SHRI NARAYAN DAS TOLANI, Bhopal V. THE ITO 3(1), Bhopal

ITA 834/IND/2016

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 5797 (ITAT-INDORE)
• Duration Of Justice: 7 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-02-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Next Hearing Date: 21-02-2017
• Assessment Year: 2007-2008
• Appeal Filed On: 27-07-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: MOHD JAVED
• Assessee Lawyers: P K JAIN
• Keywords: Unexplained investment; Period of limitation; Valuation report; Time period of passing order
• Section: 133A; 147; 148

Judgement Text

PAGE 1 OF 16 SHRI NARAYAN DAS TOLANI VS. ITO, 3(1), BHOPAL I.T.A .NO. 834/IND/2016 A.Y.2007-08 , , IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE .. , . . , # BEFORE SHRI C. M. GARG, JUDICIAL MEMBER AND SHRI O.P. MEENA, ACCOUNTANT MEMBER . . /. I.T.A. NO. 834/IND/2016 / ASSESSMENT YEAR: 2007-08 SHRI NARAYANDAS TOLANI, PROP. OF M/S. JAICHAND NANAKRAM, 280, ONE TREE HILLS, BAIRAGARH, BHOPAL VS. ITO, 3(1), BHOPAL / / / / APPELLANT / / / / RESPONDENT .../ PAN: ABTPT6860F / / / / APPELLANT BY SHRI P.K.JAIN, CA / / / / RESPONDENT BY SHRI MOHD. JAVED, DR / / / / DATE OF HEARING 21.02.2017 / / / / DATE OF PRONOUNCEMENT 28.02.2017 / / / / O R D E R PER O.P. MEENA, ACCOUTANT MEMEBR. THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE OR DER OF LD. COMMISSIONER OF INCOME TAX (APPEALS)-II, BHOPAL [HE REINAFTER PAGE 2 OF 16 SHRI NARAYAN DAS TOLANI VS. ITO, 3(1), BHOPAL I.T.A .NO. 834/IND/2016 A.Y.2007-08 REFERRED TO AS THE CIT (A)] DATED 22.03.2016. THIS APPEAL PERTAINS TO ASSESSMENT YEAR 2007-08 AS AGAINST APPEAL DECIDED I N RESPECT OF ASSESSMENT ORDER DATED 29.12.2009 PASSED U/S. 143(3 )/147 OF INCOME TAX ACT, 1961(HEREINAFTER REFERRED TO AS 'TH E ACT) BY THE ITO WARD 3(1) BHOPAL [HEREINAFTER REFERRED TO AS THE AO ]. 2. GROUND NOS. 1, 2 & 3 ARE NOT PRESSED. HENCE, THE SA ME ARE DISMISSED AS NOT PRESSED. 3. GROUND NO. 4 READS AS UNDER :- THAT THE HON'BLE CIT-(APPEALS-II), BHOPAL, HAS ERR ED UNDER THE LAW IN GIVING DIRECTIONS U/S 150(1) TO THE AO TO TAKE NECESSARY ACTION IN TERMS OF THE REPORT OF THE DVO OR OTHERWISE IN RESPECTIVE ASSESSMENT YEARS I.E. 2004-0 5, 2005- 06 AND 2006-07 FOR TAXATION OF RS. 6,22,034/- AND R S. 3,00,000/- RESPECTIVELY WHICH IS NOT PERMISSIBLE UND ER THE LAW AND CONTRAVENES PREVAILING LEGAL STANDARDS. 4. FACTS OF THE CASE ARE THAT THE ASSESSEE IS PROPRIET OR OF M/S. JAICHAND NANAKRAM DEALING IN UTENSILS AND THERMO WAR E ETC. THE RETURN OF INCOME WAS FILED FOR THE ASSESSMENT YEAR 2 007-08 ON 02.11.2007 AT A TOTAL INCOME OF RS. 1,43,580/-. A S URVEY U/S 133A OF THE INCOME-TAX ACT, 1961, WAS CONDUCTED AT THE BU SINESS PREMISES OF THE ASSESSEE ON 13.03.2007, IN WHICH THE ASSESSEE SURRENDERED UNDISCLOSED INCOME STATING THAT THE ASS ESSEE WOULD DECLARE THE INCOME SURRENDERED BY HIM, BUT ASSESSEE RETRACTED AND PAGE 3 OF 16 SHRI NARAYAN DAS TOLANI VS. ITO, 3(1), BHOPAL I.T.A .NO. 834/IND/2016 A.Y.2007-08 DID NOT DISCLOSE THE SAME IN HIS RETURN OF INCOME. A SURVEY WAS ALSO CONDUCTED AT THE BUSINESS PREMISES OF THE ASSESSEE BY THE SALES TAX AUTHORITIES ON 14.02.2007. AS PER THE SALES TAX ORDER, THE SALES FOR THE YEAR WERE ASSESSED AT RS. 64,99,442/-. THE ASSESSEE WAS FOUND TO HAVE MADE AN UNDER DECLARATION OF SALES BY RS. 16,90,251/-. 