Agroh Infrastructure Developers P Ltd, Mhow V. Pr CIT Central Circle Bhopal, Bhopal

ITA 95/Ind/2021

AI Insights

The case involves M/s Agroh Infrastructure Developers Pvt. Ltd., the appellant, contesting a revision order under section 263 of the Income Tax Act, 1961, concerning the assessment year 2008-09. The Pr. CIT (Central), Bhopal, had passed a revision order on 24.02.2021, which the appellant challenged on grounds of being barred by limitation and not addressing their objections to the show cause notice. The Tribunal examined whether the revision order was within the permissible time frame and whether the issues raised were previously addressed in earlier assessments or revisions. The Tribunal found that the revision order was indeed beyond the statutory period and involved issues not covered in earlier assessments, leading to the conclusion that the order was invalid.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 130502 (ITAT-INDORE)
• Duration Of Justice: 1 year(s) 11 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-04-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 09-04-2023
• Assessment Year: 2008-2009
• Appeal Filed On: 25-04-2021
• Other Referred Cases: CIT vs. M/s. Alagendran Finance Ltd., Indira Industries vs. Pr. CIT, BRAHM DATT vs. ACIT, CIT vs. Sat Pal Aggarwal, Commissioner of Income-Tax vs. Sun Engineering Works P. Ltd., V. Jaganmohan Rao v. CIT and CEPT, Hind Wire Industries Ltd vs. CIT, MAK Data P. Ltd. Vs. Commissioner of Income Tax, Malabar Industrial Co. Ltd. Vs. Commissioner of Income Tax
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: REVENUE PRESSED INTO
• Assessee Lawyers: MANISH MITTAL
• Keywords: Revision of order; Depreciation; Period of limitation; Bad and doubtful debts; Difference of opinion; Time period of passing order; Change of opinion; Reassessment proceedings; Set aside
• Section: 147; 148; 263; 139; 143(3); 143(1); 139(1); 13

Judgement Text

Page 1 of 16 आयकर अपील य अ धकरण, इंदौर यायपीठ, इंदौर IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI VIJAY PAL RAO, JUDICIAL MEMBER AND SHRI B.M. BIYANI, ACCOUNTANT MEMBER ITA No. 95/Ind/2021 (Assessment Year:2008-09) M/s Agroh Infrastructure Developers Pvt. Ltd. Aqua Point, A.B.Road, Umaria, Mhow, Indore Vs. Pr. CIT (Central) Bhopal (Appellant / Assessee) (Respondent/ Revenue) PAN: AAECA 2752 L Assessee by Shri Manish Mittal, AR Revenue by Shri Ashish Porwal, Sr. DR Date of Hearing 10.04.2023 Date of Pronouncement 11.04.2023 O R D E R Per Vijay Pal Rao, JM: This appeal by the assessee is directed against the revision order dated 24.02.2021 of Ld. Pr. Commissioner of Income Tax, Central, (in short Ld. Pr. CIT), Bhopal passed u/s 263 of the Income Tax Act, 1961, for Assessment Year 2008-09. The assessee has raised following grounds of appeal: “1. The ld. Pr. CIT has erred in passing the order u/s 263 without disposing the objection to show cause notice, filed through written submission on 13.02.2021 and request for adjournment of personal hearing filed on 22.02.2021. 2. Based on facts and circumstances the ld. Pr. CIT has erred in passing the order u/s 263 for a.Y.2008-09 on 22.02.2021 after more than 2 years from date of original order u/s 147 r.w. 143(3) dt. 03.03.2016. ITA No.95/Ind/2021 Agroh Infrstructure Developers P. Ltd. Page 2 of 16 Page 2 of 16 3. Based on facts and circumstances the Ld. PCIT has erred in passing the order u/s 263 for AY 2008-09 for revision of an order dt. 31.07.2017 which itself was an order passed u/s 143(3) r.w.s. 263. The appellant craves leave to amend, alter add to the grounds of appeal and or raise any other ground of appeal.” 2. In ground no.2, the assesse has challenged the validity of the impugned order passed u/s 263 of the Act being barred by limitation as the same has been passed after more than two years from the date of original order passed u/s 147 r.w.s. 143(3) dated 03.03.2016. Ld. AR of the assessee has submitted that the assesse company filed its return of income for year under consideration on 13.10.2008 declaring total income at Rs. 4,13,050/-. The assessment was initially processed u/s 143(1) and thereafter, it was reopened by issuing notice u/s 148 of the Income Tax Act and reassessment order was passed on 03.03.2016. Thereafter, Pr. CIT invoked the provisions of section 263 against the reassessment order dated 03.03.2016, on the issue of loan transactions found recorded in the seized material but were not considered and added by the Ld. AO while passing the reassessment order. The Ld. Pr. CIT then pass a revision order u/s 263 on 15.03.2017 by holding that the order passed by the Ld. AO u/s 147 r.w.s.143(3) dated 03.03.2016 is erroneous and prejudicial to the interest of revenue and accordingly, the same was set aside with the direction to the Ld. AO to reframe the assessment after examining the above said issues and after giving sufficient opportunity to the assessee. Ld. AO passed the order in pursuant to the revision order on 31 st July 2017 u/s 143(3) r.w.s. 263 of the Income Tax Act whereby made the addition on account of undisclosed investment (loan) and