2008 (10) TMI 715 - AT - Income Tax

Rectification Order under Income Tax Act Ruled Void, Time-Barred

The Tribunal upheld the Commissioner (Appeals)'s decision that the rectification order u/s 154 of the Income Tax Act was invalid and void ab initio due to ... - Issues Involved:1. Validity of the rectification order u/s 154 of the Income Tax Act.2. Time-barred nature of the rectification order.Summary:Issue 1: Validity of the rectification order u/s 154 of the Income Tax ActThe appeal by the revenue challenges the order of the Commissioner (Appeals), Coimbatore, which held that the rectification order passed by the assessing officer u/s 154 was invalid and void ab initio. The original assessment order was passed u/s 143(3) on 30-3-1999. Subsequent rectification orders were issued on various dates, but none addressed the issue of exemption u/s 10B. The Commissioner (Appeals) concluded that the rectification order dated 3-3-2006 was invalid as it attempted to rectify an issue from the original assessment order, which was beyond the permissible four-year period stipulated u/s 154(7).Issue 2: Time-barred nature of the rectification orderThe learned departmental Representative argued that the rectification was within four years of the earlier rectification order, citing case laws such as Hind Wire Industries Ltd. v. CIT, Waldies Ltd. v. CIT, and Salem Co-operative Spg. Mills Ltd. v. CIT. However, the Tribunal noted that these cases involved rectifications on the same matter as the intervening orders. In contrast, the present case involved a rectification of the original assessment order, not the intervening orders. Therefore, the rectification sought by the revenue was beyond the four-year limitation period from the date of the original order, making it time-barred.The Tribunal upheld the Commissioner (Appeals)'s decision, stating that the impugned rectification order was invalid and void ab initio due to being time-barred. Consequently, the appeal filed by the revenue was dismissed.