HP General Industries Corporation Ltd., Shimla V. ACIT, Shimla

ITA 862/CHANDI/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 73417 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 5 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-01-2014
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 04-12-2013
• Assessment Year: 2007-2008
• Appeal Filed On: 17-08-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: MANJIT SINGH
• Keywords: Depreciation; Opportunity of being heard; Period of limitation; Advance ruling; Revised return; Unabsorbed depreciation
• Section: 143(3); 142(1); 153A; 115JB; 147; 148; 263; 144; 90; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH A CHANDIGARH BEFORE SHRI T.R.SOOD ACCOUNTANT MEMBER AND MS. SUSHMA CHOWLA, JUDICIAL MEMBER ITA NO.861 & 862/CHD/2012 A.Y.: 2005-06 & 2007-08 H.P. GENERAL INDUSTRIES VS THE ACI T, CORPORATION LTD., CIRCLE, NEW HIMRUS BUILDING, SHIMLA. CIRCULAR ROAD, SHIMLA-H.P. PAN : AAACH-6125L (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI RAJESH KUMAR RESPONDENT BY : SHRI MANJIT SINGH DATE OF HEARING : 04.12.2013 DATE OF PRONOUNCEMENT : 21.01.2014 O R D E R PER SUSHMA CHOWLA, JM THESE TWO APPEALS BY THE SAME ASSESSEE ARE DIRECTED AGAINST THE SEPARATE ORDERS OF THE CIT(APPEALS) SHIMLA DATED 27 .06.2012 & 02.07.2012 RELATING TO ASSESSMENT YEARS 2005-06 & 2 007-08 RESPECTIVELY AGAINST THE ORDER PASSED UNDER SECTION 143(3) OF TH E INCOME-TAX ACT, 1961 ( 'THE ACT' FOR SHORT). 2. IN ITA NO. 861/CHD/2012, THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL : 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE ID. COMMISSIONER OF INCOME TAX(APPEALS) IS NOT JUSTIFIE D IN HOLDING THAT THE ORDER PASSED BY THE ID. ACIT, CIRCLE -1 SH IMLA IS NOT BARRED BY LIMITATION AS THE SAID ORDER IS COVERED B Y THE PROVISIONS OF SECTION 153(3)(II) OF THE INCOME TAX ACT, 1961 AND THE LIMITATION AS PRESCRIBED U/S 153(2A) OF THE INCOME TAX ACT, 1961 ARE NOT APPLICABLE. 2 2. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE ID. COMMISSIONER OF INCOME TAX (APPEALS) IS NOT JUSTIFI ED IN HOLDING THAT CAPITAL GAIN OF RS. 2,80,20,000/ -INVESTED U/S 54EC OF THE INCOME TAX ACT, 1961 IS PART OF THE BOOK PROFITS U/S 115JB OF THE INCOME TAX ACT, 1961 AND IS LIABLE TO MAT. 3. IN ITA NO. 862/CHD/2012, THE ASSESSEE HAS RAISED THE FOLLOWING GROUND OF APPEAL : 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD. CIT(APPEALS) IS NOT JUSTIFIED IN SUSTAINING AND CONFIRMING THE ADDITIONS OF RS. 12,35,165/- UNDER SECTION 40(A)(IA) OF THE INCOME TAX ACT,1961. 4. BOTH THESE APPEALS RELATING TO THE SAME ASSESSEE WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS CONSOLID ATED ORDER FOR THE SAKE OF CONVENIENCE. ITA NO. 861/CHD/2012 :: ASSTT.YEAR 2005-06 5. THE ASSESSEE BY WAY OF GROUND NO. 1 HAS RAISED T HE ISSUE OF LIMITATION AS PRESCRIBED UNDER SECTION 153(2A) OF T HE ACT IN COMPLETING THE PROCEEDINGS UNDER SECTION 153(3)(II) OF THE ACT. 6. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E HAD FURNISHED THE RETURN OF LOSS DECLARING TOTAL LOSS OF RS. 1.17 CR. REGULAR ASSESSMENT UNDER SECTION 143(3) WAS COMPLETED VIDE ORDER DATED 14.08.2007 AND THE RETURNED LOSS WAS ACCEPTED. THE ASSESSEE, THOU GH HAD DECLARED THAT NO TAX WAS PAYABLE UNDER SECTION 115JB OF THE INCOME TAX ACT, AS BOOK RESULT WAS LOSS, BUT NO FINDING IN THIS REGARD WAS GIVEN IN THE ASSESSMENT ORDER. ON PERUSAL OF THE RECORD, IT TRA NSPIRED THAT THOUGH THERE WAS A LOSS COMPUTED UNDER THE NORMAL PROVISIO NS OF THE ACT, THE PROFIT & LOSS ACCOUNT FOR THE YEAR UNDER CONSIDERAT ION REFLECTED PROFIT OF RS.1.84 CR AND EVEN IN THE AUDIT REPORT FILED FO R COMPUTING THE BOOK PROFITS UNDER SECTION 115JB OF THE ACT, THE PR OFIT AS PER PROFIT & 3 LOSS ACCOUNT WAS SHOWN AT RS.1.16 CR FROM WHICH PRO FIT ON SALE OF ASSET AT RS. 3.02 CR WAS EXCLUDED RESULTING IN PROF IT TURNING INTO LOSS. THE SAID FACTS WERE NOT VERIFIED BY THE ASSESSING O FFICER NOR THE CLAIM OF THE ASSESSEE WAS GONE INTO AND CONSEQUENTLY, PRO CEEDINGS UNDER SECTION 263 OF THE ACT WERE INITIATED BY THE COMMIS SIONER OF INCOME TAX, SHIMLA AND SHOW CAUSE NOTICE WAS ISSUED TO THE ASSESSEE. THE COMMISSIONER OF INCOME TAX HELD THE ASSESSMENT ORDE R DATED 14.08.2007 PASSED BY THE ASSESSING OFFICER TO BE BO TH ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE AND THE SAME WAS SET ASIDE VIDE ORDER DATED 30.03.2010. THE ASSESSING OFFICER WAS DIRECTED TO RE- FRAME THE ASSESSMENT AFTER COMPUTING THE BOOK PROFI TS UNDER SECTION 115JB OF THE ACT. THE ASSESSING OFFICER WAS ALSO DI RECTED TO BRING SUCH PROFITS OF RS.1.79 CR TO TAX UNDER SECTION 115 JB OF THE ACT AFTER ALLOWING DEDUCTION ON ACCOUNT OF UNABSORBED DEPRECI ATION FROM BOOK PROFITS OR BUSINESS LOSS, WHICHEVER WAS LOWER. THE ASSESSING OFFICER ISSUED STATUTORY NOTICES UNDER SECTION 142(1) AND 1 43(2) OF THE ACT FROM TIME TO TIME AND THE PROCEEDINGS WERE ATTENDED TO BY THE AUTHORIZED REPRESENTATIVE WHO IN TURN FILED REQUISI TE DETAILS/INFORMATION. THE ASSESSMENT IN THE CASE WA S COMPLETED VIDE ORDER DATED 20.09.2011. 