interest thereon which was the issue in the proceeding u/s 263 of the Act. Ld. Pr. CIT again invoked the provision of section 263 vide notice dated 23.03.2020 as well as dated 09.02.2021 on the issue of interest on income tax which was not disallowed by the ld. AO. Ld. AR has submitted that the second revision order passed on 24.02.2021 is illegal, being barred by limitation as the same has been passed after two years from the end of this financial year in which the reassessment order passed u/s 147 r.s.s. 143(3) on 03.03.2016. The issue on which the second revision order is passed was ITA No.95/Ind/2021 Agroh Infrstructure Developers P. Ltd. Page 3 of 16 Page 3 of 16 not an issue in the first revision order passed u/s 263 of the Act and therefore, it was neither subject matter of the revision order passed u/s 263 on 15.03.2017 nor the issue in the order passed by the Ld. AO dated 31 st July 2017 in pursuant to the first revision order. Thus, the Ld. Pr. CIT has erred in passing impugned order u/s 263 beyond the period of limitation and that too without disposing of the objections raised by the assessee against show cause notice issued u/s 263 of the Act which was beyond the period of limitation. Ld. AR has referred to sub-section (2) to section 263 of the Act and submitted that no order shall be made under sub-section (1) of section 263 after expiry of two years from the end of the financial year in which the order sought to be revised was passed. 3. In support of his contention has relied the judgment of Hon’ble Supreme Court in the case of CIT vs. M/s. Alagendran Financ Ltd. 293 ITR 1 and submitted that the limitation would begin to run from the date of the original order and not from the order which was passed in pursuant to the first revision order when no such issue was a subject matter of first revision order passed u/s 263 of the Act or the order passed by the Ld. AO in pursuant to the first revision order. He has also relied upon the judgment of Hon’ble Madras High Court in case of Indira Industries vs. Pr. CIT 95 taxman 103. Hence the Ld. AR has pleaded that show cause notice dated 09.02.2021 and consequential order dated 24.02.2021 are beyond the period of two years from the end of the financial year when the reassessment order dated 03.03.2016 was passed and therefore the impugned order is unsustainable and liable to be quashed. 4. On the other hand, Ld. DR has submitted that the assessment order dated 03.03.2016 was set aside by the Pr. CIT while passing revision order dated 15.03.2017 and thereafter the said order has merged with the subsequent order passed by the Ld. AO u/s 143(3) r.w.s. 263 on 31 st July 2017. After the assessment order was set aside by the Ld. Pr. CIT u/s 263 the same was no more inexistence and get merged with the subsequent order passed by the Ld. AO u/s 143(3) r.w.s. 263 of the Act. Therefore, the limitation will reckon from the subsequent order passed by the Ld. AO on ITA No.95/Ind/2021 Agroh Infrstructure Developers P. Ltd. Page 4 of 16 Page 4 of 16 31 st July 2017. He thus submitted that the revision order is valid and within the period of limitation. He has relied upon the judgment of Hon’ble Delhi High Court in case of BRAHM DATT vs. ACIT 149 ITR 19. 5. We have considered the rival submission as well as relevant material on record. The assessee has challenged the second revision order passed by the Ld. Pr. CIT dated 24.02.2017 whereby the order passed by the Ld. AO u/s 143(3) r.w.s. 263 on 31 st July 2017 was held as erroneous so far as the prejudicial to the interest of revenue on the issue of interest on income tax claimed by the assessee of Rs. 3,64,906/- which was not disallowed by the Ld. AO. On the merits of this issue of allowability of the claim of interest on income tax the Ld. AR has submitted that it was only a mistake and due to inadvertence the claim was made therefore, he has not disputed that the said claim is not allowable. However, the assesse has challenged the impugned order on the ground of limitation. The undisputed facts emerging from the records are as under: (a) Return of income u/s 139(1) was filed on 13.10.2008. (b) The said return was processed u/s 143(3) (c) Notice u/s 148 was issued on 18.03.2015 (d) Order u/s 143 r.w.s. 147 was passed on 03.03.2016. (e) The revision order u/s 263 was passed on 15.03.2017. (f) The Ld. AO passed order u/s 143 r.w.s. 263 of the Act on 31 st July 2017 (g) Second revision order u/s 263 was passed by the Ld. Pr. CIT on 24.02.2021 which is impugned order. 6. In the first revision order passed u/s 263 of the Act on 15.03.2017 the Pr. CIT took the issue of cash loan of Rs.1,15,00,000/- which was found recorded in the seized material but was not considered by the Ld. AO while passing reassessment order u/s 147 r.w.s. 143(3) dated 03.03.2016. The issue which was subject matter of first revision order dated 15.02.2017 has been recorded by the Pr. CIT in para 7 as under: ITA No.95/Ind/2021 Agroh Infrstructure Developers P. Ltd. Page 5 of 16 Page 5 of 16 7. In view of the above facts and on examination of the records it is seen that the said assessment order is found to be erroneous and prejudicial to the interest of the revenue on the following ground. Sr. No. A.Y. Grounds/issues 1. 