TaxTMI 
TaxTMI 
2016 (6) TMI 334
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....e said order was passed by issue of a defective and invalid notice u/s 154 dt. 16.02.2009 in which the rectification proposed by the A.O was clearly confined I restricted only to the "calculation of tax and interest u/s 115JA" and not to make any assessment of income u/s115JA. The A.O's order dt. 30.03.2009 making an assessment of income not permissible u/s 154 and even in absence of such proposed action mentioned in the notice u/s 154 being without jurisdiction and passed against an invalid notice u/s 154 and the Ld. CIT(A)'s order confirming such invalid order were wholly unreasonable, uncalled for, bad in law and void abinitio and hence both the orders are liable be quashed/ cancelled. 2. For that in view of the facts and circumstances the Ld. CIT (A) was wholly wrong and unjustified in confirming the aforesaid order u/s 154 dt. 30.03.2009 without considering the facts that the issue involved in the process of rectification u/s 154 and assessment of an income afresh in a proceeding U/S 154 not mentioned in the notice u/s 154 are highly debatable and controversial on which there can divergent views. The invalid proceeding initiated u/s 154 dt. 16.02.2009 and the ....
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....der u/s 143(3)/251 was passed by the A.O on 11-01-2005 giving effect to the appellate order and revising the income at Rs. 97,50,220/- under the normal provisions of the Act. Neither any reference was made nor any income was determined by the A.O u/s 115JA in the said order. 5. Thereafter, the assessee filed a petition dt:16.02.2005 u/s 154 on 18-02- 2005 requesting the A.O to allow the set off brought forward unabsorbed depreciation of the earlier years and to rectify the same in order dt:11.01.2005 made u/s 143(3)/251 against the total income computed therein. Considering the rectification petition the A.O allowed set off unabsorbed depreciation of the earlier years by revising the total income at Rs. 8,11,970/- and passed an order dt: 18.02.2005 u/s 143(3)/251/154 and no reference was made therein referring to income u/s 115JA by the A.O. 6. Consequently, the A.O issued a notice dt. 23.02.2005 u/s 154 of the Act where he proposed to rectify the order made u/s 143(3)/251/154 on 18.02.2005 on the ground referring to mistake in calculation of tax. In response to which, the assessee agitated that the Sec.154 cannot be invoked as it is highly debatable legal issue to carry out any ....
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....oceeding u/s 154 on the ground that :- i) The rectification proposed u/s 154 is beyond the time limit of 4 years prescribed in the Act since the mistake proposed to be rectified relates back to the order u/s 143(3) and hence the proceeding so initiated afresh u/s 154 is bad in law. ii) The Hon'ble ITAT vide its order dt. 11.04.2008 in ITA No. 1718/ Kol/ 2006 has already cancelled the order U/S 154. Since the proceeding earlier initiated u/s 154 has already been cancelled it cannot be subjected to further proceeding u/s 154 as per the provision of sec. 154(1A). Furthermore, the matter is already sub-judiced before the Hon'ble Calcutta High Court. 9. Considering the submissions made above, the AO again passed an order dt: 30.03.2009 assessing the total income at Rs. 29,96,785/- as per the provision of sec. 115JA of the Act and raised demand of Rs. 6,61,140/- including interest of Rs. 3,15,997/- and Rs. 39,213/- u/s 234B and u/s 234C of the Act respectively u/s 143(3)/251/154/154/154/251/251/154 of the Act. 10. An appeal was filed before the CIT-A questioning the action of AO the aforesaid rectification u/s. 154 of the Act raising demand of Rs. 6,61,140/- including in....
