TaxTMI 
TaxTMI 
TaxTMI 
2012 (7) TMI 694
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....t on 31.3.1989 determining a total income of the petitioner at Rs.13,22,030/-. This order of assessment was not filed along with the petition. Counsel for the petitioner tendered a copy thereof which we take on record to enable us to appreciate the controversies arising in the petition more closely. 3. Upon perusal of the assessment order, we notice that the Assessing Officer had questioned two separate amounts of commission paid by the petitioner to two different agencies and claimed deduction thereof from its total income. The Assessing Officer held that a sum of Rs.9,27,672/- paid by way of commission to one Shri Kishor N. Amarchand and a sum of Rs.1,85,000/- paid by way of service charges to M/s Alloy Metal Traders, should be disallowed. It was on this basis, therefore, the Assessing Officer computed total income of the assessee at Rs.13,22,030/- as against returned income of Rs.2,09,106/-. 4. The assessee carried the matter in appeal. The CIT (Appeals), dismissed the appeal, upon which the assessee preferred further appeal before the Tribunal. The Tribunal, by a judgement and order dated 5.7.1994, remanded this issue before the Assessing Officer. While doing so, the Tribunal....
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....ed. The petitioner, therefore, wrote a letter dated 28.6.2001 to the Commissioner of Income Tax and demanded not only the amounts of penalties already collected from him, also prayed for refund of Rs.3,56,161/- towards the tax he had paid to the department pursuant to the assessment framed by the Assessing Officer, but which was reopened by the Tribunal by its order dated 5.7.1994. 7. Despite such representation of the petitioner, the respondents took no steps pursuant to the order passed by the Tribunal. The petitioner, therefore, made further representations. It is not necessary to record all of them in this judgement. Suffice it to note that since despite such repeated representations, the respondents did not take any further steps, the petitioner moved this petition and made the prayers noted above. 8. During the pendency of the petition, two things happened. Firstly, since the respondents were in the process of activating the assessment proceedings which had remained dormant for number of years after the Tribunal placed the same before the Assessing Officer, the petitioner moved an amendment praying for necessary direction to set aside such assessment proceedings as time bar....
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....e said sub-section. 12. In this respect, the counsel relied on the decision of the Delhi High Court in case of Commissioner of Income Tax v. Bhan Textile P. Ltd., reported in (2008) 300 ITR 176 wherein the Delhi High Court was pleased to make a distinction between those cases which would fall under sub-section (2A) of section 153 and those which would fall under clause (ii) of sub-section (3) thereof. Counsel further submitted that even if it were to be accepted that the case would fall under sub-section (3)(ii) of section 153 of the Act, where the Legislature provided that such order of assessment or re-assessment can be passed at any time, such order should be passed within a reasonable period. He submitted that the period of seven years cannot be stated to be reasonable period under any circumstances. 13. On the other hand, learned counsel for the revenue relying on the affidavit in-reply filed on behalf of the respondents contended that the Tribunal having required the Assessing Officer to permit cross-examination of the two agencies to whom commission was paid by the petitioner and having further permitted the Assessing Officer to probe the issue, the case would be one....
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....nt in pursuance of an order besides other, under section 254 of the Act. Section (2A) of section 153 of the Act reads as under : "Section 153 (2A) : Notwithstanding anything contained in sub-sections (1) and (2), in relation to the assessment year commencing on the 1st day of April, 1971, and any subsequent assessment year, an order of fresh assessment under section 146 or in pursuance of an order, under section 250, section 254, section 263 or section 264, setting aside or cancelling an assessment, may be made at any time before the expiry of two years from the end of the financial year in which the order under section 146 cancelling the assessment is passed by the Assessing Officer or the order under section 250 or section 254 is received by the Chief Commissioner or, as the case may be, the order under section 263 or section 264 is passed by the Chief Commissioner or Commissioner." 16.2 Sub-section (3) of section 153, however, provides that the provisions of sub-sections (1) and (2) shall not apply to certain classes of assessments, reassessments and recomputations. Sub-section (3) of section 153 of the Act reads as under: "Section 153(3) : The provisions of sub-sections (1) ....
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....e case may be, could be completed at any time. 19. The situation, however, must be seen to have undergone a material change upon introduction of sub-section (2A) of section 153 of the Act, which provides inter alia that notwithstanding anything contained in sub-sections (1) and (2), in relation to the assessment year commencing on the 1st day of April, 1971, and any subsequent assessment year, an order of fresh assessment under section 146 or in pursuance of an order, under section 250, section 254, section 263 or section 264, setting aside or cancelling an assessment, may be made at any time before the expiry of two years from the end of the financial year in which the order under section 146 cancelling the assessment is passed by the Assessing Officer or the order under section 250 or section 254 is received by the Chief Commissioner or, as the case may be, the order under section 263 or section 264 is passed by the Chief Commissioner or Commissioner, as the case may be. As already noted, while introducing sub-section (2A) in section 153 of the Act, the Legislature simultaneously made a small change in sub-section (3) thereof by adding the words, "subject to the provisions of su....
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....n 153(3)(ii) of the Act is concerned, that relates to giving effect to a finding or direction, inter alia, by the Commissioner of Incometax (Appeals). What this means is that the Assessing Officer must comply with the finding or direction given by the appellate authority without necessarily disturbing the assessment order. In so far as the present case is concerned, that is not the position because the Assessing Officer was directed by the Commissioner of Income-tax (Appeals) to pass a fresh order under section 144 of the Act meaning thereby that the assessment order to the extent that it is covered by ground No.2 of the appeal filed by the assessee was set aside or cancelled. There was no independent finding or direction which the Assessing Officer was required to comply with on the basis that the core of the assessment order has been sustained by the Commissioner of Income-tax (Appeals)." 24. With this background in mind, we may revert back to the facts of the case. The Tribunal on an appeal filed by the assessee, upheld the assessee's contention that the commission was disallowed in case of two agencies, placing reliance on statements recorded behind the back of the assessee wi....