Appeal Details
Counselvise Citation
[2018] 125 COUNSELVISE.COM (IT) 3100 (ITAT-LUCKNOW)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
8 month(s) 2 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
24-08-2018
Appeal Filed By
Assessee
Order Result
Allowed
Bench Allotted
SMC
Assessment Year
2003-2004
Appeal Filed On
22-12-2017
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH SMC, LUCKNOW BEFORE SHRI T. S. KAPOOR, ACCOUNTANT MEMBER AND SHRI PARTHA SARATHI CHAUDHURY, JUDICIAL MEMBER ITA NOS.811 & 812/LKW/2017 ASSESSMENT YEARS:2003-04 & 2014-15 SANDEEP JAIN, C/O 24/4, THE MALL, KANPUR PAN: AERPJ 6157 J VS. INCOME TAX OFFICER, WARD 1(4), KANPUR (APPELLANT) (RESPONDENT) O R D E R PER T. S. KAPOOR, A.M. THESE ARE TWO APPEALS FILED BY THE ASSESSEE AGAINS T THE SEPARATE ORDERS OF CIT(A) BOTH DATED 18/08/2017. THESE APPE ALS WERE HEARD TOGETHER AND THEREFORE, FOR THE SAKE OF CONVENIENCE , A COMMON AND CONSOLIDATED ORDER IS BEING PASSED. 2. THE GROUNDS OF APPEAL TAKEN BY THE ASSESSEE IN I .T.A. NO.811 & 812/LKW/2017 ARE REPRODUCED BELOW: 1 THAT THE ASSESSING OFFICER HAS ERRED IN REOPENING THE ASSESSMENT BASED UPON THE DIRECTION OF LEARNED CIT (APPEALS) IN THE ASSESSMENT YEAR 2004-05. 2 THAT THE ASSESSING OFFICER HAS ERRED IN REOPENING THE ASSESSMENT PROCEEDING BY ISSUING NOTICE UNDER SECTION 148 OF THE ACT WHICH IS BARRED BY LIMITATION. APPELLANT BY SHRI ASHISH JAISWAL, ADVOCATE RESPONDENT BY SHRI R.K. VISHWAKARMA, DR DATE OF HEARING 06 / 08 /201 8 DATE OF PRONOUNCEMENT 24/08/2018 I.T.A. NOS.811 & 812/LKW/2017 ASSESSMENT YEARS:2003-04 & 2014-15 2 3 THAT THE LEARNED CIT (APPEALS) HAS ERRED IN CONFIRMING THE ADDITION OF RS. 1,56,660.00 UNDER SECTION 68 OF THE ACT MADE BY ASSESSING OFFICER. 4 THAT THE LEAREND CIT (APPEALS) HAS ERRED IN NOT PROVIDING PROPER AND ADEQUATE OPPORTUNITY TO THE APPELLANT. 2.1 THE GROUNDS OF APPEAL TAKEN BY THE ASSESSEE IN I.T.A. NO. 812/LKW/2017 ARE REPRODUCED BELOW: 1. THAT THE LEARNED CIT (APPEALS) HAS ERRE D IN CONFIRMING THE AD-HOC DISALLOWANCE MADE BY THE ASSESSING OFFIC ER OF RS. 6,38,422.00 OUT OF SALES PROMOTION EXPENSES. 2. THAT THE ADDITION / DISALLOWANCES MADE B Y THE ASSESSING OFFICER AND CONFIRMED BY LEARNED CIT (APPEALS) IS H IGHLY EXCESSIVE AND ARBITRARY. 3. THAT THE LEARNED CIT (APPEALS) HAS ERRED IN NOT PROVIDING PROPER AND ADEQUATE OPPORTUNITY TO THE APPELLANT. 3. AT THE OUTSET, LEARNED A. R. INVITED OUR ATTENTI ON TO THE LEGAL GROUND TAKEN IN ITA NO. 811/LKW/2017 AND SUBMITTED THAT TH E NOTICE ISSUED U/S 148 OF THE ACT WAS BARRED BY LIMITATION AND IN THIS RESPECT OUR ATTENTION WAS INVITED TO THE COPY OF THE ASSESSMENT ORDER, WHEREI N THE ASSESSING OFFICER HAD MENTIONED IN HIS ORDER THAT ON THE BASIS OF APP ELLATE ORDER PASSED BY LEARNED CIT(A) DATED 22.12.2015, THE ASSESSEE WAS R EQUIRED TO EXPLAIN THE CASH CREDIT U/S 68 OF THE ACT TO THE EXTENT OF RS.1 ,56,660/- RELEVANT TO F.Y. 2003-04. THE LEARNED A.R. SUBMITTED THAT THE NOTICE U/S 147 OF THE ACT WAS ISSUED AND SERVED ON THE ASSESSEE ON 31.03.2016 AND THE ASSESSMENT YEAR WAS 2003-04, WHICH WAS BEYOND A PERIOD OF SIX YEARS AS CONTEMPLATED FOR REOPENING OF ASSESSMENT. THE LEARNED A.R. SUBMITTED THAT THE PROVISION OF SECTION 150(2) CLEARLY PUTS AN EMBARGO ON THE ASSES SING OFFICER, WHEREIN IT HAS BEEN STATED THAT REASSESSMENT OR RE-COMPUTATION CAN ONLY BE DONE BY WAY OF ACTION U/S 148 OF THE ACT IF THE RE-COMPUTAT ION ITSELF COULD HAVE BEEN MADE AT THE TIME THE ORDER WHICH WAS THE SUBJECT TO MATTER OF THE APPEAL I.T.A. NOS.811 & 812/LKW/2017 ASSESSMENT YEARS:2003-04 & 2014-15 3 BY REASON OF ANY OTHER PROVISION LIMITING THE TIME WITHIN WHICH ANY ACTION FOR REASSESSMENT IS TAKEN. IN THIS RESPECT, THE LEA RNED A. R. READ THE PROVISIONS OF SECTION 150(1) AND 150(2) OF THE ACT. THE LEARNED A.R. FURTHER SUBMITTED THAT THE ISSUE HAS NOW BEEN SETTLED BY TH E THIRD MEMBER IN THE CASE OF EMGEEYAR PICTURES (P.) LTD. VS. DCIT, 70 TA XMANN.COM 45 (CHENNAI- TM) AND OUR ATTENTION WAS INVITED TO PARA 15 OF THE ORDER. OUR ATTENTION WAS FURTHER INVITED TO AN ORDER OF THE I.T.A.T. JAI PUR BENCH IN THE CASE OF RAMESH CHAND SONI, HUF VS. INCOME TAX OFFICER, TAX MANN.COM 71 (JAIPUR- TRIB.) WHEREIN THE TRIBUNAL VIDE ORDER DATED 08.12. 2017 HAS FURTHER PASSED THE ORDER IN FAVOUR OF THE ASSESSEE. 4. THE LEARNED D. R. ON THE OTHER HAND SUBMITTED TH AT THE ASSESSING OFFICER HAD TAKEN THE ACTION, ON THE BASIS OF A DIR ECTION BY LEARNED CIT(A) AND WITHIN ONE YEAR OF THE DIRECTION THE ASSESSMENT WAS REOPENED. 5. ARGUING THE APPEAL IN ITA NO.812/LKW/2017, THE L EARNED A.R. SUBMITTED THAT THE ASSESSING OFFICER HAS MADE AD-HO C DISALLOWANCE EQUIVALENT 30% OF SALE PROMOTION EXPENSES, WHICH IS ARBITRARY AND QUITE HIGH, SPECIFICALLY, KEEPING IN VIEW, THE FACT THAT ASSESSEE HAD SUBMITTED BOOKS OF ACCOUNT AND HAD PROVIDED BILLS AND VOUCHER S. IT WAS SUBMITTED THAT THE ASSESSING OFFICER WITHOUT POINTING OUT ANY MIST AKE IN ANY VOUCHERS OR BILLS AND WITHOUT REJECTING BOOKS OF ACCOUNT HAS MA DE AD-HOC DISALLOWANCE, WHICH WAS NOT WARRANTED. THE LEARNED A.R. FURTHER SUBMITTED THAT THE EXPENSES INCURRED DURING THE YEAR CONSIDERATION WER E LOWER AS COMPARED TO PRECEDING YEAR AND THEREFORE, THE ASSESSING OFFICER SHOULD NOT HAVE MADE THE DISALLOWANCE. 