7. BEFORE THE CIT(APPEALS), THE ASSESSEE RAISED THE PRELIMINARY ISSUE THAT THE ORDER PASSED BY THE ASSESSING OFFICE R WAS BARRED BY LIMITATION AND BAD IN LAW, AS IT HAS BEEN PASSED BE YOND THE TIME FRAME PRESCRIBED UNDER THE PROVISIONS OF SECTION 153(2) O F THE INCOME TAX ACT. THE CIT(APPEALS) VIDE PARA 3.3 AND 3.4 HELD A S UNDER : 3.3 THE APPELLANT'S SUBMISSIONS HAVE BEEN CAREFULLY CONSIDERED WITH REFERENCE TO THE RELEVANT PROVISIONS OF LAW. A PERUSAL OF CLAUSE (II) OF SUB-SECTION (3) OF SECTION 153 REVEALS THAT WHER E THE RE-ASSESSMENT IS MADE ON THE ASSESSES IN CONSEQUENCE OF OR TO GIVE E FFECT TO ANY FINDING OR DIRECTION CONTAINED IN AN ORDER U/S 263, THE RE-ASS ESSMENT MAY BE 4 COMPLETED AT ANY TIME AND THE TIME LIMITATION PRESC RIBED UNDER OTHER SUB-SECTIONS OF SECTION 153 DO NOT APPLY TO THIS CL ASS OF RE-ASSESSMENT. HAD THE CIT, SHIMLA SIMPLY SET-ASIDE OR CANCELED TH E ASSESSMENT IN THE CASE OF THE APPELLANT U/S 263, THE TIME LIMITS FOR COMPLETION OF FRESH ASSESSMENT AS PROVIDED IN SUB-SECTION (2A) OF SECTI ON 153 READ WITH ITS SECOND PROVISO WOULD HAVE BEEN APPLICABLE. IN THAT CASE THE FRESH ASSESSMENT ORDER SHOULD HAVE BEEN PASSED BY 31 ST DECEMBER, 2010. BUT A PERUSAL OF THE ORDER U/S 263 PASSED BY THE CIT, SHI MLA ON 30.03.2010 CLEARLY SHOWS THAT HE HAS FIRST GIVEN A CLEAR FINDI NG THAT THE CAPITAL GAIN EARNED BY THE ASSESSEE WAS TO BE TREATED AS A PART OF THE BOOK PROFIT AND HAS THEN GIVEN A CLEAR DIRECTION IN PARA 6 OF THE O RDER TO THE A.O. TO REFRAME THE ASSESSMENT AFTER BRINGING THE BOOK PROF IT OF RS. 1,79,70,529/- TO TAX U/S 115 JB OF THE ACT AFTER AL LOWING A DEDUCTION ON ACCOUNT OF THE UNABSORBED DEPRECIATION OR BUSINESS LOSS AS PER BOOKS, WHICHEVER IS LOWER. THUS THE CIT HAS NOT SIMPLY SET -ASIDE THE ORIGINAL ASSESSMENT LEAVING IT OPEN FOR THE A.O. TO REFRAME THE ASSESSMENT IN ANY MANNER HE LIKES. INSTEAD THE CIT HAS BOUND THE A.O. BY HIS CATEGORICAL DIRECTION AND HAS LEFT NOTHING TO THE DISCRETION OF THE A.O. THE ORDER PASSED U/S 263 THUS FALLS IN THE CATEGORY SPECIFIED IN SUB-SECTION (3) OF SECTION 153. THE INTENTION BEHIND NOT PRESCRIBING A NY TIME LIMIT FOR THE CATEGORIES OF ASSESSMENT OR RE-ASSESSMENT SPECIFIED IN SUB-SECTION (3) OF SECTION 153 IS OBVIOUS SINCE NO TIME LIMIT IS LOGIC ALLY REQUIRED TO BE PRESCRIBED WHEN THE A.O. IS REQUIRED TO SIMPLY GIVE EFFECT/COMPLY WITH THE DIRECTION/FINDING CONTAINED IN AN ORDER U/S 250 , 254, 260, 262, 263 OR 264 OR IN AN ORDER OF ANY COURT IN A PROCEEDING OTHERWISE THAN BYWAY OF APPEAL OR REFERENCE UNDER THE INCOME TAX ACT. IN SUCH CASES OBVIOUSLY THERE IS ABSOLUTELY NO ROOM OR SCOPE FOR AN ASSESSI NG OFFICER TO USE HIS OWN DISCRETION. IT IS WELL SETTLED BY VARIOUS COURT S THAT THE EXPRESSION 'DIRECTION' IN SECTION 153 (3)(II) IS INTENDED TO M EAN AN EXPRESS DIRECTION NECESSARY FOR THE DISPOSAL OF THE CASE BEFORE THE A UTHORITY OR COURT. SIMILARLY, 'FINDING' GIVEN IN AN APPEAL, REVISION O R REFERENCE ARISING OUT OF AN ASSESSMENT MUST BE A FINDING NECESSARY FOR TH E DISPOSAL OF THE PARTICULAR CASE. IT HAS BEEN REPEATEDLY HELD BY VAR IOUS COURTS INCLUDING THE HON'BLE SUPREME COURT (REFER RAJINDER NATH VS. CIT (1979) 120 ITR 14, 18-19) THAT SECTION 153(3)(II) IS NOT A PROVISI ON ENLARGING THE JURISDICTION OF THE AUTHORITY OR COURT. IT IS A PRO VISION WHICH MERELY RAISES THE BAR OF LIMITATION FOR MAKING AN ASSESSME NT ORDER U/S 143 OR SECTION 144 OR SECTION 147. IN THE CASE OF RAJINDER NATH VS. CIT (SUPRA), IT WAS HELD BY THE HON'BLE SUPREME COURT THAT A DIR ECTION BY A STATUTORY AUTHORITY IS IN THE NATURE OF AN ORDER REQUIRING PO SITIVE COMPLIANCE, BUT WHEN IT IS LEFT TO THE OPTION AND DISCRETION OF AN ASSESSING OFFICER WHETHER OR NOT TO TAKE ACTION, IT CANNOT BE DESCRIBED AS A DIRECTION. IN THE CASE OF KHALSA PROVISIONS VS. CIT (1982) 135 ITR 817 (DEL.) , IT WAS HELD THAT IN A CASE WHERE THE APPELLANT ASSTT. COMMISSIONER SET- ASIDE THE ASSESSMENT AND INTENDED THE INCOME TAX OFFICER TO DO A FRESH A SSESSMENT ON THE LINES INDICATED IN THE ORDER, THERE WAS A CLEAR DIR ECTION TO THAT EFFECT. 3.4 IN VIEW OF ABOVE, IT IS HELD THAT THE PURPOSE O F SECTION 153(3) IS TO LIFT THE BAR OF LIMITATION TO MAKE AN EFFECTIVE ORD ER OF ASSESSMENT. IN THE INSTANT CASE, THERE WAS A CLEAR FINDING AS WELL AS A DIRECTION GIVEN BY THE CIT, SHIMLA AND THE ASSESSMENT WAS MADE BY THE A.O. IN CONSEQUENCE OF THE FINDING/DIRECTION GIVEN BY THE C IT. THEREFORE, THE GROUND TAKEN BY THE APPELLANT REGARDING THE ASSESSM ENT ORDER BEING TIME-BARRED IS NOT FOUND TO BE HAVING ANY FORCE. T HE SAID GROUND IS, THEREFORE, DISMISSED. 8. THE ASSESSEE IS IN APPEAL AGAINST THE SAID ORDER OF THE 5 CIT(APPEALS) AND HAS FILED WRITTEN SUBMISSIONS AND THE RELEVANT SUBMISSIONS ARE AS UNDER : IT IS SUBMITTED THAT THE SUB-SECTION (2A) TO SECTIO N 153 WAS FIRST INSERTED FIRST BY THE TAXATION LAW (AMENDMENT)ACT, 1970 W.E.F. 1.4 .1971 AND IS APPLICABLE TO ASSESSMENT YEAR 1971-72 AND SUBSEQUENT YEARS. T HIS SUB-SECTION PROVIDES THAT NOTWITHSTANDING ANYTHING CONTAINED IN SUB SECT ION (1), (IA) ,(1B) AND IN (2), ANY FRESH ASSESSMENT FOR ASSESSMENT YEAR 1971- 72 AND ONWARDS IN PURSUANCE OF AN ORDER U/S 250, 254 , 263 AND 264 SE TTING ASIDE OR CANCELLING THE ASSESSMENT ALREADY MADE, MAY BE MADE AT ANY TIM E BEFORE EXPIRY OF ONE YEAR FROM THE END OF THE FINANCIAL YEAR IN WHICH OR DER U/S 250 OR U/S 254 IS RECEIVED BY THE CHIEF COMMISSIONER OR COMMISSIONER OR, AS THE CASE MAY BE, ORDER U/S 263 OR U/S 264 IS PASSED BY THE CHIEF COM MISSIONER OR COMMISSIONER. SINCE THE APPELLANT ASSESSMENT ORDER U/S 263 WAS PA SSED ON 30.03.2010 , THE SECOND PROVISO TO SUB SECTION (2A) TO SECTION 153 O F THE INCOME TAX ACT, 1961 IS APPLICATION WHICH PROVIDES FOR TIME LIMIT O F NINE MONTHS FOR PASSING THE FRESH ASSESSMENT ORDER. AS PER THE LIMITATION P ROVIDED BY SECTION (2A) TO SECTION 153 THE FRESH ORDER SHOULD HAVE BEEN PASSED AT ANY TIME BEFORE EXPIRY OF NINE MONTHS FROM THE END OF THE FINANCIAL YEAR I.E. 31.3.2010.THE NINE MONTHS TIME EXPIRES ON 31.12.2010. THEREFORE F RESH ASSESSMENT ORDER DATED 20.09.2011 IS BARRED BY LIMITATION. 