5. DURING ASSESSMENT PROCEEDINGS, THE HOUSE PROPERTY WA S REFERRED FOR VALUATION TO THE DVO U/S 142A OF THE A CT WHO SUBMITTED THE VALUATION REPORT STATING UNDISCLOSED INVESTMENT IN CONSTRUCTION AS UNDER :- S.NO. PERIOD OF CONSTRUCTION EXPENDITURE AS STATED BY THE ASSESSEE (RS.) ASSESSED COST OF CONSTRUCTION (RS.) DIFFERECE (RS.) 1. 2003-04 11,42,000 15,66,118 4,24,118 2. 2004-05 2,58,000 3,53,743 95,743 3. 2005-06 2,75,000 3,77,173 1,03,173 TOTAL 16,75,000 22,97,034 6,22,034 AFTER REJECTING THE OBJECTIONS RAISED BY THE VALUER OF THE ASSESSEE, THE ADDITION OF RS. 6,22,034/- WAS MADE TO THE RETUR NED INCOME OF THE ASSESSEE IN THE ASSESSMENT OF ASSESSMENT YEAR 2 007-08 ON ACCOUNT OF UNDISCLOSED INVESTMENT IN THE CONSTRUCTI ON OF THE HOUSE. IN ADDITION TO ABOVE, THE AO MADE ADDITIONAL ADDITI ON OF RS. 3 LAKHS PAGE 4 OF 16 SHRI NARAYAN DAS TOLANI VS. ITO, 3(1), BHOPAL I.T.A .NO. 834/IND/2016 A.Y.2007-08 ON ACCOUNT OF EXPENDITURE/INVESTMENT IN FURNITURE, INTERIORS, FURNISHINGS, ELEVATION FOR THE ASSESSMENT YEAR 2007 -08. 6. THE MATTER CARRIED TO THE LD. CIT(A) AND THE LD. CI T(A) HAS DELETED THE ADDITIONS BY OBSERVING AS UNDER :- 12.4 I HAVE CONSIDERED THE FACTS OF THE CASE AND T HE WRITTEN SUBMISSION OF THE APPELLANT. THERE IS MERIT IN THE SUBMISSION OF THE ASSESSEE THAT THE DIFFERENCE IN T HE COST OF CONSTRUCTION AS ASSESSED BY THE DVO AND AS SHOWN B Y THE ASSESSEE HAD TO BE ASSESSED IN THE RESPECTIVE ASSES SMENT YEARSA.Y.2004-05, 2005-06 AND 2006-07. THE ACTION O F THE AO OF MAKING ADDITION OF THE SUM OF RS. 6,22,034/- IN A.Y.2007-08 CANNOT BE JUSTIFIED. THE ADDITION IS, ACCORDINGLY, DELETED IN THE ASSESSMENT YEAR 2007-08. THE AO IS DIRECTED U/S 150(1) OF THE ACT TO TAKE NE CESSARY ACTION IN TERMS OF THE REPORT OF THE DVO IN THE RE SPECTIVE ASSESSMENT YEARS, I.E. A.YS. 2004-05, 2005-06 AND 2 006-07. 13.4 I HAVE CONSIDERED THE FACTS OF CASE AND THE WR ITTEN SUBMISSIONS OF THE ASSESSEE. AS MENTIONED IN THE AS SESSMENT ORDER, DURING THE COURSE OF HIS STATEMENT RECORDED DURING SURVEY, THE APPELLANT STATED THAT A SUM OF RS. 16,0 0,000/- WAS SPENT ON THE FURNISHING, ELEVATION AND INTERIORS OF THE HOUSE WHICH WAS OVER AND ABOVE THE COST OF CONSTRUCTION. WHILE COMPLETING THE ASSESSMENT, THE AO HAS MADE AN ADDIT ION OF RS. 3,00,000/- ON THIS ACCOUNT. UPON DUE CONSIDERATION OF THE MATTER, IT IS HELD THAT THE ADDITION OF RS. 3,00,00 0/- HAS BEEN RIGHTLY MADE OVER AND ABOVE THE ADDITION ON ACCOUNT OF THE DIFFERENCE IN THE COST OF CONSTRUCTION. DURING APPEAL, IT HAS BEEN SUBMITTED BY THE APPELL ANT IN HIS WRITTEN SUBMISSIONS THAT THE ADDITION OF RS. 3,00,0 00/- OUGHT TO HAVE BEEN CONSIDERED/MADE IN A.Y. 2006-07. I FIND M ERIT IN THIS PAGE 5 OF 16 SHRI NARAYAN DAS TOLANI VS. ITO, 3(1), BHOPAL I.T.A .NO. 834/IND/2016 A.Y.2007-08 PART OF THE SUBMISSIONS OF THE LD. AR THE ADDITION OF RS. 3,00,000/- IS ACCORDINGLY DELETED IN A.Y. 2007-08. THE AO IS DIRECTED U/S 150(1) OF THE ACT TO MAKE TH E ABOVE ADDITION IN ASSESSMENT YEAR 2006-07. THE GROUND OF APPEAL IS DISPOSED OF AS ABOVE. 