ITO 13(2)3, MUMBAI V. AAREN CHEMICALS, MUMBAI

ITA 8605/MUM/2011

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 71545 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 10 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-11-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 31-10-2013
• Assessment Year: 2001-2002
• Appeal Filed On: 21-12-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SU RENDRA KUMAR
• Assessee Lawyers: KARNA THAKKAR
• Keywords: Reopening of assessment; Search and seizure; Charitable institution; Period of limitation; Block assessment; Time period of passing order; Reassessment proceedings
• Section: 147; 148; 15; 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH A, MUMBAI BEFORE SHRI B.R. MITTAL, JUDICIAL MEMBER AND SHRI RAJENDRA, ACCOUNTANT MEMBER ITA NO.8605/M/11 ASSESSMENT YEAR:2001-02 INCOME TAX OFFICER 13(2) - (3) ROOM NO.425/477, 4 TH FLOOR, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI - 400020 VS. M/S. AAREN CHEMICALS 222, SAMUEL STREET, MUMBAI- 400 003 PAN: AAAFA5760 F (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI KARNA THAKKAR REVENUE BY : SHRI SURENDRA KUMAR DATE OF HEARING : 31.10.13 DATE OF PRONOUNCEMENT : 06.11.13 O R D E R PER B.R.MITTAL, JM: THE DEPARTMENT HAS FILED THIS APPEAL FOR ASSESSMEN T YEAR 2001-02 AGAINST THE ORDER OF LD. CIT(A) DATED 31.10.11 ON F OLLOWING GROUNDS: GROUNDS OF APPEAL: (1) (I) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN HOLDING THAT THE RE-ASSESSM ENT PROCEEDINGS ARE WITHOUT JURISDICTION. (II) WHILE DOING SO, THE LD. CIT(A) HAS ERRED IN IG NORING THE PROVISIONS OF SECTION 150(2) OF THE I.T. ACT, 1961. (2) THE APPELLANT PRAYS THAT THE ORDER OF THE CIT(A) O N THE ABOVE GROUND(S) BE SET ASIDE AND THAT OF THE ASSESSING OF FICER BE RESTORED. (3) THE APPELLANT CRAVES LEAVE TO AMEND OR ALTER ANY G ROUND OR ADD ANY NEW GROUND, IF NECESSARY. ITA NO.8605/MUM/11 M/S. AAREN CHEMICALS 2 2. WE HAVE HEARD THE LD. REPRESENTATIVES OF THE PAR TIES AND HAVE PERUSED THE ORDERS OF THE AUTHORITIES BELOW. 3. AT THE TIME OF HEARING LD. D.R. RELIED ON THE OR DER OF THE ASSESSING OFFICER TO JUSTIFY THE ACTION TO INITIATE RE-ASSESS MENT PROCEEDINGS UNDER SECTION 148 OF THE ACT PURSUANT TO THE ORDER PASSED BY LD. CIT(A) DATED 28.08.09 RELATING TO ASSESSMENT YEAR 2005-06. HOWEVER, LD. A.R. SUBMITTED THAT THE LD. CIT(A) IN THE IMPUGNED ORDER HAS RIGHTLY HELD THAT THERE WAS NO SUCH DIRECTION GIVEN BY LD. CIT(A) IN THE ORDER PASSED FOR ASSESSM ENT YEAR 2005-06 AS CONTEMPLATED UNDER SECTION 150(1) OF THE ACT TO INI TIATE RE-ASSESSMENT PROCEEDINGS AGAINST THE ASSESSEE FOR ASSESSMENT YEA R 2001-02. HE SUPPORTED IMPUGNED ORDER OF LD. CIT(A). 4. ON CONSIDERATION OF THE FACTS OF THE CASE AND TH E SUBMISSIONS OF THE LD. REPRESENTATIVES OF THE PARTIES, WE FIND MERIT IN TH E CONTENTION OF LD. A.R. IN ORDER TO APPRECIATE THE CONTENTION OF LD. A.R. WE C ONSIDER IT NECESSARY TO STATE THE RELEVANT FACTS WHICH HAVE BEEN STATED BY THE LD . CIT(A) AND THE FINDINGS GIVEN BY HIM IN PARA 4.1 TO 4.8. 5. THE FACTS ARE THAT THE ORIGINAL ASSESSMENT FOR T HE ASSESSMENT YEAR UNDER CONSIDERATION WAS MADE UNDER SECTION 143(3) OF THE ACT. FURTHER, THE ASSESSMENT WAS MADE UNDER SECTION 143(3) OF THE ACT FOR ASSESSMENT YEAR 2005-06 MAKING ADDITION OF RS.80,84,380/- ON THE GR OUND THAT SUNDRY CREDITORS AMOUNTING TO RS.80,84,380/- WERE BOGUS. DURING THE COURSE OF PROCEEDINGS BEFORE THE FIRST APPELLATE AUTHORITY, REMAND PROCEE DINGS WERE SOUGHT FOR AND THE ASSESSING OFFICER FOUND THAT ONE OF THE CREDITO R AS ON 31.03.05 NAMELY M/S. SWAGAT TRADING COMPANY WAS NOT FOUND AT THE AD DRESS GIVEN BY THE ASSESSEE. HE ALSO FOUND THAT IN RESPECT OF M/S. AM IT PHARMACEUTICALS AND ITA NO.8605/MUM/11 M/S. AAREN CHEMICALS 3 M/S. K.B. TRADING COMPANY THE ASSESSEE HAS NOT FILE D ANY CONFIRMATION. THEREFORE THE GENUINENESS OF THE CREDITORS COULD NO T BE ASCERTAINED. HOWEVER LD. CIT(A) IN HIS APPELLATE ORDER FOR ASSESSMENT YE AR 2005-06 FOUND THAT IMPUGNED