Brooke Bond Lipton India Limited(Now merged with Hindustan Unilever Ltd.), Mumbai V. DCIT, Special Range - 2, Kolkata, Kolkata

ITA 91/KOL/2010

• Counselvise Citation: [2011] 119 COUNSELVISE.COM (IT) 6807 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 5 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-06-2011
• Appeal Filed By: Assessee
• Bench Allotted: B
• Next Hearing Date: 24-06-2011
• Assessment Year: misc
• Appeal Filed On: 14-01-2010
• Court: TRIBUNAL
• Department Lawyers: A S MONDAL
• Assessee Lawyers: N L THABAR; P V PADIWALA
• Keywords: Business income; Depreciation; Rectification of order; Period of limitation; Retrospective amendment; Question of law; Time period of passing order; Unabsorbed depreciation; Reassessment proceedings
• Section: 143(3); 80HHC; 147; 6; 263; 28; 154

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL, BEN CH B, KOLKATA () BEFORE , , , , , SHRI MAHAVIR SINGH, JUDICIAL MEMBER. /AND . .. .!' !'!' !'. .. . , #$ SHRI C.D.RAO, ACCOUNTANT MEMBER % % % % / ITA NO . 91/KOL/2010 &' ()/ ASSESSMENT YEAR : 1992-93 (+, / APPELLANT ) BROOKE BOND LIPTON (I) LTD.,KOLKATA (PAN: AAACH 1004 N) - & - - VERSUS - . (./+,/ RESPONDENT ) D.C.I.T., SPL.RANGE.2, KOLKATA +, 0 1 #/ FOR THE APPELLANT: SHRI P.V.PADIWALA & SHRI N.L.THABAR ./+, 0 1 #/ FOR THE RESPONDENT: SHRI A.S.MONDAL #2 / ORDER ( (( ( . .. .!' !'!' !'. .. . ) )) ), , , , #$ PER SHRI C.D.RAO, AM THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE O RDER DATED 24.08.2009 OF THE CIT(A)-XII, KOLKATA RELATING TO A.YR. 1992-93. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GRO UNDS OF APPEAL :- 1. THE LEARNED CIT(A) ERRED IN LAW IN CONFIRMING T HAT THE ORDER U/S 154/155 OF THE ACT WAS VALID AND IN TREATING THE PURPORTED MISTAKES AS MISTAKE APPARENT FROM RECORDS. 2. THE LEARNED CIT(A) ERRED IN CONFIRMING AS VALID THE ORDER U/S 154/155 PURPORTING TO RECTIFY AN ALLEGED MISTAKE MADE IN OR DER U/S 143(3) DATED 29/3/1995 BEYOND THE STATUTORY PERIOD OF 4 YEARS I. E. 31 ST MARCH, 1999. 3. WITHOUT PREJUDICE TO 2 ABOVE, THE LEARNED CIT(A) ERRED IN CONFIRMING THAT ORDER U/S 154/155 PASSED ON A DEBATABLE ISSUES, THA T GOT CONFIRMED SUBSEQUENTLY BY SUPREME COURT DECISIONS, AS VALID. 2 3.1. THE LEARNED CIT(A) FAILED TO APPRECIATE THAT T HE ISSUES COVERED BY THE ORDER U/S 154 WERE CLEARLY DEBATABLE ISSUES ON THE DATE OF PASSING THE ORDER U/S 154/155 AND COULD NOT BE TERMED AS A MISTAKE APPARE NT FROM RECORD. 3.2. THE LEARNED CIT(A) OUGHT TO HAVE HELD THAT ORD ER U/S 154/155 PASSED ON DEBATABLE ISSUES WAS BAD AND UNTENABLE IN LAW AND T HE ASSUMPTION OF JURISDICTION OF POWER OF RECTIFICATION WAS IN EXCES S OF AUTHORITY VESTED UNDER THE ACT. 3. AT THE TIME OF HEARING THE LD. COUNSEL APPEARING ON BEHALF OF THE ASSESSEE ARGUED ON THE LEGAL ISSUE I.E. ORDER PASSED BY THE LD. AO ON 10.03.2000 IS BEYOND THE LIMITATION PERIOD AS SPECIFIED U/S 154(7) OF THE IT ACT. 4. THE BRIEF FACTS OF THIS ISSUE ARE THAT THE AO WH ILE PASSING ORDER U./S 251/154/154/143(3) OF THE IT ACT, 1961 HAS OBSERVED AS UNDER : CONSEQUENT TO ORDER OF CIT(A)-VI IN I.T.APPE AL NO.21/CIT(A)-VI/98-99/DC.SPL.R-2 DATED 16-6-99 AGAINST ORDER U/S 154/143(3) DT.28-01 -97 WHEREIN APPLICABILITY OF SEC.34A WAS INVOLVED, THE ASSESSMENT IS REVISED AS UNDER : FURTHERMORE, IN THIS CASE REGULAR ASSESSME NT U/S 143(3) WAS LAST RECTIFIED U/S 154 ON 5.12.97 COMPUTING THE TOTAL INCOME AT RS.39,47,00,0 00/-. THIS RECTIFICATION WAS FOR WITHDRAWING THE EXCESS INVESTMENT ALLOWANCE AND DEP RECIATION ALLOWED TO THE A COMPANY. SUBSEQUENTLY, IT WAS NOTICED THAT THE DEDUCTION U/S 80HHC WAS ALLOWED ON THE INCOME COMPUTED AT RS.5234.84 LAC. THIS FIGURE WAS WRONGLY TAKEN BEFORE SETTING OFF THE BUSINESS LOSS OF KGFC TO THE TUNE OF RS.848.90 LAC AND THE DEDUCT ION SHOULD HAVE ACTUALLY BEEN ALLOWED ON THE NET INCOME, I.E. RS.4385.94 LAC.(5234.84 848. 90). THIS MISTAKE HAD RESULTED IN EXCESS ALLOWANCE OF DEDUCTION U/S 80HHC. SINCE THIS WAS A MISTAKE APPARENT FROM THE RECORDS, NOTICE U/S 154 OF THE I.T.ACT WAS DULY SERVED ON TH E ASSESSEE PROPOSING TO RECTIFY THE SAID MISTAKE AND CALLING FOR ITS OBJECTION TO THE SAME, IF ANY. IN REPLY TO THE SAID NOTICE, THE ASSESSEE COMPANY VIDE LETTER DT.27-8-99 & 18-2-2000 SOUGHT FOR ADJOURNMENT OF THE HEARING AND FINALLY THE A CO. VIDE THEIR LETTER DT.9.3.20 00 OBJECTED THE PROPOSED RECTIFICATION ON THE GROUND THAT (I) THERE IS NO MISTAKE IN RESPECT OF W ORKING OUT THE DEDUCTION U/S 80HHC AS STATED IN THE NOTICE U/S 154, (II) THE MISTAKE POIN TED OUT DOES NOT ARISE FROM THE RECORD WITHIN THE MEANING OF SEC.154., (III) EVEN ON THE MERITS A ND CORRECT INTERPRETATION OF LAW THE ACTION OF THE LD. D.C. WHO HAD PASSED THE ORDER ON 5.12.97 WA S CORRECT. THE OBJECTION OF THE A CO. IS NOT ACCEPTABLE AND I PROCEED TO RECTIFY THE SAID MI STAKE. 