6. THE LEARNED D.R. ON THE OTHER HAND HEAVILY PL ACED RELIANCE ON THE ORDER OF THE AUTHORITIES BELOW AND SUBMITTED THAT B EFORE LD. CIT(A) ASSESSEE HAD NOT SUBMITTED ANY BOOKS OF ACCOUNT OR VOUCHERS DESPITE SPECIFIC DIRECTION. I.T.A. NOS.811 & 812/LKW/2017 ASSESSMENT YEARS:2003-04 & 2014-15 4 7. WE HAVE HEARD THE RIVAL PARTIES AND HAVE GONE TH ROUGH THE MATERIAL PLACED ON RECORD. WE FIRST TAKE ITA NO.811/LKW/2017 . THE LIMITED ISSUE TO BE DECIDED IN THIS APPEAL IS AS TO WHETHER THE REAS SESSMENT PROCEEDINGS INITIATED BY THE ASSESSING OFFICER DURING THE F.Y. 2015-16 FOR REOPENING THE CASE RELATING TO 2003-04 IS LEGAL OR NOT. THIS QUES TION HAS ALREADY BEEN DECIDED BY THE THIRD MEMBER IN THE CASE OF EMGEEYAR PICTURES (P.) LTD. VS. DCIT, 70 TAXMANN.COM 45 (CHENNAI-TM). THE HON'BLE T HIRD MEMBER HAS DISCUSSED THE ISSUE IN DETAIL AND HAS DECIDED THE I SSUE IN FAVOUR OF THE ASSESSEE BY HOLDING AS UNDER: 3. ACCORDING TO THE LD. COUNSEL, IN FACT, WHEN THE APPEAL CAME BEFORE THIS TRIBUNAL FOR THE ASSESSMENT YEARS 2003-04 AND 2004-05, THIS TRIBUNAL FOUND THAT THE TRANSFER TOOK PLACE IN THE YEAR 2000 . THEREFORE, THE CAPITAL GAIN CANNOT BE TAXED FOR THE ASSESSMENT YEARS 2003- 04 AND 2004-05. THERE IS NEITHER A FINDING THAT THE CAPITAL GAIN HA S TO BE TAXED IN THE ASSESSMENT YEAR 2001-02 NOR ANY DIRECTION TO ASSESS THE SAME IN THE ASSESSMENT YEAR 2001-02. THEREFORE, ACCORDING TO TH E LD. COUNSEL, THE ASSESSING OFFICER CANNOT TAKE THE BENEFIT OF SECTIO N 150(1) OF THE ACT FOR REOPENING THE COMPLETED ASSESSMENT AFTER EXPIRY OF LIMITATION PROVIDED IN SECTION 149 OF TIJIE ACT. REFERRING TO SECTION 150( 1) OF THE ACT, THE LD. COUNSEL POINTED OUT THAT THE ASSESSING OFFICER MAY REOPEN THE ASSESSMENT NOTWITHSTANDING ANYTHING CONTAINED IN SECTION 149 O F THE ACT BY ISSUING A NOTICE UNDER SECTION 148, FOR THE PURPOSE OF MAKING AN ASSESSMENT OR REASSESSMENT OR RE-COMPUTATION IN CONSEQUENCE OF AN Y FINDING OR DIRECTION CONTAINED IN THE ORDER PASSED BY ANY AUTH ORITY IN A PROCEEDING UNDER THIS ACT. THE ONLY PROCEEDING UNDER THIS ACT IS APPEAL BY THE ASSESSEE BEFORE THIS TRIBUNAL FOR THE ASSESSMENT YE ARS 2003-04 AND 2004- 05 IN I.T.A. NOS. 327 & 328/MDS/2010 AND THERE IS N O FINDING OR DIRECTION BY THIS TRIBUNAL TO ASSESS THE CAPITAL GAIN ARISING OUT OF TRANSFER OF THE PROPERTY IN THE ASSESSMENT YEAR 2001 -02. 4. SHRI D. ANAND, THE LD. COUNSEL FOR THE ASSESSEE, INVITED OUR ATTENTION TO THE ORDER OF THIS TRIBUNAL DATED 31.05.2010 AND SUB MITTED THAT SECTION 150(1) OF THE ACT SHOULD NOT BE APPLIED IN A CASE W HERE THE ASSESSMENT OR REASSESSMENT OR RE-COMPUTATION COULD NOT HAVE BEEN MADE AT THE TIME THE ORDER WAS PASSED BY THE TRIBUNAL IN VIEW OF LIM ITATION PROVIDED IN SECTION 149 OF THE ACT. IN THIS CASE, ACCORDING TO THE LD. COUNSEL, THE ORDER OF THE TRIBUNAL WAS PASSED ON 31.05.2010. THE PERIOD OF LIMITATION FOR COMPLETING THE ASSESSMENT OIL THE REASSESSMENT IS TWO YEARS FROM THE END OF THE ASSESSMENT YEAR IN WHICH THE INCOME WAS FIRST ASSESSABLE. THE INCOME WAS FIRST ASSESSABLE IN THE ASSESSMENT YEAR 2001-02. THEREFORE, AT THE BEST, THE ASSESSMENT ORDER CAN BE PASSED ON OR BEFORE 31.03.2005. THE ASSESSING OFFICER PASSED THE INITIAL ASSESSMENT ORDER, AFTER REOPENING I.T.A. NOS.811 & 812/LKW/2017 ASSESSMENT YEARS:2003-04 & 2014-15 5 UNDER SECTION 147 OF THE ACT, ON 30.03.2006. THE AS SESSMENT WAS REOPENED FOR THE SECOND TIME UNDER SECTION 150 OF T HE ACT, CONSEQUENT TO THE ORDER OF THIS TRIBUNAL FOR ASSESSMENT YEARS 200 3-04 AND 2004-05 DATED 30.05.2010. REFERRING TO THE JUDGMENT OF THE APEX COURT IN CIT V. GREENWORLD CORPORATION [2009] 314 ITR 81/181 TAXMAN 111, THE LD. COUNSEL SUBMITTED THAT NO NOTICE UNDER SECTION 148 SHOULD BE ISSUED SINCE FOUR YEARS HAVE ELAPSED FROM THE END OF THE R ELEVANT ASSESSMENT YEAR. AT THE BEST, ASSESSING OFFICER CAN ISSUE NOTI CE UNDER SECTION 148 WITHIN A PERIOD OF SIX YEARS IN CASE THE INCOME ASS ESSABLE TO TAX EXCEEDED RS. 1 LAKH OR MORE. LN THIS CASE, EVEN THE SIX-YEAR PERIOD EXPIRED ON 31.03.2008. THEREFORE, ISSUE OF NOTICE UNDER SECTIO N 147 R.W.S. 150 OF THE ACT ON 10.06.2011 IS BEYOND THE PERIOD OF LIMITATIO N. 5. THE LD. COUNSEL FOR THE ASSESSEE FURTHER SUBMITT ED THAT SECTION 150(2) OF THE ACT CLEARLY SAYS THAT IF THE TIME LIMIT EXPI RED AT THE TIME OF THE ORDER WHICH WAS SUBJECT MATTER OF APPEAL, THEN PROVISIONS OF SECTION 150(1) OF THE ACT IS NOT APPLICABLE. IN THIS CASE, ACCORDING T O THE LD. COUNSEL, THE ORDER OF THE TRIBUNAL WAS PASSED ON 31.05.2010. THE LIMITATION PERIOD HAD ALREADY EXPIRED, THEREFORE, NO ORDER CAN BE PASSED UNDER SECTION 150(1 ) OF THE ACT IN THE GUISE OF REOPENING UNDER SECTION 147 OF THE ACT. THE LD. COUNSEL HAS ALSO PLACED THIS RELIANCE ON THE JUDGME NT OF THE APEX COURT IN K.M. SHARMAV. HO [2002] 254 ITR 772/122 TAXMAN 426. THEREFORE, ACCORDING TO THE LD. COUNSEL, THE ASSESSING OFFICER OUGHT NOT TO HAVE REOPENED THE ASSESSMENT IN THE GUISE OF GIVING EFFE CT TO THE ORDER OF THE TRIBUNAL FOR THE ASSESSMENT YEARS 2003-04 AND 2004- 05. 6. THE LD. COUNSEL FURTHER SUBMITTED THAT THE CIT ( APPEALS), REFERRING TO THE CONTENTION OF THE ASSESSEE THAT THERE WAS NO SP ECIFIC FINDING OR DIRECTION OF THE TRIBUNAL IN THE ORDER DATED 31.05. 