SUNDRY CREDITORS, IN RESPECT OF WHOM ADDIT IONS OF RS.80,84,380/- WAS MADE BY THE ASSESSING OFFICER WERE OLD AND THE RELEVANT PURCHASES WERE MADE IN THE ASSESSMENT YEARS 2000-01, 2001-02, 2002 -03, 2003-04 AND 2004- 05. THEREFORE THE ASSESSING OFFICER HAD ERRED IN D ISALLOWING OLD AND BROUGHT FORWARD BALANCES. THE LD. CIT(A) ALSO STATED THAT THERE IS NO JUSTIFICATION TO MAKE THE SAID ABOVE OLD AND BROUGHT FORWARD BALANCE S OF THE SUNDRY CREDITORS IN THE ASSESSMENT YEAR 2005-06 AND ACCORDINGLY DELE TED THE SAME. HOWEVER, THE LD. CIT(A) STATED THAT THE ASSESSING OFFICER WO ULD BE FREE TO EXAMINE THOSE PURCHASES IN RESPECT OF RELEVANT ASSESSMENT YEARS I F FACTS AND CIRCUMSTANCES SO WARRANTED AND STRICTLY WITHIN THE FOUR CORNERS OF L AW. PURSUANT TO ABOVE ORDER OF THE LD. CIT(A) THE ASSESSING OFFICER INITIATED R EASSESSMENT PROCEEDINGS FOR THE ASSESSMENT YEAR UNDER CONSIDERATION I.E. ASSESS MENT YEAR 2001-02 BY ISSUE OF NOTICE UNDER SECTION 148 DATED 06.11.09 ON THE G ROUND THAT INCOME OF THE ASSESSEE ESCAPED ASSESSMENT AND LD. CIT(A) HAD DIRE CTED THE ASSESSING OFFICER TO REOPEN THE SAID ASSESSMENT YEAR TO CHARGE INCOME WHICH HAD ESCAPED BEING ASSESSED. THE ASSESSING OFFICER RELIED ON THE PROV ISIONS OF SECTION 150(1) AND/OR 150(2) OF THE INCOME TAX ACT FOR REOPENING T HE ASSESSMENT. THEREAFTER THE ASSESSING OFFICER MADE THE ADDITION OF RS.72,38 ,001/- ON ACCOUNT OF SUNDRY CREDITORS I.E. M/S. SWAGAT TRADING COMPANY A ND M/S. AMIT PHARMACEUTICALS HOLDING THAT THESE WERE NOT GENUINE . BEING AGGRIEVED, ASSESSEE FILED APPEAL BEFORE THE FIRST APPELLATE AU THORITY DISPUTING THE ACTION OF THE ASSESSING OFFICER OF REOPENING THE ASSESSMENT A ND MAKING THE ABOVE ADDITION OF RS.72,38,001/-. ITA NO.8605/MUM/11 M/S. AAREN CHEMICALS 4 6. THE LD. CIT(A) AFTER CONSIDERING THE SUBMISSION OF THE ASSESSEE STATED THAT THE ASSESSMENT HAS BEEN REOPENED BEYOND THE PE RIOD OF SIX YEARS AND ALSO THE SUBMISSION OF THE ASSESSEE THAT THERE WAS NO SU CH FINDING ON DIRECTION AS CONTEMPLATED IN SECTION 150(1) AND/OR 150(2) WHICH COULD JUSTIFY THE ISSUE OF NOTICE UNDER SECTION 148 BEYOND A PERIOD OF SIX YEA RS FROM THE ASSESSMENT YEAR, AS HELD BY THE IMPUGNED ORDER THAT THE ACTION OF THE ASSESSING OFFICER TO REOPEN THE ASSESSMENT UNDER SECTION 148 IS NOT JUST IFIED AND IS WITHOUT JURISDICTION. THE LD. CIT(A) HAS ALSO STATED THAT THERE IS NO SUCH DIRECTION GIVEN BY THE LD. CIT(A) VIDE ORDER DATED 28.08.09 W HILE DECIDING THE APPEAL FOR ASSESSMENT YEAR 2005-06 FOR REOPENING THE ASSES SMENT. WE CONSIDER IT PRUDENT TO STATE PARAGRAPHS 4.1 TO 4.9 OF THE ORDER OF THE LD. CIT(A) WHICH READ AS UNDER: 4.1 I HAVE CONSIDERED THE FACTS OF THE CASE AND T HE SUBMISSIONS MADE BY THE ASSESSEE. THE MAIN CHALLENGE OF THE ASSESSEE IN GROUND NO. (1) IS THAT THE AO COULD NOT HAVE ISSUED THE NOTICE U/S 14 8 AS IT WAS TIME- BARRED SINCE THE SAID NOTICE WAS ISSUED BEYOND SIX YEARS AND COULD NOT HAVE BEEN SAID TO HAVE BEEN ISSUED FOR THE PURPOSE OF MAKING AN ASSESSMENT OR REASSESSMENT IN CONSEQUENCE OF OR TO GIVE EFFECT TO ANY 'FINDING' OR 'DIRECTION' CONTAINED IN THE ORDER PAS SED BY THE LD. CIT(A) IN THE APPELLATE PROCEEDINGS FOR THE A.Y. 2005-06. UND ISPUTABLY, THE NOTICE U/S 148 HAS BEEN ISSUED BEYOND THE PERIOD OF SIX YE ARS, WHICH IS NOT NORMALLY PERMITTED UNDER THE ACT IN VIEW OF THE PRO VISIONS OF SEC. 149. HOWEVER, IF THE NOTICE U/S 148 HAS BEEN ISSUED BY T HE AO BY TAKING THE SHELTER OF SEC. 150(1) OF THE I.T. ACT, 1961, IT WO ULD BE IMPERATIVE TO EXAMINE WHETHER THE APPELLATE ORDER FOR THE A.Y. 20 05-06 CONTAINED ANY 'DIRECTION' OR 'FINDING' WHICH WOULD JUSTIFY THE IS SUE OF NOTICE U/S 148 BEYOND THE PERIOD SPECIFIED IN SEC. 149 OF THE I.T. ACT, 1961. FOR THIS PURPOSE, IT WOULD BE USEFUL TO REPRODUCE THE RELEVA NT EXTRACTS OF THE LD. CIT(A)'S ORDER FOR THE A.Y. 2005-06 BASED ON WHICH THE AO HAS ISSUED THE NOTICE U/S 148 BEYOND THE TIME PERMITTED BY SEC . 