7. BEING AGGRIEVED, THE ASSESSEE HAS FILED THIS APPEAL BEFORE THE TRIBUNAL. THE LD. AUTHORIZED REPRESENTATIVE OF THE ASSESSEE SUBMITTED THAT THE LD. CIT(A) HAS ERRED IN GIVING D IRECTION TO THE AO FOR THE ASSESSMENT YEARS 2004-05, 2005-06 AND 2006- 07, WHICH NOT SUBJECT MATTER OF APPEAL BEFORE HIM. THE LD. AR TOO K US THROUGH THE PROVISIONS OF SECTION 251 AND SUBMITTED THAT ACCORD ING TO SECTION 251, THE LD. CIT(A) MAY CONFIRM, REDUCE, ENHANCE FO R ANNULLING THE ASSESSMENT OR MAY CONDUCT ENQUIRY AS HE MAY THINK F IT FOR THE YEAR UNDER APPEAL, BUT HE CANNOT GIVE ANY DIRECTION FOR THE ASSESSMENT YEARS, WHICH ARE NOT IN APPEAL BEFORE HIM. IN SUPPOR T OF THIS CONTENTION, THE LD. AR PLACED RELIANCE ON THE DECIS ION OF INDORE BENCH OF TRIBUNAL IN THE CASE OF M/S. OM PRAKASH BA GDIA, UJJAIN VS. ACIT, UJJAIN, (2005) 4 ITJ 106 (INDORE TRIBUNAL ) (COPY PLACED ON RECORD), WHEREIN IT WAS HELD THAT THE LD. CIT(A) WHILE DIRECTING THE AO TO ISSUE NOTICE U/S 148 AFTER RECORDING REASONS SHOWN BY HIM AS TRANSGRESSION OF HIS JURISDICTION AND ABOVE ALL WHE N AN ISSUE IS PAGE 6 OF 16 SHRI NARAYAN DAS TOLANI VS. ITO, 3(1), BHOPAL I.T.A .NO. 834/IND/2016 A.Y.2007-08 REGARDING THE VALIDITY OF REPORT OF DVO AND THE ASS ESSMENT ORDER BASED ON THE SAME, HAS ALREADY BEEN DECIDED BY THE TRIBUNAL IN OTHER ASSESSMENT YEARS, WHEREIN ALSO THE SAME DVOS REPORT WAS RELIED FOR MAKING THE ASSESSMENT. THE LD. AUTHORIZE D REPRESENTATIVE OF THE ASSESSEE FURTHER RELIED ON THE DECISION OF L ILASONS INDUSTRIES LIMITED VS. ACIT, BHOPAL, (2016) 29 ITJ 261 (INDORE TRIB.) DATED 30.06.2016 (COPY FILED), WHEREIN RELYING ON THE PLET HORA OF JUDGMENTS, IT WAS OBSERVED AS UNDER :- 20. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES. WE HAVE ALSO GONE THROUGH THE CASE LAWS RE LIED UPON BY THE LD. AUTHORIZED REPRESENTATIVE FOR THE ASSES SEE. WE FIND THAT THE GIST OF THE PLETHORA OF JUDGMENTS QUOTED A BOVE IS THAT WHERE ANY ASSESSMENT YEAR WAS NOT BEFORE THE LD. CI T(A), NO FINDINGS CAN BE GIVEN IN RESPECT OF SUCH CASES. WE FIND THAT IN THE CASE OF PT. HAZARI LAL, 39 ITR 265 (ALL.), IT W AS MADE CLEAR THAT THE AAC WAS ONLY COMPETENT TO RECORD THE FINDI NG THAT THE SUM, WHICH WAS IN QUESTION IN THE APPEAL BEFORE HIM , WAS NOT INCOME RELEVANT TO THE ASSESSMENT YEAR 1947-48, WHI CH WAS IN APPEAL IN THAT CASE. THE QUESTION WHETHER THIS INCO ME ACCRUED OR WAS EARNED IN THE PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR 1946-47 (I.E. THE YEAR NOT IN APPEAL), WAS NOT BEFORE HIM FOR DECISION, NOR WAS IT A POINT ON WHICH IT WAS ES SENTIAL FOR HIM TO RECORD A FINDING BEFORE APPROPRIATELY DECIDING A PPEAL BEFORE HIM. WE ALSO OBSERVE IN THE CASE OF MATHURADAS B. M