ACIT,Circle Shimla, Shimla V. M/s H.P.Forest Development Corporation Ltd., Shimla

ITA 70/CHANDI/2020

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 3681 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 8 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-09-2021
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 12-05-2021
• Assessment Year: 1994-1995
• Appeal Filed On: 20-01-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: C CHANDRAKANTA
• Assessee Lawyers: SHRIY K SUD
• Keywords: Period of limitation; Time period of passing order; Set aside
• Section: 143(3); 260A; 250; 264; 153(2A); 263; 63; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, A, CHANDIGARH BEFORE SHRI N.K. SAINI, VICE PRESIDENT & SHRIR.L NEGI, JUDICIAL MEMBER ./ ITA NO.70/CHD/2020 / ASSESSMENT YEAR :1994-95 THE ACIT, CIRCLE SHIMLA, SHIMLA M/S H.P. FOREST DEVELOPMENT CORPORATION, VAN NIGAM, KASUMPTI, SDA COMPLEX, SHIMLA ./PAN NO: AAACH4036L / APPELLANT /RESPONDENT HEARING THROUGH VIDEO CONFERENCING / REVENUE BY : SMT. C. CHANDRAKANTA, CIT /ASSESSEE BY : SHRIY. K. SUD, CA $ /DATE OF HEARING : 09.09.2021 $ / DATE OF PRONOUNCEMENT : 24.09.2021 / ORDER PERR.L. NEGI, JUDICIAL MEMBER: THE REVENUE HAS FILED THE PRESENT APPEAL AGAINST TH E ORDER DATED 29.10.2019 PASSED BY COMMISSIONER OF INCOME TAX (AP PEALS)-2, AMRITSAR [FOR SHORT THE CIT(A)] FOR THE ASSESSMEN T YEAR 1994-95, VIDE WHICH, THE LD. CIT(A) HAS ALLOWED THE APPEAL FILED BY THE ASSESSEE AGAINST THE ASSESSMENT ORDER PASSED U/S 143(3)/260A OF THE INCOME TAX ACT, 1961 [FOR SHORT THE ACT]. 2. THE BRIEF FACTS EMANATING FROM THE RECORD AND PL EADINGS OF THE PARTIES ARE THAT THE ASSESSEE FILED ITS RETURN OF I NCOME FOR THE ASSESSMENT YEAR UNDER CONSIDERATION DECLARING TOTAL INCOME OF RS.57,00,000/-THE ITA NO.70-CHD-2020- H.P FOREST DEVELOPMENT CORPORATIO N, SHIMLA 2 AO PASSED THE ASSESSMENT ORDER U/S 144 OF THE ACT A ND DETERMINED THE TOTAL INCOME AT RS. 1,50,00,000/- IN THE FIRST APPE AL, THE LD. CIT(A) CONFIRMED THE ACTION OF THE AO. HOWEVER, IN THE SEC OND APPEAL PREFERRED BY THE ASSESSEE, THE ITAT SET ASIDE THE I MPUGNED ORDER AND SENT THE APPEAL BACK TO THE AO FOR PASSING ASSESSME NT ORDER AFRESH WITH THE DIRECTION THAT THE ASSESSED INCOME SHOULD NOT B E LESS THAN THE RETURNED INCOME. THE ASSESSEE FILED MISCELLANEOUS A PPLICATION FOR RECTIFICATION OF THE SAID ORDER ON THE GROUND THAT THE TRIBUNAL HAS WRONGLY ISSUED THE DIRECTION THAT THE ASSESSED INCO ME SHOULD NOT BE LESS THAN THE RETURNED INCOME BUT THE DIRECTION SHOULD H AVE BEEN GIVEN THAT THE INCOME TO BE ASSESSED SHOULD NOT EXCEED THE ALR EADY ASSESSED INCOME OF RS. 1,50,00,000/- THE ITAT ACCEPTED THE PLEA OF THE ASSESSEE AND DIRECTED THE AO THAT THE ASSESSED INCOME SHOULD NOT BE MORE THAN RS.1,50.00.000/- 3. AGGRIEVED BY THE ORDER PASSED BY THE TRIBUNAL, T HE REVENUE CHALLENGED THE SAME BEFORE THE HONBLE PUNJAB AND H ARYANA HIGH COURT. THE HON'BLE HIGH COURT SET ASIDE THE IMPUGNED ORDER PASSED BY THE TRIBUNAL AND DIRECTED THE AO