149 OF THE I.T. ACT,1961 BY TAKING RECOURSE TO SEC.150(1) AND 150(2 ) OF THE I.T. ACT, 1961. THE RELEVANT EXTRACT WHICH IS CONTAINED AT PA RA 2.5.3 OF THE APPELLATE ORDER READS AS FOLLOWS:- ITA NO.8605/MUM/11 M/S. AAREN CHEMICALS 5 HAVING REGARD TO THE FACTS AND CIRCUMSTANCES OF TH E CASE AND AS ADMITTED BY THE LD. ASSESSING OFFICER HIMSELF THE I MPUGNED SUNDRY CREDITORS IN THE BOOKS ARE OLD AND THE RELEV ANT PURCHASES WERE MADE IN THE A.YRS. 2000-01, 2001-02, 2002-03, 2003-04 & 2004-05 RESPECTIVELY. THEREFORE, LD. ASSESSING OFFI CER HAS ERRED IN DISALLOWING OLD AND BROUGHT FORWARD BALANCES BY ERRONEOUSLY CLAIMING THAT THEY PERTAIN TO THE A. Y.2005-06. NO MATERIAL NOR ANY EVIDENCE WERE BROUGHT ON RECORD FOR JUSTIFYING THE ADDITION OF OLD AND BROUGHT FORWARD BALANCE ON SUNDRY CREDITORS IN THE RELEVANT A. Y. 2005-06. THEREFORE, THE ADDITION MAD E BY THE LD. ASSESSING OFFICER IS NOT SUSTAINED IN THE A. Y. 200 5-06. HOWEVER, LD. ASSESSING OFFICER WILL BE FREE TO EXAMINE THESE PURCHASES IN THE RESPECTIVE ASSESSMENT YEARS IF FACTS AND CIRCUM STANCES SO WARRANT AND STRICTLY WITHIN THE FOUR CORNERS OF LAW . IF THE LD. ASSESSING OFFICER HAD ANY SUCH EVIDENCES AS ALLEGE D BY HIM IN PARA 5 OF THE IMPUGNED ASSESSMENT ORDER DT. 31/12/2 007 THEN HE WILL BE FREE TO USE THOSE EVIDENCES GATHERED DURING THE SEARCH AND SEIZURE ACTION AND WILL EXAMINE THE REOPENING OF AS SESSMENT IN THE LIGHT OF FRESH MATERIAL IN HIS POSSESSION, WHICH WA S SUBSEQUENTLY BROUGHT TO HIS NOTICE. MOREOVER, LD. ASSESSING OFFI CER HAS TO KEEP THE REMAND REPORTS AND MATERIAL AVAILABLE ON RECORD IN HIS MIND. HOWEVER, LD. ASSESSING OFFICER IS REQUIRED TO BE CA REFUL AND SHALL ACT STRICTLY IN ACCORDANCE WITH THE PROVISIONS OF S EC.148, 147 AND OTHER RELEVANT SECTIONS OF THE ACT. IT IS BROUGHT T O MY NOTICE THAT A. Y. 2001-02 WAS COMPLETED UNDER SCRUTINY ASSESSME NT, WHEREAS ASSESSMENT YEARS 2000-01, 2002-03 AND 2003-04 WERE ASSESSED IN A SUMMARY MANNER U/S 143(1) OF THE ACT.' 4.2 IT WOULD ALSO BE USEFUL TO REPRODUCE THE PROVIS IONS OF SEC. 150 IN ORDER TO EXAMINE THE ISSUE SINCE IT IS THIS SECTION WHICH HAS BEEN INVOKED BY THE AO FOR ISSUING THE NOTICE U/S 148 BEYOND THE LIMITATION PERIOD. '150 (1) NOTWITHSTANDING ANYTHING CONTAINED IN SEC. 149, THE NOTICE UNDER SECTION 148 MAY BE ISSUED AT ANY TIME FOR 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 AU THORITY IN ANY PROCEEDING UNDER THIS ACT BY WAY OF APPEAL, REFEREN CE OR REVISION (OR BY A COURT IN ANY PROCEEDING UNDER ANY OTHER LA W). ITA NO.8605/MUM/11 M/S. AAREN CHEMICALS 6 (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 AT THE APPEAL, REFERENCE OR REVISION , AS THE CASE MAY BE, WAS MADE BE REASON OF ANY OTHER PROVISION L IMITING THE TIME WITHIN WHICH ANY ACTION FOR ASSESSMENT, REASSE SSMENT OR RECOMPUTATION MAY BE TAKEN. FROM THE ABOVE, IT WOULD BE APPARENT THAT, FOR THE PURPOSE OF SEC. L50, SO AS TO ENABLE THE AO TO ISSUE THE NOTICE U/S 148 AT ANY TIME WITHOUT BEING CURTAILED BY THE TIME LIMIT PRESCRIBE D U/S 149, THERE MUST BE SATISFACTION OF EITHER OF THE TWO INGREDIENTS UN DER SUB-SECTION (1) OF SEC. 150. THE FIRST INGREDIENT IS THAT THE REOPENIN G MUST HAVE BEEN DONE FOR THE PURPOSE OF GIVING EFFECT TO ANY FINDING C ONTAINED IN ANY ORDER PASSED BY ANY AUTHORITY IN ANY PROCEEDINGS UNDER TH E ACT BY WAY OF APPEAL, REFERENCE OR REVISION OR BY A COURT IN ANY PROCEEDING UNDER ANY OTHER LAW. THE SECOND INGREDIENT IS THAT THE REOPEN ING MUST HAVE BEEN DONE FOR THE PURPOSE OF GIVING EFFECT TO ANY 'DIREC TION' CONTAINED IN THE ORDER PASSED BY ANY AUTHORITY. 