2010, OBSERVED THAT THERE WAS AN INFERENCE THAT THE FINDING OF THE ITAT IS THAT THE CAPITAL GAIN IS TO BE TAXED IN ASSESSMENT YEAR 2001-02. ACCORDIN G TO THE LD. COUNSEL, ON THE BASIS OF THE INFERENCE THERE CANNOT BE ANY A SSESSMENT UNDER SECTION 150(1) OF THE ACT. THE LANGUAGE USED BY THE PARLIAMENT IS 'FINDING OR DIRECTION' OF ANY AUTHORITY UNDER THE PROVISIONS OF THE INCOME-TAX ACT. IN HIS CASE THERE WAS NO FINDING OR DIRECTION BY THE ITAT. THEREFORE, THERE CANNOT BE ANY INFERENCE THAT THE TRIBUNAL INTENDED TO TAX THE CAPITAL GAIN IN THE ASSESSMENT YEAR 2001-02. THE LD. COUNSEL HAS ALSO ADVANCED HIS ARGUMENT ON MERIT AND SUBMITTED THAT SECTION 5QC OF THE ACT IS APPLICABLE FROM ASSESSMENT YEAR 2003-04, AND THEREFORE, NOT AP PLICABLE FOR THE YEAR (UNDER CONSIDERATION. THE LD. COUNSEL ALSO PLACED H IS RELIANCE IN THE JUDGMENT OF MADRAS HIGH COURT IN CIT V. VELLORE ELE CTRIC CORPN. [2006] 287 ITR 50. 7. ON THE CONTRARY, SHRI A.V. SREEKANTH, THE LD. DE PARTMENTAL REPRESENTATIVE, SUBMITTED THAT ON APPEAL BY THE ASS ESSEE FOR ASSESSMENT YEARS 2003-04 AND 2004-05, THIS TRIBUNAL FOUND THAT THERE WAS AN AGREEMENT FOR JOINT DEVELOPMENT OF PROPERTY ON 25.1 2.2000 AND THE ASSESSEE HAD ALSO HANDED OVER THE POSSESSION OF THE PROPERTY TO THE BUILDER ON THE SAME DAY. THEREFORE, THIS TRIBUNAL F OUND THAT THE CAPITAL I.T.A. NOS.811 & 812/LKW/2017 ASSESSMENT YEARS:2003-04 & 2014-15 6 GAIN CANNOT BE TAXED IN THE ASSESSMENT YEARS 2003-0 4 AND 2004-05 SINCE THE TRANSFER, TOOK PLACED IN THE ASSESSMENT YEAR 20 01-02. ON THE BASIS OF THIS OBSERVATION, THE ASSESSING OFFICER REOPENED TH E ASSESSMENT UNDER SECTION 150(1) R.W.S. 147 OF THE ACT. THEREFORE, AC CORDING TO THE LD. D.R., THERE WAS A CLEAR OBSERVATION BY THIS TRIBUNAL THAT CAPITAL GAIN R AS TO BE ASSESSED IN THE ASSESSMENT YEAR 2001-02. REFERRING TO THE ORDER OF THE CIT (APPEALS), THE LD. D.R. POINTED OUT THAT THE CI T (APPEALS), BY PLACING RELIANCE ON THE JUDGMENT OF KARNATAKA HIGH COURTING . CIT V. SPENCES HOTEL (P.) LTD. [2007] 289 ITR 145/160 TAXMAN 360. FOUND THAT NOTICE ISSUED FOR ASSESSMENT YEAR 1976-77 ON 17.11.1998, O N THE BASIS OF THE FINDING OF THE TRIBUNAL FOR THE ASSESSMENT YEAR 198 0-81, WAS FOUND TO BE IN ORDER. THE LD. D.R. SUBMITTED THAT THE CIT (APPE ALS) ALSO REFERRED TO THE JUDGMENT OF ANDHRA PRADESH HIGH COURT IN B.A.R. ABDUL RAKMAN SAHEB V. 7TO|[1975] 100 ITR 541 AND SUBMITTED THAT SUB-SECTION (3) OF SECTION 153 WIPES THE LIMITATION PROVIDED IN SECTIO N 153(1) AND 153(2) OF THE ACT. REFERRING TO SUB-SECTION (2) TO SECTION 15 3, THE LD. D.R. POINTED OUT THAT IF ANY INCOME WAS EXCLUDED FROM THE TOTAL INCOME OF THE ASSESSEE FOR AN ASSESSMENT YEAR, THEN FOR ASSESSING TL AT IN COME FOR ANOTHER ASSESSMENT YEAR SHOULD BE CONSIDERED AS ONE MADE CO NSEQUENT TO THE ORDER GIVING EFFECT TO THE FINDING OR DIRECTION CON TAINED IN THE ORDER THE HIGHER AUTHORITY. THEREFORE, ACCORDING TO THE LD. D .R., WHEN THE ASSESSING OFFICER PASSED AN ORDER GIVING EFFECT TO THE ORDER OF THE TRIBUNAL FOR ASSESSMENT YEARS 2003-04 AND 2004-05, IT HAS TO BE DEEMED THAT THE ORDER OF THE ASSESSMENT WAS PASSED GIVING EFFECT TO THE FINDING CONTAINED IN THE ORDER OF THIS TRIBUNAL. THEREFORE, ACCORDING TO THE LI, D.R., THE CIT (APPEALS) HAS RIGHTLY CONFIRMED THE ORDER OF THE AS SESSING OFFICER. 8. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND PERUSED THE RELEVANT MATERIAL ON RECORD. INITIALLY THE ASSE SSEE FILED THE RETURN OF INCOME FOR ASSESSMENT YEAR 2001-02 ON 25.04.2005 CO NSEQUENT TO-THE NOTICE ISSUED UNDER SECTION 148 OF THE ACT, DISCLOS ING THE LOSS OF RS. 56,758/-. HOWEVER, THE ASSESSING OFFICER REOPENED T HE ASSESSMENT UNDER SEC ION 147 OF THE ACT AND DETERMINED THE LOSS AT R S. 2,4427- BY AN ORDER DATED 30.03.2006 INSTEAD OF RS. 56,758/- CLAIMED BY THE ASSESSEE. 9. THE ASSESSEE FILED APPEALS BEFORE THIS TRIBUNAL AGAINST THE ORDERS OF THE LOWER AUTHORITY FOR ASSESSMENT YEARS 2003-04 AND! 2004-05 IN IT.A. NOS. &27 & 328/MDS/2010. THE MAIN CONTENTION OF THE ASSESSEE BEFORE THIS TRIBUNAL WAS THAT THE CAPITAL GAIN ARISING OUT OF THE TRANSFER OF PROPERTY CANNOT BE TAXED IN THE ASSESSMENT YEARS 20 03-04 AND 2004-05. THIS CONTENTION OF THE ASSESSEE WAS ACCEPTED BY THE TRIBUNAL ON THE GROUND THAT THE JOINT DEVELOPMENT AGREEMENT WAS ENT ERED INTO ON 25.12.2000 AND THE POSSESSION OF THE PROPERTY WAS A LSO HANDED OVER ON THE VERY SAME DAY. THEREFORE, THIS TRIBUNAL FOUND T HAT THE CAPITAL GAIN CANNOT BE TAXED IN ASSESSMENT YEARS 2003-04 AND 200 4-05. THIS ORDER OF THE TRIBUNAL WAS PASSED ON 31.05|.2010. WE HAVE CAR EFULLY GONE THROUGH THE PROVISIONS OF SECTION 150(2) OF THE ACT, WHICH READS AS FOLLOWS: '150(1) I.T.A. NOS.811 & 812/LKW/2017 ASSESSMENT YEARS:2003-04 & 2014-15 7 (2) THE PROVISIONS OF SUB-SECTION (1) SHALL NOT APP LY IN ANY CASE WHERE ANY SUCH ASSESSMENT, REASSESSMENT OR RECOMPUT ATION AS IS REFERRED TO IN THAT SUB-SECTION RELATES TO AN ASSES SMENT YEAR IN RESPECT OF WHICH AN ASSESSMENT, REASSESSMENT OR REC OMPUTATION COULD NOT HAVE BEEN MADE AT THE TIME THE ORDER WHIC H WAS THE SUBJECT-MATTER OF ME APPEAL, REFERENCE OR REVISION, AS THE CASE MAY BE, WAS MADE BY REASON ASSESSMENT, REASSESSMENT OR RECOMPUTATION MAY BE TAKEN. 