OHTA, 56 ITR 269 (BOM.), RELYING ON SUPREME COURT IN ITO VS. MURLIDHAR BHAGWAN DAS 52 ITR 335, WHEREIN IT WAS HELD THAT TH E JURISDICTION OF THE AAC UNDER SECTION 31 OF THE 192 2 ACT WAS STRICTLY CONFINED TO THE ASSESSMENT ORDER OF THAT P ARTICULAR YEAR UNDER APPEAL. THE AAC NO DOUBT WAS COMPETENT TO HOL D WHETHER A PARTICULAR ITEM OR A PARTICULAR AMOUNT WA S INCOME OF THAT ASSESSMENT YEAR, BUT HE HAD NO JURISDICTION FU RTHER TO PAGE 7 OF 16 SHRI NARAYAN DAS TOLANI VS. ITO, 3(1), BHOPAL I.T.A .NO. 834/IND/2016 A.Y.2007-08 DECIDE IN THAT APPEAL THE APPROPRIATE YEAR IN WHICH THE SAID INCOME WOULD FALL. WE ALSO OBSERVE THAT IN THE CASE OF NATHALAL DHANJIBHAI 59 ITR 615 (GUJ), WHEREIN IT WAS HELD TH AT A FINDING, THEREFORE, COULD ONLY BE THAT WHICH WAS NECESSARY F OR THE DISPOSAL OF AN APPEAL IN RESPECT OF THE ASSESSMENT OF A PARTICULAR YEAR. HON'BLE SUPREME COURT OBSERVED THA T THE AAC MIGHT HOLD ON THE EVIDENCE THAT THE INCOME SHOWN BY THE ASSESSEE WAS NOT THE INCOME OF THE RELEVANT YEAR AN D THEREBY EXCLUDE THAT INCOME FROM THE ASSESSMENT OF THE YEAR UNDER APPEAL. WE FIND THAT IN THE CASE OF DAVE (MRS. RH) 140 ITR 1035 (CAL), WHERE ASSESSEES LAND WAS ACQUIRED BY GOVERN MENT IN MAY 1961 BUT COMPENSATION WAS RECEIVED AND ASSESSED IN ASSESSMENT YEAR 1971-72 AS INCOME FROM OTHER SOURCE S. LD. CIT(A) WHILE DELETING THE IMPUGNED ADDITION ON THE GROUND, INTER-ALIA, HELD THAT RELEVANT CAPITAL GAINS HAD AL READY BEEN TAXED IN ASSESSMENT YEAR 1962-63 WHEN LAND WAS ACQU IRED, DIRECTED ITO TO BRING IT TO TAX IN CURRENT ASSESSME NT YEAR. SUCH DIRECTIONS OF THE LD. CIT(A) WERE HELD TO BE UNSUST AINABLE. WE FIND THAT IN ONKAR NATH, 64 ITR 347 (ALL.), HON'BLE ALLAHABAD HIGH COURT HELD THAT THE LAW GIVES THE AAC THE POWE R TO GIVE DIRECTION THAT A CERTAIN SUM WHICH WAS DELETED FROM THE ASSESSMENT OF THE FIRM SHOULD BE ASSESSED IN THE HA NDS OF A PARTNER AS HIS INDIVIDUAL INCOME. FOR THE ASSESSMEN T YEAR 1957-58, THE ITO MADE AN ADDITION WHICH INCLUDED CE RTAIN SUM INTRODUCED IN THE HEAD OFFICE CASH BOOK IN NOVEMBER 1955. ON APPEAL, THE AAC DELETED THE ADDITION OF SAID SUM ON THE GROUND THAT THE SAID SUM WAS OUTSIDE THE FINANCIAL YEAR 19 56-57, RELEVANT TO THE ASSESSMENT YEAR IN QUESTION. THE CO URT FURTHER OBSERVED THAT IN THE INSTANT CASE THE AAC WAS DEALI NG WITH THE PROPRIETY OF THE ASSESSMENT FOR ASSESSMENT YEAR 195 7-58. HE FOUND THAT THE SAID SUM DID NOT RELATE TO THAT YEAR . THAT FINDING WAS SUFFICIENT TO DISPOSE OF THE ITEM. HE WOULD NOT RECORD A DEFINITE FINDING THAT THIS VERY ITEM REPRESENTED INCOME OF THE ASSESSEE FROM AN UNDISCLOSED SOURCE FOR ASSESSMENT YEAR 1956-57. WE FIND THAT IN THE INSTANT CASE THE ASSE SSMENT YEAR INVOLVED BEFORE THE LD. CIT(A) WAS A.Y. 2011-12. TH E OBSERVATIONS MADE FOR ASSESSMENT YEARS 2010-11 AND 2009-10 WOULD BE OUT OF THE JURISDICTION OF THE LD. CIT(A), AS BEFORE HIM NO SUCH ASSESSMENT YEAR WAS PENDING. AS THE ISSUE I S SQUARELY PAGE 8 OF 16 SHRI NARAYAN DAS TOLANI VS. ITO, 3(1), BHOPAL I.T.A .NO. 834/IND/2016 A.Y.2007-08 COVERED BY HON'BLE SUPREME COURT AND THE HON'BLE HI GH COURT JUDGMENTS, WE HOLD THAT THE DIRECTIONS OF THE LD. C IT(A) TO TAKE REMEDIAL ACTION IN THE A.Y. 2010-11 AND 2009-10 IS UNCALLED FOR AND LIABLE TO BE EXPUNGED. WE DIRECT ACCORDINGLY. 