4.3 A 'FINDING' IN THE CONTEXT OF SUB-SECTION (1) O F THE SEC. 150 IS THE CONCLUSION WHICH THE HIGHER AUTHORITY HAS NECESSARI LY TO REACH SO AS TO DISPOSE OF THE APPEAL BEFORE HIM. THE EXPRESSION 'F INDING' OR 'DIRECTION' CANNOT BE TREATED AS IN VACCUM. THE WORDS ''IN CONS EQUENCE OF' OR 'TO GIVE EFFECT TO ANY FINDING OR DIRECTION HAVE TO BE COLLATED WITH AND CANNOT ENLARGE THE SCOPE OF THE FINDING OR DIRECTIO N MENTIONED IN THE SAID SUB-SECTION [C.M. RAJGHARIA VS ITO 98 ITR 486, 497 (PAT)]. IN THE CASE OF CIT VS S. GOVINDRAM CHETTIAR [79 ITR 60 (MA D)] IT HAS BEEN HELD THAT EVERY STEP OR REASON TO OBSERVATION INCID ENTAL TO A FINDING CANNOT BE MISTAKEN FOR THE FINDING ITSELF. IN THE CASE OF MOHINI THAPAR CHARITABLE TRUST 160 ITR 408, 410, IT HAS BEEN HELD BY THE HONBLE CALCUTTA HIGH COURT THAT THE INTENT, PURPOSE AND IM PORT OF THE FINDING OR DIRECTION IN THE APPELLATE ORDER WILL DETERMINE THE CHARACTER, SCOPE AND LIMITATIONS OF THE ASSESSMENT PROCEEDINGS TAKEN IN PURSUANCE OF SUCH FINDING OR DIRECTION. THE HON'BLE SUPREME COURT IN THE CASE OF RAJINDER NATH (120 ITR 14) HAS HELD THAT THE OBSERVATION OF THE APPELLATE ASSISTANT COMMISSIONER TO THE EFFECT THAT THE INCOM E-TAX OFFICER ''IS FREE ITA NO.8605/MUM/11 M/S. AAREN CHEMICALS 7 TO TAKE ACTION' TO ASSESS THE EXCESS IN THE HANDS O F THE CO-OWNERS COULD NOT BE DESCRIBED AS A 'DIRECTION.' A DIRECTION BY A STATUTORY AUTHORITY IS IN THE NATURE OF AN ORDER REQUIRING POSITIVE COMPLI ANCE. WHEN IT IS LEFT TO THE OPTION AND DISCRETION OF THE INCOME-TAX OFFICER WHETHER OR NOT TO TAKE ACTION, IT CANNOT BE DESCRIBED AS A 'DIRECTION .' THE HON'BLE ORISSA HIGH COURT IN THE CASE OF PRAFULLA KUMAR MALLICK (1 03 ITR 418) HAS HELD, WHILE DECIDING IN THE CONTEXT OF EXPLANATION 2 TO SEC. 153 THAT IT IS BUT NATURAL THAT IN ORDER TO INVOKE THE FICTION OF EXPLANATION 2, THE HIGHER AUTHORITY MUST GIVE A PROPER AND DEFINITE FI NDING THAT THE IMPUGNED AMOUNT IS OF THE INCOME CHARACTER, BUT IT DOES NOT BELONG TO THE YEAR UNDER APPEAL AND IS, THEREFORE, DELETED. I N RAJINDER NATH (SUPRA), THE HON'BLE SUPREME COURT HAS HELD AS FOLL OWS :- 'THE EXPRESSIONS ''FINDING'' AND 'DIRECTION' ARE LI MITED IN MEANING. A FINDING GIVEN IN AN APPEAL, REVISION OR REFERENCE ARISING OUT OF AN ASSESSMENT MUST BE A FINDING NECE SSARY FOR THE DISPOSAL OF THE PARTICULAR CASE, THAT IS TO SAY, IN RESPECT OF THE PARTICULAR ASSESSEE AND IN RELATION TO THE PARTICUL AR ASSESSMENT YEAR. TO BE A NECESSARY FINDING, IT MUST BE DIRECTL Y INVOLVED IN THE DISPOSAL OF THE CASE. IT IS POSSIBLE IN CERTAIN CAS ES THAT IN ORDER TO RENDER A FINDING IN RESPECT OF A, A FINDING IN RESP ECT OF B MAY BE CALLED FOR. FOR INSTANCE, WHERE THE FACTS SHOW THAT THE INCOME CAN BELONG EITHER TO A OR B AND TO NO ONE ELSE, A FINDI NG THAT IT BELONGS TO B OR DOES NOT BELONG TO B WOULD BE DETER MINATIVE OF THE ISSUE WHETHER IT CAN BE TAXED AS AS INCOME. A FINDING RESPECTING B IS INTIMATELY INVOLVED AS A STEP IN TH E PROCESS OF REACHING THE ULTIMATE FINDING RESPECTING A IF, HOWE VER, THE FINDING AS TO AS LIABILITY CAN BE DIRECTLY ARRIVED AT WITH OUT NECESSITATING A FINDING IN RESPECT OF B, THEN A FINDING MADE IN R ESPECT OF B IS AN INCIDENTAL FINDING ONLY. IT IS NOT A FINDING NECES SARY FOR THE DISPOSAL OF THE CASE PERTAINING TO A. THE SAME PRI NCIPLES SEEM TO APPLY WHEN THE QUESTION IS WHETHER THE INCOME UNDER ENQUIRY IS TAXABLE IN THE ASSESSMENT YEAR UNDER CONSIDERATION OR ANY OTHER ASSESSMENT YEAR. AS REGARDS THE EXPRESSION DIRECT ION IN SECTION 153(3)(II) OF THE ACT, IT IS NOW WELL SETTLED THAT IT MUST BE AN EXPRESS DIRECTION NECESSARY FOR THE DISPOSAL OF THE CASE BEFORE THE AUTHORITY OR COURT. IT MUST ALSO BE A DIRECTION WH ICH THE AUTHORITY OR COURT IS EMPOWERED TO GIVE WHILE DECIDING THE CA SE BEFORE IT. THE EXPRESSION FINDING AND DIRECTION IN SEC. 15 3(3)(II) OF THE ACT MUST BE ACCORDINGLY CONFINED. ITA NO.8605/MUM/11 M/S. AAREN CHEMICALS 8 4.4 IN THE LIGHT OF THE ABOVE, IT WOULD BE NECESSAR Y TO SEE WHETHER THERE WAS ANY 'FINDING' OR 'DIRECTION' CONTAINED IN THE A PPELLATE ORDER OF LD. CIT(A) IN THE CASE OF THE ASSESSEE FOR THE A. Y. 20 05-06 WHICH WOULD HAVE GIVEN THE ASSESSING OFFICER THE AUTHORITY TO R EOPEN THE ASSESSMENT FOR THE A.Y. 2001-02 BEYOND THE PERIOD OF SIX YEARS , I.E. BEYOND THE DATE OF LIMITATION. IN THIS CASE, THE ASSESSMENT WAS REO PENED U/S 147 ON 6/11/2009, WHILE AS PER THE PROVISIONS OF SEC. 149, NO NOTICE U/S 148 COULD HAVE BEEN ISSUED TO THE ASSESSEE BEYOND 31/03 /2008. A CURSORY