10. IN VIEW OF SECTION 150(2) THE PROVISIONS OF SU B-SECTION (1) OF SECTION 150 OF THE ACT IS NOT APPLICABLE IN RESPECT OF1 THE ASSESSMENT YEAR IN WHICH THE ASSESSMENT, REASSESSMENT OR RE-COMPUTATIO N COULD NOT HAVE BEEN MADE AT THE TIME THE ORDER, WHICH WAS SUBJECT MATTER OF THE APPEAL, WAS PASSED BY REASON OF ANY OTHER PROVISIONS LIMITI NG THE TUNE WITHIN WHICH THE ACTION FOR REASSESSMENT OR RE-COMPUTATION SHOULD BE TAKEN. IN THE CASE BEFORE US, SECTION 149 OF THE ACT PROVIDES MAXIMUM OF SIX YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR, IN CA SE THE INCOME CHARGEABLE TO TAX EXCEEDS RS. 1 LAKH. THE RELEVANT ASSESSMENT YEAR IS 2001-02 AND THE SIX YEARS PERIOD FROM THE END OF TH E RELEVANT ASSESSMENT YEAR EXPIRED ON 31.03.2008, THEREFORE, THE LIMITATI ON FOR REOPENING UNDER SECTION 147 OF THE ACT EXPIRED ON 31.03.2008 WHEN T HE TRIBUNAL PASSED THE ORDER ON 31.05.2010. THEREFORE, THIS TRIBUNAL I S OF THE CONSIDERED OPINION THAT THE ASSESSING OFFICER CANNOT TAKE ANY ADVANTAGE ON THE BASIS OF THE ORDER OF THIS TRIBUNAL DATED 31.05.2010 BY I NVOKING SECTION 150(1) OF THE ACT. THIS TRIBUNAL IS OF THE CONSIDERED OPIN ION THAT THE ASSESSING OFFICER CAN PASS AN ORDER UNDER SECTION 150(1) OF T HE ACT PROVIDED THE APPELLATE/REVISIONAL ORDER WAS PASSED WITHIN THE PE RIOD OF LIMITATION AVAILABLE FOR REOPENING THE ASSESSMENT. IN THIS CASE , ON THE DATE 0F APPELLATE ORDER, I.E. 31.05.2010, THE LIMITATION PE RIOD HAD EXPIRED. THEREFORE, THE ORDER PASSED TJY THE ASSESSING OFFIC ER BY ISSUING NOTICE FOR REOPENING THE ASSESSMENT ON 10.06.2011 IS BARRED BY LIMITATION. 11. WE HAVE CAREFULLY GONE THROUGH THE JUDGMENT OF THE APEX COURT IN KM. SHARMA (SUPRA). THE APEX COURT, AFTER CONSIDERI NG THE PROVISIONS OF SECTION 150(2) OF THE ACT, FOUND THAT SUB-SECTION ( 2) OF SECTION 150 PUTS EMBARGO ON REOPENING ASSESSMENTS, WHICH HAVE ATTAIN ED FINALITY ON EXPIRY OF PERIOD OF LIMITATION. THE APEX COURT ALSO FOUND THAT SUB-SECTION (2) OF SECTION 150 MAKES IT CLEAR THAT REASSESSMENT PERMIS SIBLE UNDER SECTION 150(1) OF THE ACT WOULD NOT BE AVAILABLE TO DEPARTM ENT WHEN THE PERIOD OF LIMITATION FOR SUCH ASSESSMENT OR REASSESSMENT H AS EXPIRED AT THE TIME IT IS PROPOSED TO BE REOPENED. IN THIS CASE, THE RE VENUE PROPOSED TO REOPEN THE ASSESSMENT ON 10.06.2011 BY ISSUING A NO TICE UNDER SECTION 148 OF THE ACT, ON WHICH DATE, THE PERIOD OF LIMITA TION WAS ADMITTEDLY EXPIRED. THE APEX COURT FURTHER FOUND THAT SUB-SECT ION (2) OF SECTION 150 INSULATES ALL ASSESSMENTS, WHICH HAVE BECOME FINAL AND MAY HAVE BEEN FOUND LIABLE TO REASSESSMENTS OR RE-COMPUTATION EIT HER ON THE BASIS OF ORDERS IN PROCEEDINGS UNDER THE ACT OR ORDERS OF CO URTS PASSED UNDER ANY OTHER LAW. IN FACT, THE APEX COURT HAS OBSERVED AS FOLLOWS: I.T.A. NOS.811 & 812/LKW/2017 ASSESSMENT YEARS:2003-04 & 2014-15 8 'WE DO NOT FIND THE ABOVE REASONING OF THE HIGH COU RT IS SOUND. THE PLAIN LANGUAGE OF SUB SECTION (2) OF SECTION 15 0 CLEARLY RESTRICTS THE APPLICATION OF SUB-SECTION (1) TO ENA BLE THE AUTHORITY TO REOPEN ASSESSMENTS WHICH HAVE NOT ALREADY BECOME FINAL ON THE EXPIRY OF THE PRESCRIBED PERIOD OF LIMITATION U NDER SECTION 149. AS IS SOUGHT TO BE C ONE BY THE HIGH COURT, SU B-SECTION (2) OF SECTION 150 CANNOT BE HELD APPLICABLE ONLY TO RE ASSESSNENTS BASED ON ORDERS 'IN PROCEEDINGS UNDER THE ACT' AND NOT TO ORDERS OF COURT 'IN PROCEEDINGS UNDER ANY OTHER LAW'. SUCH AN INTERPRETATION WOULD MAKE THE WHOLE PROVISION UNDER SECTION 150 DISCRIMINATORY IN ITS APPLICATION TO ASSESSMENTS SO UGHT TO BE REOPENED ON THE BASIS OF ORDERS UNDER THE INCOME-TA X ACT AND OTHER ASSESSMENTS PROPOSED TO BE REOPENED ON THE BA SIS OF ORDERS UNDER ANY OTHER LAW. THE INTERPRETATION, WHI CH CREATES SUCH UNJUST AND DISCRIMINATORY SITUATION, LAS TO BE AVOIDED. WE DO NOT FIND THAT SUB-SECTION (2) OF SECTION 150 HAS TH AT RESULT. SUB- SECTION (2) INTENDS TO INSULATE ALL PROCEEDINGS OF ASSESSMENTS, WHICH HAVE ATTAINED FINALITY DUE TO THE THEN EXISTI NG BAR OF LIMITATION. TO ACHIEVE THE DESIRED RESULT IT WAS NO T NECESSARY TO MAKE ANY AMENDMENT IN SUB-SECTION (2) CORRESPONDING TO SUB- SECTION (1), AS IS THE REASONING ADOPTED BY THE HIG H COURT. SUB-SECTION (2) AIMS AT PUTTING AN EMBARGO ON REOPE NING ASSESSMENTS, WHICH HAVE ATTAINED FINALITY ON THE EX PIRY OF THE PRESCRIBED PERIOD OF LIMITATION. SUB-SECTION (2) HI PUTTING SUCH EMBARGO REFERS TO THE WHOLE OF SUB-SECTION (1) MEAN ING THEREBY TO INSULATE ALL ASSESSMENTS, WHICH HAVE BECOME FINA L AND MAY HAVE BEER, FOUND LIABLE TO REASSESSMENTS OR RECOMPU TATION EITHER ON THE BASIS OF ORDERS IN PROCEEDINGS UNDER THE ACT OR ORDERS 9F COURTS PASSED UNDER ANY OTHER LAW. THE HIGH COURT, THEREFORE, WAS IN ERROR IN NOT READING THE WHOLE OF THE AMENDE D SUB-SECTION (1) INTO SUBSECTION (2) AND COMING TO THE CONCLUSIO N THAT THE REASSESSMENT PROPOSED ON THE BASIS OF THE ORDER OF THE COURT IN PROCEEDINGS UNDER THE LAND ACQUISITION ACT COULD BE COMMENCED EVEN THOUGH THE ORIGINAL ASSESSMENTS FOR PIE RELEVA NT YEARS IN QUESTION HAVE ATTAINED FINALITY ON THE EXPIRY OF TH E PERIOD OF LIMITATION UNDER SECTION 149 OF THE APT. ON A COMBI NED READING OF SUB-SECTION (1) AS AMENDED WITH EFFECT FROM APRIL 1 , 1989, AND SUB-SECTION (2) OF SECTION 150 AS IT STANDS, IN OUR VIEW, A FAIR AND JUST INTERPRETATION WOULD BE THAT THE AUTHORITY UND ER THE ACT HAS BEEN EMPOWERED ONLY TO RE-OPEN ASSESSMENTS, WHICH H AVE NOT ALREADY BEEN CLOSED AND ATTAINED FINALITY DUE TO TH E OPERATION OF THE BAR OF LIMITATION UNDER SECTION L49.' 12. WE HAVE ALSO CAREFULLY GENE THROUGH THE JUDGMEN T OF KARNATAKA HIGH COURT IN SPENCES HOTEL (R) LTD. (SUPRA). IN THE CAS E BEFORE KARNATAKA HIGH COURT, IT FOUND THAT SECTION 150(1) OF THE ACT BEGINS WITH THE WORDS 'NOTWITHSTANDING ANYTHING CONTAINED U R SECTION 149 '. THEREFORE, THE I.T.A. NOS.811 & 812/LKW/2017 ASSESSMENT YEARS:2003-04 & 2014-15 9 NOTICE ISSUED TO THE ASSESSEE, PURSUANT TO THE FIND ING OF THE TRIBUNAL WITH REGARD TO ESCAPED INCOME FOR ASSESSMENT, WAS FOUND TO BE VALID. REFERRING TO SECTION 150(2) OF THE ACT, THE KARNATA KA HIGH COURT FOUND THAT PLACING RELIANCE ON SECTION 150(2) WAS MISPLAC ED. THE KARNATAKA HIGH COURT HAD NO BENEFIT OF GOING THROUGH THE SUBS EQUENT JUDGMENT OF APEX COURT IN KM. SHARMA (SUPRA). IN VIEW OF FINDIN G OF THE APEX COURT IN K.M. SHARMA (SUPRA) AS EXTRACTED ABOVE, THE JUDGMEN T OF KARNATAKA HIGH COURT IN SPENCES HOTEL (P.) LTD. (SUPRA) MAY NOT BE OF ANY ASSISTANCE TO THE REVENUE. 