8. THUS, IT WAS CONTENDED THAT OBSERVATION MADE BY THE LD. CIT(A) FOR ASSESSMENT YEARS 2004-05 TO 2006-07 ARE WITHOUT JURISDICTION OF THE LD. CIT(A), AS THESE WERE NOT P ENDING BEFORE HIM. 9. THE LD. AR FURTHER PLACED RELIANCE ON THE FOLLOWING DECISIONS :- (I) CIT VS. T. A. KRISHNASWAMY REPORTED IN (2008)02 DTR (MAD) 0143. (II) MRS. R.H. DAVE VS. CIT, (1983) 140 ITR ( CAL) 1035. (III) ABDUL WAHID GEHLOT VS. ITO, (2005) 93 TTJ 0232 (JODHPUR TRIB.) (IV) KISHAN CHAND HARISH CHAND VS. ACIT, I.T.A.NO. 255/JP/1996. 10. THE LD. AR FURTHER RELIED ON THE JUDGMENT OF HON' BLE M.P. HIGH COURT IN THE CASE OF COMPUTER SCIENCE CORPORA TION INDIA (P) LIMITED VS. ADDL. CIT & ORS, (2014) 99 DTR (MP) 383 . THE LD. AR STATED THAT IN THE CASE OF COMPUTER SCIENCE CORPORA TION INDIA (P) LIMITED VS. ADDL. CIT & ORS,( SUPRA ) THE HON'BLE J URISDICTIONAL HIGH COURT HAS HELD AS UNDER :- PAGE 9 OF 16 SHRI NARAYAN DAS TOLANI VS. ITO, 3(1), BHOPAL I.T.A .NO. 834/IND/2016 A.Y.2007-08 SECTION 251, READ WITH SECTION 10A OF THE INCOME-T AX ACT, 1961 - COMMISSIONER (APPEALS) - POWERS OF (SUB JECT MATTER OF APPEAL) - ASSESSMENT YEAR 2007-08 - COMMISSIONER (APPEALS) UPHELD DISALLOWANCE OF DEDUC TION UNDER SECTION 10A TO ASSESSEE FOR RELEVANT YEAR AND ALSO DIRECTED ASSESSING OFFICER TO TAKE REMEDIAL ACTION FOR WITHDRAWAL OF CLAIM FOR SUBSEQUENT ASSESSMENT YEARS 2008-09 TO 2011-12 - ASSESSEE CLAIMED THAT DIRECTIO N PERTAINING TO ASSESSMENT YEARS 2008-09 TO 2011-12, YEARS WHICH WERE NOT SUBJECT MATTER OF APPEAL WERE WITHOU T JURISDICTION - WHETHER DIRECTIONS CONTAINED IN IMPU GNED ORDER PERTAINING TO SUBSEQUENT ASSESSMENT YEARS SHA LL NOT BE CONSTRUED TO BE OF BINDING NATURE AND IT WILL BE OPEN FOR ASSESSING OFFICER TO PROCEED WITH ASSESSMENT PROCEE DINGS IN ACCORDANCE WITH LAW UNINFLUENCED BY SAID IMPUGNE D OBSERVATIONS/DIRECTIONS CONTAINED IN IMPUGNED ORDER - HELD, YES [PARA 7][IN FAVOUR OF ASSESSEE] 11. THE LD. AUTHORIZED REPRESENTATIVE OF THE ASSESSEE, THEREFORE, REQUESTED THAT THE DIRECTIONS ISSUED FOR MAKING ADD ITION OF RS. 6,22,034/- AND RS. 3 LAKHS IN A.Y. 2004-05 TO 2006- 07 MAY BE EXPUNGED. 12. ON THE OTHER HAND, THE LD. DR SUBMITTED THAT THE L D. CIT(A) HAS FOUND THAT CERTAIN UNEXPLAINED INVESTMENT REFLE CTED IN DVOS REPORT WERE PERTAINING TO ASSESSMENT YEARS 2004-05 TO 2006-07 AS REPRODUCED BY THE AO IN THE TABLE GIVEN IN THE ASSE SSMENT ORDER. THEREFORE, THE LD. CIT(A) HAS ACCEPTED THE CONTENTI ON OF THE ASSESSEE THAT THE SAME CANNOT BE ADDED FOR THE ASSESSMENT YE AR UNDER PAGE 10 OF 16 SHRI NARAYAN DAS TOLANI VS. ITO, 3(1), BHOPAL I.T.A .NO. 834/IND/2016 A.Y.2007-08 APPEAL. HENCE, IT WAS DELETED. HOWEVER, THE LD. CIT (A) HAD DIRECTED THE AO TO TAX THE SAID UNEXPLAINED INVESTMENT IN TH E ASSESSMENT YEAR 2004-05 TO 2006-07 