9. IT WAS CONTENDED BY THE LD. AR FOR THE ASSESSEE THAT SECTION 153(3) WAS SUBJECT TO THE PROVISIONS OF SUB SECTION (2A) OF THE ACT, WHICH HAS BEEN INSERTED W.E.F. 01.04.1971 MEANING T HEREBY THAT THE PROVISIONS OF SECTION 153(3) ARE SUBJECT TO THE PRO VISIONS OF SECTION 153(2A) OF THE ACT. RELIANCE WAS PLACED UPON THE DE CISION OF INSTRUMENTS & CONTROL COMPANY VS CIT & ORS. [349 ITR 579 (GUJ)]. 10. THE LD. DR FOR THE REVENUE POINTED OUT THAT UND ER SECTION 263 OF THE ACT, THERE ARE TWO ASPECTS I.E. A CASE WHERE TH E MATTER AS SUCH SENT TO THE FILE OF ASSESSING OFFICER AND A CASE WHERE S PECIFIC DIRECTIONS ARE GIVEN TO THE ASSESSING OFFICER TO COMPUTE THE I NCOME. THE LIMITATION PRESCRIBED UNDER SECTION 153(3)(II) OF T HE ACT IS IN CONSEQUENCE OF THE ORDER TO GIVE EFFECT TO THE DIRE CTIONS OF THE CIT. RELIANCE WAS PLACED ON JOGINDER SINGH VS CIT [128 I TR 14 (P&H)] AND CIT VS FORAMER FRANCE [264 ITR 566 (S.C)]. 6 11. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. IN THE FACTS OF THE PRESENT CASE BEFORE US, THE ORIGIN AL ASSESSMENT IN THE CASE WAS COMPLETED VIDE ORDER DATED 14.08.2007 IN W HICH THE RETURNED LOSS WAS ACCEPTED BY THE ASSESSING OFFICER. THEREA FTER, PROCEEDINGS WERE INITIATED UNDER SECTION 263 OF THE ACT AND COM MISSIONER OF INCOME TAX (APPEALS) SHOW CAUSED THE ASSESSEE VIS- -VIS THE COMPUTATION OF BOOK PROFITS UNDER SECTION 115JB OF THE ACT. THE ASSESSEE HAD DECLARED LOSS UNDER THE NORMAL PROVISI ONS OF THE ACT AND ALSO THE BOOK PROFIT UNDER SECTION 115JB WAS DECLAR ED AT NIL. HOWEVER, IN THE PROFIT & LOSS ACCOUNT, THE ASSESSEE HAD DECLARED PROFIT OF RS.1.16 CR AND WHILE COMPUTING THE BOOK P ROFITS, HAD DEDUCTED THE PROFIT OF SALE OF ASSETS AT RS. 3.02 C R AND DECLARED THE BOOK PROFITS AT NIL. THE COMMISSIONER OF INCOME TAX WAS OF THE VIEW THAT THE SAID ASPECT OF THE COMPUTATION OF BOO K PROFITS UNDER SECTION 115JB WAS NOT LOOKED INTO BY THE ASSESSING OFFICER FOR WHICH SHOW CAUSE NOTICE WAS ISSUED TO THE ASSESSEE UNDER SECTION 263 OF THE ACT. THEREAFTER, THE COMMISSIONER OF INCOME TAX VI DE ORDER DATED 30.03.2010 HELD THAT THE ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER WAS BOTH ERRONEOUS AND PREJUDICIAL TO THE I NTEREST OF REVENUE AND THE SAID ASSESSMENT ORDER WAS SET ASIDE WITH DI RECTIONS TO THE ASSESSING OFFICER TO COMPUTE THE BOOK PROFITS IN AC CORDANCE WITH THE PROVISIONS OF SECTION 115JB OF THE ACT. VIDE PARA 5 AND 6 OF THE ORDER PASSED UNDER SECTION 263 OF THE ACT, THE COMMISSION ER OF INCOME TAX HELD AS UNDER : 5. IN VIEW OF THE ABOVE, IT IS CLEAR THAT THE BOOK PROFITS SHOWN BY THE ASSESSEE IN THE P&L A/C WERE CHARGEABLE TO TAX U/S 115JB. IT HAS BEEN POINTED BY THE ASSESSEE THAT SUCH BOOK PROFITS ARE ACTUALLY RS.1, 79,70,529/-, AND NOT RS.1,84,22,774/- AS MENTIONED IN THE SHOW CAUSE NOT ICE. THIS IS BECAUSE A DEBIT OF RS.4,52,245/- REPRESENTING PRIOR PERIOD ADJUSTME NTS MUST ALSO BE TAKEN INTO ACCOUNT. THIS SUBMISSION OF THE ASSESSEE IS ACCEPTA BLE IN VIEW OF THE DECISION OF THE DELHI HIGH COURT IN THE CASE OF CIT VS, KHAITAN CHEMICALS & FERTILIZERS LTD. (307 ITR 150). IN THE PRESENT CASE THE BOOK PR OFITS CHARGEABLE U/S 7 115JB SHOULD BE TAKEN AT RS. 1,79,70,529/-. THE ASS ESSEE HAS ALSO POINTED OUT THAT THERE WERE BOOK LOSSES IN EARLIER YEARS WHICH ARE R EQUIRED TO BE ADJUSTED AGAINST THE BOOK PROFIT OF THE CURRENT YEAR AND SUCH AMOUNT S HAVE BEEN SHOWN IN THE RETURN OF INCOME AS RS.15.74 LACS BEING UNABSORBED DEPRECIATION AND RS3;41 CRORES BEING THE BROUGHT FORWARD LOSSES. TH E LESSER OF THE TWO AMOUNTS IS TO BE REDUCED FROM THE BOOK PROFIT OF RS .1.79 CRORES. THIS CONTENTION OF THE ASSESSEE IS ALSO IN ACCORDANCE WI TH LAW AND ACCEPTABLE. 6. CONSIDERING THE ABOVE FACTS AND POSITION IN L AW, I HAVE NO HESITATION IN HOLDING THAT THE ASSESSMENT ORDER DATED 14.8.2007 P ASSED BY THE AO IS ERRONEOUS AS HE HAD COMMITTED A PATENT ERROR OF LAW IN NOT BRINGING THE BOOK PROFIT TO TAX UNDER SECTION 115JB. SINCE SUCH TAX WAS CLEARLY CHARGEABLE IN LAW, THE ERROR HAD RESULTED IN A LOSS OF LEGITIMATE REVENUE AND WAS THEREFORE ALSO PREJUDICIAL TO THE INTEREST OF REVENUE. THE A SSESSMENT ORDER DATED 14.08.2007 IS THEREFORE SET ASIDE UNDER SECTION 263 . THE ASSESSING OFFICER IS DIRECTED TO REFRAME THE SAME AFTER COMPUTING THE BO OK PROFITS IN ACCORDANCE WITH SECTION 115JB AND THE LAW LAID DOWN BY THE SUP REME COURT. HE IS DIRECTED TO BRING SUCH BOOK PROFIT OF RS. 1,79,70,529/- TO T AX UNDER SECTION 115JB, AFTER ALLOWING A DEDUCTION ON ACCOUNT OF THE UNABSORBED D EPRECIATION AS PER BOOKS OR BUSINESS LOSS AS PER BOOKS, WHICHEVER IS LOWER. THE ASSESSEE MAY BE GIVEN AN OPPORTUNITY OF BEING HEARD WHILE DETERMINING THE CHARGEABLE BOOK PROFITS. 