4.1. ON APPEAL THE ASSESEE HAS RAISED LIMITATION IS SUE. HOWEVER, THE LD. CIT(A) HAS REJECTED THE SAME BY OBSERVING AS UNDER :- I HAVE CAREFULLY CONSIDERED THE APPELLANTS SUBMIS SIONS. I AM NOT IN AGREEMENT WITH THE APPELLANTS ARGUMENTS. IN THIS CASE THE OR IGINAL ASSESSMENT WAS COMPLETED ON 29.04.1995. THEREAFTER, AFTER PASSING THE SECOND RECTIFICATION ORDER ON 5.12.97, THE A.O. ISSUED A NOTICE U/S 154 ON 20.8.1999 AND PASSED RECTIFICATION ORDER ON 10.3.2000. AS SEEN FROM THE FACTS, THE LATEST RECTIFICATION ORDER WAS PASSED ON 5.12.1997 BEFORE THE IMPUGNED O RDER PASSED. IN MY OPINION THE TIME LIMIT OF FOUR YEARS TO BE CALCULAT ED FROM THIS DATE AS THE ASSESSMENT PROCEEDINGS INITIATED U/S 143(3) HAD NOT COME TO AN END. 3 I PLACE RELIANCE ON HONBLE SUPREME COURT DECISION IN THE CASE OF HIND WIRE INDUSTRIES LTD. VS CIT (1995) 212 ITR 639, WHE REIN THE APEX COURT HELD THAT THE TIME LIMIT FOR RECTIFICATION HAS TO BE REC KONED FROM THE DATE OF THE ORDER SOUGHT TO BE AMENDED. THE RELEVANT EXTRACT FROM THE HEAD NOTE OF THE APEX COURT JUDGEMENT IS REPRODUCED AS UNDER : SINCE THE WORD ORDER IN THE EXPRESSION FROM THE DATE OF THE ORDER SOUGHT TO BE AMENDED IN SECTION 154(7) WAS N OT QUALIFIED IN ANY WAY, IT DID NOT NECESSARILY MEANS THE ORIGINAL ORDER, IT COULD BE ANY ORDER INCLUDING AMENDED OR RECTIFIED ORDER THE SAME VIEW HAS BEEN REITERATED BY THE APEX COURT IN THE CASE OF WALDIES LTD V.CIT (1997) 223 ITR 163. IT IS CLEAR FROM THES E JUDICIAL DECISIONS THAT SUCH RECTIFICATION IS \POSSIBLE WITH REFERENCE TO T HE LAST SUCH ORDER, WHERE THE MISTAKE HAS OCCURRED. IT IS RELEVANT TO QUOTE THE A PEX COURTS REASONING GIVEN IN A SALES TAX CASE IN INTERNATIONAL COTTON CORPORA TION (P) LTD V. CTO (1975) 35 STC L THAT THE ORIGINAL ORDER IS NO LONGER EXTAN T WITH THE RESULT THAT THE LIME LIMIT CAN NOT BE COUNTED FROM THE DATE OF THE ORIGI NAL ORDER. IN THE PRESENT CASE, THE ORIGINAL ORDER WAS PASSED ON 29.4.95 AND THEREA FTER TWO RECTIFICATIONS ORDERS WERE PASSED. AS SOON AS THE SECOND RECTIFICATION OR DER WAS PASSED ON 5.12.97, THE EARLIER ORDERS STOOD SUPERSEDED AND THE ONLY OR DER WHICH WAS IN FORCE WAS THE ORDER DT. 5.12.97 PASSED BY THE A.O. THUS I AM OF THE VIEW THAT THE ORDER OF RECTIFICATION PASSED ON 10.3.2000 IS WITHIN FOUR YE ARS FROM THE DATE OF THE ORDER PASSED ON 5.12.97. THE APPELLANTS GROUND IS REJECT ED ON THIS COUNT. 4.2. AGGRIEVED BY THIS THE ASSESSEE IS IN APPEAL BE FORE US. 5. AT THE TIME OF HEARING THE LD. COUNSEL APPEARING ON BEHALF OF THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE LD. CIT( A) WHICH ARE AS UNDER :- THE ORIGINAL ASSESSMENT U/S. 143(3) WAS COMPLETED VIDE ORDER DATED 29 TH MARCH, 1995 (COPY ENCLOSED ANNEXURE -1) AND SUBSEQ UENTLY RECTIFIED ON 28.9.95 (COPY ENCLOSED ANNEXURE 2) AND 5. 12.97 ( COPY ENCLOSED) ANNEXURE 3). SUBSEQUENT TO THIS ORDER THE A.O ISSUE D NOTICE U/S. 154 DT. 20TH AUGUST 1999 (AFTER 4 YEARS OF COMPLETION OF THE ORI GINAL ASSESSMENT) TO RECTIFY THE ALLEGED MISTAKE ON ACCOUNT OF DEDUCTION ALLOWAB LE U/S. 8OHHC IN THE ORIGINAL ASSESSMENT ORDER U/S. 143(3). THE RECTIFIC ATION SOUGHT BY THE A.O IS FOR NOT SETTING OFF OF UNABSORBED BUSINESS LOSS OF KOTH ARI GENERAL FOODS CORPORATION (FOR BREVITY SAKE KGFC) AMOUNTING TO RS . 848.90 LAKHS WHILE COMPUTING THE BUSINESS PROFIT FOR THE PURPOSE OF DE DUCTION U/S. 80HHC. THIS PARTICULAR ISSUE IS ARISING OUT OF THE ALLEGED MIST AKE IN THE ORIGINAL ASSESSMENT ORDER U/S. 143(3) DT.29.3.1995 AND WAS NOT A SUBJEC T MATTER IN ANY OF THE SUBSEQUENT RECTIFICATION ORDERS. YOUR APPELLANT SUBMITS THAT THE NOTICE ISSUED U/S. 154 FOR RECTIFICATION OF ALLEGED MISTAKE IN THE ORIGINAL ASSESSMENT ORDER WE RE TIME BARRED AS 4 RECTIFICATION OF THE ORDER U./S. 143(3) PASSED ON 2 9TH MARCH, 1995 COULD NOT BE MADE AFTER EXPIRY OF 4 YEARS PERIOD I.E. AFTER 31 ST MARCH, 1999. THE LEARNED AO HAS NONETHELESS PROCEEDED TO PASS THE RECTIFICATION ORDER. IT IS RESPECTFULLY SUBMITTED THAT THE ORDER U/S 154 PASSED ON 20TH AUGUST 1999 RECTIFYING THE MISTAKE ALLEGED TO HAVE BEEN COMMITT ED IN THE ASSESSMENT ORDER DT. 29TH MARCH, 1995 IS BARRED BY LIMITATION BY VIR TUE OF PROVISION OF SECTION 154(7) WHICH LAYS DOWN THE 4 YEARS PERIOD AFTER THE EXPIRY OF WHICH NO RECTIFICATION CAN BE MADE BY THE AO. THEREFORE, THE PROCEEDINGS U/S. 154 WHICH HAVE CULMINATED IN THE SAID ORDER ARE VOID AB INI TIO AND OUGHT TO BE QUASHED. 