2008-09 During the course of assessment proceedings, the assessee has admitted the fact that the entry of the amount of Rs. 85 Lakhs appearing at page no. 23 of LPS-1 is a valid entry and that this amount of Rs. 85 Lakhs is advanced by the assessee to PATH therefore there is no logic for not accepting the other entries mentioned in the second table in the same page no. 23 of LPS 1 i.e. entry of Rs. 1,15,00,000/- which is alleged to be advanced by the assessee to PATH in cash (not by PATH to the Assessee) and was subsequently repaid along with the interest of Rs. 14,659 by PATH to the Assessee. 7. Thus, the issue on which provisions of section 263 of the Act were invoked by the Pr. CIT was regarding the entries of cash loan of Rs.1,15,00,000/- was found in the seized material at page no.23 of LPS-1 which was not considered by the Ld. AO while passing reassessment order dated 03.03.2016. The Pr. CIT finally set aside the reassessment order as under: “After careful examination of the facts placed on record and the legal position levitated as above, I am of the view that the Assessing Officer did not examine the facts of the case properly as it was required from him. In view of the above facts. I am satisfied that the order passed by the Assessing Officer u/s 147 rws 143(3) for A.Y. 2008-09 on 03/03/2016 is erroneous and prejudicial to the interest of the revenue. Therefore, the order passed by the Assessing Officer w/s 147 r.ws. 143(3) for A.Y. 2008-09 on 03/03/2016 is set aside. The Assessing Officer is directed to reframe the assessment after examining the above said issues and after affording sufficient opportunity to the assessee of being heard.” 8. It is manifest from the revision order dated 15.03.2017 that the reassessment order was set aside in respect of issue of loan of Rs.1,15,00,000/- and interest thereupon and Ld. AO was directed to ITA No.95/Ind/2021 Agroh Infrstructure Developers P. Ltd. Page 6 of 16 Page 6 of 16 reframe assessment after examining above said issues. Thus, it is clear that the first revision order dated 15.03.2017 was confined only on the issue of said transaction of loan of Rs.1,15,00,000/- and interest thereon and no other issue was taken up by the Ld. Pr. CIT while passing the revision order dated 15.03.2017. The Assessing Officer has passed the order in pursuant to the revision order on 31 st July 2017 whereby the addition in respect of the issue which was subject matter of the revision order dated 15.03.2017 was made. Therefore, when the issue of interest on income tax was neither subject matter of first revision order nor it can be a subject matter of the order passed by the Ld. AO in pursuant to the revision order then allowing the said claim by the Ld. AO while passing original reassessment order dated 03.03.2016 cannot be said to be an error, in the order passed by the Ld. AO u/s 143(3) r.w.s. 263 of the Act. Though, the order passed by the Ld. AO u/s 143(3) r.s.s 147 of the Act dated 03.03.2016 was certainly erroneous to the extent of allowing the said claim of interest on income tax however, the remedial action u/s 263 of the Act must have been taken within the period of limitation. Ld. DR has contended that after the reassessment order dated 03.03.2016 was set aside by the Ld. CIT the same has merged with the subsequent order dated 31 st July 2017. However, the said doctrine of merger would not apply beyond the subject matter of revision order dated 15.03.2017. The Hon’ble Supreme Court in case of CIT vs. M/s. Alagendran Finance Ltd. (supra) while considering the identical issue of limitation has held in para 7 to 15 as under: “7. A bare perusal of the order passed by the Commissioner of Income Tax would clearly demonstrate that only that part of order of assessment which related to lease equalization fund was found to be prejudicial to the interest of the Revenue. The proceedings for reassessment have nothing to do with the said head of income. Doctrine of merger, therefore, would not apply in a case of this nature. 8. Furthermore, Explanation (c) appended to Sub-section (1) of Section 263 of the Act is clear and unambiguous as in terms thereof doctrine of merger applies only in respect of such items which were the subject matter of appeal and not which were not. The question came up for consideration before this Court in Commissioner of Income Tax v. Sun ITA No.95/Ind/2021 Agroh Infrstructure Developers P. Ltd. Page 7 of 16 Page 7 of 16 Engineering Works P. Ltd. [198 ITR 297]. Therein the assessee raised a contention that once jurisdiction under Section 147 of the Act is invoked, the whole assessment proceeding became reopened, which was negatived by the court opining: "Section 147, which is subject to Section 148, divides cases of income escaping assessment into two clauses i.e. viz. (a) those due to the non- submission of return of income or non-disclosure of true and full facts and (b) other instances. Explanation (1) defines as to what constitutes escape of assessment. In order to invoke jurisdiction under Section 147(a) of the Act, the ITO must have reason to believe that some income chargeable to tax of an assessee has escaped assessment by reason of the omission or failure on the part of the assessee either to make a return under Section 139 for the relevant assessment year or to disclose fully and truly material facts necessary for the assessment for that year. Both the conditions must exist before an ITO can proceed to exercise jurisdiction under Section 147(a) of the Act. Under Section 147(b) the Income-tax Officer also has the jurisdiction to initiate proceedings for reassessment where he has reason to believe, on the basis of information in his possession, that income chargeable to tax has been either under- assessed or has been assessed at too low a rate or has been made the subject of excessive relief under the Act or excessive loss or depreciation allowance has been computed. In either case whether the Income-tax Officer invokes his jurisdiction under Clause (a) or Clause (b) or both, the proceedings for bringing to tax an 'escaped assessment' can only commence by issuance of a notice under Section 148 of the Act within the time prescribed under the Act. Thus, under Section 147, the assessing officer has been vested with the power to "assess or reassess" the escaped income of an assessee. The use of the expression "assess or reassess such income or recompute the loss or depreciation allowance" in Section 147 after the conditions for reassessment are satisfied, is only relatable to the preceding expression in Clauses (a) and (b) viz., "escaped assessment". The term "escaped assessment" includes both "non- assessment" as well as "under assessment". Income is said to have "escaped assessment" within the meaning of this section when it has not been charged in the hands of an assessee in the relevant year of assessment. The expression "assess" refers to a situation where the assessment of the assessee for a particular year is, for the first time, made by resorting to the provisions of Section 147 because the assessment had not been made in the regular manner under the Act. The expression "reassess" refers to a situation where an assessment has already been made but the Income-tax Officer has, on the basis of information in his possession, reason to believe that there has been under assessment on account of the existence of any of the grounds contemplated by the provisions of Section 147(b) read with the Explanation (I) thereto." ITA No.95/Ind/2021 Agroh Infrstructure Developers P. Ltd. Page 8 of 16 Page 8 of 16 9. We may at this juncture also notice the decision of this Court in Hind Wire Industries Ltd (supra) wherein the decision of this Court in V. Jaganmohan Rao v. CIT and CEPT [75 ITR 373] interpreting the provisions of Section 34 of the Act was reproduced which reads as under: "Section 34 in terms states that once the Income- tax officer decides to reopen the assessment, he could do so within the period prescribed by serving on the person liable to pay tax a notice containing all or any of the requirements which may be included in a notice under section 22(2) and may proceed to assess or reassess such income, profits or gains. It is, therefore, manifest that once assessment is reopened by issuing a notice under sub-section (2) of section 22, the previous underassessment is set aside and the whole assessment proceedings start afresh. When once valid proceedings are started under section 34(1)(b), the Income-tax Officer had not only the jurisdiction, but it was his duty to levy tax on the entire income that had escaped assessment during that year." 10. There may not be any doubt or dispute that once an order of assessment is reopened, the previous underassessment will be held to be set aside and the whole proceedings would start afresh but the same would not mean that even when the subject matter of reassessment is distinct and different, the entire proceeding of assessment would be deemed to have been reopened. 11. In Sun Engineering Works P. Ltd (supra) also, V. Jaganmohan Rao (supra) was noticed stating: "The principle laid down by this Court in Jaganmohan Rao's case, therefore, is only to the extent that once an assessment is validly reopened by issuance of a notice under Section 22(2) of the 1922 Act (corresponding to Section 148 of the Act) the previous under assessment is set aside and the ITO has the jurisdiction and duty to levy tax on the entire income that had escaped assessment during the previous year The judgment in Jaganmohan Rao's case, therefore, cannot be read to imply as laying down that in the reassessment proceedings validly initiated, the assessee can seek reopening of the whole assessment and claim credit in respect of items finally concluded in the original assessment. The assessee cannot claim recomputation of the income or redoing of an assessment and be allowed a claim which he either failed to make or which was otherwise rejected at the time of original assessment which has since acquired finality. Of