AS PER PROVISIONS OF SECTIO N 150(1) OF THE ACT. THE LD. DR CONTENDED THAT IT IS WITHIN THE POWE R OF THE LD. CIT(A) TO DIRECT THE AO FOR TAKING ANY ACTION OF WHI CH ADDITION HAS BEEN DISPUTED AND IS SUBJECT MATTER OF APPEAL BEFOR E HIM. IT WAS SUBMITTED THAT THE AO CAN INVOKE THE PROVISIONS OF SECTION 150(1) OF THE ACT TO ASSUME JURISDICTION U/S 147 OF THE AC T FOR WHICH THE LD. CIT(A) HAS GIVEN THE REASONS AND DIRECTIONS IN THE SAID ORDER. IN SUPPORT OF HIS VIEW, THE LD. DR ALSO PLACED RELIANC E ON THE DECISION OF COORDINATE BENCH OF BANGALORE TRIBUNAL IN THE C ASE OF MRS. SUVINA KRUPAL VS. ITO, WARD 1, MEDIKERI, I.T.A.NOS . 336 & 337/BANG/2014 (A.YS. 2003-04 & 2004-05 ) DATED 29.0 6.2015 (COPY OF ORDER WAS FILED), WHEREIN IT WAS OBSERVED AS UNDER :- 5.3.4 FROM THE ABOVE, IN OUR VIEW, IT IS EVIDENT TH AT THE LD. CIT(A) 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 LD. CIT(A) HAS ALSO RENDERED A FINDING THAT THE ADDITION TO BE MADE ON ACCOUNT OF UNEXPLAINED INVESTMENT IN THE SAID PROPERTY MAY BE DIVIDED AMON G 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 LD. CIT(A) THA T THE PAGE 11 OF 16 SHRI NARAYAN DAS TOLANI VS. ITO, 3(1), BHOPAL I.T.A .NO. 834/IND/2016 A.Y.2007-08 FACTS OF THE ASSESSEES CASE ARE DISTINGUISHABLE FR OM THE DECISIONS CITED BY THE ASSESSEE; THAT THE LD. CIT(A ) HAD RENDERED A CLEAR FINDING IN THE MATTER AND THAT, T HEREFORE, IN THE FACTS AND CIRCUMSTANCES OF THE CASE ON HAND, THE AO HAS CORRECTLY ASSUMED JURISDICTION U/S 147 OF THE A CT BY INVOKING THE PROVISIONS OF SECTION 150(1) OF THE AC T. CONSEQUENTLY, THE GROUNDS RAISED AT S.NOS. 1 O 5 FO R BOTH ASSESSMENT YEARS 2003-04 AND 2004-05 ARE DISMISSED. 13. WE HAVE CONSIDERED THE FACTS, RIVAL SUBMISSIONS AN D PERUSED THE MATERIAL AVAILABLE ON RECORD. IT IS SEEN THAT THE AO HAS OBTAINED VALUATION REPORT FROM THE DEPARTMENTAL VAL UER. THIS VALUATION REPORT CLEARLY SHOWS THAT THE INVESTMENT I N THE CONSTRUCTION OF HOUSE PROPERTY WAS SPREAD OVER DURIN G THE PERIOD FROM ASSESSMENT YEAR 2004-05 TO 2006-07. HOWEVER, THE AO CONSIDERED THE SAME FOR A.Y. 2007-08, WHEREAS THE LD . CIT(A) HAS DIRECTED U/S 150(1) OF THE ACT TO TAKE NECESSARY AC TION IN TERMS OF REPORT OF THE DVO IN THE RESPECTIVE ASSESSMENT YEAR S I.E. A.Y. 2004- 05 TO 2006-07. THE ASSESSEE HAS CHALLENGED THE FIND INGS OF THE LD. CIT(A) ON THIS ACCOUNT STATING THAT IT IS THE BEYON D THE POWER OF THE CIT(A) TO GIVE SUCH DIRECTION FOR THE ASSESSMENT YE ARS WHICH ARE NOT SUBJECT MATTER OF APPEAL BEFORE HIM. THE LD. COUNSE L FOR THE ASSESSEE ALSO PLACED RELIANCE IN THE CASE OF M/S. O M PRAKASH BAGDIA, UJJAIN VS. ACIT, UJJAIN, (2005) 4 ITJ 106. (INDORE TRIB.), PAGE 12 OF 16 SHRI NARAYAN DAS TOLANI VS. ITO, 3(1), BHOPAL I.T.A .NO. 834/IND/2016 A.Y.2007-08 LILASONS INDUSTRIES LIMITED VS. ACIT, BHOPAL, (2016 ) 29 ITJ 261 (INDORE TRIB.) AND COMPUTER SCIENCE CORPORATION IND IA (P) LIMITED VS. ADDL. CIT & ORS, (2014) 99 DTR (MP) 383, WHICH S UPPORTS HIS CONTENTION. TO APPRECIATE THE PROVISIONS IN PROPER PERSPECTIVE, IT