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....2005 and the tax was charged accordingly. The said order was confirmed by the C.I.T (A) & I.T.A.T. However subsequently the Hon'ble tribunal recalled the order in response to the M.A and held that the order under section 154 was not valid oh technical reason as the specific mistake proposed to be rectified is not specified in the notice. Subsequently fresh proceeding was initiated and the order dt. 18.02:2005 was rectified under section 154 and tax as per MAT provision was charged as per provision of the Act. 5. The submission of the L.d A.r that the order has been passed beyond the statutory period of limitation of 4 years has no merit. In the case under consideration the order sought to be amended was passed on 18.02.2005, which is within the time limit specified in sub section 7 of section 154 of the act. Moreover this issue has been settled by the Supreme Court in the case of Hind Wire Industries Ltd vs CIT 212 ITR 639(S.C), where it has been held that the limitation under section 154(7) for rectification within four years from the order sought to be amended does not qualify from the original order as "order" in section 154(7) does not mean original order. It could mean any ....
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....raise demand thereafter. 15. We may refer to the notice dated 16-02-2009 issued to rectify the order dated 22.05.2008 by mentioning that there was a mistake in calculation of tax and interest. The said order sought to be rectified by the AO was an order passed giving effect to the order of B-Bench of Kolkata where it quashed the proceedings dt: 28-02-2005 initiated U/Sec 154 of Act by declaring as invalid relying on an order of the Chandigarh Bench of Tribunal in the case of ACIT vs. Varinder Agro Chemicals Ltd reported in (2007) 107 TTJ (Chd) 842. We find the observation of the Tribunal at para-2.3 at page no-18 of paper book the relevant portion of which is reproduced hereunder:- AO having issued notice under s.154 only for rectifying mistake in quantifying deduction under s.80-IA, further rectification as regards book profit under s.115JA was not valid." 16. A perusal of the original assessment order u/s 143(3) dt. 30.03.2001 or in the order u/s 143(3)/251 dt. 11.01.2005 or in the rectification order u/s 143(3)/251/154 dt. 18.02.2005 the total income was determined by the A.O under normal procedure but not an whisper made in respect of computing the income u/s 115JA and it ....
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....tice to rectify the said mistake. 9. In view of above discussion, mistake in computation of total income of the assessee and tax liability thereon is rectified and recomputed as under:- Total Income as per order Dated 13.02.05 30% of book profit Rs. 99,89,318/- Rs. 8,11,970 As per return of income filed by the assessee Rs. 29,96,795/- The income as per MAT provisions is at higher side therefore tax is to be payable u/s. 115JA on Rs. 29,96,795/-, calculated as under:- Tax on book profit Rs. 29,96,795/- @35% Rs. 10,48,878/- Less TDS Rs. 5,31,128/- Assessed Tax- Rs. 5,17,750/- Add Interest u/s. 234B Rs.3,15,797 Interest u/s. 234C Rs. 39,213 Rs. 3,55,010/- Rs. 8,72,760/- Less Refund of A.Y 1999-2000 Rs. 11,620/- Balance payable- Rs. 8,61,140/- Less Tax paid on 17-08-06 Rs.40,000/- 17-08-06 Rs.40,000/- 23-08-06 Rs.40,000/- 04-05-06 Rs.20,000/- 17-05-06 Rs.20,000/- 27-06-06 Rs. 40,000/- Rs.2,00,000/- Payable Rs. 6,61,140/- 18. A perusal of the above order suggests that the assessee disclosed the book profit Rs. 99,89,318/- in the return of income originally filed by the assessee on 30-11-98, but, however,....
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....ms which do not form part of the reassessment, the original assessment continues to hold the field. When 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 which 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 reassessment in respect of other independent issues, the order of the AO can be construed to be erroneous and to be prejudicial to the interest of the Revenue within the meaning of s. 263. The submission cannot be accepted in the facts of the present case. The substantive part of s. 147 as well as Expln. 3 enables the AD to assess or reassess income chargeable to tax which he has reason to believe had escaped assessment and other income which has escaped assessment and which comes to his notice subsequently in the course of the proceedings 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 the AD as having escaped assessment in the course of the proceedings under s. 147 and when he passed the....