13. NOW COMING TO THE JUDGMENT OF ANDHRA PRADESH HI GH COURT IN B.A.R. ABDUL RAHMAN SAHEB (SUPRA), THE ASSESSEE BEFORE HE ANDHRA PRADESH HIGH COURT CHALLENGED THE ORDER OF THE ASSESSING OF FICER BEFORE THE APPELLATE ASSISTANT COMMISSIONER, WHO ALLOWED THE A PPEAL HOLDING THAT THE UNEXPLAINED INVESTMENT DURING THE ACCOUNTING YE ARS J156-57 AND 1957-58 SHOULD BE BROUGHT TO TAX IN THE ASSESSMENT YEARS 1957-58 AND 1958-59 AND THE ADDITION MADE IN THE ASSESSMENT YEA R 1959-60 COULD NOT BE SUSTAINED. SUBSEQUENT TO THE ORDER OF THE APPELL ATE ASSISTANT COMMISSIONER, THE INCOME TAX OFFICER ISSUED NOTICE ON 20.03.1969 TO SHOW CAUSE WHY THE ASSESSMENTS FOR ASSESSMENT YEARS 1957-58 AND 1958-59 SHOULD NOT BE REOPENED AND UNEXPLAINED INVE STMENTS IN THE RESPECTIVE ACCOUNTING YEARS ADDED. THE ASSESSEE CHA LLENGED THE ACTION OF THE ASSESSING OFFICER ON THE GROUND THAT THE NOTICE ISSUED ON 20.03.1969 FOR REOPENING ASSESSMENTS FOR ASSESSMENT YEARS 1957 -58 AND 1958-59 WERE TIME BARRED AND BAD IN LAW. THE ANDHRA PRADESH HIGH COURT FOUND THAT EXPLANATION 2 TO SECTION 153 OF THE ACT PROVID ES FOR TAKING STEPS UNDER SECTION 147 TO ASSESS LIE INCOME OF ANOTHER Y EAR WITHOUT ANY LIMITATION PRESCRIBED BY SECTION 149 AS REGARDS THE ISSUE OF NOTICE UNDER SECTION 148 OF THE ACT. THE ANDHRA PRADESH HIGH COU RT HAD ALSO 10 OCCASION TO CONSIDER THE SUBSEQUENT JUDGMENT OF APE X COURT IN KM SHARMA (SUPRA). 14. WE HAVE ALSO GONE THROUGH THE JUDGMENT OF ALLAH ABAD HIGH COURT IN ASHWANI DHINGRA V. CHIEF CIT [2005] 276 ITR 98 [200 4] 141 TAXMAN 651. IN THE CASE BEFORE ALLAHABAD HIGH COURT, THE ASSESSE E LAND WAS ACQUIRED BY THE GOVERNMENT OF PUNJAB ON 20.08.1973 UNDER THE LAND ACQUISITION ACT, 1984. THE COMPENSATION WAS AWARDED ON 12.09.19 90 AND 29.05.1993 BY THE ORDERS OF PUNJAB & HARYANA HIGH COURT. INTERE ST WAS ALSO PAID ON 21.08.2001 FROM THE DATE OF TAKING OVER THE POSSESS ION OF THE LAND. SUBSEQUENTLY, THE ASSESSEE SHIFTED TO NOIDA IN THE YEAR 1991 AND DOING BUSINESS THERE. AFTER RECEIVING THE INTEREST ON THE COMPENSATION AMOUNT ON 21.08.2001, THE ASSESSEE FILED REVISED RETURN ON 14.01.2001 FOR ASSESSMENT YEARS 1995-96 TO 2001-02. THE ASSESSING OFFICER REOPENED THE ASSESSMENT BY ISSUING NOTICE UNDER SECTION 148 FOR THE ASSESSMENT YEARS 1989-90 TO 1994-95. THE ASSESSEE CHALLENGED T HE NOTICE BEFORE THE ALLAHABAD HIGH COURT ON THE GROUND THAT THE ASSESSM ENTS CANNOT BE REOPENED. THE ALLAHABAD HIGH COURT, BY PLACING JUDG MENT OF APEX COURT IN K.M. SHARMA (SUPRA), FOUND THAT THE WORDS 'OR BY A COURT HI ANY I.T.A. NOS.811 & 812/LKW/2017 ASSESSMENT YEARS:2003-04 & 2014-15 10 PROCEEDING UNDER ANY OTHER LAW' WERE INSERTED BY DI RECT TAX LAWS (AMENDMENT) ACT, 1987 WITH EFFECT FROM 01.04.1989. THE ALLAHABAD HIGH COURT FOUND THAT THE NOTICE WAS ISSUED AFTER 01.04J 1989, I.E. AFTER THE AMENDED ACT CAME INTO EFFECT FROM 01.04.1989 AND AC CORDINGLY, REJECTED THE CONTENTION OF THE ASSESSEE. 15. WE HAVE ALSO CAREFULLY GONE THROUGH THE JUDGMEN T OF MADRAS HIGH COURT IN VELLORE ELECTRIC CORPORATION (SUPRA). IN TH E CASE BEFORE THE MADRAS HIGH COURT, THE ISSUE AROSE FOR CONSIDERATIO N WAS WHETHER THE PERIOD OF LIMITATION PRESCRIBED FOR REOPENING THE A SSESSMENT WAS APPLICABLE EVEN FOR AN ORDER PASSED BY THE ASSESSIN G OFFICER BY INVOKING THE PROVISIONS OF SECTION 150 OF THE ACT. THE MADRA S HIGH COURT, BY PLACING RELIANCE ON THE JUDGMENT OF THE APEX COURT IN KM. SHARMA (SUPRA) FOUND THAT THE PLAIN LANGUAGE OF SUB-SECTION (2) OF SECTION 150 CLEARLY RESTRICTS THE APPLICATION OF SUB-ACCTION (1) OF SEC TION 150 TO ENABLE THE AUTHORITIES TO REOPEN THE ASSESSMENTS WHICH HAVE NO T ALREADY BECOME FINAL ON THE EXPIRY OF THE PERIOD OF LIMITATION PRE SCRIBED UNDER SECTION 149(2) OF THE ACT. THE MADRAS HIGH COURT FURTHER J FOUND THAT THE HOLD SUB-SECTION (1) OF SECTION 150 INSULATES ALL ASSESS MENTS WHICH HAVE BECOME FINAL AND MAY HAVE BEEN FOUND LIABLE FOR REA SSESSMENT OR RE- COMPUTATION ON THE BASIS OF ORDERS OF THE AUTHORITI ES UNDER INCOME-TAX ACT OR ORDERS OF HIGH COURT OR UNDER ANY OTHER LAW. THE MADRAS HIGH COURT FURTHER FOUND THAT SECTION 150(1) AS AMENDED WITH EFFECT FROM 01.04.1989 DID NOT ENABLE THE AUTHORITIES TO REOPEN ASSESSMENTS WHICH HAVE BECOME FINAL DUE TO THE BAR OF LIMITATION PRIO R TO 01.04.1989 AND THIS POSITION WAS EQUALLY APPLICABLE TO REASSESSMENTS PR OPOSED ON THE BASIS OF ORDER PASSED UNDER THE ACT UNDER ANY OTHER LAW. 16. IN VIEW OF THE ABOVE FINDING OF THE MADRAS HIGH COURT, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE JUDGMENT OF ALLA HABAD HIGH COURT IN ASHWANI DHINGRA (SUPRA), THE JUDGMENT OF KARNATAKA HIGH COURT IN SPENCES HOTEL (P.) LTD. (SUPRA) AND THE JUDGMENT OF ANDHRA PRADESH HIGH COURT IN B.A.R. ABDUL RAHMAN SAHEB (SUPRA) WOULD NO T BE APPLICABLE TO THE FACTS OF THE CASE. 17. WE HAVE ALSO CAREFULLY GONE THROUGH THE JUDGMEN T OF THE APEX COURT IN GREENWORLD CORPN. (SUPRA). AFTER REFERRING TO SECTION 150 OF THE ACT, THE APEX COURT OBSERVED THAT IF NO PROCEEDINGS BEFORE THE AUTHORITY OR IF THE (ASSESSMENT YEAR HI QUESTION IS NOT A SUB JECT MATTER WHICH WOULD FALL