LOOK AT THE ORDER OF THE LD. CIT(A) FOR THE A. Y. 2 005-06 WOULD REVEAL THAT NO SUCH 'FINDING' OR 'DIRECTION' WAS CONTAINED THEREIN WHICH WOULD JUSTIFY RAISING THE BAR OF LIMITATION OF MAKING THE ASSESSMENT U/S 147. THE ONLY FINDING' OF LD. CIT(A) IN THE ORDER FOR T HE A.Y. 2005-06 IS THAT THE ''IMPUGNED SUNDRY CREDITORS IN THE BOOKS A RE OLD AND THE RELEVANT PURCHASES WERE MADE IN THE A. YRS. 2000-01 ,2001-02, 2002-03, 2003-04 AND 2004-05 RESPECTIVELY. THEREFORE, LD. AS SESSING OFFICER HAS ERRED IN DISALLOWING OLD AND BROUGHT FORWARD BALANC ES BY-ERRONEOUSLY CLAIMING THAT THEY PERTAIN TO THE A. Y. 2005-06. NO MATERIAL NOR ANY EVIDENCE WERE BROUGHT ON RECORD FOR JUSTIFYING THE ADDITION OF OLD AND BROUGHT FORWARD BALANCE OF SUNDRY CREDITORS IN THE RELEVANT A. Y. 2005- 06.' THE CIT(A), THEREFORE, DID NOT SUSTAIN THE ADD ITION OF THESE OLD SUNDRY CREDITORS IN THE A.Y. 2005-06. THE ONLY FIND ING GIVEN BY THE LD. CIT(A) IN THE APPELLATE ORDER WAS THAT THE CREDIT B ALANCES WERE OLD AND BROUGHT FORWARD BALANCES AND THE ASSESSING OFFICER HAD ERRED IN DISALLOWING THE SAID OLD AND BROUGHT FORWARD BALANC ES BY ERRONEOUSLY CLAIMING THAT THEY PERTAINED TO THE A.Y. 2005-06. H IS OTHER FINDING ON WHICH HE HAD BASED HIS DECISION WAS THAT THE RELEVA NT PURCHASES WERE MADE IN THE A.YRS. 2000-01, 2001-02, 2002-03 AND 20 03-04. IT WOULD BE IMPORTANT TO NOTE THAT THE LD. CIT(A) HAS GIVEN NO FINDING WITH RESPECT TO THE A.Y. 2001-02 THAT THE SUNDRY CREDITORS WERE REQUIRED TO BE ADDED IN THE A.Y. 2001-02. IN FACT, NO FINDING HAS EVEN B EEN GIVEN BY LD. CIT(A) THAT THE IMPUGNED AMOUNT REPRESENTED BY SUND RY CREDITORS WAS OF THE INCOME CHARACTER BUT WAS BEING DELETED BECAU SE IT DID NOT BELONG TO THE YEAR IN QUESTION AND THAT THESE WERE OF INCO ME CHARACTER AND WERE REQUIRED TO BE ASSESSED IN THE A.Y. 2001-02. HENCE, IT CANNOT BE SAID THAT THE ASSESSING OFFICER HAD REOPENED THE ASSESSM ENT FOR THE A.Y.2001-02 FOR THE PURPOSE OF GIVING EFFECT TO ANY FINDING CONTAINED IN THE ORDER PASSED BY THE LD. CIT(A) SINCE THE SAID O RDER DID NOT CONTAIN ANY FINDING WHICH WOULD NECESSIATE GIVING EFFECT TO THE SAME. IN VIEW OF THE ABOVE FACTUAL MATRIX, NO PROCEEDING CAN BE INIT IATED TO GIVE EFFECT TO ITA NO.8605/MUM/11 M/S. AAREN CHEMICALS 9 A NON-EXISTENT FINDING. HENCE, NO PROCEEDINGS U/S 1 47 COULD HAVE BEEN INITIATED BY THE AO U/S 147 TO GIVE EFFECT TO A FIN DING CONTAINED IN THE APPELLATE ORDER OF CIT(A) FOR THE A.Y. 2005-06. 4.5 AS REGARDS 'DIRECTION', I FIND THAT NO SUCH 'DI RECTION' WAS CONTAINED IN THE ORDER OF LD. CIT(A) FOR THE A.Y. 2005-06. LD . CIT(A) HAS ONLY OBSERVED THAT THE ASSESSING OFFICER 'WILL BE FREE T O EXAMINE THESE PURCHASES IN THE RESPECTIVE ASSESSMENT YEARS IF FAC TS AND CIRCUMSTANCES SO WARRANT AND STRICTLY WITHIN THE FOUR COMERS OF L AW. IF THE LD. ASSESSING OFFICER HAD ANY SUCH EVIDENCES AS ALLEGED BY HIM IN PARA 5 OF THE IMPUGNED ASSESSMENT ORDER DT.31/12/2007 THEN HE WILL BE FREE TO USE THOSE EVIDENCES GATHERED DURING THE SEARCH AND SEIZ URE ACTION AND WILL EXAMINE THE REOPENING OF ASSESSMENT IN THE LIGHT OF FRESH MATERIAL IN HIS POSSESSION, WHICH WAS SUBSEQUENTLY BROUGHT TO HIS N OTICE. MOREOVER, LD. ASSESSING OFFICER HAS TO KEEP THE REMAND REPORT S AND MATERIAL AVAILABLE ON RECORD IN HIS MIND. HOWEVER, LD. ASSE SSING OFFICER IS REQUIRED TO BE CAREFUL AND SHALL ACT STRICTLY IN AC CORDANCE WITH THE PROVISIONS OF SEC. 148J, 147 AND OTHER RELEVANT SEC TIONS OF THE ACT. 4.6 FROM THE ABOVE, IT IS CLEAR THAT THE LD. C!T(A) HAS NOT GIVEN ANY DIRECTIONS TO MAKE THE ASSESSMENT OF THE PURCHASES OR SUNDRY CREDITORS IN QUESTION AS INCOME IN THE A.Y. 2001-02. HE HAS GIVEN NO FINDING THAT ANY AMOUNT RELATING TO THE A.Y. 2001-02 WAS OF INCO ME NATURE AND NO DIRECTION HAS BEEN GIVEN THAT SUCH INCOME IS TO BE ASSESSED IN THE A.Y. 2001-02. HE HAS MERELY STATED THAT THE AO WAS FREE TO EXAMINE THE PURCHASES, ALBEIT WITHIN THE FOUR CORNERS OF LAW. THE FOUR CORNERS OF LAW PROHIBITS THE ASSESSING OFFICER FROM CONDUCTING