course, in the reassessment proceedings it is open to an assessee to show that the income alleged to have escaped assessment has in truth and in fact not escaped assessment but that the same had been shown under some inappropriate head in the original return, but to read the judgment in Jaganmohan Rao's case, as if laying down that reassessment wipes out the original assessment and that reassessment is not only confined to "escaped assessment" or "under assessment" but to the entire assessment for ITA No.95/Ind/2021 Agroh Infrstructure Developers P. Ltd. Page 9 of 16 Page 9 of 16 the year and starts the assessment proceeding de novo giving the right to an assessee to reagitate matters which he had lost during the original assessment proceeding, which had acquired finality, is not only erroneous but also against the phraseology of Section 147 of the Act and the object of reassessment proceedings. Such an interpretation would be reading that judgment totally out of context in which the questions arose for decision in that case. It is neither desirable nor permissible to pick out a word or a sentence from the judgment of this Court, divorced from the context of the question under consideration and treat it to be the complete 'law' declared by this Court. The judgment must be read as a whole and the observations from the judgment have to be considered in the light of the questions which were before this Court. A decision of this Court takes its colour from the questions involved in the case in which it is rendered and while applying the decision to a later case, the courts must carefully try to ascertain the true principle laid down by the decision of this Court and not to pick out words or sentences from the judgment, divorced from the context of the questions under consideration by this Court, to support their reasonings " It was furthermore held: "As a result of the aforesaid discussion, we find that in 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 that item or items which have led to the issuance of notice under Section 148 and where ressessment is made under Section 147 in respect of income which has escaped tax, the Income Tax Officer's jurisdiction is confined to only such income which has escaped tax or has been under-assessed and does not extend to revising, reopening or reconsidering the whole assessment or permitting the assessee to reagitate questions which had been decided in the original assessment proceedings. It is only the under- assessment which is set aside and not the entire assessment when reassessment proceedings are initiated. The Income Tax Officer cannot make an order of reassessment inconsistent with the original order of assessment in respect of metters which are not the subject- matter of proceedings under Section 147 " 12. We may at this juncture also take note of the fact that even the Tribunal found that all the subsequent events were in respect of the matters other than the allowance of 'lease equalization fund'. The said finding of fact is binding on us. Doctrine of merger, therefore, in the fact situation obtaining herein cannot be said to have any application whatsoever. It is not a case where the subject matter of reassessment and subject matter of assessment were the same. They were not. ITA No.95/Ind/2021 Agroh Infrstructure Developers P. Ltd. Page 10 of 16 Page 10 of 16 13. It may be of some interest to notice that a similar contention raised at the instance of an assessee was rejected by a 3-Judge Bench of this Court in Commissioner of Income-Tax v. Shri Arbuda Mills Ltd. [231 ITR 50]. This Court took note of the amendment made in Section 263 of the Act by the Finance Act, 1989 with retrospective effect from June 1, 1988, inserting Explanation (c) to Sub-section (1) of Section 263 of the Act stating: "The consequence of the said amendment made with retrospective effect is that the powers under section 263 of the Commissioner shall extend and shall be deemed always to have extended to such matters as had not been considered and decided in an appeal. Accordingly, even in respect of the aforesaid three items, the powers of the Commissioner under section 263 shall extend and shall be deemed always to have extended to them because the same had not been considered and decided in the appeal filed by the assessee. This is sufficient to answer the question which has been referred." We, therefore, are clearly of the opinion that in a case of this nature, the doctrine of merger will have no application. 