FOR CONSIDERATION, SECTION 150 OF THE ACT WILL HAVE NO APPLICATION. IN FACT, THE APEX COURT HAS OBSERVED AS FOLLOWS AT PAR A 60 TO 67 OF ITS JUDGMENT:-- '60. THE AFOREMENTIONED PROVISION ALTHOUGH APPEARS TO BE OF A VERY WIDE AMPLITUDE, BUT WOULD NOT IN TERMS OF SECTIONS 147 A ND 148 OF THE ACT CAN A PROCEEDING CAN BE INITIATED ONLY WITHIN THE PERIO D OF LIMITATION PRESCRIBED THEREFORE AS CONTAINED IN SECTION 149 OF THE ACT. 61. SECTION 150(1) OF THE ACT IS AN EXCEPTION TO TH E AFOREMENTIONED PROVISION. IT BRINGS WITHIN ITS AMBIT ONLY SUCH CASE S WHERE REOPENING OF I.T.A. NOS.811 & 812/LKW/2017 ASSESSMENT YEARS:2003-04 & 2014-15 11 THE PROCEEDINGS MAY BE NECESSARY TO COMPLY WITH AN ORDER OF THE HIGHER AUTHORITY. FOR THE SAID PURPOSE, THE RECORDS OF THE PROCEEDINGS MUST BE BEFORE THE APPROPRIATE AUTHORITY. IT MUST EXAMINE TH E RECORDS OF THE PROCEEDINGS. IF THERE IS NO PROCEEDING BEFORE IT OR IF THE ASSESSMENT YEAR IN QUESTION IS ALSO NOT A MATTER WHICH WOULD FALL F OR CONSIDERATION BEFORE THE HIGHER AUTHORITY, SECTION 150 OF THE ACT WILL H AVE NO APPLICATION. 62. IN ITO V. MURLIDHAR BHAGWAN DAS [1964] 52 ITR33 5 (SC)? IT WAS HELD (PAGE 339): 'THE PROCEEDINGS WOULD! BE IN TIME, IF THE SECOND P ROVISO TO SECTION 34(3) OF THE ACT COULD BE INVOKED. THE QUESTION, TH EREFORE, IS WHAT IS THE TME MEANING OF THE TERMS OF THE SECOND PROVISO TO S ECTION 34(3) OF THE ACT. IF, READS: 'PROVIDED FURTHER THAT NOTHING IN THIS SECTION LIMI TING THE TIME WITHIN WHICH ANY ACTION MAY BE TAKEN, OR ANY ORDER, ASSESSMENT OR REASSESSMENT MAY BE MADE, SHALL APPLY TO A REASS ESSMENT MADE UNDER SECTION 27 OR TO THE ASSESSMENT OR REASS ESSMENT MADE ON THE ASSESSEE OR ANY PERSON. IN CONSEQUENCE OF OR TO GIVE EFFECT TO ANY FINDING O|* DIRECTION CONTAINED IN AN ORDER UNDER SECTION 31, SECTION 33, SECTION 33A, EJECTION 33B, SECTION 66 SECTION 66A. | ! PRIMA FACIE THIS PROVISO LIFTS THE BAN OF LIMITATIO N IMPOSED BY THE OTHER PROVISIONS OF THE SECTION IN THE MATTER OF TA KING AN ACTION IN RESPECT OF OR [MAKING AN ORDER OF ASSESSMENT OR REA SSESSMENT FALLING WITHIN THE SCOPE OFF THE SAID PROVISO. THE SCOPE OF THE PROVISO IS CON FINED TO AN ASSESSMENT OR REASSESSME NT MADE ON! THE ASSESSEE OR ANY PERSON IN CONSEQUENCE OF AN ORD ER TO GIVE EFFECT TO ANY FINDING OR DIRECTION CONTAINED IN ANY ORDER MADE UNDER SECTION 31, I.E., IN AN APPEAL BEFORE THE ASS ISTANT APPELLATE COMNISSIONER, UNDER SECTION 33, I.E., IN AN APPEAL BEFORE THE TRIBUNAL, UNDER SECTION 33A, I.E., IN A REVISION BE FORE THE COMMISSIONER, UNDER SECTION 33B, I.E., IN A REVISIO N BEFORE THE COMMISSIONER AGAINST AN ORDER OF THE INCOME-TAX OFF ICER, AND UNDER SECTIONS 66 AND 66A, I.E., IN A REFERENCE TO THE HIGH COURT AND APPEAL AGAINST THE HIGH COURT' S ORDER TO THE S UPREME COURT. LEARNED COUNSEL FOR THE APPELLANT CONTENDS THAT THE SCOPE OF THE PROVISO IS ONLY CONFINED TO THE ASSESSMENT OF THE Y EAR THAT IS THE SUBJECT-MATTER OF THE APPEAL OR THE REVISION, AS TH E CASE MAY BE. LEARNED COUNSEL FOR THE DEPARTMENT ARGUES THAT THE COMPREHENSIVE PHRASEOLOGY USED IN THE PROVISO TAKES IN ITS THE DISPOSAL OF THE APPEAL BROAD SWEEP ANY FINDING GIVE N BY THE APPROPRIATE AUTHORITY NECESSARY FOR OR THE REVISION , AS THE CASE MAY BE, AND TO ANY DIRECTION GIVEN BY THE SAID AUTH ORITY TO EFFECTUATE ITS FINDING AND THAT THE SAID FINDING OR DIRECTION MAY BE IN RESPECT OF ANY YEAR OR ANY PERSON. AS (THE PHRAS EOLOGY USED IN THE PROVISO IS NOT CLEAR OR UNAMBIGUOUS, THE QUESTI ON RAISED I.T.A. NOS.811 & 812/LKW/2017 ASSESSMENT YEARS:2003-04 & 2014-15 12 CANNOT BE SATISFACTORILY RESOLVED WITHOUT HAVING A PRECISE APPRECIATION OF A BRIEF HISTORY OF SECTION 34 OF TH E ACT CULMINATING IN THE ENACTMENT OF THE PROVISO IN THE PRESENT FORM .' 63. THIS COURT NOTICED THE DEVELOPMENT OF LAW AS AL SO THE FACT THAT THE DECISION OF THE INCOME-TAX OFFICER GIVEN IN A, PART ICULAR YEAR DOES NOT OPERATE AS RESJUDICATA TO OPINE (PAGE 343): 'THE LIFTING OF THE BAN WAS ONLY TO GIVE EFFECT TO THE ORDERS THAT MAY BE MADE BY THE APPELLATE, REVISIONAL OR REVIEWING TRIB UNAL WITHIN THE SCOPE OF ITS JURISDICTION. IF THE INTENTION WAS TO REMOVE THE PERIOD OF LIMITATION IN RESPECT OF ANY ASSESSMENT AGAINST ANY PERSON, TH E PROVISO WOULD NOT HAVE BEEN ADDED AS A PROVISO TO SUB-SECTION (3) OF SECTION 34, WHICH DEALS WITH COMPLETION OF AN ASSESSMENT, BUT WOULD H AVE BEEN ADDED TO SUB-SECTION (1) THEREOF.' 64. IN REGARD TO THE QUESTION THAT WHAT WOULD BE MEA NING OF THE TERM FINDING OR DIRECTION, IT WAS HELD (PAGE 345): 'A 'FINDING', THEREFORE, CAN BE ONLY THAT WHICH IS (NECESSARY FOR THE DISPOSAL OF AN APPEAL IN RESPECT OF AN ASSESSMENT O F 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 EXCLUDE TH AT INCOME FROM THE ASSESSMENT OF THE YEAR UNDER APPEAL. THE F INDING IN THAT CONTEXT IS THAT THAT INCOME DOES NOT BELONG TO THE RELEVANT YEAR. HE MAY INCIDENTALLY FIND THAT THE INCOME BELONGS TO ANOTHER YEAR, BUT THAT IS NOT A FINDING NECESSARY FOR THE DISPOSA L OF AN APPEAL IN RESPECT OF THE YEAR OF ASSESSMENT IN QUESTION. THE EXPRESSION DIRECTION CANNOT BE CONSTRUED IN VACUUM, BUT MUST B E COLLATED TO THE DIRECTIONS WHICH THE APPELLATE ASSISTANT COMMIS SIONER CAN GIVE UNDER SECTION 31. UNDER THAT SECTION HE CAN GI VE DIRECTIONS, INTER ALIA, UNDER SECTION 31(3)(B), (C) OR (E) OR S ECTION 31(4). THE EXPRESSION DIRECTIONS IN THE PROVISO COULD ONLY REF ER TO THE DIRECTIONS WHICH THE APPELLATE ASSISTANT COMMISSION ER OR OTHER TRIBUNALS CAN ISSUE UNDER THE POWERS CONFERRED ON H IM FOR THEM UNDER THE RESPECTIVE SECTIONS. THEREFORE, THE EXPRE SSION' FINDING1 AS WELL AS THE EXPRESSION ' DIRECTION' CAN BE GIVEN FULL MEANING, NAMELY, THAT THE FINDING IS A FINDING NECESSARY FOR GIVING RELIEF IN RESPECT OF THE ASSESSMENT OF THE YEAR IN QUESTION A ND THE DIRECTION IS A DIRECTION WHICH THE APPELLATE REVISIONAL AUTHO RITY, AS THE CASE MAY BE, IS EMPOWERED TO GIVE UNDER THE SECTIONS MEN TIONED THEREIN.' 