ANY ENQUIRIES IN RESPECT OF TIME-BARRED MATTERS. AS HELD BY THE HON'BLE SUP REME COURT IN RAJINDER NATH (SUPRA), THE OBSERVATIONS OF THE LD. CIT(A) TO THE EFFECT THAT THE INCOME-TAX OFFICER 'IS FREE TO TAKE ACTION TO ASSESS THE EXCESS IN THE HANDS OF THE CO-OWNERS COULD NOT BE DESCRIBED AS A 'DIRECTION'. A DIRECTION BY A STATUTORY AUTHORITY WAS IN THE NATUR E OF AN ORDER REQUIRING POSITIVE COMPLIANCE. WHEN IT WAS LEFT TO THE OPTION AND DISCRETION OF THE INCOME TAX OFFICER WHETHER OR NOT TO TAKE ACTION, I T CANNOT BE DESCRIBED AS A DIRECTION. THE OBSERVATIONS OF LD. CIT(A) IN T HE ORDER FOR THE A.Y. 2005-06 ARE ALSO SIMILAR IN NATURE. HENCE, THE SAID OBSERVATIONS CANNOT BE CONSTRUED AS 'DIRECTIONS' AS ENSHRINED IN SEC. 1 50(1) OF THE I.T. ACT, 1961. IT IS CLEAR FROM THE OBSERVATIONS OF LD. C1T( A) THAT THESE ARE NOT IN THE NATURE OF AN ORDER REQUIRING POSITIVE COMPLI ANCE. THE EXAMINATION, IF ANY, FOR REOPENING IS LEFT TO THE O PTION AND DISCRETION OF ITA NO.8605/MUM/11 M/S. AAREN CHEMICALS 10 THE ASSESSING OFFICER WHETHER OR NOT TO MAKE THE EX AMINATION. THE LD. CIT(A) HAS LEFT THE EXAMINATION TO THE ASSESSING OF FICER, IF IN THE OPINION OF THE ASSESSING OFFICER, THE FACTS AND CIR CUMSTANCES SO WARRANTED, AND, IF THE LAW PERMITTED HIM TO DO SO. HENCE, IN VIEW OF THE DECISION OF THE HON'BLE SUPREME COURT IN RAJINDER N ATH (SUPRA), THE OBSERVATIONS OF LD. CIT(A) CANNOT BE DESCRIBED AS ' DIRECTION.' THEREFORE, THE ASSESSING OFFICER COULD NOT HAVE REO PENED THE ASSESSMENT OF A.Y.2001-02 BEYOND THE LIMITATION PERIOD TAKING THE SHELTER OF SEC. 150(1) OF THE I.T. ACT, 1961. ANOTHER IMPORTANT ASP ECT IS THAT LD. CIT(A) HAS HIMSELF ADVISED THE ASSESSING OFFICER TO BE CAR EFUL AND TO ACT STRICTLY IN ACCORDANCE WITH THE PROVISIONS OF SEC. 148, 147 AND OTHER RELEVANT SECTIONS OF THE ACT. FURTHER, THE OBSERVATIONS OF THE LD. CIT(A) OR DIRECTIONS, EVEN IF THE SAME IS CONSTRUED AS A DIRE CTION IS SIMPLY TO EXAMINE THE REOPENING OF THE ASSESSMENT OF THE EARL IER YEARS, IF LAW PERMITS. SUCH OBSERVATION, EVEN IF IT WERE TO BE AS SUMED TO BE IN THE NATURE OF DIRECTIONS WAS DEFINITELY NOT A DIRECTION TO ASSESS ANY INCOME IN THE A.Y. 2001-02 SINCE NO FINDING WAS GIVEN BY L D. CIT(A) THAT ANY INCOME WAS REQUIRED TO BE ASSESSED IN THE SAID ASSE SSMENT YEAR. 4.7 IN VIEW OF THE AFORESAID REASONS, I AM OF THE O PINION THAT THE NOTICE U/S 148 COULD NOT HAVE BEEN ISSUED FOR MAKIN G AN ASSESSMENT OR REASSESSMENT OR RECOMPUTATION IN CONSEQUENCE OF OR TO GIVE EFFECT TO ANY FINDING OR DIRECTION CONTAINED IN THE ORDER PAS SED BY THE LD. CIT(A) FOR THE A.Y. 2005-06 SINCE THERE WAS NO SUCH 'FINDING' OR 'DIRECTION' AS CONTEMPLATED IN SEC.150(1). AS PER T HE PROVISIONS OF SEC. 149(1), NO ASSESSMENT CAN BE REOPENED BEYOND A PERI OD OF 6 YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR. IN THE PRE SENT CASE THE NOTICE U/S 148 WAS ISSUED BEYOND THE PERIOD OF 6 YEARS FRO M THE END OF THE RELEVANT ASSESSMENT YEAR. HENCE, THE SAID NOTICE WA S BARRED BY LIMITATION AND WAS WITHOUT JURISDICTION. THEREFORE, THE REASSESSMENT COMPLETED BY THE ASSESSING OFFICER WAS WITHOUT JURI SDICTION. FOR REACHING THIS CONCLUSION, RELIANCE IS ALSO PLACED O N THE DECISIONS OF THE HONBLE BOMBAY HIGH COURT IN THE CASES OF LOTUS INV ESTMENTS LTD. (288 ITR 459) AND RAKESH N. DUTT (311 ITR 247). 4.8 IN THE CASE OF LOTUS INVESTMENTS LTD. (SUPRA) THE FACTS OF THE CASE WERE THAT CERTAIN DISALLOWANCES WERE MADE BY THE AS SESSING OFFICER IN THE BLOCK ASSESSMENT PROCEEDINGS. ON AN APPEAL FILE D BY THE ASSESSEE, THE CIT(A) VIDE HIS ORDER DT.24/12/2004 SET ASIDE T HE BLOCK ASSESSMENT ORDER BY HOLDING THAT THE UNDISCLOSED INCOME COMPUT ED BY THE AO COULD ITA NO.8605/MUM/11 M/S. AAREN CHEMICALS 11 NOT BE SUSTAINED INTER ALIA ON THE GROUND THAT THER E WAS NO EVIDENCE OR ANY MATERIAL FOUND DURING THE SEARCH PROCEEDINGS ON THE BASIS OF WHICH THE UNDISCLOSED INCOME COULD BE ASSESSED U/S 158BC OF THE ACT. THE CIT(A) HOWEVER OBSERVED THAT THE AO WAS FREE TO LOO K