WOULD BE RELEVANT TO REPRODUCE SECTIONS 150(1) AND 1 50(2), WHICH READ AS UNDER :- 150. PROVISION FOR CASES WHERE ASSESSMENT IS IN PURSUANCE OF AN ORDER ON APPEAL, ETC. (1) NOTWITHSTANDING ANYTHING CONTAINED IN SECTION 149, THE NOTICE UNDER SECTION 148 MAY BE ISSUED AT ANY TIME F OR THE PURPOSE OF MAKING AN ASSESSMENT OR REASSESSMENT OR RECOMPUTATION IN CONSEQUENCE OF OR TO GIVE EFFECT T O ANY FINDING OR DIRECTION CONTAINED IN AN ORDER PASSED BY ANY AUT HORITY IN ANY PROCEEDING UNDER THIS ACT BY WAY OF APPEAL, REFE RENCE OR REVISION 1 OR BY A COURT IN ANY PROCEEDING UNDER ANY OTHER LA W]. (2) THE PROVISIONS OF SUB- SECTION (1) SHALL NOT APPLY IN ANY CASE WHERE ANY SUCH ASSESSMENT, REASSESSMENT OR RECOMPUT ATION AS IS REFERRED TO IN THAT SUB- SECTION RELATES TO AN ASSESSMENT YEAR IN RESPECT OF WHICH AN ASSESSMENT, REASSESSMEN T OR RECOMPUTATION COULD NOT HAVE BEEN MADE AT THE TIME T HE ORDER WHICH WAS THE SUBJECT- MATTER OF THE APPEAL, REFERE NCE OR REVISION, AS THE CASE MAY BE, WAS MADE BY REASON OF ANY OTHER PROVISION LIMITING THE TIME WITHIN WHICH ANY ACTION FOR ASSESSMENT, REASSESSMENT OR RECOMPUTATION MAY BE TA KEN. 14. IN VIEW OF SECTION 150(2) OF THE ACT, THE PROVISIONS OF SUB SECTION (1) OF SECTION 150 OF THE ACT IS NOT APPLIC ABLE IN RESPECT OF THE ASSESSMENT YEAR IN WHICH THE ASSESSMENT, REASSES SMENT OR PAGE 13 OF 16 SHRI NARAYAN DAS TOLANI VS. ITO, 3(1), BHOPAL I.T.A .NO. 834/IND/2016 A.Y.2007-08 RECOMPUTATION COULD NOT HAVE BEEN MADE AT THE TIME OF ORDER, WHICH WAS SUBJECT MATTER OF APPEAL PASSED BY REASON O F ANY OTHER PROVISIONS LIMITING THE TIME WITHIN WHICH THE ACTION FOR REASSESSMENT OR RECOMPUTATION SHOULD BE TAKEN. THE PROVISION OF SECTION 149 OF THE ACT PROVIDES THAT NOTICE U/S 148 CAN BE ISSUED WITHIN THE MAXIMUM PERIOD OF SIX YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR IN CASE WHERE THE INCOME CHARGEABLE TO TAX EXCEEDS RS. 1 LAKH. IN THE CASE BEFORE US, WE FIND THAT THE RELEVANT ASSESSMENT YEARS ARE 2004-05, 2005-06 AND 2006-07 F OR WHICH DIRECTION U/S 150(1) HAVE BEEN ISSUED. THEREFORE, F OR THE PURPOSE OF ISSUE OF NOTICE U/S 148, THE PERIOD OF 6 YEARS FROM THE END OF RELEVANT ASSESSMENT YEAR I.E. 2004-05, 2005-06 AND 2006-07 EXPIRES ON 31.03.2010, 31.03.2011 AND 31.03.2012 RE SPECTIVELY, WHEREAS THE LD. CIT(A) HAS PASSED THE APPEAL ORDER O N 22.03.2016. THEREFORE, THE AO COULD HAVE TAKEN ANY ACTION AS PE R LIMITATION PROVIDED U/S 150(2) ON THE BASIS OF THE ORDER OF T HE LD. CIT(A) DATED 22.03.2016 FOR INVOKING SECTION 150(1) OF THE ACT, IF THE ORDER OF APPEAL WAS PASSED ON OR BEFORE 31.03.2012. THUS, WE ARE OF THE CONSIDERED OPINION THAT THE AO CAN PASS AN ORDER U/ S 150(1) OF THE ACT, PROVIDED THE APPELLATE/ORIGINAL ORDER WAS PASS ED WITHIN THE PAGE 14 OF 16 SHRI NARAYAN DAS TOLANI VS. ITO, 3(1), BHOPAL I.T.A .NO. 834/IND/2016 A.Y.2007-08 PERIOD OF LIMITATION AVAILABLE FOR REOPENING THE RE LEVANT ASSESSMENT. IN THIS CASE, ON THE DATE OF APPELLATE ORDER I.E. 22.03.2016, THE LIMITATION PERIOD FOR TAKING