65. IT WAS CLARIFIED THAT THE WORDS ANY PERSON WOUL D REFER TO THOSE WHO WERE NOT NOMINEE PARTIES TO THE APPEAL ALTHOUGH THI S ASSESSMENT OF THEIR INCOME WOULD DEPEND UPON THE ASSESSMENTS OF THE ASS ESSEE. 66. MUDHOLKAR J., SPEAKING FOR THE MINORITY, REFERR ED TO THIS COURT' S DECISION IN S.C. PRASHAR V. VASANTSEN DWARKADAS [1963] 49 IT R 1 WHEREIN THE I.T.A. NOS.811 & 812/LKW/2017 ASSESSMENT YEARS:2003-04 & 2014-15 13 VALIDITY OF THE AFOREMENTIONED PROVISIONS WAS QUEST IONED; READ DOWN TH& PROVISO APPENDED TO SECTION 34(1) STATING (PAGE 349 OF 52 ITR): 'NO DOUBT, THIS COURT HAS RECENTLY HELD IN S.C. PRA SHAR V. VASANTSEN DWARKADAS [1963] 49 ITR 1 THAT THE PROVIS O IN SO FAR AS IT REMOVES THE BAR OF LIMITATION WITH RESPECT TO PERSONS OTHER THAN THE ASSESSEE, IS INVALID AS IT INFRINGES THE P ROVISIONS OF ARTICLE 14 OF THE CONSTITUTION. THAT, HOWEVER, IS A QUESTIO N APART. WHAT WE HAVE TO CONSIDER IS T LE LEGISLATIVE INTENT, AND FOR ASCERTAINING IT, IT IS LEGITIMATE TO LOOK ALSO AT THAT PART OF T HE ENACTMENT WHICH HAS BEEN HELD TO BE INVALID.' 67. TO THE SIMILAR EFFECT ARE THE DECISIONS OF THIS COURT IN N.KT SIVALINGAM CHETTIAR V. CIT [19671 ITR 14 (SC). IN THE CASE BEFORE US, THE TRIBUNAL HAS NOT EXAMINED THE RECORDS FOR THE ASSESSMENT YEAR UNDER CONSIDERATION. MOREOVER, NO ( PROCEEDING WAS BEFORE, THE TRIBUNAL FOR THE YEAR UNDER CONSIDERATI ON. THEREFORE, AS HELD BY THE APEX COURT, SECTION 150) OF THE ACT IS NOT APPL ICABLE FOR THE YEAR UNDER CONSIDERATION. IN OTHER WORDS!, THE OBSERVATION MAD$ TOY THE TRIBUNAL IN THE ORDER DATED 31,05.2010 CANNOT BE CONSIDERED EITHER AS 'FINDING' OR 'DIRECTION. 18. WE FIND THAT THE ANDHRA PRADESH HIGH COURT IN C IT V. G. VISWANADHAM [1988] 172 ITR 401/38 TAXMAN 142 CONSIDERED AN IDEN TICAL ISSUE AND OBSERVED AS FOLLOWS AT PAGES 408 & 409 OF ITR:- A READING OF THESE EXPLANATIONS CLEARLY SHOWS THAT THEY MERELY ILLUSTRATE AND CLARIFY THE MEANING OF THE WORDS 'IN CONSEQUENC E OF OR TO GIVE EFFECT TO ANY FINDING OR DIRECTION' CONTAINED IN AN APPELLATE , REVISIONAL OR ANY OTHER ORDER. EXPLANATION 2 SAYS THAT WHERE AN APPELLATE, REVISIONAL OR OTHER ORDER EXCLUDES ANY .INCOME FROM THE TOTAL INCOME OF THE A SSESSEE FOR AN ASSESSMENT YEAR, THE ASSESSMENT OF SUCH INCOME FOR ANOTHER ASSESSMENT YEAR SHALL, FOR THE PURPOSES OF BOTH SECTION 150 AN D SECTION 153, BE DEEMED TO BE ONE MADE IN CONSEQUENCE OF OR TO GIVE EFFECT TO ANY FINDING OR DIRECTION CONTAINED IN THE ORDER. SIMILARLY, EXPLAN ATION 3 SAYS THAT WHERE BY AN APPELLATE, REVISIONAL OR OTHER ORDER MY INCOME I S EXCLUDED FROM THE TOTAL INCOME OF ONE PERSON AND HELD TO BE THE INCOME OF A NOTHER PERSON, THE ASSESSMENT OJF INCOME OF SUCH OTHER PERSON SHALL, B OTH FOR THE PURPOSES OF SECTION 150 AND SECTION 153, BE DEEMED TO BE ONE MA DE IN CONSEQUENCE OF OR TO GIVE EFFECT TO ANY FINDING OR DIRECTION CONTA INED IN THE[ ORDER, PROVIDED, OF COURSE, SUCH OTHER PERSON WAS GIVEN AN OPPORTUNITY OF BEING HEARD BEFORE THE SAID ORDER WAS MADE. WHAT IS, HOWE VER, CLEAR IS THAT EXPLANATIONS 2 AND 3 DO NOT PURPORT TO OBLITERATE J OR REMOVE THE RESTRICTION CONTAINED IN SUB-SECTION (2) OF SECTION 150. THEY, NO DOUBT, REFER TO SECTION 150, BUT FOR A LIMITED PURPOSE, MENTIONED ABOVE. A REVIEW OF THE ABOVE PROVISIONS MAKES IT CLEAR THA T THE ACT PROVIDES CERTAIN TIME LIMITS BOTH FOR INITIATION OF PROCEEDINGS. THE TIME LIMITS FOR INITATION OF SUCH PROCEEDINGS ARE CONTAINED IN SECTIONS 149 AND 150, WHILE THE TIME I.T.A. NOS.811 & 812/LKW/2017 ASSESSMENT YEARS:2003-04 & 2014-15 14 LIMITS FOR COMPLETION OF SUCH PROCEEDINGS ARE MENTI ONED IN SUB SECTIONS (2) AND (3) OF SECTION 153 SUB-SECTION (3) OF SECTION 1 53 IS A PROVISO TO SUB- DOUBT, ARE RELEVANT BOTH FOR SECTION 150 AND SECTIO N 153(3) BUT THEIR PURPOSE IS MERELY TO ILLUSTRATE CERTAIN WORDS OCCUR RING THEREIN, AND NOT TO REMOVE OR OBLITERATE THE TIME LIMITS PRESCRIBED IN THE SEVERAL PROVISIONS REFERRED TO ABOVE. LEARNED STANDING COUNSEL FOR THE REVENUE BROUGHT TO OUR NOTICE CERTAIN DECISIONS, ALL OF WHICH APPEAR TO HAVE BEEN RENDERE D WITH REFERENCE TO EXPLANATION 2 IN SECTION 153. IN B. A.R. ABDUL RAHM AN SAHEB V. ITO [1975] 100 ITR 541, A BENCH OF THIS COURT HELD THAT THE EF FECT OF SECTION 150 AND SUB-SECTION (3) OF SECTION 153 READ WITH EXPLANATIO N 2 IS THAT, IF ANY INCOME IS DELETED FROM ASSESSMENT BY THE ORDER OF A HIGHER AUTHORITY, OR THE GROUND THAT IT IS NOT THE INCOME OF THAT YEAR, STEP S MAY BE TAKEN UNDER SECTION 147 TO ASSES IT AS THE INCOME OF ANOTHER YE AR, WITHOUT ANY LIMITATION PRESCRIBED UNDER SECTION 149 AS REGARD THE ISSUE OF NOTICE UNDER SECTION 148 OR AS TO THE COMPLETION OF THE ASSESSMENT OR RE ASSESSMENT PRESCRIBED BY SECTION 153. THE BENCH READ SUBSECTION (2) OF SE CTION 150 AS PROVIDING THAT THE PROVISIONS OF SUB-SECTION (1) THEREOF WILL NOT APPLY TO A CASE OF ASSESSMENT, REASSESSMENT OR RECOMPUTATION OF INCOME , IF IT RELATED TO AN ASSESSMENT YEAR IN RESPECT OF WHICH ASSESSMENT, REA