12. IN VIEW OF THE DIRECTIONS OF THE COMMISSIONER O F INCOME TAX, THE ASSESSING OFFICER FIXED THE CASE FOR HEARING AN D STATUTORY NOTICE UNDER SECTION 142(1) AND 143(2) OF THE ACT WERE ISS UED TO THE ASSESSEE FROM TIME TO TIME AS IS MENTIONED IN PARA 5 OF THE ORDER PASSED UNDER SECTION 143(3)/263 OF THE ACT. THEREAFTER, VIDE PA RAS 5.1 TO 5.3, THE CONTENTIONS OF THE ASSESSEE BEFORE THE ASSESSING OF FICER WERE NOTED AT PAGE 3 OF THE ASSESSMENT ORDER. THE ASSESSING OFFI CER VIDE PARA 6 STATES THAT HE HAD PERUSED THE SUBMISSIONS OF THE A SSESSEE AND HAD ALSO GONE THROUGH VARIOUS JUDGEMENTS RELIED UPON BY THE ASSESSEE AND THEREAFTER COMPUTED THE BOOK PROFITS UNDER SECTION 115JB OF THE ACT BY OBSERVING THAT CAPITAL GAINS OTHERWISE EXEMPT UN DER SECTION 54EC COULD NOT BE REDUCED FROM THE BOOK PROFITS SHOWN IN THE PROFIT & LOSS ACCOUNT. THE ASSESSING OFFICER VIDE PARA 6 TO 6.2 H AD DEALT UPON THE ISSUE AT PAGES 3 & 4 OF THE ASSESSMENT ORDER AND TH EREAFTER HELD THAT THE BOOK PROFITS WERE CHARGEABLE TO TAX UNDER SECTI ON 115JB OF THE ACT AT RS. 1.79 CR AND NOT RS. 1.84 CR AS PER THE PROFI T & LOSS ACCOUNT. THEREAFTER, BROUGHT FORWARD UNABSORBED LOSSES WERE SET OFF AGAINST THE 8 BOOK PROFITS AND NET BOOK PROFITS WERE COMPUTED BY THE ASSESSING OFFICER. THE ASSESSMENT ORDER HAS BEEN PASSED AT R S. 20.09.2011. 13. THE PRELIMINARY ISSUE RAISED BY THE ASSESSEE VI DE GROUND NO. 1 IS THAT THE SAID ASSESSMENT ORDER PASSED BY THE ASS ESSING OFFICER UNDER SECTION 143(3)/263 OF THE ACT IS BARRED BY LI MITATION IN VIEW OF THE PROVISIONS OF SECTION 153(2A) OF THE ACT. THE C ASE OF THE REVENUE IS THAT THE SAID PROVISIONS ARE NOT BARRED BY LIMIT ATION IN VIEW OF THE PROVISIONS OF SECTION 153(3)(II) OF THE ACT. 14. UNDER SECTION 153 OF THE INCOME TAX ACT, TIME L IMITS FOR COMPLETION OF ASSESSMENTS AND RE-ASSESSMENTS ARE PR OVIDED. SECTION 153 READS AS UNDER : 153. [(1) NO ORDER OF ASSESSMENT SHALL BE MADE UNDER SE CTION 143 OR SECTION 144 AT ANY TIME AFTER THE EXPIRY OF ( A ) TWO YEARS FROM THE END OF THE ASSESSMENT YEAR IN WHICH THE INCOME WAS FIRST ASSESSABLE ; OR ( B ) ONE YEAR FROM THE END OF THE FINANCIAL YEAR IN W HICH A RETURN OR A REVISED RETURN RELATING TO THE ASSESSMENT YEAR COMMENCING ON THE 1 ST DAY OF APRIL, 1988, OR ANY EARLIER ASSESSMENT YEAR, IS FILED UNDER SUB-SECTION (4) OR SUB-SECTION (5) OF SECTION 139 , WHICHEVER IS LATER :] [ PROVIDED THAT IN CASE THE ASSESSMENT YEAR IN WHICH THE INCO ME WAS FIRST ASSESSABLE IS THE ASSESSMENT YEAR COMMENCING [ON OR AFTER THE 1S T DAY OF APRIL, 2004 BUT BEFORE THE 1ST DAY OF APRIL, 2010], THE PROVISIONS OF CLAUSE ( A ) SHALL HAVE EFFECT AS IF FOR THE WORDS 'TWO YEARS', THE WORDS 'TWENTY-ONE MONTHS' HA D BEEN SUBSTITUTED :] [ PROVIDED FURTHER THAT IN CASE THE ASSESSMENT YEAR IN WHICH THE INCOM E WAS FIRST ASSESSABLE IS THE ASSESSMENT YEAR COMMENCING [ON OR AFTER THE 1ST DAY OF APRIL, 2005 BUT BEFORE THE 1ST DAY OF APRIL, 2009] AND DURING T HE COURSE OF THE PROCEEDING FOR THE ASSESSMENT OF TOTAL INCOME, A REFERENCE UNDER SUB-S ECTION (1) OF SECTION 92CA ( I ) WAS MADE BEFORE THE 1ST DAY OF JUNE, 2007 BUT AN ORDER UNDER SUB-SECTION (3) OF THAT SECTION HAS NOT BEEN MADE BEFORE SUCH DATE; OR ( II ) IS MADE ON OR AFTER THE 1ST DAY OF JUNE, 2007, THE PROVISIONS OF CLAUSE ( A ) SHALL, NOTWITHSTANDING ANYTHING CONTAINED IN THE FIRST PROVISO, HAVE EFFECT AS IF FOR THE WORDS 'TWO YEARS ', THE WORDS 'THIRTY-THREE MONTHS' HAD BEEN SUBSTITUTED:] 9 [PROVIDED ALSO THAT IN CASE THE ASSESSMENT YEAR IN WHICH THE INCOM E WAS FIRST ASSESSABLE IS THE ASSESSMENT YEAR COMMENCING ON THE 1ST DAY OF APRIL, 2009 OR ANY SUBSEQUENT ASSESSMENT YEAR AND DURING THE COURSE OF THE PROCEEDING FOR THE ASSESSMENT OF TOTAL INCOME, A REFERENCE UNDER SUB-S ECTION (1) OF SECTION 92CA IS MADE, THE PROVISIONS OF CLAUSE ( A ) SHALL, NOTWITHSTANDING ANYTHING CONTAINED IN THE FIRST PROVISO, HAVE EFFECT AS IF FOR THE WORDS 'TWO YEARS ', THE WORDS 'THREE YEARS' HAD BEEN SUBSTITUTED. ] [(1A) NO ORDER OF ASSESSMENT SHALL BE MADE UNDER SECTION 115WE OR SECTION 115WF AT ANY TIME AFTER THE EXPIRY OF 7 [TWENTY-ONE MONTHS] FROM THE END OF THE ASSESSMENT YEAR IN WHICH THE FRINGE BENEFITS WERE FIRST ASSESS ABLE. (1B) NO ORDER OF ASSESSMENT OR REASSESSMENT SHALL B E MADE UNDER SECTION 115WG AFTER THE EXPIRY OF [NINE MONTHS] FROM THE END OF T HE FINANCIAL YEAR IN WHICH THE NOTICE UNDER SECTION 115WH WAS SERVED.] [(2) NO ORDER OF ASSESSMENT, REASSESSMENT OR RECOMP UTATION SHALL BE MADE UNDER SECTION 147 AFTER THE EXPIRY OF 10 [ONE YEAR] FROM THE END OF THE FINANCIAL YEAR IN WH ICH THE NOTICE UNDER SECTION 148 WAS SERVED : [ PROVIDED THAT WHERE THE NOTICE UNDER SECTION 148 WAS SERVED ON OR AFTER THE 1ST DAY OF APRIL, 1999 BUT BEFORE THE 1ST DAY OF APRIL, 200 0, SUCH ASSESSMENT, REASSESSMENT OR RECOMPUTATION MAY BE MADE AT ANY TIME UP TO THE 31S T DAY OF MARCH, 2002 :] [ PROVIDED FURTHER THAT WHERE THE NOTICE UNDER SECTION 148 WAS SERVED ON OR AFTER THE 1ST DAY OF APRIL, 2005 [BUT BEFORE THE 1ST DAY OF A PRIL, 2011], THE PROVISIONS OF THIS SUB-SECTION SHALL HAVE EFFECT AS IF FOR THE WORDS ' ONE YEAR', THE WORDS 'NINE MONTHS' HAD BEEN SUBSTITUTED :] [ PROVIDED ALSO THAT WHERE THE NOTICE UNDER SECTION 148 WAS SERVED ON OR AFTER THE 1ST DAY OF APRIL, 2006 [BUT BEFORE THE 1ST DAY OF APRIL , 2010] AND DURING THE COURSE OF THE PROCEEDINGS FOR THE ASSESSMENT OR REASSESSMENT OR R ECOMPUTATION OF TOTAL INCOME, A REFERENCE UNDER SUB-SECTION (1) OF SECTION 92CA ( I ) WAS MADE BEFORE THE 1ST DAY OF JUNE, 2007 BUT AN ORDER UNDER SUB-SECTION (3) OF THAT SECTION HAS NOT BEEN MADE BEFORE SUCH DATE; OR ( II ) IS MADE ON OR AFTER THE 1ST DAY OF JUNE, 2007, THE PROVISIONS OF THIS SUB-SECTION