5.1. IN ADDITION TO HIS SUBMISSIONS HE FURTHER ARGU ED THAT RELIANCE PLACED BY THE LD. CIT(A) IN THE CASE OF WALDIES LTD. VS CIT 223 ITR 1 63 (SC) AND INTERNATIONAL COTTON CORPORATION (P) LTD. VS. CTO (1975) 35 STC 1 (SC) I S NOT APPLICABLE TO THE PRESENT FACTS OF THE CASE. IN ORDER TO DEMONSTRATE THIS, HE FURTHER REFERRED TO THE DECISION OF THE APEX COURT IN THE CASE OF WALDIES LTD. VS CIT. HE F URTHER REFERRED TO THE DECISION OF THE HONBLE APEX COURT IN THE CASE OF HIND WIRE IND USTRIES LTD. VS CIT . THIRDLY HE REFERRED TO THE DECISION OF THE HONBLE APEX COURT IN THE CASE OF CIT, CHENNAI VS ALAGENDRAN FINANCE LTD. HE FURTHER RELIED ON THE DE CISION OF THE HONBLE MADRAS HIGH COURT IN THE CASE OF CIT VS SHRIRAM ENGINEERIN G CONSTRUCTION COMPANY LTD. AND THE DECISION OF THE HONBLE BOMBAY HIGH COURT I N THE CASE OF ASHOKA BUILDCON LTD. VS ACIT WHEREIN BOTH THE HIGH COURTS HAVE FOLL OWED THE HONBLE APEX COURTS DECISION IN THE CASE OF CIT,CHENNAI VS ALAGENDRAN FINANCE LTD. THOUGH ALL THESE CASES ARE RELATING TO THE LIMITATION PERIOD U/S 263 THE LIMITATION PERIOD AS PRESCRIBED U/S 154(7) AND 263 ARE SYNONYMOUS. THEREFORE, THE L AW LAID DOWN BY THE HONBLE APEX COURT AND OTHER VARIOUS HIGH COURTS ON THE LIM ITATION PROCEEDINGS ARE APPLICABLE TO THE PROCEEDINGS OF SECTION 154 ALSO. THEREFORE, HE CONTENDED THAT ORDER PASSED BY THE AO WHICH WAS CONFIRMED BY THE LD. CIT (A) IS BARRED BY LIMITATION. 6. ON THE OTHER HAND, THE LD. DR APPEARING ON BEHAL F OF THE REVENUE HEAVILY RELIED ON THE ORDERS OF THE REVENUE AUTHORITIES. 7. AFTER HEARING THE RIVAL SUBMISSIONS AND ON CAREF UL PERUSAL OF MATERIALS AVAILABLE ON RECORD, WE FIND THAT ORIGINAL ASSESSME NT ORDER WAS PASSED BY DCIT, SPL - RANG-2,KOLKATA U/S 143(3) OF THE ACT VIDE HIS ORDER DATED 29.03.1995, WHEREIN HE HAS CONSIDERED THE ISSUE OF DEDUCTION U/S 80HHC OF THE ACT AND ARRIVED AT FIGURE OF 5 BUSINESS PROFIT ON WHICH DEDUCTION U/S 80HHC IS TO BE ALLOWED IN VIEW OF UNABSORBED DEPRECIATION OF KGFC BY CONSIDERING PROVISIONS OF S ECTION 72 OF THE ACT AS UNDER :- IT BECOMES ABUNDANTLY CLEAR FROM THE ABOVE THAT TH E UNABSORBED DEPRECIATION OF M/S.KGFC SHALL BECOME THE DEPRECIATION OF THIS Y EAR FOR THE ASSESSEE COMPANY AND ONCE IT BECOMES SO IT HAS TO BE DEDUCTE D TO ARRIVE AT THE BUSINESS PROFIT IN ACCORDANCE WITH OTHER PROVISIONS OF THE A CT AS MENTIONED IN THE LAST LINE OF SECTION 72A QUOTED ABOVE. THE CONTENTION OF SIRI SETH THAT UNABSORBED DEPRECIATION IS ALLOWABLE U/S 72A IS THEREFORE NO C ORRECT. SECTION 72A CLEARLY SAYS THAT UNABSORBED DEPRECIATION SHALL BE TREATED AS DEPRECIATION FOR THE YEAR THEN IT SHALL BE ALLOWED IN ACCORDANCE WITH OTHER P ROVISIONS OF THE ACT. THIS MEANS THAT UNABSORBED DEPRECIATION IS TO BE ALLOWED AS CURRENT DEPRECIATION U/S 32(1) OF THE INCOME-TAX ACT. SINCE BUSINESS PROFIT FOR THE PURPOSE OF SECTION 80HHC IS TO BE CALCULATED IN ACCORDANCE WITH SECTIO N 28 TO 43 OF THE INCOME- TAX ACT EFFECT OF UNABSORBED DEPRECIATION U/S 32(1) HAS TO BE GIVEN TO FIND OUT PROFIT FROM BUSINESS FOR THE PURPOSE OF 80HHC. THER EFORE, PROFIT FORM BUSINESS OF RS.5588.46 TAKEN BY THE ASSESSEE FOR 80HHC IS RE DUCED BY 1897.18 LACS TO ARRIVE AT CORRECT BUSINESS PROFIT. AND IN HIS COMPUTATION OF INCOME TREATED UNABSORBED DEPRECIATION AT PAGE 20 OF HIS ASSESSMENT ORDER AS UNDER :- XI) UNABSORBED DEPRECIATION OF KGF U/S 32(1) : 185 3.22 7.1. WE FURTHER FIND THAT THIS ASSESSMENT ORDER WAS SOUGHT TO BE RECTIFIED BY AO U/S 154 OF THE ACT VIDE ORDER DATED 28.09.1995 WHEREBY UNABSORBED DEPRECIATION OF KGF WAS TREATED IN THE COMPUTATION AS UNDER :- LESS : UNABSORBED DEPRECIATION OF KGF CLAIM ALLOWANCE : 1893.90 LESS: ALREADY ALLOWED : 1853.22 RS. 40.68 RS.4437.61 LESS: BUSINESS LOSS FROM KGF LTD. RS. 848.91 RS.3588.70 7.2. FURTHER VIDE RECTIFICATION ORDER U/S 154 OF TH E ACT VIDE ORDER DATED 5.12.1997 AO DISALLOWED EXCESS ALLOWANCE OF UNABSORBED DEPREC IATION TO THE EXTENT OF 631.30 LAKHS AND THE SAME WAS THE SUBJECT MATTER OF APPEAL BEFORE CIT(A) WHICH WAS QUASHED BY CIT(A) IN APPEAL NO.21/CIT(A)-VI/98-99/S E-2 VIDE ORDER DATED 16.6.1999. IN VIEW OF THIS FACT WE ARE OF THE VIEW THAT IN ORIGINAL ASSESSMENT, UNABSORBED DEPRECIATION OF KGFC AGGREGATING TO RS.1 853.22 LACS WAS ALLOWED FOR COMPUTING BUSINESS INCOME IN TERMS OF SEC.72-A OF T HE ACT AS CURRENT DEPRECIATION U/S 6 32(1)OF THE ACT. THIS ALLOWANCE WAS SUBSEQUENTLY RE VISED IN ORDER U/S 154 OF THE ACT DATED 29.9.1995 AT RS.1893.90 LACS AND IN PARA-15 O F ASSESSMENT ORDER DATED 29.3.1995 WHILE DEALING WITH COMPUTATION OF CLAIM U /S 80-HHC OF THE ACT, AO GAVE FINDING THAT DEPRECIATION OF KGFC TO BE ALLOWED IN TERMS OF SEC.72-A OF THE ACT WAS CURRENT DEPRECIATION U/S 32(1) OF THE ACT AND ACCOR DINGLY, HE, DEDUCTED THE SAME IN ARRIVING AT BUSINESS PROFIT FOR THE YEAR. SIMILARLY , WHILE COMPLETING ORIGINAL ASSESSMENT, AO ALLOWED INVESTMENT ALLOWANCE OF KGFC U/S 32(1) OF THE ACT AGGREGATING TO RS.497.81 LACS WHILE COMPUTING BUSIN ESS INCOME UNDER CHAPTER IV-D OF THE ACT AS KGFC HAS AMALGAMATED WITH ASSESSEE IN TERMS OF