TO ASSESS THE INCOME O F THE ASSESSEE AFRESH WITHOUT BEING BOUND BY ANY UPPER OR LOWER LIMIT AS LAID DOWN BY THE TRIBUNAL WITHOUT ANY UPPER LIMIT. ACCORDINGLY, THE AO PASSED THE ASSESSMENT ORDER AFRESH U/S 143(3)/260A OF THE ACT. THEREAFTER THE ASSESSEE CHALLENGED THE ASSESSMENT ORDER PASSED BY THE AO INTER ALIA ON THE GROUND THAT THE ASSESSMENT ORDER PASSED BY THE AO WAS BARRED BY ITA NO.70-CHD-2020- H.P FOREST DEVELOPMENT CORPORATIO N, SHIMLA 3 LIMITATION PROVIDED U/S 153(3) OF THE ACT. THE LD. CIT(A) ALLOWED THE LEGAL GROUND RAISED BY THE ASSESSEE AND SET ASIDE T HE IMPUGNED ASSESSMENT ORDER. THE DEPARTMENT HAS PREFERRED THE PRESENT APPEAL AGAINST THE SAID ORDER PASSED BY THE LD. CIT(A). 4. THE REVENUE HAS CHALLENGED THE IMPUGNED ORDER PA SSED BY THE LD. CIT(A) ON THE FOLLOWING EFFECTIVE GROUNDS: - 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN LAW BY HOLDING THAT THE IMPUGNE D ASSESSMENT ORDER BARRED BY LIMITATION AS PROVIDED U NDER SUB SECTION 153(3) R.W.S. 153(2)(A) AND SECOND PROVISO TO SUB SECTION 153(2)(A) OF THE ACT WHEREAS THE A.O. HAS S IMPLY GIVEN APPEAL EFFECT TO THE ORDER OF THE HON'BLE HIGH COUR T OF H.P. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN LAW BY HOLDING THAT THE IMPUGNE D ASSESSMENT ORDER BARRED BY LIMITATION AS PROVIDED U NDER SUB SECTION 153(3) R.W.S. 153(2)(A) AND SECOND PROVISO TO SUB SECTION 153(2)(A) OF THE ACT WHEREAS NO TIME LIMIT HAS BEEN PRESCRIBED TO GIVE EFFECT TO THE DIRECTIONS OF THE HON'BLE HIGH COURT. 5. THE LD. DEPARTMENTAL REPRESENTATIVE (DR) SUBMIT TED BEFORE US THAT SINCE THE AO HAS GIVEN APPEAL EFFECT TO THE ORDER O F THE HON'BLE HIGH COURT, THE LD. CIT(A) HAS WRONGLY ALLOWED THE APPEA L OF THE ASSESSEE HOLDING THAT THE ASSESSMENT ORDER IS BARRED BY LIMI TATION U/S 153(3) R.W.S. 153(2)(A) AND SECOND PROVISO TO SUB SECTION 153(2)(A) OF THE ACT. THE LD. DR FURTHER CONTENDED THAT UNDER THE AFORESA ID SECTIONS NO TIME LIMIT HAS BEEN PRESCRIBED TO GIVE EFFECT TO THE DIR ECTIONS OF THE HIGH COURT. THE LD. DR ACCORDINGLY SUBMITTED THAT THE IM PUGNED ORDER PASSED BY THE LD. CIT(A) MAY BE SET ASIDE AND THE O RDER PASSED BY THE ITA NO.70-CHD-2020- H.P FOREST DEVELOPMENT CORPORATIO N, SHIMLA 4 AO U/S 143(3) READ WITH SECTION 260A OF THE ACT MAY BE UPHELD. 6. ON THE OTHER HAND, THE LD. COUNSEL FOR THE ASSE SSEE REITERATED HIS ARGUMENTS ADVANCED BEFORE THE LD. CIT(A) AND SUBMIT TED THAT SINCE THE FINDINGS OF THE LD. CIT(A) ARE IN ACCORDANCE WITH T HE PROVISIONS OF THE ACT, THERE IS NO MERIT IN THE PRESENT APPEAL. THE L D. COUNSEL POINTED OUT THAT IN THE PRESENT CASE, THE DEPARTMENT RECEIVED T HE ORDER DATED 02.09.2009 PASSED BY THE HON'BLE HIGH COURT ON 13.1 0.2009 AND AS PER THE PROVISIONS OF SECTION 153(2A) AND (3) THE ASSES SMENT WAS TO BE PASSED WITHIN IN 9 MONTHS FROM THE END OF FINANCIAL YEAR IN WHICH THE ORDER OF THE HON'BLE HIGH COURT WAS RECEIVED BY THE PR. CIT. HENCE, THE AO WAS BOUND TO PASS THE FRESH ASSESSMENT ORDER ON OR BEFORE 31.12.2010, BUT THE ORDER WAS PASSED