SHALL, NOTWITHST ANDING ANYTHING CONTAINED IN THE SECOND PROVISO, HAVE EFFECT AS IF FOR THE WORDS 'ON E YEAR', THE WORDS 'TWENTY-ONE MONTHS' HAD BEEN SUBSTITUTED:] [PROVIDED ALSO THAT WHERE THE NOTICE UNDER SECTION 148 WAS SERVED ON OR AFTER THE 1ST DAY OF APRIL, 2010 AND DURING THE COURSE OF THE PRO CEEDING FOR THE ASSESSMENT OR REASSESSMENT OR RECOMPUTATION OF TOTAL INCOME, A RE FERENCE UNDER SUB-SECTION (1) OF SECTION 92CA IS MADE, THE PROVISIONS OF THIS SUB-SECTION SHALL, NOTWITHSTANDING ANYTHING CONTAINED IN THE SECOND PROVISO, HAVE EFFE CT AS IF FOR THE WORDS 'ONE YEAR', THE WORDS 'TWO YEARS' HAD BEEN SUBSTITUTED. ] [(2A) NOTWITHSTANDING ANYTHING CONTAINED IN SUB-SEC TIONS (1) 17 [, (1A), (1B)]AND (2), IN RELATION TO THE ASSESSMENT YEAR COMMENCING ON TH E 1ST DAY OF APRIL, 1971, AND ANY SUBSEQUENT ASSESSMENT YEAR, AN ORDER OF FRESH ASSES SMENT IN PURSUANCE OF AN ORDER UNDER SECTION 250 OR SECTION 254 OR SECTION 263 OR SECTION 264 , SETTING ASIDE OR CANCELLING AN ASSESSMENT, MAY BE MADE AT ANY TIME B EFORE THE EXPIRY OF ONE YEAR FROM THE END OF THE FINANCIAL YEAR IN WHICH THE ORDER UN DER SECTION 250 OR SECTION 254 IS RECEIVED BY THE CHIEF COMMISSIONER OR COMMISSIONER OR, AS THE CASE MAY BE, THE 10 ORDER UNDER SECTION 263 OR SECTION 264 IS PASSED BY THE CHIEF COMMISSIONER OR COMMISSIONER: PROVIDED THAT WHERE THE ORDER UNDER SECTION 250 OR SECTION 254 IS RECEIVED BY THE CHIEF COMMISSIONER OR COMMISSIONER OR, AS THE CASE MAY BE, THE ORDER UNDER SECTION 263 OR SECTION 264 IS PASSED BY THE CHIEF COMMISSIONER OR COMMISSIONE R, ON OR AFTER THE 1ST DAY OF APRIL, 1999 BUT BEFORE THE 1ST DAY O F APRIL, 2000, SUCH AN ORDER OF FRESH ASSESSMENT MAY BE MADE AT ANY TIME UP TO THE 31ST D AY OF MARCH, 2002 :] [ PROVIDED FURTHER THAT WHERE THE ORDER UNDER SECTION 254 IS RECEIVED BY THE CHIEF COMMISSIONER OR COMMISSIONER OR, AS THE CASE MAY BE , THE ORDER UNDER SECTION 263 OR SECTION 264 IS PASSED BY THE COMMISSIONER ON OR AFTER THE 1ST DAY OF APRIL, 2005 19 [BUT BEFORE THE 1ST DAY OF APRIL, 2011], THE PROVISIONS OF THIS SUB-SECTION SHALL HAVE EFFECT AS IF FOR THE WORDS 'ONE YEAR', THE WORDS 'NINE MON THS' HAD BEEN SUBSTITUTED:] [ PROVIDED ALSO THAT WHERE THE ORDER UNDER SECTION 254 IS RECEIVED BY THE CHIEF COMMISSIONER OR COMMISSIONER OR, AS THE CASE MAY BE , THE ORDER UNDER SECTION 263 OR SECTION 264 IS PASSED BY THE COMMISSIONER ON OR AFTER THE 1ST DAY OF APRIL, 2006 [BUT BEFORE THE 1ST DAY OF APRIL, 2010], AND DURING THE COURSE OF THE PROCEEDINGS FOR THE FRESH ASSESSMENT OF TOTAL INCOME, A REFERENCE UNDER SUB-SECTION (1) OF SECTION 92CA ( I ) WAS MADE BEFORE THE 1ST DAY OF JUNE, 2007 BUT AN ORDER UNDER SUB-SECTION (3) OF SECTION 92CA HAS NOT BEEN MADE BEFORE SUCH DATE; OR ( II ) IS MADE ON OR AFTER THE 1ST DAY OF JUNE, 2007, THE PROVISIONS OF THIS SUB-SECTION SHALL, NOTWITHST ANDING ANYTHING CONTAINED IN THE SECOND PROVISO, HAVE EFFECT AS IF FOR THE WORDS 'ON E YEAR', THE WORDS 'TWENTY-ONE MONTHS' HAD BEEN SUBSTITUTED:] [PROVIDED ALSO THAT WHERE THE ORDER UNDER SECTION 254 IS RECEIVED BY THE CHIEF COMMISSIONER OR COMMISSIONER OR, AS THE CASE MAY BE , THE ORDER UNDER SECTION 263 OR SECTION 264 IS PASSED BY THE COMMISSIONER ON OR AFTER THE 1ST DAY OF APRIL, 2010, AND DURING THE COURSE OF THE PROCEEDING FOR THE FRESH A SSESSMENT OF TOTAL INCOME, A REFERENCE UNDER SUB-SECTION (1) OF SECTION 92CA IS MADE, THE PROVISIONS OF THIS SUB- SECTION SHALL, NOTWITHSTANDING ANYTHING CONTAINED I N THE SECOND PROVISO, HAVE EFFECT AS IF FOR THE WORDS 'ONE YEAR', THE WORDS 'TWO YEARS' HAD BEEN SUBSTITUTED. ] (3) THE PROVISIONS OF SUB-SECTIONS (1) 22 [, (1A), (1B)] AND (2) SHALL NOT APPLY TO THE FOLLOWING CLASSES OF ASSESSMENTS, REASSESSMENTS AND RECOMPUTATIONS WHICH MAY, 23 [SUBJECT TO THE PROVISIONS OF SUB-SECTION (2A),] BE COMPLETED AT ANY TIME ( I ) [***] ( II ) WHERE THE ASSESSMENT, REASSESSMENT OR RECOMPUTAT ION IS MADE ON THE ASSESSEE OR ANY PERSON IN CONSEQUENCE OF OR TO GIVE EFFECT TO A NY FINDING OR DIRECTION CONTAINED IN AN ORDER UNDER SECTION 250 , 254 , 260 , 262 , 263 , OR 264 [OR IN AN ORDER OF ANY COURT IN A PROCEEDING OTHERWISE THAN BY WAY OF APPEAL OR REFER ENCE UNDER THIS ACT] ; ( III ) WHERE, IN THE CASE OF A FIRM, AN ASSESSMENT IS M ADE ON A PARTNER OF THE FIRM IN CONSEQUENCE OF AN ASSESSMENT MADE ON THE FIRM UNDER SECTION 147 . [(4) NOTWITHSTANDING ANYTHING CONTAINED IN THE FORE GOING PROVISIONS OF THIS SECTION, SUB-SECTION (2) OF SECTION 153A AND SUB-SECTION (1) OF SECTION 153B , THE ORDER OF ASSESSMENT OR REASSESSMENT, RELATING TO ANY ASSESSM ENT YEAR, WHICH STANDS REVIVED UNDER SUB-SECTION (2) OF SECTION 153A , SHALL BE MADE WITHIN ONE YEAR FROM THE END OF 11 THE MONTH OF SUCH REVIVAL OR WITHIN THE PERIOD SPEC IFIED IN THIS SECTION OR SUB-SECTION (1) OF SECTION 153B , WHICHEVER IS LATER.] [ EXPLANATION 1. IN COMPUTING THE PERIOD OF LIMITATION FOR THE PURP OSES OF THIS SECTION ( I ) THE TIME TAKEN IN REOPENING THE WHOLE OR ANY PAR T OF THE PROCEEDING OR IN GIVING AN OPPORTUNITY TO THE ASSESSEE TO BE RE-HEARD UNDER TH E PROVISO TO SECTION 129, OR ( II ) THE PERIOD DURING WHICH THE ASSESSMENT PROCEEDIN G IS STAYED BY AN ORDER OR INJUNCTION OF ANY COURT, OR [( IIA ) THE PERIOD COMMENCING FROM THE DATE ON WHICH THE ASSESSING OFFICER INTIMATES THE CENTRAL GOVERNMENT OR THE PRESCRIBED AUTHORITY, THE CONTRAVENTION OF THE PROVISIONS OF CLAUSE ( 21 ) OR CLAUSE ( 22B ) OR CLAUSE ( 23A ) OR CLAUSE ( 23B ) OR SUB- CLAUSE ( IV ) OR SUB-CLAUSE ( V ) OR SUB-CLAUSE ( VI ) OR SUB-CLAUSE ( VIA ) OF CLAUSE ( 23C ) OF SECTION 10, UNDER CLAUSE ( I ) OF THE PROVISO TO SUB-SECTION (3) OF SECTION 143 AND ENDING WITH THE DATE ON WHICH THE COPY OF THE ORDER WITHDRAWING THE APPROVAL OR RESCINDING THE NOTIFICATION, AS THE CASE MAY BE, UN DER THOSE CLAUSES IS RECEIVED BY THE ASSESSING OFFICER,] OR [ ( III ) THE PERIOD COMMENCING FROM THE DATE ON WHICH THE AS SESSING OFFICER DIRECTS THE ASSESSEE TO GET HIS ACCOUNTS AUDITED UNDER SUB- SECTION (2A) OF SECTION 142 AND ( A ) ENDING WITH THE LAST DATE ON WHICH THE ASSESSEE IS REQUIRED TO FURNISH A REPORT OF SUCH AUDIT UNDER THAT SUB-SECTION; OR ( B ) WHERE SUCH DIRECTION IS CHALLENGED BEFORE A COUR T, ENDING WITH THE DATE ON WHICH THE ORDER SETTING ASIDE SUCH DIRECTION IS REC EIVED BY THE COMMISSIONER, OR ] ( IV ) [* * *] [( IVA ) THE PERIOD (NOT EXCEEDING SIXTY DAYS) COMMENCING FROM THE DATE ON WHICH THE [ASSESSING] OFFICER RECEIVED THE DECLARATION UNDER SUB-SECTION (1) OF SECTION 158A AND ENDING WITH THE DATE ON WHICH THE ORDER UNDER S UB-SECTION (3) OF THAT SECTION IS MADE BY HIM, OR] ( V ) IN A CASE WHERE AN APPLICATION MADE BEFORE THE I NCOME-TAX SETTLEMENT COMMISSION UNDER SECTION 245C IS REJECTED BY IT OR IS NOT ALLO WED TO BE PROCEEDED WITH BY IT, THE PERIOD COMMENCING FROM THE DATE ON WHICH SUCH APPLI CATION IS MADE AND ENDING WITH THE DATE ON WHICH THE ORDER UNDER SUB-SECTION (1) OF SECTION 245D IS RECEIVED BY THE COMMISSIONER UNDER SUB-SECTION (2) OF THAT S ECTION, [OR] [( VI ) THE PERIOD COMMENCING FROM THE DATE ON WHICH AN A PPLICATION IS MADE BEFORE THE AUTHORITY FOR ADVANCE RULINGS UNDER SUB-SECTION (1) OF SECTION 245Q AND ENDING WITH THE DATE ON WHICH THE ORDER REJECTING THE APPL ICATION IS RECEIVED BY THE COMMISSIONER UNDER SUB-SECTION (3) OF SECTION 245R, OR ( VII ) THE PERIOD COMMENCING FROM THE DATE ON WHICH AN APPLICATION IS MADE BEFORE THE AUTHORITY FOR ADVANCE RULINGS UNDER SUB-SECTION (1) OF SECTION 245Q AND ENDING WITH THE DATE ON WHICH THE ADVANCE RULING PRONOUNCE D BY IT IS RECEIVED BY THE COMMISSIONER UNDER SUB-SECTION (7) OF SECTION 245R, [OR]] [ ( VIII ) THE PERIOD COMMENCING FROM THE DATE ON WHICH A REFE RENCE OR FIRST OF THE REFERENCES FOR EXCHANGE OF INFORMATION IS MADE BY A N AUTHORITY COMPETENT UNDER AN AGREEMENT REFERRED TO IN SECTION 90 OR SECTION 90A AND ENDING WITH THE DATE ON 12 WHICH THE INFORMATION REQUESTED IS LAST RECEIVED BY THE COMMISSIONER OR A PERIOD OF ONE YEAR, WHICHEVER IS LESS, ] [ OR ] ( IX ) [ *** ] THE FOLLOWING CLAUSE ( IX ) SHALL BE INSERTED AFTER CLAUSE ( VIII ) IN EXPLANATION 1 TO SECTION 153 BY THE FINANCE ACT, 2013, W.E.F. 1-4-20 16 : (IX) THE PERIOD COMMENCING FROM THE DATE ON WHICH A REFERENCE FOR DECLARATION OF AN ARRANGEMENT TO BE AN IMPERMISSIBLE AVOIDANCE ARRANG EMENT IS RECEIVED BY THE COMMISSIONER UNDER SUB-SECTION (1) OF SECTION 144BA AND ENDING ON THE DATE ON WHICH A DIRECTION UNDER SUB-SECTION (3) OR SUB-SECT ION (6) OR AN ORDER UNDER SUB- SECTION (5) OF THE SAID SECTION IS RECEIVED BY THE ASSESSING OFFICER,SHALL BE EXCLUDED [ PROVIDED THAT WHERE IMMEDIATELY AFTER THE EXCLUSION OF THE AFORESAID TIME OR PERIOD, THE PERIOD OF LIMITATION REFERRED TO IN SUB-SECTION S (1), [(1A), (1B),] [(2), (2A) AND (4)] AVAILABLE TO THE ASSESSING OFFICER FOR MAKING AN ORDER OF ASSESSMENT, REASSESSMENT OR RECOMPUTATION, AS THE CASE MAY BE, IS LESS THAN SIXTY DAYS, SUCH REMAINING PERIOD SHALL BE EXTENDED TO SIXTY DAYS AN D THE AFORESAID PERIOD OF LIMITATION SHALL BE DEEMED TO BE EXTENDED ACCORDING LY:] [ PROVIDED FURTHER THAT WHERE A PROCEEDING BEFORE THE SETTLEMENT COMM ISSION ABATES UNDER SECTION 245HA, THE PERIOD OF LIMITATION AVAIL ABLE UNDER THIS SECTION TO THE ASSESSING OFFICER FOR MAKING AN ORDER OF ASSESSMENT , REASSESSMENT OR RE-COMPUTATION, AS THE CASE MAY BE, SHALL, AFTER THE EXCLUSION OF T HE PERIOD UNDER SUB-SECTION (4) OF SECTION 245HA, BE NOT LESS THAN ONE YEAR; AND WHERE SUCH PERIOD OF LIMITATION IS LESS THAN ONE YEAR, IT SHALL BE DEEMED TO HAVE BEEN EXTE NDED TO ONE YEAR; AND FOR THE PURPOSES OF DETERMINING THE PERIOD OF LIMITATION UN DER SECTIONS 149, 153B, 154, 155, 158BE AND 231 AND FOR THE PURPOSES OF PAYMENT OF IN TEREST UNDER SECTION 243 OR SECTION 244 OR, AS THE CASE MAY BE, SECTION 244A, THIS PROV ISO SHALL ALSO APPLY ACCORDINGLY.] EXPLANATION 2. WHERE, BY AN ORDER [REFERRED TO IN CLAUSE ( II ) OF SUB-SECTION (3)], ANY INCOME IS EXCLUDED FROM THE TOTAL INCOME OF THE ASS ESSEE FOR AN ASSESSMENT YEAR, THEN, AN ASSESSMENT OF SUCH INCOME FOR ANOTHER ASSESSMENT YEAR SHALL, FOR THE PURPOSES OF SECTION 150 AND THIS SECTION, BE DEEMED TO BE ONE M ADE IN CONSEQUENCE OF OR TO GIVE EFFECT TO ANY FINDING OR DIRECTION CONTAINED IN THE SAID ORDER. EXPLANATION 3. WHERE, BY AN ORDER [REFERRED TO IN CLAUSE ( II ) OF SUB-SECTION (3)], ANY INCOME IS EXCLUDED FROM THE TOTAL INCOME OF ONE PER SON AND HELD TO BE THE INCOME OF ANOTHER PERSON, THEN, AN ASSESSMENT OF SUCH INCOME ON SUCH OTHER PERSON SHALL, FOR THE PURPOSES OF SECTION 150 AND THIS SECTION, BE DEEMED TO BE ONE MADE IN CONSEQUENCE OF OR TO GIVE EFFECT TO ANY FINDING OR DIRECTION CONTA INED IN THE SAID ORDER, PROVIDED SUCH OTHER PERSON WAS GIVEN AN OPPORTUNITY OF BEING HEAR D BEFORE THE SAID ORDER WAS PASSED. 