BIFR ORDER DATED 10.01.1992. AS ARGUED BY LD. COUNSEL THAT WHILE COM PLETING ORIGINAL ASSESSMENT, THE AO TREATED INVESTMENT ALLOWANCE AND DEPRECIATION PE RTAINING TO KGFC U/S 32A(6) AND U/S 32(1) OF THE ACT , RECOMPUTING BUSINESS INC OME FOR THE PURPOSE OF CHAPTER- VIA OF THE ACT IN COMPUTING DEDUCTION U/S 80HHC OF THE ACT. WE FIND THAT IN ORIGINAL ASSESSMENT ORDER, DCIT CAL EXAMINED THE PROVISION O F 34-A OF THE ACT RESTRICTING DEDUCTION OF UNABSORBED DEPRECIATION ALLOWANCE IN T HE CASE OF DOMESTIC COMPANY. THIS WAS INTRODUCED FOR ASSESSMENT YEAR 1992-93 BY FINANCE ACT, 1992 ONLY. DCIT WAS SATISFIED THAT KGFC ALLOWANCE WILL NOT FALL UND ER SAID SECTION ON THE GROUND THAT THEY DID NOT REPRESENT UNABSORBED DEPRECIATION OR U NABSORBED INVESTMENT ALLOWANCE TO ANY PREVIOUS YEAR RELEVANT TO ASSESSMENT YEAR COMME NCING ON OR BEFORE 1.4.1991 I.E. ASSESSMENT YEAR 1991-92. THIS WAS ON THE REASONING THAT FICTION WAS CREATED U/S 72-A OF THE ACT, WHICH IS ONLY FOR LIMITED PURPOSE, AND FOR THIS, CLAIM SHOULD NOT BE MADE UNDER RELEVANT PROVISION OF THE ACT. THE RECTIFICAT ION ORDER TRIED TO CHANGE THE ALLOWANCE GIVEN IN THE ORIGINAL ORDER STATING THAT EXCESS HAS BEEN ALLOWED TO THE APPELLANT U/S 34-AOF THE ACT AND THAT EXCESS HE WAN TS TO WITHDRAW BY INVOKING PROVISIONS OF SEC.154 READ WITH SEC.34-A OF THE ACT . 7.3. NOW QUESTION ARISES IS, WHETHER MISTAKE AS POI NTED OUT IN THE RECTIFICATION ORDER U/S 154 OF THE ACT HAS ARISEN OUT OF THE ORDER PASS ED BY AO U/S 143(3) OF THE ACT DATED 29.03.1995 OR AS NOTED BY LD. CIT(A) OUT OF THE ORD ER PASSED BY AO U/S 154 OF THE ACT DATED 5.12.1997. ON CAREFUL PERUSAL OF THE ABOVE FA CTS OF THE CASE WE ARE OF THE VIEW THAT THE SUBJECT MATTER OF UNABSORBED BUSINESS LOSS OF KGF AMOUNTING TO RS.848.90 7 LAKHS, SETTING OFF BY AO ALLOWED, WHILE COMPUTING B USINESS PROFIT FOR THE PURPOSE OF DEDUCTION US 80HHC OF THE ACT, WAS IN ORDER PASSED U/S 143(3) OF THE ACT DT. 29.3.1995 AND AO WHILE PASSING THE RECTIFICATION O RDER ON 28.9.1995 OR IN ANY SUBSEQUENT RECTIFICATION ORDERS HAS RECTIFIED THE S AID MISTAKE BUT HE RESORTED TO RECTIFY THE MISTAKE APPARENT FROM RECORD FROM THE ORDER PAS SED BY AO U/S 143(3) DATED 29.3.1995 WHILE PASSING ORDER U/S 251/154/154/143(3 ) OF THE IT ACT, THEREFORE THE LIMITATION HAS TO BE SEEN FROM THE ORIGINAL ORDER D ATED 29.3.1995. 7.4. IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES, NOW WE HAVE TO SEE THE LEGAL POSITION AS ENUNCIATED BY HONBLE APEX COURT AND HO NBLE HIGH COURTS. FOR THIS, LD. COUNSEL DISTINGUISHED THE CASE LAW OF HONBLE APEX COURT RELIED ON BY CIT(A) IN THE CASE OF WALDIES LTD. VS CIT (1997) 223 ITR 163 (SC) , ACCORDING TO LD. COUNSEL AS FAR THE RATIO LAID DOWN IN THIS JUDGMENT WAS THAT FOR R ECTIFICATION, LIMITATION HAS TO BE RECKONED 'FROM THE DATE OF THE ORDER SOUGHT TO BE A MENDED'. THE RESULT IS THAT SUCH RECTIFICATION IS POSSIBLE WITH REFERENCE TO THE LAS T SUCH ORDER, WHERE THE MISTAKE HAD OCCURRED. BUT IN THE PRESENT CASE, LD. COUNSEL STA TED THAT THE MISTAKE ACTUALLY HAS OCCURRED IS THAT THE DEDUCTION U/S. 80HHC OF THE AC T WAS ALLOWED EVEN ON UNABSORBED LOSSES IN ORIGINAL ASSESSMENT ORDER FRAMED U/S. 143 (3) OF THE ACT DATED 20.03.1995 AND FACTS BEFORE HONBLE APEX COURT WERE THAT BEFORE TH E AO THE ORIGINAL ASSESSMENT ORDER WAS RECTIFIED ON 16.09.1968, WHICH WAS DATED 30.03.1965 AND THIS RECTIFIED ORDER GAVE RELIEF TO THE ASSESSEE BY DEDUCTING THE ADDITIONAL AMOUNT OF INCOME TAX LEVIED BY THE ORDER PASSED U/S. 147 OF THE ACT. TH IS RELIEF HAS TO BE TAKEN OUT WHEN THE ORDER U/S. 147 WAS SET ASIDE BY THE AAC AND TAX LIA BILITY OF THE ASSESSEE STOOD REDUCED. HONBLE APEX COURT STATED THAT THE ITO WA S TRYING TO DO IN EFFECT WAS TO NULLIFY THE ORDER OF RECTIFICATION WHICH WAS PASSED ON 16.09.1968. BUT AT THAT POINT OF TIME ORDER U/S. 147 OF THE ACT WAS SUBSISTING AND T HAT ORDER WAS SET ASIDE ON APPEAL. THEREFORE, ITO WAS JUSTIFIED IN INVOKING THE PROVIS IONS OF SECTION 13 OF THE ACT AND CORRECTING THE ERROR IN THE ORDER PASSED ON 16.09.1 968 AND IN THE SECOND ORDER, THE ITO WAS NOT TRYING TO RECTIFY THE ORIGINAL ORDER OF ASS ESSMENT PASSED ON 30.03.1965 BUT WAS SEEKING TO RESTORE IT BY RECTIFYING THE ERROR I N THE AMENDED ORDER PASSED ON 16.09.1968. HONBLE APEX COURT HELD THAT THE INCOME -TAX OFFICER COULD RECTIFY THE ASSESSMENT ORDER AND GIVE RELIEF TO THE ASSESSEE-CO MPANY WHEN THE ORDER UNDER 8 SECTION 147 OF THE INCOME-TAX ACT WAS PASSED THERE WAS NO REASON WHY HE COULD NOT RECTIFY THE ORDER OF ASSESSMENT ONCE AGAIN WHEN THA T ORDER UNDER SECTION 147 WAS SET ASIDE BY THE APPELLATE ASSISTANT COMMISSIONER. NO O RDER OF ASSESSMENT COULD BE PASSED UNDER THE COMPANIES (PROFITS) SURTAX ACT, 19 64, EXCEPT ON THE BASIS OF THE ASSESSMENT ORDER