14. The Madras High Court in A.K. Thanga Pillai (supra), in our opinion, has rightly considered the matter albeit under Section 17 of the Wealth Tax Act, 1957 which is in pari materia with the provisions of the Act. Relying on Sun Engineering Works P. Ltd (supra), it was held: "Under section 17 of the Wealth-tax Act, 1957, even as it is under section 147 of the Income-tax Act, proceedings for reassessment can be initiated when what is assessable to tax has escaped assessment for any assessment year. The power to deal with underassessment and the scope of reassessment proceedings as explained by the Supreme Court in the case of Sun Engineering [1992] 198 ITR 297, is in relation to that which has escaped assessment, and does not extend to reopening the entire assessment for the purpose of redoing the same de novo. An assessee cannot agitate in any such reassessment proceedings matters forming part of the original assessment which are not required to be dealt with for the purpose of levying tax on that which had escaped tax earlier. Cases of underassessment are also treated as instances of escaped assessment. The order of reassessment is one which deals with the assessment already made in respect of items which are not required to be reopened, as also matters which are required to be dealt with in order to bring what had escaped in the earlier order of assessment, to assessment. An assessee who has failed to file an appeal against the original order of assessment cannot utilise the reassessment proceedings as an occasion for seeking revision or review of what had been assessed earlier. He may only question the extent of the reassessment in so far as the escaped assessment is concerned. The Revenue is similarly bound " ITA No.95/Ind/2021 Agroh Infrstructure Developers P. Ltd. Page 11 of 16 Page 11 of 16 The same principle was reiterated by a Division Bench of the Calcutta High Court in Commissioner of Income-Tax v. Kanubhai Engineers (P.) Ltd. [241 ITR 665]. 15. We, therefore, are clearly of the opinion that keeping in view the facts and circumstances of this case and, in particular, having regard to the fact that the Commissioner of Income Tax exercising its revisional jurisdiction reopened the order of assessment only in relation to lease equalization fund which being not the subject of the reassessment proceedings, the period of limitation provided for under Sub-section (2) of Section 263 of the Act would begin to run from the date of the order of assessment and not from the order of reassessment. The revisional jurisdiction having, thus, been invoked by the Commissioner of Income Tax beyond the period of limitation, it was wholly without jurisdiction rendering the entire proceeding a nullity. 9. Thus, when this issue of allowing the claim of interest on income tax was not involved or subject matter of the first revision order then the order passed by the Ld. AO u/s 143(3) r.w.s. 263 of the Act on 31 st July 2017 cannot be held as erroneous on this issue. This issue certainly could have been considered by the Ld. AO while passing the reassessment order dated 03.03.2016 and therefore, the original order passed by the Ld. AO dated 03.03.2016 could be held as erroneous so far as allowing this claim of interest on income tax while passing 1 st revision order dated 15.03.2017. Therefore, the limitation for passing revision order as prescribed under sub-section(2) of section 263 would reckon from the end of the financial year in which the original order u/s 143(3) r.w.s. 147 dated 03.03.2016 was passed and the same expired on 31.03.2018. The Hon’ble Madras High Court in the case of Indira Industries vs Pr. CIT (supra) has held in para 3 & 4 as under: 3.DISCUSSION: 3(i) By consent of both the counsel, the main writ appeal itself was heard out and again by consent of both counsel, we are disposing of the main writ appeal itself by the instant judgment. 3(ii) Assessee assailed the impugned notice before the learned single Judge on two main grounds. The two main grounds, in simple terms, can be crystallized and set out as follows: ITA No.95/Ind/2021 Agroh Infrstructure Developers P. Ltd. Page 12 of 16 Page 12 of 16 a) As the original re-assessment was done on the basis of Assessee accepting the position, the same issue cannot be reopened under Section 263 of the IT Act as it tantamounts to 'Change of Opinion'; and b) The impugned notice lacks jurisdiction as it is hit by limitation prescribed by sub-section (2) of Section 263. It was contended by the Assessee that under Section 263(2), the impugned notice ought to have been issued within two years from the end of the financial year in which the order sought to be revised was passed. 3(iii) In support of this first point i.e., 'Change of Opinion', Assessee pressed into service Commissioner of Income-Tax Vs. Sat Pal Aggarwal case reported in [2007] 293 ITR 90 (P&H). To be noted, this is a judgment of a Division Bench of the Punjab and Haryana High Court. To buttress the second point pertaining to Limitation under Section 263(2) of the IT Act, the Assessee pressed into service Commissioner of Income Tax, Chennai Vs. Alagendran Finance Ltd., case reported in [2007] 162 Taxman 465 (SC). 3(iv) We have heard Mr.R.Vijay Narayanan, learned senior counsel appearing for the counsel on record for the appellant/assessee and Mr.J.Narayanaswamy, learned senior standing counsel appearing for Income Tax Department on behalf of the Revenue. 