INTO AND CONSIDER THE SAID DISALLOWANCES U/S 148 OF THE I.T. ACT IN T HE RELEVANT ASSESSMENT YEARS IN TERMS OF SEE. 150(1) R.W. EXPLANATION 2 TO SEC. 153 OF THE ACT. BASED ON THE ABOVE OBSERVATIONS MADE BY THE CIT(A), THE AO ISSUED THE NOTICES U/S 148 OF THE ACT SO AS TO REOPEN THE ASSE SSMENTS FOR THE A.YRS. 1989-90 TO A.Y. 1999-2000. IN THE WRIT PETITION FIL ED BY THE ASSESSEE, THE HON'BLE BOMBAY HIGH COURT, HELD AS FOLLOWS :- 'UNDER S.150 OF THE ACT, IRRESPECTIVE OF THE LIMITA TION PRESCRIBED U/S 149, REASSESSMENT PROCEEDINGS CAN BE INITIATED AT ANY TIME IF THE INITIATION OF REASSESSMENT IS IN CONSEQUENCE OF OR TO GIVE EFFECT TO ANY FINDING OR DIRECTION CONTAINED IN ANY ORDER PASSED BY ANY AUTHORITY UNDER THE ACT BY WAY OF APPEAL, REFERENCE OR REVISION OR BY A COURT IN ANY PROCEEDING UNDER ANY OTHER LAW. WHILE CONSTRUING SIMILAR PROVISIONS CONTAINED IN THE 1922 , ACT, THE APEX COURT IN THE CASE OF MURLIDHAR BHAGWAN DAS (SUPRA) HELD THAT THE WORD 'FINDING' CAN BE ONLY THAT WHICH IS NECESSARY FOR THE DISPOSAL OF AN APPEAL IN RESPECT OF AN ASSESSMENT OF A PARTI CULAR YEAR. THE APEX COURT FURTHER HELD THAT THE APPELLATE AUTHORIT Y MAY INCIDENTALLY FIND THAT THE INCOME BELONGS TO ANOTHE R YEAR, BUT THAT IS NOT A FINDING NECESSARY FOR THE DISPOSAL OF AN A PPEAL IN RESPECT OF THE ASSESSMENT YEAR IN QUESTION. SIMILARLY, THE EXPRESSION 'DIRECTION' HAS BEEN CONSTRUED BY THE APEX COURT TO MEAN A DIRECTION WHICH THE APPELLATE OR REVISIONAL AUTHORI TY AS THE CASE MAY BE, IS EMPOWERED TO GIVE UNDER THE SECTIONS MEN TIONED THEREIN. IN THE PRESENT CASE, THE CIT(A) HAS NEITHE R GIVEN A FINDING TO THE EFFECT THAT THE INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT NOR GIVEN ANY DIRECTION TO THE ITO TO IN ITIATE REASSESSMENT PROCEEDINGS FOR THE BLOCK PERIOD BY IS SUING NOTICES U/S 148 OF THE ACT. THE CLEAR FINDING RECORDED BY T HE CIT(A) IS THAT THERE IS NO EVIDENCE OR ANY MATERIAL FOUND DUR ING THE SEARCH PROCEEDINGS ON THE BASIS OF WHICH UNDISCLOSED INCOM E CAN BE COMPUTED U/S 158BC OF THE ACT. THE CIT(A) HAS RECOR DED A FINDING (SEE. P. 141 OF THE PETITION) THAT EVEN THE STATEMENTS RECORDED IN THE FORM OF PRELIMINARY OR FINAL STATEM ENTS DO NOT SHOW ANY ADMISSION BY MR. STANY SALDANHA (DIRECTOR OF THE ASSESSEE) WHICH CAN BE USED AS A MATERIAL RELATABLE TO ANY ITA NO.8605/MUM/11 M/S. AAREN CHEMICALS 12 EVIDENCE FOUND ON 7 TH SEPT., 1998 AS NONE WAS FOUND ON THAT DATE. IT IS FURTHER HELD (SEE P.142 OF THE PETITION) THAT THERE IS NOTHING IN THE STATEMENT EXPRESSING ANY DOUBT FOR NON-GENUINEN ESS OF THE LOAN TRANSACTION AS ALSO DISALLOWANCE OF DEPRECIATI ON ON FIXED ASSETS. IN THESE PETITIONS, WE ARE NOT CALLED UPON TO DECIDE THE CORRECTNESS OF THE ABOVE FINDINGS RECORDED BY THE C IT(A). THE ABOVE OBSERVATIONS OF CIT(A) MAY BE ERRONEOUS AND M AY BE SET ASIDE BY THE TRIBUNAL WHILE DISPOSING THE APPEAL FI LED BY THE REVENUE. THAT IS A DIFFERENT MATTER. BUT AS THE F INDINGS RECORDED BY THE CIT(A) STAND TODAY, THERE IS NO EVIDENCE OR MATERIAL ON RECORD TO HOLD THAT THE INCOME HAS ESCAPED ASSESSME NT AND THERE IS NO DIRECTION TO THE ITO TO INITIATE REASSESSMENT PROCEEDINGS. THEREFORE, THE CONTENTION OF THE REVENUE THAT THE C IT(A) HAS GIVEN A FINDING AND A DIRECTION TO REOPEN THE ASSES SMENTS CANNOT BE ACCEPTED. THE FACT THAT THE CIT(A) IN HIS ORDER DT.24 TH DEC., 2004 HAS OBSERVED THAT THE AO IS FREE TO LOOK INTO AND CONSI DER THE DISALLOWANCES U/S 148 OF THE ACT IN THE RELEVANT AS SESSMENT YEARS IN TERMS OF S. 150(1) R/W EXPLN. 