PASSED UNDER THE INCOME-TAX ACT. A NY CHANGE OR VARIATION OF THE INCOME-TAX LIABILITY HAD TO BE GIVEN EFFECT IN THE SURTAX ASSESSMENT. THE INCOME-TAX ASSESSMENT ORDER WHICH WAS THE VERY BASIS OF THE SU RTAX ASSESSMENT WAS A PART OF THE RECORD OF THE SURTAX ASSESSMENT PROCEEDINGS. THEREF ORE, HONBLE APEX COURT HELD THAT INCOME-TAX OFFICER WAS JUSTIFIED IN INVOKING THE PR OVISIONS OF SECTION 13 OF THE COMPANIES (PROFITS) SURTAX ACT AND CORRECTING THE E RROR IN THE ORDER PASSED ON SEPTEMBER 16, 1968 AND INCOME-TAX OFFICER BY SECOND ORDER OF RECTIFICATION WAS NOT SEEKING TO RECTIFY THE ORIGINAL ORDER OF ASSESSMENT PASSED ON MARCH 30, 1965, BUT TO RESTORE IT BY RECTIFYING THE ERROR IN THE AMENDED O RDER PASSED ON SEPTEMBER 16, 1968. THE SECOND RECTIFICATION WAS, THEREFORE, NOT BARRED BY LIMITATION. THE EXACT OBSERVATIONS OF HONBLE APEX COURT ARE REPRODUCED A S IT IS, AS UNDER: 6. THE NEXT POINT RELATES TO LIMITATION. THE JURI SDICTION OF ITO TO AMEND ANY ORDER PASSED BY HIM IS LIMITED TO FOUR YEARS FORM THE DA TE ON WHICH SUCH ORDER WAS PASSED. IN THE INSTANT CASE, THE ORIGINAL ORDER OF ASSESSMENT WAS RECTIFIED ON 16.9.1968. THIS RECTIFIED ORDER GAVE RELIEF TO THE ASSESSEE BY DEDUCTING THE ADDITIONAL AMOUNT OF INCOME-TAX LEVIED BY THE ORDER PASSED UND ER SECTION 147. THIS RELIEF HAS TO BE TAKEN OUT WHEN THE ORDER UNDER SECTION 147 WAS S ET ASIDE BY THE AAC AND THE INCOME-TAX LIABILITY OF THE ASSESSEE STOOD REDUCED. WHAT THE ITO WAS TRYING TO DO IN EFFECT WAS TO NULLIFY THE ORDER OF RECTIFICATION WH ICH WAS PASSED ON 16.9.1968. THE ASSESSEE IS RIGHT IN HIS CONTENTION THAT THIS ORDER WAS A GOOD ORDER WHEN IT WAS PASSED. BUT THAT WAS THE TIME WHEN THE ORDER UNDER SECTION 147 WAS SUBSISTING AND THE ASSESSEES INCOME-TAX LIABILITY WAS LARGER. BUT HAT ORDER UNDER SECTION 147 WAS SET ASIDE ON APPEAL. THE ASSESSEES INCOME-TAX LIAB ILITY BECAME SMALLER AND CONSEQUENTLY, THE CHARGEABLE PROFITS COULD NOT BE T REATED AS VALIDLY COMPUTED WHEN DEDUCTION HAD BEEN MADE FOR INCOME-TAX WHICH WAS NO T ACTUALLY PAYABLE. THEREFORE, THE ITO WAS JUSTIFIED IN INVOKING THE PROVISIONS OF SECTION 13 AND CORRECTING THE ERROR IN THE ORDER PASSED ON 16.9.1968. THE ITO BY THE SE COND ORDER OF RECTIFICATION WAS NOT TRYING TO RECTIFY THE ORIGINAL ORDER OF ASSESSM ENT PASSED ON 30.3.1965 BUT WAS SEEKING TO RESTORE IT BY RECTIFYING THE ERROR IN TH E AMENDED ORDER PASSED ON 16.9.1968. 7.4. THE LD. COUNSEL ALSO DISTINGUISHED THE CASE LA W OF HONBLE APEX COURT IN THE CASE OF HIND WIRE INDUSTRIES LTD. VS CIT [1995] 212 ITR 639 (SC), WHEREIN IT IS HELD THAT THE TIME LIMIT FOR RECTIFICATION HAS TO BE REC KONED FROM THE DATE OF THE ORDER SOUGHT TO BE AMENDED BUT IN CASE THERE IS MISTAKE I N THE ORDER THAT ONLY CAN BE 9 RECTIFIED AND LIMITATION IS TO BE RECKONED FROM THA T ORDER ONLY FROM WHICH MISTAKE IS ORIGINALLY COMMITTED. HE REFERRED TO THE LATEST DE CISION OF HONBLE APEX COURT IN THE CASE OF CIT VS. ALAGENDRAN FINANCE LTD. (2007) 293 ITR 1 (SC), WHEREIN CONSIDERING THE PROVISIONS OF SECTION 263 EXPLANATION (C),(2), HONBLE APEX COURT HAS CONSIDERED THE PERIOD OF LIMITATION COMMENCES FROM THE DATE OF ORIGINAL ASSESSMENT AND NOT FROM THE REASSESSMENT, SINCE LATER HAD NOT HAD ANYTHING TO DO WITH THE ISSUES UNDER REASSESSMENT. THE HONBLE APEX COURT HELD THAT A B ARE PERUSAL OF THE ORDER PASSED BY COMMISSIONER OF INCOME-TAX WOULD CLEARLY DEMONSTRAT E THAT ONLY THAT PART OF THE ORDER OF ASSESSMENT WHICH RELATED TO LEASE EQUALISA TION FUND WAS FOUND TO BE PREJUDICIAL TO THE INTERESTS OF THE REVENUE. THE P ROCEEDINGS FOR REASSESSMENT HAVE NOTHING TO DO WITH THE SAID HEAD OF INCOME AND THE DOCTRINE OF MERGER, THEREFORE, WOULD NOT APPLY IN A CASE OF THIS NATURE. BEFORE H ONBLE APEX COURT ASSESSMENTS FOR THE ASSESSMENT YEARS 1994-95, 1995-96 AND 1996-97, WHICH WERE COMPLETED IN 1997- 98 WERE THERE AND IN THE ORDERS OF ASSESSMENT ASSES SEES CLAIM RELATING TO LEASE EQUALISATION FUND WAS ACCEPTED AND THEREAFTER REASS ESSMENTS WERE FRAMED WITH RESPECT TO THREE OTHER ITEMS BUT NOT THE ITEMS RELATING TO LEASE EQUALISATION FUND. HONBLE APEX COURT HELD THAT THE PROCEEDINGS FOR REASSESSME NTS HAVE NOTHING TO DO WITH THE ISSUE OF LEASE EQUALISATION FUND. HONBLE CALCUTTA HIGH COURT IN THE CASE OF CIT VS. KANUBHAI ENGINEERS (P) LTD. (2000) 241 ITR 665 (CAL ) HAS DEALT WITH THE SIMILAR ISSUE AND SAME PRINCIPLE WAS REITERATED BY HOLDING THAT I N PROCEEDINGS UNDER SECTION 147 OF THE ACT, THE INCOME-TAX OFFICER MAY BRING TO CHARGE ITEMS OF INCOME WHICH HAD ESCAPED ASSESSMENT OTHER THAN OR IN ADDITION TO THA T ITEM OR ITEMS WHICH HAVE LED TO THE ISSUANCE OF THE NOTICE UNDER SECTION 148OF THE ACT. WHERE REASSESSMENT IS MADE UNDER SECTION 147 OF THE ACT IN RESPECT OF INCOME W HICH HAS