3(v) With regard to the first point raised by the Assessee i.e., 'Change of Opinion', learned single Judge has noticed Sat Pal Aggarwal's case. Learned single Judge has also noticed that Sat Pal Aggarwal's case pertains to 'Change of Opinion', but has held that this cannot come in the way of or denude the powers of the Commissioner under Section 263 of the IT Act on the assumption that Section 263 is a provision which empowers the Commissioners to give their opinion that an order of Authority below him is erroneous. 3(vi) In the instant case, a perusal of the re-assessment order dated 30.12.2016 under Section 143(3) of the IT Act reveals that the only point qua reassessment is dis-allowance of interest paid to the Bank by the Assessee in the light of the loans on which the interest was paid being diverted to partners of the Assessee firm. To be noted, this is the lone point on which the reassessment was done or in other words, this is the lone point on which the entire re-assessment exercise was carried out. 3(vii) However, a perusal of the impugned order now reveals that it raises other issues such as bad debts written off to the tune of Rs. 33.06 lakhs and administrative, selling and distribution expenses claimed by the Assessee to the tune of Rs. 3.23 crores. ITA No.95/Ind/2021 Agroh Infrstructure Developers P. Ltd. Page 13 of 16 Page 13 of 16 3(viii) Some other issues have also been raised in the impugned notice under Section 263. 3(ix)The Principle of law is, it can be construed to be 'Change of Opinion' only when the same issue dealt with in reassessment is raised again in proceedings under Section 263. This is clearly articulated in Sat Pal Aggarwal's case itself. On facts, it would be seen that in Sat Pal Aggarwal's case, reassessment proceedings and thereafter invocation of jurisdiction by Commissioner under Section 263 of the IT Act were on the same set of grounds. 3(x) Therefore, while we agree with the conclusion of the learned single Judge that this is not a case of change of opinion qua Section 263 of the IT Act, we do not agree with ultimate conclusion for reasons which are elaborated in this judgment. 3(xi)This takes us to the next point urged by the Assessee. As would be evident from the narration of facts and discussion supra, the second point raised by the Assessee is that the impugned notice is barred by limitation, to be precise, it is barred by Section 263(2) of the IT Act is the plea of the Assessee. In support of the second point, as mentioned supra, Assessee pressed into service Alagendran Finance case (citation given supra elsewhere in this judgment). 3(xii) Learned single Judge has noticed Alagendran Finance case and has also extracted Paragraph 7 of Alagendran Finance case. Learned Judge has held that Alagendran Finance case does not help the Asseessee, as the impugned notice has been issued within two years from the date of reassessment, i.e., within two years from 30.12.2016. 3(xiii) Learned senior counsel for the Assessee contended before us that the date of reassessment cannot be the reckoning date and that the date of original assessment in the instant case being 25.02.2015 alone should be the reckoning date. To buttress this submission, learned senior counsel stressed that the term occurring in sub-section (2) of Section 263 is 'order' and not 'notice'. We deem it appropriate to extract sub-section (2) of Section 263 of IT Act, which reads as follows: 263.Revision of orders prejudicial to Revenue_(1)..... (2) No order shall be made under sub-section (1) after the expiry of two years from the end of the financial year in which the order sought to be revised w as passed. 3(xiv) Mr.J.Narayana Swamy, learned senior standing counsel appearing for the Revenue drew our attention to Alagendran Finance case and advanced a submission that two years can be computed from the date of reassessment order. ITA No.95/Ind/2021 Agroh Infrstructure Developers P. Ltd. Page 14 of 16 Page 14 of 16 3(xv) We are unable to agree. We are unable to agree as Paragraph 15 of the Alagendran Finance case makes it clear that when a notice under Section 263 raises new issues, which are not subject matter of the re-assessment proceedings, then the two year period contemplated under Sub-section (2) of Section 263 would begin to run from the date of assessment and not from the date of re-assessment. In other words, the ratio laid down in Alagendran Finance case, particularly as elucidated in Paragraph 15 of the Alagendran Finance case, is to the effect that the two year limitation period stipulated under Section 263(2) will run from the date of assessment only and not from the date of re-assessment when the Section 263 notice does not deal with the same subject as in assessment and when it deals with other issues which are not subject matter of reassessment proceedings. 