SSESSMENT, ETC., COULD NOT HAVE BEEN MADE AT THE TIME WHEN THE ORDER, WHIC H WAS THE SUBJECT- MATTER OF APPEAL, REFERENCE OR REVISION, WAS MADE, BY REASON OF THE TIME LIMITS FIXED UNDER SECTION 153 FOR MAKING THE ASSES SMENT, REASSESSMENT, ETC. (VIDE PARAGRAPH 2 AT PAGE 545). IT WOULD IMMED IATELY BE SEEN THAT SUB- SECTION (2) OF SECTION 150 DOES NOT REFER TO SECTIO N 153. IT ONLY REFERS TO 'ANY OTHER PROVISION LIMITING THE TIME WITHIN WHICH ANY ACTION FOR ASSESSMENT, REASSESSMENT OR RECOMPUTATION MAY BE TA KEN'. THE WORD 'TAKEN' REFERS ONLY TO INITIATION OF PROCEEDINGS AN D NOT TO COMPLETION. SIMILARLY, AT PAGE 547, THE BENCH OBSERVED:' THE EF FECT OF SECTION 150 AND THIS SUB-SECTION (SECTION 153(3)) READ WITH EXPLANA TION 2 IS THAT IF ANY INCOME IS DELETED FROM ASSESSMENT N A HIGHER PROCEE DING ON THE GROUND THAT IT IS NOT THE INCOME OF THAT YEAR, STEPS MAY B E TAKEN UNDER SECTION 147 TO ASSESS IT AS THE INCOME OF ANOTHER YEAR, WITHOUT ANY LIMITATION APPLYING TO THE ISSUE OF NOTICE UNDER SECTION 148 OR TO THE COMPLETION OF THE ASSESSMENT OR REASSESSMENT. .... 'WITH GREAT RESPEC T, WE THINK THAT THIS OBSERVATION OVERLOOKS THE PROVISIONS I CONTAINED IN SUB-SECTION (2) OF SECTION 150. HOWEVER, INASMUCH AS THE CASE BEFORE U S IS NOT ONE FALLING UNDER EXPLANATION 2 TO SECTION 153, WE DO NOT THINK IT NECESSARY TO REFER THE MATTER TO A LARGER BENCH.' 19. BY RESPECTFULLY FOLLOWING THE JUDGMENT OF THE A PEX COURT IN KM. SHARMA (SUPRA) AND THE 'C| CORPORATION (SUPRA), THIS TRIBU NAL IS OF THE JUDGMENT OF MADRAS HIGH COURT IN VELLORE ELECTS CONSIDERED OPIN ION THAT THE ORDER OF THE ASSESSING OFFICER IS BARRED BY LIMITATION, THEREFOR E, THE SAME CANNOT STAND IN THE EYES OF LAW. ACCORDINGLY, THE ORDERS OF THE LOWER AUTHORITIES ARE SET ASIDE. 19. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. I.T.A. NOS.811 & 812/LKW/2017 ASSESSMENT YEARS:2003-04 & 2014-15 15 8. WE FURTHER FIND THAT THIS ISSUE IS COVERED IN FA VOUR OF THE ASSESSEE BY THE ORDER OF I.T.A.T. JAIPUR BENCH IN THE CASE OF R AMESH CHAND SONI, HUF VS. INCOME TAX OFFICER (SUPRA) VIDE ORDER DATED 08. 12.2017. THE HEAD NOTES OF THE SAID TRIBUNAL ARE REPRODUCED BELOW: SECTION 150, READ WITH SECTION 149. OF THE INCOME- TAX ACT, 1961 - INCOME ESCAPING ASSESSMENT - ASSESSMENT IN PURSUANCE OF AN ORDER OF APPEAL ETC. (LIMITATION) - ASSESSMENT YEARS-2001-02 AND 2002-03 - WHETHER FOR PURPOSE OF COMPUTATION OF PERIOD OF LIM ITATION FOR REASSESSMENT AS PRESCRIBED IN SUB-SECTION (2) OF SE CTION 150, LIMITATION PROVIDED UNDER SECTION 149 HAS TO BE COUNTED FROM E ND OF RELEVANT ASSESSMENT YEAR TILL DATE OF ORDER WHICH IS SUBJECT MATTER OF APPEAL WHEREIN DIRECTIONS WERE PASSED - HELD, YES - WHETHE R, THEREFORE, WHERE DIRECTIONS, WERE PASSED BY TRIBUNAL THEN ORDER OF C OMMISSIONER (APPEALS) WAS SUBJECT MATTER OF APPEAL BEFORE TRIBU NAL AND THEREFORE, ORDER OF COMMISSIONER (APPEALS) WAS RELEVANT FOR PU RPOSE OF SECTION 150(2) AND NOT ORIGINAL ASSESSMENT ORDER - HELD; YE S [PARA 7] [IN FAVOUR OF ASSESSEE] 9. IN THE PRESENT CASE, UNDOUBTEDLY, THE CASE WAS R EOPENED IN VIEW OF CIT(A)S ORDER DATED 22.12.2015 AND ON THAT DATE THE ASSESSMENT ORDER FOR 2003-04 WERE ALREADY BARRED BY LIMITATION BY THE PROVISIONS OF SECTION 149 OF THE ACT. THEREFORE, WE ACCEPT THE CO NTENTIONS OF THE LEARNED A.R. AND FOLLOWING THE ABOVE JUDICIAL PRECE DENT ALLOW THE APPEAL OF THE ASSESSEE. ACCORDINGLY, APPEAL IN ITA NO.811/ LKW/2017 IS ALLOWED. 10. AS REGARDS, APPEAL IN ITA NO.812/LKW/2017, WE F IND THAT THE ASSESSING OFFICER HAS PASSED THE ORDER U/S 143(3) O F THE ACT WITHOUT REJECTION OF BOOKS OF ACCOUNT AND ASSESSEE DURING T HE COURSE OF ASSESSMENT PROCEEDING HAS PRODUCED THE BOOKS OF ACC OUNT INCLUDING BILLS AND VOUCHERS AND THIS FACT HAS BEEN NOTED BY THE AS SESSING OFFICER IN HIS ORDER ITSELF. HE SIMPLY DISALLOWED 30% OF THE EXPEN SES UNDER THE HEAD SALES PROMOTION TO SAFEGUARD THE LEAKAGE OF REVENUE . IN HIS ORDER, HE DID NOT POINT OUT ANY INFIRMITY OR DEFECT IN THE BO OKS OF ACCOUNT OR VOUCHERS. THE LEARNED CIT(A), ON THE OTHER HAND HAS HELD THAT THE ASSESSEE DID NOT PRODUCE BOOKS OF ACCOUNT AND VOUCH ERS FOR RE- I.T.A. NOS.811 & 812/LKW/2017 ASSESSMENT YEARS:2003-04 & 2014-15 16 VERIFICATION AND RE-ESTIMATION OF THE DISALLOWANCE . THE LEARNED CIT(A) COULD HAVE EXAMINED THE ASSESSMENT RECORD, WHEREIN THE ASSESSEE HAS FILED COMPLETE DETAILS OF VOUCHERS TO VERIFY THE GE NUINENESS OF EXPENSES AND SIMPLY BY HOLDING THAT THE ASSESSEE DID NOT PRO DUCE THE BOOKS OF ACCOUNT AND VOUCHERS, HE SUSTAINED THE ADDITION. TH E FINDINGS OF THE ASSESSING OFFICER CLEARLY STATES THAT THE ASSESSEE HAD PRODUCED BOOKS OF ACCOUNT AND HAD ALSO PRODUCED BILLS AND VOUCHERS, T HEREFORE, IN VIEW OF THESE CONTRADICTIONS AND FOR THE SAKE OF JUSTICE, W E SET ASIDE THE ORDER TO LEARNED CIT(A), WHO SHOULD PASS A SPEAKING ORDER RE GARDING THE ARBITRARY DISALLOWANCE MADE BY THE ASSESSING OFFICE R. IN NUTSHELL, APPEAL FILED IN ITA NO. 812/LKW/2017 IS ALLOWED FOR STATIS TICAL PURPOSES. 11. IN THE RESULT, APPEAL OF THE ASSESSEE IN ITA NO . 811/LKW/2017 IS ALLOWED AND ITA NO.812/LKW/2017 IS ALLOWED FOR STAT ISTICAL PURPOSES. (ORDER PRONOUNCED IN THE OPEN COURT ON 24/08/2018) SD/. SD/. (PARTHA SARATHI CHAUDHURY) ( T. S . KAPOOR ) JUDICIAL MEMBER A CCOUNTANT MEMBER DATED:24/08/2018 AKS/- COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. CONCERNED CIT 4. THE CIT(A) 5. D.R., I.T.A.T., LUCKNOW ASSTT. REGISTRAR