ESCAPED ASSESSMENT, THE INCOME-TAX OFFICER'S JURISDICTION IS CONFINED TO ON LY SUCH INCOME WHICH HAS ESCAPED ASSESSMENT OR HAS BEEN UNDER ASSESSED AND DOES NOT EXTEND TO REVISING, RE-OPENING OR RECONSIDERING THE WHOLE ASSESSMENT OR PERMITTING TH E ASSESSEE TO RE-AGITATE QUESTIONS WHICH HAD BEEN DECIDED IN THE ORIGINAL ASSESSMENT P ROCEEDINGS. IT IS ONLY THE UNDERASSESSMENT WHICH IS SET ASIDE AND NOT THE ENTI RE ASSESSMENT WHEN REASSESSMENT PROCEEDINGS ARE INITIATED. WHEN THE ASSESSMENT IS R EOPENED, THE ORIGINAL ASSESSMENT UNDER SECTION 143(3) OF THE ACT REMAINS AND IT COUL D NOT BE SAID THAT THE ORIGINAL 10 ASSESSMENT IS NON-EST ON ACCOUNT OF THE REOPENING O F THE ASSESSMENT. WHEN THE ORIGINAL ASSESSMENT REMAINS THE COMMISSIONER OF INC OME-TAX HAD EVERY RIGHT TO REVISE THE ORDER IF IT WAS ERRONEOUS AND PREJUDICIAL TO TH E INTERESTS OF THE REVENUE. BUT THE ORIGINAL ASSESSMENT WAS MADE ON NOVEMBER 18, 1985, AND THE REASSESSMENT UNDER SECTION 147 OF THE ACT WAS MADE ON JANUARY 8, 1987 AND THE COMMISSIONER OF INCOME-TAX REVISED THE ORIGINAL ASSESSMENT ORDER UN DER SECTION 263 ON MARCH 8, 1988, DIRECTING THE INCOME-TAX OFFICER TO CHARGE INTEREST UNDER SECTION 215 OF THE ACT. THE ASSESSEE CONTENDED THAT AS THE ORIGINAL ASSESSMENT ORDER HAD MERGED WITH THE REASSESSMENT ORDER, THE COMMISSIONER OF INCOME-TAX COULD NOT REVISE THE ORIGINAL ASSESSMENT ORDER UNDER SECTION 263OF THE ACT. HONB LE HIGH COURT HELD THAT THE COMMISSIONER OF INCOME-TAX COULD REVISE THE ORIGINA L ASSESSMENT ORDER UNDER SECTION 263OF THE ACT. 7.5. EVEN ORDER U/S. 143(1)(A) IS AMENABLE TO REVIS ION U/S. 263 OF THE ACT AND THIS VIEW HAS BEEN HELD BY HONBLE MADRAS HIGH COURT IN THE CASE OF CIT VS SMT. R. G. UMARANEE (2003) 262 ITR 507 (MAD), WHEREIN IT IS HE LD THAT THE ORDER OF TRIBUNAL HOLDING THAT THE COMMISSIONER HAS NO JURISDICTION T O REVISE U/S. 263 AN ORDER U/S. 143(1)(A)OF THE ACT, IS NOT CORRECT AND IS LEGALLY NOT SUSTAINABLE. SIMILAR VIEW IS HELD BY HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. ANDERSON MARINE & SONS PVT. LTD. (2004) 266 ITR 694 (BOM). IN VIEW OF THE ABOV E FACTUAL MATRIX OF THE CASE AND LEGAL POSITION AS NOTED ABOVE, WE ARE OF THE VIEW T HAT WHERE AN ASSESSMENT HAS BEEN MADE AND THE SAME HAD BECOME THE SUBJECT MATTER OF THE REASSESSMENT, THE QUESTION THAT AROSE WAS WHETHER REVISION IS POSSIBLE IN RESP ECT OF A MATTER IN THE ORIGINAL ASSESSMENT, BUT NOT IN THE REASSESSMENT WITH THE TI ME LIMIT RECKONED WITH REFERENCE TO THE REASSESSMENT ORDER. IN RESPECT OF A SIMILAR MATTER OF RECTIFICATION, THE SUPREME COURT IN HIND WIRE INDUSTRIES LTD. V. CIT (1995) 21 2 ITR 639 HELD THAT THE ORIGINAL MISTAKE CONTINUES IN ALL ORDERS, THOUGH NOT A SPECI FIC SUBJECT MATTER IN THE LAST ORDER, SO THAT THE DATE OF THE LAST ORDER CAN BE TAKEN FOR PURPOSES OF THE TIME LIMIT, FOLLOWING A SALES TAX DECISION IN INTERNATIONAL COTTON CORPOR ATION (P) LTD. V. CTO [1975] 35 STC I (SC). THE DOCTRINE OF MERGER WAS ALSO SOUGHT TO BE RELIED UPON EVEN FOR REVISIONAL POWERS AS WAS SANCTIFIED FOR RECTIFICATI ON POWERS AND IT IS IN THIS CONTEXT 11 THAT THE STATUS OF THE REASSESSMENT VIS-A-VIS THE O RIGINAL ASSESSMENT BECAME THE SUBJECT MATTER OF ADJUDICATION IN ALAGENDRAN FINANCE LTD. ( SUPRA) THE ISSUE WHETHER REASSESSMENT REPLACES THE ORIGINAL ASSESSMENT IN IT S ENTIRETY OR IT IS ONLY A SUPPLEMENTARY ASSESSMENT WITH THE ORIGINAL ASSESSME NT REMAINING INTACT CAME TO BE INCIDENTALLY CONSIDERED AS A MATTER RELEVANT FOR RE SOLVING THE ISSUE. THIS ISSUE WAS INCONCLUSIVE, SINCE THERE WAS SOME CONFLICT AS BETW EEN THE DECISIONS OF THE SUPREME COURT. IN V. JAGANMOHAN RAO V. CIT AND CEPT [1970] 75 ITR 373, THE SUPREME COURT TOOK THE VIEW THAT THE ENTIRE ASSESSMENT WAS WITHIN THE PURVIEW OF THE ASSESSING OFFICER DURING REASSESSMENT. IN A LATER D ECISION IN CIT V. SUN ENGINEERING WORKS P. LTD. [1992] 198 ITR 297 (SC), IT WAS DECID ED THAT THE ASSESSING OFFICERS JURISDICTION WAS CONFINED TO THE INCOME THAT HAS ES CAPED ASSESSMENT AND THAT IT CANNOT JUSTIFY REVISION, REOPENING OR RECONSIDERATION OF T HE ENTIRE ASSESSMENT. RECONCILIATION WAS SOUGHT BETWEEN THESE TWO VIEWS BEFORE A BENCH O F THREE JUDGES OF THE SUPREME COURT IN ITO V. K. L. SRIHARI (HUF) [2001] 250 ITR 193 ON A REFERENCE BY THE BENCH, WHICH INITIALLY HEARD THE CASE. BUT IN THE CASE BEF ORE HOBLE SUPREME COURT IN THE FACTS OF THE CASE AFTER PERUSAL OF BOTH THE ASSESSM ENT AND REASSESSMENT ORDERS WAS SATISFIED AND FOUND THAT THE HIGH COURT WAS RIGHT O N THE DISPUTE INVOLVED IN THE CASE BEFORE IT IN THAT THE EARLIER ASSESSMENT ORDER HAD BEEN EFFACED BY THE SUBSEQUENT ORDER AND CLOSED THE CASE WITH THE OBSERVATION IN THESE CIRCUMSTANCES, WE DO NOT CONSIDER IT NECESSARY TO GO INTO THE QUESTION THAT IS RAISED AN D THE SAME IS LEFT OPEN. THE DECISION OF THE SUPREME COURT IN THE CASE OF ALAGENDRAN FINA NCE LTD. (SUPRA) HAS NOT NOTICED THE DECISION IN K. L. SRIHARIS CASE (SUPRA), WHICH , AT ANY RATE, CAN BE CONSIDERED ONLY AS ONE RENDERED IN THE FACTS OF THE CASE AS IT ACTU ALLY LEFT THE ISSUE OPEN. THERE ARE A NUMBER OF OTHER DECISIONS OF THE HIGH COURTS TAKING ONE OR THE OTHER VIEW, THE SUPREME COURT CHOOSING THE DECISION OF THE MADRAS H IGH COURT IN CWT VS. A. K. THANGA PILLAI [2001] 252 ITR 260 FOR ITS APPROVAL I N SORTING OUT THE CONTROVERSY. 