2 TO S. 153 CANNOT BE CONSTRUED TO BE A DIRECTION TO REOPEN THE ASSESSMENTS SO AS TO I SSUE REASSESSMENT NOTICES EVEN AFTER THE EXPIRY OF SIX Y EARS FROM THE END OF THE RELEVANT ASSESSMENT VEERS, AS CONTEMPLAT ED U/S 150 OF THE ACT. THE ABOVE OBSERVATIONS MADE BY THE CIT(A) CAN AT BEST BE SAID TO BE A SUGGESTION MADE TO THE AO TO CONSID ER AS TO WHETHER SUCH DISALLOWANCES COULD BE MADE BY INITIAT ING REASSESSMENT PROCEEDINGS. IF THE FINDINGS GIVEN BY THE CIT(A) WERE THAT, THERE IS EVIDENCE ON MATERIAL ON RECORD TO SUGGEST THAT INCOME HAS ESCAPED ASSESSMENT BUT THE SAME CANNOT B E BROUGHT TO TAX IN THE BLOCK ASSESSMENT AND ACCORDINGLY IF ANY DIRECTIONS WERE GIVEN FOR REOPENING OF THE ASSESSMENTS THEN IT WOUL D BE A TOTALLY DIFFERENT MATTER. HOWEVER, IN THE PRESENT CASE, THE CIT(A) HAS GIVEN A CLEAR FINDING THAT THERE IS NO EVIDENCE OR MATERIAL ON RECORD TO SUSTAIN THE ADDITIONS AND, HENCE, THE CIT (A) COULD NOT HAVE GIVEN DIRECTIONS TO THE ITO TO INITIATE REASSE SSMENT PROCEEDINGS. THEREFORE, THE CONTENTION OF THE REVE NUE THAT THE CIT(A) HAS DIRECTED THE AO TO INITIATE REASSESSMENT PROCEEDINGS CANNOT BE ACCEPTED. ITA NO.8605/MUM/11 M/S. AAREN CHEMICALS 13 AS HELD BY THE APEX COURT IN THE CASE OF RAJINDER N ATH (SUPRA), THE OBSERVATIONS OF CIT(A) THAT THE ITO IS FREE TO LOOK AND CONSIDER THE DISALLOWANCES, WOULD SIMPLY MEAN, GIVING AN OPTION AND DISCRETION TO THE ITO TO TAKE OR NOT TO TAKE ACTION AS HE DEEMS FIT AND SUCH AN OBSERVATION CANNOT BE SAID TO BE A 'DIRECTION' GIVEN BY THE CIT(A) AS CONTEMPLATED U/S 150 OF THE ACT. THE HONBLE BOMBAY HIGH COURT HELD THAT THE CIT(A) HAD NOT GIVEN ANY FINDING OR DIRECTION FOR REOPENING OF THE ASSESSMENTS AND, THEREFORE, THE PROVISIONS OF SEC.150 WERE NOT APPLI CABLE, CONSEQUENTLY, THE IMPUGNED NOTICES WHICH ARE TIME BARRED UNDER S. 149 OF THE ACT ARE WITHOUT JURISDICTION AND ARE LIABLE TO BE QUASHED A ND SET ASIDE. ONCE, IT IS HELD THAT THE CIT(A) HAS NOT GIVEN ANY FINDING O R DIRECTION FOR REOPENING THE ASSESSMENT, THE BENEFIT OF EXPLANATIO N 2 TO S.153 OF THE ACT WOULD NOT BE AVAILABLE TO THE REVENUE. 4.9 RELIANCE IS ALSO PLACED ON THE DECISIONS OF HON BLE ITAT LUCKNOW SMC BENCH IN THE CASE OF SMT. NEELAM GUPTA (110 T TJ 714), HONBLE ITATA AMRITSAR IN THE CASE OF LALIT GUPTA & CO. (98 TTJ 130) AND HONBLE ITAT, DELHI B BENCH IN THE CASE OF SMT. S AROJ GUPTA (106 TTJ 1073). 7. HENCE, THIS APPEAL BEFORE THE TRIBUNAL BY THE DE PARTMENT. 8. ON CONSIDERATION OF THE REASONING GIVEN BY THE L D. CIT(A) IN THE LIGHT OF THE RELEVANT EXTRACT OF THE ORDER OF LD. CIT(A) DAT ED 28.08.09, WHICH ITSELF HAS BEEN STATED BY THE LD. CIT(A) IN PARA 4.1 (AS REPRO DUCED HEREINABOVE AS WELL) WE AGREE WITH LD. CIT(A) THAT THERE IS NO SUCH DIRE CTION AND/OR FINDING GIVEN BY THE LD. CIT(A) TO INITIATE REASSESSMENT PROCEEDI NG FOR THE ASSESSMENT YEAR UNDER CONSIDERATION. THEREFORE WE AGREE WITH LD. C IT(A) THAT THE OBSERVATION MADE BY THE LD. CIT(A) WHILE DISPOSING THE APPEAL F OR ASSESSMENT YEAR 2005- 06, IT WAS ONLY AN OPTION GIVEN TO THE ASSESSING OF FICER TO TAKE OR NOT TO TAKE ACTION IN RESPECT OF THE SUNDRY CREDITORS IN THE RE LEVANT ASSESSMENT YEARS IN WHICH THE PURCHASES WERE MADE AND THAT TOO STRICTLY WITHIN THE FOUR CORNERS OF ITA NO.8605/MUM/11 M/S. AAREN CHEMICALS 14 LAW TO ASCERTAIN THE GENUINENESS OF THE PURCHASES. SINCE THE REASSESSMENT PROCEEDING IS INITIATED BEYOND THE PERIOD SPECIFIED IN SECTION 149 OF THE INCOME TAX ACT, WE ARE OF THE CONSIDERED VIEW THAT THE ACTION OF THE ASSESSING OFFICER TO ISSUE NOTICE UNDER SECTION 148 OF THE AC T IS BARRED BY LIMITATION AND THE SAID NOTICE IS NOT SAVED UNDER THE PROVISION OF SECTION 150(1) AND/OR 150(2) OF THE ACT. HENCE, THE REASONS WHICH HAVE BEEN GIV EN BY THE LD. CIT(A) THEMSELVES IN THE IMPUGNED ORDER ARE JUSTIFIED. TH EREFORE WE UPHOLD THE ORDER OF THE LD. CIT(A) THAT THE ACTION OF THE ASSESSING OFFICER IS NOT IN ACCORDANCE WITH LAW AND THE ASSESSMENT ORDER PASSED BY THE ASS ESSING OFFICER IS LIABLE TO BE QUASHED. HENCE, WE UPHOLD THE ORDER OF THE LD. CIT(A) BY REJECTING THE GROUNDS OF APPEAL TAKEN BY THE DEPARTMENT. 9. IN THE RESULT APPEAL OF THE DEPARTMENT IS DISMIS SED. ORDER PRONOUNCED IN THE OPEN COURT ON 06.11.2013. SD/- SD/- (RAJENDRA) (B.R. MITTAL) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED: 06.11.2013. * KISHORE COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT (A) CONCERNED, MUMBAI THE DR C BENCH //TRUE COPY// [ BY ORD ER DY/ASSTT. REGISTRAR, ITAT, MUMBAI.