BY THE AO ON 2 1.12.2011. THE LD. COUNSEL ACCORDINGLY SUBMITTED THAT SINCE THE ORDER PASSED BY THE AO BEYOND LIMITATION PERIOD, THE LD. CIT(A) HAS RIGHTL Y ALLOWED THE APPEAL OF THE ASSESSEE. SINCE THERE IS NO INFIRMITY IN THE ORDER OF THE LD. CIT(A), NO ACTION IS WARRANTED IN THE PRESENT CASE THEREFORE, THE APPEAL OF THE ASSESSEE MAY BE DISMISSED. THE LD. COUNSEL RELIED UPON THE FOLLOWING JUDGMENTS TO SUBSTANTIATE HIS CONTENTION: I. NOKIA INDIA PVT. LTD. VS. DCIT 407 ITR 20 (DELH I) II. BHARTI ENGG. CORP. VS. UOI 298 ITR 400 (P&H) III. DEEP CHAND JAIN VS. ITD 145 ITR 676 (P&H) 7. WE HAVE HEARD THE RIVAL SUBMISSIONS OF THE PART IES INCLUDING THE ITA NO.70-CHD-2020- H.P FOREST DEVELOPMENT CORPORATIO N, SHIMLA 5 CASES RELIED UPON BY THE LD. COUNSEL FOR THE ASSESS EE. AS POINTED OUT BY THE LD. COUNSEL, IN THE PRESENT CASE THE PR. CIT RE CEIVED THE ORDER PASSED BY THE HON'BLE HIGH COURT DIRECTING THE AO T O PASS THE ASSESSMENT ORDER AFRESH ON 13.10.2009. NOW, THE QUE STION BEFORE THE LD. CIT(A) WAS WHETHER THE AO WAS BOUND TO PASS THE ASS ESSMENT ORDER WITHIN NINE MONTHS FROM THE END OF THE FINANCIAL YE AR IN WHICH THE ORDER OF THE HON'BLE HIGH COURT WAS RECEIVED I.E., ON OR BEFORE 31.12.2010. THE LD. CIT(A) HAS ALLOWED THE CONTENTION OF THE AS SESSEE AND HELD THE ASSESSMENT ORDER INVALID BEING BARRED BY LIMITATION . THE FINDINGS RECORDED BY THE LD. CIT(A) ARE AS UNDER: - I HAVE CONSIDERED THE ISSUE, SECTION 153, AS IT ST OOD AT THE RELEVANT TIME BEFORE 1.06.2016, PROVIDED AS UND ER: 153. TIME LIMIT FOR COMPLETION OF ASSESSMENTS AND R E- ASSESSMENTS - (1) (2) (2A) AN ORDER OF FRESH ASSESSMENT IN PURSUANCE OF AN ORDER UNDER SECTION 250 OR SECTION 254 OR SECTION 2 63 OR SECTION 264, SETTING ASIDE OR CANCELLING AN ASSESSM ENT MAY BE MADE AT ANY TIME BEFORE THE EXPIRY OF ONE YE AR FROM THE END OF THE FINANCIAL YEAR IN WHICH THE OR DER UNDER SECTION 250 OR SECTION 254 IS RECEIVED BY THE PR. CHIEF COMMISSIONER OR CHIEF COMMISSIONER OR PR. COMMISSIONER OR COMMISSIONER, OR AS THE CASE MAY BE , THE ORDER UNDER SECTION 263 OR SECTION 264 IS PASSE D BY THE PR. CHIEF COMMISSIONER OR CHIEF COMMISSIONER OR PR. CIT: PROVIDED THAT WHERE THE ORDER UNDER SECTION 250 OR SECTION 254 IS RECEIVED BY THE PR. CHIEF COMMISSION ER OR CHIEF COMMISSIONER OR PR. COMMISSIONER OR ITA NO.70-CHD-2020- H.P FOREST DEVELOPMENT CORPORATIO N, SHIMLA 6 COMMISSIONER, AS THE CASE MAY BE, THE ORDER UNDER SECTION 263 OR SECTION 264 IS PASSED BY THE PR. CHI EF COMMISSIONER OR CHIEF COMMISSIONER OR PR. COMMISSIONER OR COMMISSIONER, ON OR AFTER THE FIRST DAY OF APRIL 1999 BUT BEFORE THE FIRST DAY OF APRIL 200 0, SUCH AN ORDER OF FRESH ASSESSMENT MAY BE MADE AT ANY TIM E UPTO 31ST DAY OF MARCH, 2002 : PROVIDED FURTHER THAT WHERE THE ORDER UNDER SECTION 254 IS RECEIVED BY THE PR. CHIEF COMMISSIONER OR CHIEF COMMISSIONER OR PR. COMMISSIONER OR COMMISSIONER, A S THE CASE MAY BE, THE ORDER UNDER SECTION 263 OR SEC TION 264 IS PASSED BY THE PR. CHIEF COMMISSIONER OR CHIE F COMMISSIONER OR