3 (xvi) In the instant case, we have already noticed that while the original issue (in the reassessment proceedings) was with regard to disallowance of interest paid by the Assessee, as the loan amount has been diverted to the partners, the issue now raised in the impugned notice under Section 263 is not restricted to the disallowance of interest on loan alone. It deals with other aspects such as claims of the assessee regarding administrative, selling and distribution expenses made by the Assessee to the tune of Rs.3.23 crores and claim of bad debts written off to the tune of Rs.33.06 lakhs etc., 3(xvii) Therefore, as the impugned notice deals with several issues other than the one raised earlier, the limitation period in the instant case has to necessarily run from 31.3.2015 being the end of the financial year as 25.02.2015 is the date on which the scrutiny assessment was admittedly made for the Assessee under Section 143 (3) of the IT Act. 3(xviii) We therefore have no hesitation in holding that the reckoning date qua the impugned notice for the purpose of Section 263(2) of IT Act is not the date of re-assessment being 30.12.2016, but the date of scrutinizing the assessment i.e, 25.02.2015. 3(xix) As would be evident from the narration of facts and discussion supra, the impugned notice is dated 16.08.2017 and is therefore, clearly beyond two years when reckoned from 25.02.2015. 3(xx) Therefore, the Assessee before us was clearly entitled to succeed on the second point raised before the learned single Judge. To be noted, we have already negatived the first point regarding 'Change of Opinion'. 3(xxi) Learned Senior Standing Counsel for Revenue pressed into service MAK Data P. Ltd. Vs. Commissioner of Income Tax [(2013) 358 ITR 593 (SC)] to say that even agreed basis orders can be revisited and Malabar Industrial Co. Ltd. Vs. Commissioner of Income Tax ITA No.95/Ind/2021 Agroh Infrstructure Developers P. Ltd. Page 15 of 16 Page 15 of 16 [(2000) 243 ITR 83 (SC)] to say that Revenue in exercise of powers under Section 263 of IT Act can travel beyond the assessing officer in cases of non-application of mind. MAK Data Systems case deals with penalty under Section 271 (1) (c) of IT Act which operates in a different realm and Malabar Industrial Co. Ltd., does not rescue the Revenue as impugned notice is hit by the vice of lack of jurisdiction on account of being time barred. 3(xxii) One other reason given by the learned single Judge for dismissing the Assessee's writ petition is that the impugned notice is a show-cause notice and therefore, no harm would be caused to the Assessee. 3(xxiii) The principles and the grounds available for assailing a show- cause notice are now well settled. If the authority issuing the show- cause notice lacks jurisdiction and if it is clearly barred by law, it certainly renders the show-cause notice invalid in law. In the instant case, owing to all that have been stated supra, as the impugned notice, though is a show-cause notice as noticed by the learned single Judge, is invalid, as it has been issued beyond two years from the reckoning date and is clearly hit by Sub-section (2) of Section 263. In other words, the impugned notice is hit by the vice of lack of jurisdiction. Therefore, the assessee is entitled to succeed in its challenge to the impugned notice. 4.CONCLUSION Owing to all that have been stated supra, impugned notice issued by the Revenue dated 16.08.2017 bearing Reference C.No.852(5)/PCIT-8/2017-18 is set aside as being hit by limitation prescribed by sub-section (2) of Section 263 of the IT Act. 5. DECISION This writ appeal is allowed, order of the learned single Judge in W.P.No.22978 of 2017 dated 28.08.2017 is set aside and consequently, the impugned notice issued by the respondent Revenue being notice dated 16.08.2017 bearing Reference C.No.852(5)/PCIT- 8/2017-18 is quashed. No costs. Consequently, connected miscellaneous petition is closed. 10. Hence, when the claim of interest on income tax was not a subject matter of subsequent order passed by the Ld. AO u/s 143(3) r.w.s. 263 of the Act then the limitation period of two years as prescribed under sub- section (2) of section 263 of the Act would reckon from the date of the first assessment and not from the second assessment. 11. The decision relied upon by the Ld. DR is regarding the scope of section 263 of the Act and does not deal with the issue of limitation. Therefore, the said decision will not help the case of the revenue. ITA No.95/Ind/2021 Agroh Infrstructure Developers P. Ltd. Page 16 of 16 Page 16 of 16 Accordingly, in the facts and circumstances of the case as well as binding precedent as cited above, we are of the considered view that the impugned revision order passed by the ld. Pr. CIT dated 24.02.2021 is beyond the period of limitation of two years provided under sub-section (2) of section 263 of the Act and consequently, the impugned order is not sustainable in law and liable to be quashed. We order accordingly. Since the impugned order has been quashed as not valid being barred by limitation, therefore, we do not propose to take up the other grounds raised by the assessee as the same become infructuous. 12. In the result, appeal of assessee is allowed. Order pronounced in the open court on 11.04.2023. Sd/- Sd/- (B.M. BIYANI) (VIJAY PAL RAO) Accountant Member Judicial Member Indore, 11.04.2023 Patel/Sr. PS Copies to: (1) The appellant (2) The respondent (3) CIT (4) CIT(A) (5) Departmental Representative (6) Guard File By order UE COPY Sr. Private Secretary Income Tax Appellate Tribunal Indore Bench, Indore