7.6. THE VIEW OF THE HONBLE MADRAS HIGH COURT, IT WAS OBSERVED, WAS IN CONSENSUS WITH THE DECISION OF THE SUPREME COURT IN SUN ENGINEERING WORKS P. LTD.S CASE (SUPRA) TREATING THE REASSESSMENT AS A SUPPLEM ENTARY ASSESSMENT. IT FOLLOWS THAT THE TIME LIMIT FOR REVISION HAS TO BE RECKONED WITH REFERENCE TO THE FIRST ASSESSMENT IN 12 RESPECT OF ANY DECISIONS PREJUDICIAL TO THE REVENUE , SO THAT THE EXTENDED TIME LIMIT WAS NOT AVAILABLE FOR REVISION UNDER SECTION 263 AS DECIDED IN ALAGENDRAN FINANCE LTD. S CASE (SUPRA). THOUGH THE DECISION OF THE SU PREME COURT IN THIS CASE WAS RENDERED BY THE BENCH OF TWO JUDGES, IT DID REFER F OR ITS CONCLUSION TO ITS OWN DECISION IN CIT V. SHRI ARBUDA MILLS LTD. [1998] 231 ITR 50 (SC) AND POINTED OUT TO THE RETROSPECTIVE AMENDMENT MADE TO SECTION 264 WITH EF FECT FROM JUNE 1, 1998, INSERTING AN EXPLANATION BY EXTENDING THE JURISDICTION TO ALL MATTERS, WHICH HAVE NOT BEEN CONSIDERED EVEN IN AN ASSESSMENT SUBJECT TO APPEAL PLACING A RESTRAINT ON THE THEORY OF MERGER. SUCH A PROVISION FOUND IN SECTION 264 IS NO T AVAILABLE UNDER SECTION 263. EVEN FOR THIS REASON, IT WAS FOUND THAT THE MERGER THEOR Y COULD HAVE NO APPLICATION FOR REVISIONAL POWERS UNDER SECTION 263. THE RULING IN SUN ENGINEERING WORKS P. LTD.S CASE (SUPRA) WAS, THEREFORE, PREFERRED. ACCORDINGLY , THE LAW AS TO THE POWERS OF REASSESSMENT APART FROM POWERS OF REVISION IS NOW T O BE TREATED AS SETTLED IN ALAGENDRAN FINANCE LTD.S CASE (SUPRA), THOUGH IT IS CONFINED TO REVISIONAL POWERS UNDER SECTION 263. SIMILARLY, LD. COUNSEL ALSO RE LIED ON THE CASE LAW OF HONBLE MADRAS HIGH COURT IN THE CASE OF CIT VS SHRIRAM ENG INEERING CONSTRUCTION COMPANY LIMITED 330 ITR 568 (MAD) HAS HELD AS UNDER :- 10. IN THE DECISION RELIED ON BY THE LEARNED SEN IOR COUNSEL IN THE CASE OF HIND WIRE INDUSTRIES LTD. VS. CIT (SUPRA), THE SUPR EME COURT WHERE EXPLAINING THE WORD ORDER EXPLAINED IN THE PROVISION S. 154( 7) HELD THAT SINCE THE WORD ORDER IN THE EXPRESSION FROM THE DATE OF THE ORD ER SOUGHT TO BE AMENDED IN S. 154(7) WAS NOT QUALIFIED IN ANY WAY, IT WOULD NO T NECESSARILY MEAN THE ORIGINAL ORDER. IT COULD BE AN ORDER INCLUDING THE AMENDED OR RECTIFIED ORDER. IN THE PROVISION UNDER CONSIDERATION ALSO, 263(1) R EFERS TO ANY ORDER. THE WORD ANY ORDER WOULD ONLY MEAN ANY ORDER UNDER TH IS ACT, AND IF HE CONSIDERS THAT ANY ORDER PASSED THEREIN BY THE AO I S ERRONEOUS INSOFAR AS IT IS PREJUDICIAL TO THE INTEREST OF THE REVENUE, THE SEC TION DEFINITELY GIVES POWER TO THE CIT. THE DECIDING FACTOR IN THE PRESENT CASE I S THAT THE COMPLAINT OF THE CIT REFERS TO THE ORDER PASSED UNDER S.143(3) AND NOT THE AMENDED ORDER UNDER S.154. HENCE THE DECISION OF THE SUPREME COUR T IN 212 IS NO WAY APPLICABLE TO THE FACTS OF THE CASE. FOR THE FOREGOING REASONS AND IN THE LIGHT OF THE S UPREME COURT JUDGEMENT IN THE CASE OF CIT VS. ALAGENDRAN FINANCE LTD. (SUPRA) REFERRED TO ABOVE, WE ARE OF THE VIEW THAT THERE IS NO QUESTION OF LAW MUCH L ESS SUBSTANTIAL QUESTION OF LAW FOR DETERMINATION IN THIS CASE AND HENCE THE AP PEAL IS DISMISSED AS SUCH. NO COSTS. 13 7.7. AND ALSO ON HONBLE BOMBAY HIGH COURT IN THE C ASE OF ASHOKA BUILDCON LTD. VS ACIT (2010) 325 ITR 574; 191 TAXMAN 29 HAS HELD AS UNDER :- 10. THE SUBMISSION WHICH HAS BEEN URGED ON BEHALF O F THE REVENUE IS THAT WHEN SEVERAL ISSUES ARE DEALT WITH IN THE ORIGINAL ORDER OF ASSESSMENT AND ONLY ONE OR MORE OF THEM ARE DEALT WITH IN THE ORDER OF REAS SESSMENT PASSED AFTER THE ASSESSMENT HAS BEEN REOPENED, THE REMAINING ISSUES MUST BE DEEMED TO HAVE BEEN DEALT WITH IN THE ORDER OF REASSESSMENT. HENCE , IT HAS BEEN URGED THAT THE OMISSION OF THE AD, WHILE MAKING AN ORDER OF REASSE SSMENT TO DEAL WITH THOSE ISSUES UNDER S. 143(3) R/W S. 147 CONSTITUTES AN ER ROR WHICH CAN BE REVISED IN EXERCISE OF THE JURISDICTION UNDER S. 263. THE SUBM ISSION CANNOT BE ACCEPTED EITHER AS A MATTER OF FIRST PRINCIPLE, BASED ON A P LAIN READING OF THE PROVISIONS OF SS. 147 AND 263, NOR IS IT SUSTAINABLE IN VIEW O F THE LAW LAID DOWN BY THE SUPREME COURT. THE SUPREME COURT HAS NOW CLEARLY HE LD IN THE DECISION IN ALAGENDRAN FINANCE LTD. (SUPRA) THAT THE DOCTRINE O F MERGER DOES NOT APPLY WHERE