PR. COMMISSIONER OR COMMISSIONER, O N OR AFTER THE FIRST DAY OF APRIL 2005 BUT BEFORE THE FIRST DAY OF APRIL 2011, THE PROVISIONS OF THESE SUB SECT ION SHALL HAVE EFFECT AS IF FOR THE WORDS 'ONE YEAR', T HE WORDS 'NINE MONTHS' HAD BEEN SUBSTITUTED: (3) THE PROVISIONS OF SUB SECTION (1), (1A), (IB) AND (2) SHALL NOT APPLY TO THE FOLLOWING CLASSES OF ASSESSM ENT, REASSESSMENTS AND RECOMPUTATIONS WHICH MAY, SUBJEC T TO THE PROVISIONS OF SUB SECTION (2A), BE COMPLETED AT ANY TIME I. ----- II. WHERE THE ASSESSMENT, REASSESSMENT AND RECOMPUTATION IS MADE ON THE ASSESSEE OR ANY PERSON IN CONSEQUENCE OF OR TO GIVE EFFECT TO ANY FINDING OR DIRECTION CONTAINED IN AN ORDER UNDER SECTION 250, 254, 260, 262, 263, OR 264, OR IN AN ORDER OF ANY COURT IN A PROCEEDING OTHERWISE THAN BY WAY OF APPEAL OR REFER ENCE UNDER THIS ACT; III. -------- IN THE PRESENT CASE, THE ORDER OF HONBLE HP HIGH C OURT IS DATED 02.09.2009. IT HAS BEEN INFORMED BY ACIT, CIRCLE - SHIMLA, VIDE HIS LETTER DATED 25.09.2019 T HAT THE ORDER OF THE HON'BLE H.P. HIGH COURT WAS RECEIVED I N THE OFFICE OF THE PR. CIT, SHIMLA, ON 13.10.2009. THE IMPUGNED ASSESSMENT ORDERS FOR A.Y. 1993-94 AND 199 4- 95 U/S 143(3)/260A OF THE ACT WERE PASSED ON 21.12.2011. I FIND MERIT IN THE SUBMISSIONS OF LD. AR ITA NO.70-CHD-2020- H.P FOREST DEVELOPMENT CORPORATIO N, SHIMLA 7 THAT THE IMPUGNED ORDERS COULD HAVE BEEN PASSED ON OR BEFORE 31.12.2010. THE ASSESSMENT ORDERS ARE THUS BARRED BY LIMITATION PROVIDED UNDER SUB SECTION 153(3) READ WITH SUB SEC TION 153(2A) AND SECOND PROVISO TO SUB SEC ION 153(2A) O F THE ACT. THE IMPUGNED ASSESSMENT ORDERS, BEING BARRED BY TIM E LIMITATION PROVIDED UNDER THE ACT, CANNOT BE SUSTAI NED AND ARE QUASHED. AS THESE ORDERS ARE NON-EST, THE ASSESSMENT ORDERS DATED 29.03.2005 AS FURTHER UPHEL D BY CIT(A) VIDE HIS ORDERS DATED 09.02.2007, SHALL PREV AIL. 8. IN OUR CONSIDERED VIEW, THE FINDINGS OF THE LD. CIT(A) ARE IN ACCORDANCE WITH THE PLAIN PROVISIONS OF LAW. ON THE OTHER HAND, WE ARE NOT CONVINCED WITH THE ARGUMENTS OF THE DEPARTMENT THAT THE RELEVANT PROVISIONS REFERRED BY THE LD. CIT(A) DO NOT APPLY TO THE CASE OF THE ASSESSEE. NO CASE LAW WAS BROUGHT TO OUR NOTICE BY THE DEPARTMENT TO REBUT THE ARGUMENTS ADVANCED BY THE LD. COUNSEL FOR THE ASSESSEE. IN OU R CONSIDERED OPINION, THE FINDINGS OF THE LD. CIT(A) ARE BASED ON THE PROVISI ONS OF LAW. HENCE, WE DO NOT FIND ANY REASON TO INTERFERE WITH THE FINDINGS OF THE LD. CIT(A). ACCORDINGLY, WE ALLOW THE APPEAL OF THE APPELLANT A SSESSEE AND UPHOLD THE ORDER PASSED BY THE LD. CIT(A). IN THE RESULT, THE APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED ON 24 TH SEPT., 2021. SD/- SD/- ( N.K. SAINI) (R.L.NEGI) / VICE PRESIDENT / JUDICIAL MEMBER DATED : 24. 09 .2021 .. ITA NO.70-CHD-2020- H.P FOREST DEVELOPMENT CORPORATIO N, SHIMLA 8 ,-.- / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. / / CIT 4. / ( )/ THE CIT(A) 5. - 2 , $2 , 4 / DR, ITAT, CHANDIGARH 6. / GUARD FILE / BY ORDER, / ASSISTANT REGISTRAR