15. UNDER SUB-SECTION (I) TO SECTION 153, THE TIME LIMIT IS PROVIDED FOR FRAMING THE ASSESSMENT UNDER SECTION 143 OR 144 OF THE INCOME TAX ACT. FURTHER UNDER SUB-SECTION 1A TO SECTION 153, THE TIME LIMIT FOR FRAMING THE ASSESSMENT OF FRINGE BENEFIT IS PROVIDE D. UNDER SUB- SECTION (2) TO SECTION 153 OF THE ACT, IT IS PROVID ED THAT NO ORDER OF 13 ASSESSMENT, RE-ASSESSMENT OR RE-COMPUTATION SHALL B E MADE UNDER SECTION 147 OF THE ACT AFTER THE EXPIRY OF ONE YEAR FROM THE END OF THE FINANCIAL YEAR IN WHICH NOTICE UNDER SECTION 148 WA S SERVED. THE PROVISO UNDER THE SAID SECTION PROVIDES FOR DIFFERE NT TIME LIMIT FOR DIFFERENT ASSESSMENT YEARS. 16. THE SUB-SECTION 2A TO SECTION 153 OF THE ACT ST ARTS WITH THE NON- OBSTANATE CLAUSE THAT NOT-WITHSTANDING ANYTHING CON TAINED IN SUB- SECTIONS (1), (1A), (1B) AND (2) TO THE SECTION, IN RELATION TO ASSESSMENT YEAR STARTING FROM 1 ST APRIL, 1971 AND ANY SUBSEQUENT YEAR, AN ORDER OF FRESH ASSESSMENT IN PURSUANCE TO AN ORD ER PASSED UNDER SECTION 250/254/263/264 OF THE ACT IS TO BE MADE AT ANY TIME BEFORE THE EXPIRY OF ONE YEAR FROM THE END OF THE FINANCIA L YEAR IN WHICH THE ORDER UNDER SECTION 250/254 IS RECEIVED BY THE CHIE F COMMISSIONER OR THE COMMISSIONER, AS THE CASE MAY BE AND/OR THE ORD ER UNDER SECTION 263/264 OF THE ACT IS PASSED BY THE CHIEF COMMISSIO NER OR THE COMMISSIONER. FOR COMPUTING THE TIME LIMIT OF COMPL ETION OF THE ASSESSMENTS WHICH HAVE BEEN SET ASIDE UNDER SECTIO N 263 FOR THE RELEVANT PERIOD I.E. ASSESSMENT YEAR 2005-06 ARE GO VERNED BY THE SECOND PROVISO UNDER SECTION 153(2A) OF THE ACT WHI CH PROVIDES THAT FOR COMPLETING THE ASSESSMENT, THE PERIOD WOULD BE 9 MONTHS AS AGAINST ONE YEAR PROVIDED UNDER THE SUB-SECTION. 17. FURTHER, UNDER SUB-SECTION (3) TO SECTION 153 O F THE ACT, IT IS PROVIDED THAT THE PROVISIONS OF SUB-SECTION (1)(1A) (1B) AND (2) OF THE SECTION SHALL NOT APPLY TO THE CLASSES OF ASSESSMEN T, RE-ASSESSMENT AND RE-COMPUTATION WHERE THE ASSESSMENT, RE-ASSESSMENT OR RE-COMPUTATION IS MADE CONSEQUENT TO OR GIVE EFFECT TO ANY FINDING OR DIRECTION CONTAINED IN AN YEAR UNDER SECTION 250, 254, 260, 2 62, 263 OR 264 OF THE ACT OR ANY ORDER OF ANY COURT IN ANY PROCEEDING S OTHERWISE THAN 14 BY WAY OF AN APPEAL OR REFERENCE UNDER THIS ACT. H OWEVER, THE SAID PROVISIONS ARE FURTHER SUBJECT TO THE PROVISIONS OF SUB-SECTION (2A) OF SECTION 153 OF THE ACT. 18. THE PROVISIONS OF SUB-SECTION (4) ARE APPLICABL E FOR COMPLETING THE ASSESSMENTS PURSUANT TO SEARCH UPON THE ASSESSE E. 19. READING THE ABOVESAID PROVISIONS, IT TRANSPIRES THAT IN CASES WHERE AN ORDER OF FRESH ASSESSMENT IS TO BE MADE PU RSUANT TO AN ORDER PASSED UNDER SECTION 250, 254, 263 OR 264 OF THE AC T THAN THE TIME LIMIT FOR MAKING THE SAID ASSESSMENTS FOR AN ORDER PASSED UNDER SECTION 254, 263 OR 264 OF THE ACT ON OR AFTER FIRS T DAY OF APRIL, 2005, IS A PERIOD OF NINE MONTHS AND NOT ONE YEAR. MEANI NG THEREBY THAT IN CASE ANY DIRECTIONS HAVE BEEN ISSUED BY THE TRIBUNA L WHILE PASSING THE ORDER UNDER SECTION 254, ORDER BY THE CHIEF COMMISS IONER OR COMMISSIONER, AS THE CASE MAY BE, UNDER SECTION 263 OR 264 OF INCOME TAX ACT, WHICH DIRECTS THE ASSESSING OFFICER TO PAS S FRESH ASSESSMENT ORDER, THEN IN SUCH CASES, THE PROVISIONS OF SUB-SE CTION (2A) TO SECTION 153 OF THE ACT ARE APPLICABLE, UNDER WHICH THE PERI OD FOR COMPLETING THE ASSESSMENT FOR THE RELEVANT PERIOD IS PROVIDED I.E. NINE MONTHS. HOWEVER, IN CASES WHERE THE ASSESSMENT, RE-ASSESSME NT OR RE- COMPUTATION IS TO BE MADE UPON THE ASSESSEE IN ORDE R TO GIVE EFFECT TO ANY FINDING OR DIRECTIONS CONTAINED IN VARIOUS ORDE RS PASSED UNDER DIFFERENT SECTIONS AS REFERRED TO IN SECTION 153(3) (2) OF THE ACT OR BY ANY COURT IN CASE PROCEEDINGS OTHERWISE THAN BY AN APPEAL OR REFERENCE TO THE ACT, THEN THE SAID ORDER COULD BE PASSED AT ANY TIME I.E. NO TIME LIMIT IS PROVIDED FOR PASSING THE SAID CONSEQUENTIA L ORDER. 20. THE DISPUTE BEFORE US IN THE PRESENT APPEAL IS WHETHER WHEN THE ORDER UNDER SECTION 263 WAS PASSED BY THE COMMISSIO NER OF INCOME 15 TAX, THE CONSEQUENT ORDER OF ASSESSMENT COULD BE PA SSED IN ANY TIME GIVING EFFECT TO THE FINDINGS OR DIRECTIONS OF THE COMMISSIONER OF INCOME TAX, OR IT HAD TO BE PASSED WITHIN A PERIOD OF NINE MONTHS AS AN ORDER OF FRESH ASSESSMENT HAD TO BE MADE PURSUAN T TO AN ORDER PASSED UNDER SECTION 263 OF THE ACT. 21. AS REFERRED TO BY US IN THE PARAS HEREIN ABOVE, THE COMMISSIONER OF INCOME TAX HAD AFTER HOLDING THAT THE ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER WAS ERRONEOUS AS WE LL AS PREJUDICIAL TO THE INTEREST OF REVENUE, HAD DIRECTED THE ASSESS ING OFFICER TO RE- FRAME THE SAME AFTER COMPUTING THE BOOK PROFITS IN ACCORDANCE WITH SECTION 115JB OF THE ACT AND THE LAW LAID DOWN BY T HE HON'BLE SUPREME COURT. ANOTHER DIRECTION GIVEN BY THE COMM ISSIONER OF INCOME TAX WAS THAT THE ASSESSING OFFICER WOULD BRI NG SUCH BOOK PROFITS OF RS.1.79 CR TO TAX UNDER SECTION 115JB AF TER ALLOWING A DEDUCTION ON ACCOUNT OF UNABSORBED DEPRECIATION OR BOOK LOSS, WHICHEVER WAS LOWER. FURTHER, IT WAS HELD BY THE C OMMISSIONER OF INCOME TAX THAT THE ASSESSEE MAY BE GIVEN AN OPPORTUNITY OF BEING HEARD WHILE DETERMINING CHARGEABLE BOOK PROFIT. PURSUANT TO THE ORDER PASSED BY THE COMMISSIONER OF INCOME TAX UNDE R SECTION 263 OF THE ACT, THE ASSESSING OFFICER HAD ALLOWED VARIOUS OPPORTUNITIES OF HEARING TO THE ASSESSEE AND THEREAFTER HAD CONSIDER ED THE ISSUE