ACTION IN ACCORDANCE WITH THE DIRECTIONS OF CIT(A) U/S 150(1) HAD EXPIRED . THEREFORE, THE DIRECTION ISSUED BY THE LD. CIT(A) TO TAKE ACTION F OR ASSESSMENT YEARS 2004-05 TO 2006-07 BY ISSUING NOTICE FOR REOP ENING OF ASSESSMENT FOR AFORESAID YEARS IS BARRED BY LIMITAT ION. THIS VIEW IS SUPPORTED BY THE DECISION OF THIRD MEMBER BENCH IN THE CASE OF EMGEEYAR PICTURES (P) LIMITED VS. DY. CIT, MEDIA CI RCLE-I, CHENNAI ( CHENNAI TRIB.) (TM). IF WE READ SUB SECTION (2) O F SECTION 150, IT PROVIDED THAT SUB SECTION (1) THEREOF WILL NOT APPLY TO A CASE OF ASSESSMENT, REASSESSMENT OR RECOMPUTATION OF INCOME , IF IT RELATED TO ASSESSMENT YEAR IN RESPECT OF WHICH ASSESSMENT, R EASSESSMENT ETC. COULD NOT HAVE BEEN MADE AT THE TIME WHEN THE O RDER, WHICH WAS THE SUBJECT MATTER OF APPEAL, REFERENCE OR REVIS ION WAS MADE, BY REASON OF THE TIME LIMITS FIXED U/S 153 FOR MAKI NG THE REASSESSMENT, IT WOULD BE SEEN THAT SUB SECTION (2) OF SECTION 150 DOES NOT REFER TO SECTION 153. IT ONLY REFERS TO ANY OTHER PROVISIONS LIMITING THE TIME WITHIN WHICH ANY ACTION FOR ASSESSM ENT, REASSESSMENT OR RECOMPUTATION MAY BE TAKEN. THE WOR D TAKEN PAGE 15 OF 16 SHRI NARAYAN DAS TOLANI VS. ITO, 3(1), BHOPAL I.T.A .NO. 834/IND/2016 A.Y.2007-08 REFERS ONLY TO INITIATION OF PROCEEDINGS AND NOT TO COMPLETION. THE TIME LIMIT FOR INITIATION OF SUCH PROCEEDINGS ARE C ONTAINED IN SECTION 149 & 150 WHILE THE TIME LIMIT FOR COMPLETION OF SUC H PROCEEDINGS ARE MENTIONED IN SUB SECTION (2) & (3) OF SECTION 1 53 JUST AS SECTION 150 IS THE PROVISO TO SECTION 149, SUB SECTION (3) OF SECTION 153 IS A PROVISO TO SUB SECTION (2) THEREOF. WE FIND THAT TH E PLAIN LANGUAGE OF SUB-SECTION (2) OF SECTION 150 CLEARLY RESTRICTS TH E APPLICATION OF SUB-SECTION (1) OF SECTION 150 TO ENABLE THE AUTHOR ITIES TO REOPEN THE ASSESSMENTS WHICH HAVE NOT ALREADY BECOME FINAL ON THE EXPIRY OF THE PERIOD OF LIMITATION PRESCRIBED U/S 149(2) O F THE ACT. 15. IN THE LIGHT OF ABOVE DISCUSSION IN RESPECT OF PROV ISIONS OF SECTION 150(1) AND (2) OF THE ACT AND RELYING ON VA RIOUS JUDICIAL PRONOUNCEMENTS AS RELIED ON BY THE LD. AUTHORIZED REPRESENTATIVE OF THE ASSESSEE AS WELL AS DISCUSSED AS ABOVE BY US AND THE DECISION OF JURISDICTIONAL HIGH COURT IN THE CASE OF COMPUT ER SCIENCE CORPORATION INDIA (P) LIMITED (SUPRA), WE ARE OF TH E CONSIDERED OPINION THAT THE DIRECTIONS ISSUED BY THE LD. CIT( A) U/S 150(1) OF THE ACT FOR THE ASSESSMENT YEARS 2004-05 TO 2006-07 ARE BARRED BY LIMITATION LEGALLY AND NOT PERMISSIBLE CONSIDERING THE FACTS OF THE PAGE 16 OF 16 SHRI NARAYAN DAS TOLANI VS. ITO, 3(1), BHOPAL I.T.A .NO. 834/IND/2016 A.Y.2007-08 PRESENT CASE. ACCORDINGLY, THE SAME ARE DIRECTED TO BE EXPUNGED AND DELETED. 16. IN THE RESULT, THE APPEAL OF THE ASSESSEE ON THIS G ROUND IS ALLOWED. 17. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. THE ORDER PRONOUNCED IN THE OPEN COURT ON 28 TH FEB.,2017. SD/- ( .. ) (C.M.GARG) JUDICIAL MEMBER SD/- (..) (O.P.MEENA) ACCOUNTANT MEMBER / DATED : 28 TH FEBRUARY , 2017 CPU*