THE SUBJECT-MATTER OF REASSESSMENT AND OF THE ORIGINAL ORDER OF ASSESSMENT IS NOT ONE AND THE SAME. IN OTHER WORDS, WHERE THE ASSESSMENT IS SOUGHT TO BE REOPENED ONLY ONE OR MORE SPECIFIC GRO UNDS AND THE REASSESSMENT IS CONFINED TO ONE OR MORE OF THOSE GROUNDS, THE OR IGINAL ORDER OF ASSESSMENT WOULD CONTINUE TO HOLD THE FIELD, SAVE AND EXCEPT F OR THOSE GROUNDS ON WHICH A REASSESSMENT HAS BEEN MADE UNDER S. 143(3) R/W S. 1 47. CONSEQUENTLY, AN APPEAL BY THE ASSESSEE ON THOSE GROUNDS ON WHICH TH E ORIGINAL ORDER OF ASSESSMENT WAS PASSED AND WHICH DO NOT FORM THE SUB JECT OF REASSESSMENT WOULD CONTINUE TO SUBSIST AND WOULD NOT ABATE. THE ORDER OF ASSESSMENT CANNOT BE REGARDED AS BEING SUBSUMED WITHIN THE ORDER OF R EASSESSMENT IN RESPECT OF THOSE ITEMS WHICH DO NOT FORM PART OF THE ORDER OF REASSESSMENT. WHERE A REASSESSMENT HAS BEEN MADE PURSUANT TO A NOTICE UND ER S. 148, THE ORDER OF REASSESSMENT PREVAILS IN RESPECT OF THOSE ITEMS WHI CH FORM PART OF REASSESSMENT. ON ITEMS WHICH DO NOT FORM PART OF TH E REASSESSMENT, THE ORIGINAL ASSESSMENT CONTINUES TO HOLD THE FIELD. WH EN THE AD REOPENS AN ASSESSMENT ON A PARTICULAR ISSUE, IT IS OPEN TO HIM TO MAKE A REASSESSMENT ON THAT ISSUE AS WELL AS IN RESPECT OF OTHER ISSUES WH ICH SUBSEQUENTLY COME TO HIS NOTICE DURING THE COURSE OF THE PROCEEDINGS UNDER S . 147. THE SUBMISSION OF THE REVENUE IS THAT BY NOT PASSING AN ORDER OF REASSESS MENT IN RESPECT OF OTHER INDEPENDENT ISSUES, THE ORDER OF THE AO CAN BE CONS TRUED TO BE ERRONEOUS AND TO BE PREJUDICIAL TO THE INTEREST OF THE REVENUE WI THIN THE MEANING OF S. 263. THE SUBMISSION CANNOT BE ACCEPTED IN THE FACTS OF T HE PRESENT CASE. THE SUBSTANTIVE PART OF S. 147 AS WELL AS EXPLN. 3 ENAB LES THE AD TO ASSESS OR REASSESS INCOME CHARGEABLE TO TAX WHICH HE HAS REAS ON TO BELIEVE HAD ESCAPED ASSESSMENT AND OTHER INCOME WHICH HAS ESCAPED ASSES SMENT AND WHICH COMES TO HIS NOTICE SUBSEQUENTLY IN THE COURSE OF THE PRO CEEDINGS UNDER THE SECTION. THERE IS NOTHING ON THE RECORD OF THE PRESENT CASE TO INDICATE THAT THERE WAS ANY OTHER INCOME WHICH HAD COME TO THE NOTICE OF TH E AD AS HAVING ESCAPED ASSESSMENT IN THE COURSE OF THE PROCEEDINGS UNDER S . 147 AND WHEN HE PASSED THE ORDER OF REASSESSMENT. THE CIT, WHEN HE EXERCIS ED HIS JURISDICTION UNDER S. 14 263, IN THE FACTS OF THE PRESENT CASE, WAS UNDER A BAR OF LIMITATION SINCE LIMITATION WOULD BEGIN TO RUN FROM THE DATE ON WHIC H THE ORIGINAL ORDER OF ASSESSMENT WAS PASSED. WE MUST HOWEVER CLARIFY THAT THE BAR OF LIMITATION IN THIS CASE ARISES BECAUSE THE REVISIONAL JURISDICTIO N UNDER S. 263 IS SOUGHT TO BE EXERCISED IN RESPECT OF ISSUES WHICH DID NOT FORM T HE SUBJECT-MATTER OF THE REASSESSMENT PROCEEDINGS UNDER S. 143(3) R/W S. 147 . IN RESPECT OF THOSE ISSUES, LIMITATION WOULD COMMENCE WITH REFERENCE TO THE ORI GINAL ORDER OF ASSESSMENT. IF THE EXERCISE OF THE REVISIONAL JURISDICTION UNDE R S. 263 WAS TO BE IN RESPECT OF ISSUES WHICH FORMED THE SUBJECT-MATTER OF THE REASS ESSMENT, AFTER THE ORIGINAL ASSESSMENT WAS REOPENED, THE COMMENCEMENT OF LIMITA TION WOULD BE WITH REFERENCE TO THE ORDER OF REASSESSMENT. THE PRESENT CASE DOES NOT FALL IN THAT CATEGORY. 7.8. KEEPING IN VIEW OF THE ABOVE DECISIONS, WE ARE OF THE VIEW THAT THE MISTAKE, IF ANY, IS OCCURRING IN THE ORIGINAL ASSESSMENT ORDER PASSED U/S. 143(3) OF THE ACT DATED 29.03.1995 AND THOUGH AO HAS PASSED SUBSEQUENT RECT IFICATION ORDERS HE HAS NOT MADE ANY CORRECTIONS ON THE SAID ISSUE BUT HE RESORTED T O RECTIFY THE MISTAKE WHILE PASSING THE SUBSEQUENT ORDER PASSED U/S 251/154/154/143(3) OF THE IT ACT. UNDER THESE CIRCUMSTANCES WE ARE OF THE VIEW THAT AO IS DUTY BO UND TO MAKE THE RECTIFICATION ORDER WITHIN FOUR YEARS FROM THE END OF THE FINANCI AL YEAR I.E. 1994-95. SINCE AO HAS PASSED RECTIFICATION ORDER U/S 154 ON 10.03.2000 I S BARRED BY LIMITATION AS IT IS BEYOND FOUR YEARS FROM THE ORIGINAL ASSESSMENT ORDER DATED 29.03.1995. THEREFORE, WE QUASH THE ORDERS OF LOWER AUTHORITIES, KEEPING IN VIEW OF THE PROVISIONS OF SECTION 154 (7) BY TREATING THE SAME AS BARRED BY LIMITATION. 8. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN THE OPEN COURT ON 24.06.2011. SD/- SD/- MAHAVIR SINGH, JUDICIAL MEMBER . .. .!' !'!' !'. .. . , ,, , #$ #$ #$ #$ , C.D.RAO, ACCOUNTANT MEMBER. ( (( ('$ '$ '$ '$) )) ) DATE: 24.06.2011 R.G.(.P.S.) 15 #2 0 .3 4#3(5- COPY OF THE ORDER FORWARDED TO: 1. M/S. BROOKE BOND LIPTON (I) LTD.,(NOW MERGED WITH H INDUSTAN UNILEVER LTD.) HINDUSTAN UNILEVER LTD., 165/166, BACKBAY REC LAMATION, MUMBAI- 400020. 2 THE D.C.I.T., SPECIAL RANGE.2, KOLKATA 3. THE CIT, 4. THE CIT(A)- XII, KOLKATA. 5. DR, KOLKATA BENCHES, KOLKATA /3 ./ TRUE COPY, #2&:/ BY ORDER, DEPUTY /ASST. REGISTRAR , ITAT, KOLKATA BENCHES