the time limit for issue of notice as prescribed u/s 150 also assumes power to give direction by the CIT (A). Section 153 of the Act provides time limit for completion of assessment, reassessment and re-computation. Sub-section (6) of this section also provides for completion of assessment, reassessment or re-computation "in consequence of or to give effect to any finding or direction contained in order under section 250". In this way, this section also presumes that there is a power with the ld. CIT(A) to give direction to the ld. AO even in an order u/s 250. 6.1. Powers of the CIT (A) Section 251 prescribes the power of the ld. CIT(A). Sub-section (1) starts with the words "in disposing of an appeal the commissioner (appeals) shall have the following powers". It is to be appreciated that this section is providing powers to the ld. CIT (A) for the purpose of disposing of the appeals only. It is to be understood that in this section the ld. CIT (A) has been give powers to perform I.T.A. No. 356/Asr/2017 Assessment Year: 2006-07 23 his functions as a quasi-judicial authority while adjudicating an appeal filed by the assessee. In other words, it can be said that these powers given to the Commissioner (Appeals) are only to the extent of conferring him with the tools in order to adjudicate the appeal against any order of the lower authority. The terminology used in clause (a) of sub-section (1) of section 251, is "in an appeal against an order of assessment, he may confirm, reduce, enhance or annul the assessment". Thus, in an appeal against an Assessment Order, the ld. CIT (A) can either confirm the order, reduce, enhance or annul the same. In this manner definitely the Act does not give power to the ld. CIT (A) to give directions, in disposing of the appeal. It is also to be remembered that the power of the ld. CIT (A) to set aside the case back to the ld. A.O. was also omitted by the Finance Act, 2001, w.e.f. 01.06.2001. 6.2. We relied on the decision of the Kolkata Bench in case of ITO v. Sri Biswajit Chatterjee (supra). The decision of the Kolkata Bench in the case of Biswajit Chatterjee (supra) has to be read in the context in which the issue of powers u/s 251 has been dealt with. In this case, the department agitated before the ITAT that if the CIT (A) was of the view that the addition does not pertain to the year under consideration, he should have given directions to the AO to reopen the case of the earlier year, to which the addition in question pertained to the logic for raising such a ground seems to be that the department while assessing the same income in another year wanted to avail of the benefit of I.T.A. No. 356/Asr/2017 Assessment Year: 2006-07 24 extended period of limitation under section 153 of the Act. The ld. DR respectfully relied on theMrs. Suvina Krupal(supra). It is to be appreciated that the assessment framed in consequence of such direction enjoys unlimited period of time to complete. The ITAT, Kolkata Bench in this context referred to the provisions of section 251 and held that the judicial power given to the ld. CIT (A) for the limited purpose of adjudication of the appeal is only limited to what has been provided in clauses (a), (b) and (c) of sub-section (1) of section 251. The CIT (A) does not enjoy any other powers, than the ones mentioned in section 251 for the purpose of disposing of an appeal. Reliance was placed on the case of Smt. Munia Devi Jain(supra). We respectfully rely on the judgment of the Hon’ble Apex Court in the case of Murlidhar Bhagwan Das, (supra), whereby the Hon'ble Apex Court has held that the ld. CIT (A) does not have any power to give any direction to the ld. AO. This was also in the context of powers of the ld. CIT (A) as provided in section 31 of Income Tax Act, 1922, which is akin to section 251 of the Act. Now with this Hon’ble Supreme Court's decision an anomaly would arise in the Act, in the way that as stated hereinabove there is a provision to provide for unlimited period for completion of assessment made in consequence of a direction given by an appellate authority, while the judgment says there is no power to the ld. CIT (A) to give directions. The judgment dealt with the provisions of Income I.T.A. No. 356/Asr/2017 Assessment Year: 2006-07 25 Tax Act, 1922, wherein also there was a provision for an extension of time limit provided under that Act in case the ld. AO makes assessment order in consequence of a finding or direction of the ld. CIT (A). However, it is to be appreciated that the consequences of the finding of Hon’ble Apex Court in the case of Murlidhar Bhagwan Das (supra), were overcome by Explanations 2 & 3 to section 153 (after to amendment in section 153 brought out by The Finance Act, 2016 w.e.f. 01.06.2016. These Explanations 1 & 2 are converted into clauses (a) & (b) of Explanation 2). With these Explanations, it has been provided that even without the direction of the ld. CIT (A), if the total income of the assessee excludes the total income for any assessment year, then assessment of such income for another assessment year shall be deemed to have been made in consequence of or to give effect to any finding or direction contained in the appellant order. Similarly, if an income is excluded from the total income of one person and held to be the income of another person, then an assessment of such another person shall be deemed to be made in consequence of or to give effect to any finding or direction contained in the appellate order. Hence, limitation prescribed for notice and for completion of assessment will get extended even in the absence of any specific direction of the ld. CIT (A). 6.3. Considering the orders of Biswajit Chatterjee and Smt. Munia Devi Jain (supra) thepower U/s 150 of the Act only to restrict with in assessment year. The direction/finding for other assessment year which is not part of appeal I.T.A. No. 356/Asr/2017 Assessment Year: 2006-07 26 before the ld. CIT(A) is beyond jurisdiction. The order referred bey the revenue is also considered. But considering the ratio decidendi the reopening U/s 148 relying on observation of the ld. CIT(A) is bad. The assessment order and impugned appeal order are quashed. 7. The legal grounds are allowed in favour of the assessee. So, the grounds related merit is only remained for academic purposes. 8. In the result, the appeal of the assessee bearing ITA No. 356/Asr/2017 is allowed. Order pronounced in the open court on 13.09.2023 Sd/- Sd/- (Dr. M. L. Meena) (ANIKESH BANERJEE ) Accountant Member Judicial Member AKV Copy of the order forwarded to: (1)The Appellant (2) The Respondent (3) The CIT (4) The CIT (Appeals) (5) The DR, I.T.A.T. True Copy By order