AT LENGTH AND COMPUTED THE INCOME I.E. THE BOOK PROFIT S UNDER SECTION 115JB OF THE ACT AND HAS ALSO TAKEN INTO CONSIDERAT ION THE LAW LAID DOWN BY THE HON'BLE SUPREME COURT ON THIS ASPECT. I N VIEW OF THE ABOVESAID PROCEEDINGS WHERE COMMISSIONER OF INCOME TAX HAD DIRECTED THE ASSESSING OFFICER TO REFRAME THE ASSES SMENT AND COMPUTE THE BOOK PROFITS UNDER SECTION 115JB OF THE ACT IN ACCORDANCE WITH THE LAW LAID DOWN BY THE HON'BLE SUPREME COURT AND ALSO THE ASSESSING 16 OFFICER HAVING ELABORATELY CONSIDERED THE ISSUE AND COMPUTING THE INCOME, SUCH DIRECTIONS GIVEN BY THE COMMISSIONER O F INCOME TAX AND CONSEQUENT ORDER PASSED BY THE ASSESSING OFFICER IS CLEARLY COVERED BY THE PROVISIONS OF SECTION 153(2A) OF THE ACT WHERE THE MATTER HAD BEEN SET ASIDE TO THE FILE OF THE ASSESSING OFFICER FOR MAKING FRESH ASSESSMENT IN PURSUANT TO AN ORDER PASSED UNDER SEC TION 263 OF THE ACT. ACCORDINGLY, THE ASSESSMENT IN THE CASE HAD T O BE COMPLETED WITHIN A PERIOD OF NINE MONTHS. THE PERUSAL OF THE ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER IN THE PRESENT CASE DOES NOT REFLECT THAT IT HAS BEEN PASSED TO ONLY GIVE EFFECT TO THE FINDING OR DIRECTIONS OF THE COMMISSIONER OF INCOME TAX GIVEN IN ORDER PA SSED UNDER SECTION 263 OF THE ACT. THE PERUSAL OF THE ORDER O F THE COMMISSIONER OF INCOME TAX CLEARLY ESTABLISH THAT WHILE PASSING THE SAID ORDER UNDER SECTION 263 OF THE ACT, THE ASSESSMENT HAD BEEN SET ASIDE TO THE FILE OF ASSESSING OFFICER TO REFRAME THE BOOK PROFIT OF THE ASSESSEE UNDER SECTION 115JB OF THE ACT. WE FIND NO MERIT IN THE PLEA OF THE REVENUE THAT THE PROVISIONS OF SECTION 153(3)(II) OF THE AC T ARE ATTRACTED IN THIS CASE. ACCORDINGLY, WE HOLD THAT THE ASSESSMENT ORD ER PASSED IN THE PRESENT CASE IS BEYOND THE PERIOD OF LIMITATION AND THE SAME IS SET ASIDE. WE ALSO FIND SUPPORT FROM THE DECISION OF H IGH COURT OF GUJRAT IN THE CASE OF INSTRUMENTS & CONTROL COMPANY VS CHI EF COMMISSIONER OF INCOME TAX & ORS [349 ITR 571 (GUJ)]. THE GROUN D OF APPEAL NO. 1 RAISED BY THE ASSESSEE IS THUS, ALLOWED. 22. IN VIEW OF OUR SETTING ASIDE THE ORDER OF ASSES SMENT, WE DO NOT ADDRESS THE GROUND NO. 2 RAISED BY THE ASSESSEE ON THE MERITS OF ADDITION 17 ITA NO. 862/CHD/2012 :: ASSTT. YEAR 2007-08 23. THE ONLY ISSUE RAISED BY THE ASSESSEE IS AGAINS T ADDITION OF RS. 12,35,165/- UNDER SECTION 40(A)(IA) OF THE INCOME T AX ACT. 24. THE BRIEF FACTS RELATING TO THE ISSUE ARE THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER NOTED THAT THE ASSESSEE HAD NOT DEDUCTED TAX AT SOURCE FROM THE PAYMENT OF RENT AMOUNTING TO RS. 12,35,165/- MADE TO HIMFED. THE ASSESSEE WAS SH OW CAUSED TO EXPLAIN AND IN RESPONSE TO THE QUERY, THE ASSESSEE VIDE REPLY DATED 30.11.2009 CONCEDED THAT TAX WAS OMITTED TO BE DEDU CTED AT SOURCE FROM THE PAYMENT OF RS. 12,35,165/-. HOWEVER, WHEN THE SAID FACT WAS POINTED OUT BY ITO (TDS), THE ASSESSEE CLAIMED TO HAVE DEDUCTED THE SAID TAX AND DEPOSITED THE SAME WITH THE DEPART MENT. AS THE ASSESSEE FAILED TO FURNISH ANY EVIDENCE OF HAVING D EPOSITED THE TDS, THE ASSESSEE WAS HELD TO BE IN DEFAULT AND ADDITION OF RS. 12,35,165/- WAS MADE. 25. BEFORE THE CIT(APPEALS), THE CLAIM OF THE ASSES SEE WAS THAT A SUM OF RS. 8,35,165/- WAS PAID DURING THE YEAR AND A SUM OF RS. 4 LACS ONLY WAS PAYABLE AS ON 31.3.2007. THE PLEA OF THE ASSESSEE BEFORE THE CIT(APPEALS) WAS THAT ONLY THE AMOUNT WHICH WAS PAY ABLE COULD BE DISALLOWED. THE CIT(APPEALS), APPLYING THE RATIO L AID DOWN BY THE HON'BLE MADRAS HIGH COURT IN TUBE INVESTMENT OF IND IA LTD. AND ANOTHER VS ASSTT.CIT AND ORS. REPORTED IN 325 ITR 6 10 (MAD) UNDER WHICH THE CONSTITUTIONAL VALIDITY OF SECTION 40(A)( IA) WAS UPHELD, HELD THE ASSESSEE TO BE IN DEFAULT AND UPHELD THE ADDITI ON OF RS. 12,35,165/-. 26. THE LD. AR FOR THE ASSESSEE MADE SIMILAR SUBMIS SIONS BEFORE US AS BEFORE THE AUTHORITIES BELOW. THE LD. AR FOR TH E ASSESSEE HAS FAILED 18 TO FURNISH ON RECORD ANY EVIDENCE OF HAVING DEPOSIT ED THE TAX AT SOURCE. HOWEVER, IN THE WRITTEN SUBMISSIONS FILED, THE ASSESSEE HAS CONTENDED THAT OUT OF RS. 12.35.165/-, RS. 8,35,165 /- HAS ALREADY BEEN PAID DURING THE YEAR AND ONLY RS. 4 LACS WAS PAYABL E AS ON THE CLOSE OF THE YEAR OUT OF THE RENT ACCOUNT. 27. WE FIND NO MERIT IN THE PLEA OF THE ASSESSEE IN VIEW OF THE RATIO LAID DOWN BY THE HON'BLE GUJRAT HIGH COURT IN CIT V S SIKANDER KHAN N.TUNVAR & OTHERS, ITA NO.905 OF 2012 JUDGMENT DA TED 2.5.2013 AND THE HON'BLE CALCUTTA HIGH COURT IN CIT VS CRESE NT EXPORT SYNDICATE ITA NO. 20 OF 2013, G.A.NO. 190 OF 2013 . THE ASSESSEE HAVING DEFAULTED IN THE DEPOSIT OF THE TAX AT SOURC E OUT OF THE PAYMENT EVEN WHERE PART OF THE RENT HAS BEEN PAID TO THE HI MFED, THE ALLOWABILITY OF DEDUCTION OF TAX AT SOURCE IS OUT O F THE TOTAL PAYMENTS OF RENT AND NOT THE RENT PAYABLE AT THE CLOSE OF TH E YEAR. IN VIEW THEREOF, WE UPHOLD THE ORDER OF COMMISSIONER OF INC OME TAX (APPEALS) IN THIS REGARD AND DISMISS THE GROUND OF APPEAL NO. 1 RAISED BY THE ASSESSEE. 28. IN THE RESULT, APPEAL OF THE ASSESSEE IN ITA NO . 861/CHD/2012 IS ALLOWED AND THE APPEAL IN ITA NO. 862/CHD/2012 IS D ISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 21 ST JANUARY,2014. SD/- SD/- ( T.R.SOOD) (SUSHMA CHOWLA) ACCOUNTANT MEMBER JU DICIAL MEMBER DATED: 21 ST JANUARY,2014 POONAM COPY TO: THE APPELLANT, THE RESPONDENT, THE CIT(A), THE CIT, DR. ASSISTANT REGISTRAR ITAT,CHD.