TaxTMI 
TaxTMI 
2017 (3) TMI 1244
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....excluding, question no. 5, read as under:- " (i) Whether the consequential order passed by the assessing authority suo-moto u/s 154 of the Act to give effect to remand report sought by the CIT (A) for complying the directions issued in ITA No. 239/LUC/2007 decided by the ITAT on 13.6.2008 on 25.1.2011 will be deemed to the rectified order of the original assessment. (ii) Whether the learned Tribunal was justified in holding that the consequential order passed by the assessing officer cannot be called to be rectified order and the doctrine of merger would not apply. The original assessment would not be called to have been merged with the order of the assessing officer passed consequent to the directions of the Appellate Authorities. (iii) Whether the word "order" in the expression "from the date of orders sought to be amended" in Section 154 (7) of the Act means the original order or it could be any order including the amended order or rectified order. (iv) Whether the learned Tribunal was justified to hold that the Application u/s 154 dated 18.5.2011 filed by the Appellant to claim the set off long term capital loss of Rs. 12,49,130/- was barred ....
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....count for both period. On this aspect assessment order was upheld, (b) Disallowance of interest amounting to Rs. 1,99,104/-. This amount was in respect to Alok Bansal and M/s Shri Durga Bansal Fertilizers Ltd. CIT (A) deleted interest worked out in respect of Alok Bansal but confirmed disallowance qua M/s Durga Bansal Fertilizers Ltd. Hence on this ground partial relief was given to Assessee. (c) Addition on account of long term capital gain amounting to Rs. 62,99,941/-. This issue was decided against Assessee and assessment order was confirmed. 7. Assessee then went before Tribunal in Income Tax Appeal no. 239/LUC/2007. Eight grounds were raised before Tribunal. Grounds no. 1, 2, 3 and 8 related to "long term capital gain". On this aspect Tribunal held that it would be fair and reasonable if A.A. is asked for valuation from Valuation Authorities, to arrive at fair and reasonable price of land on the date of transfer. Matter therefore, was remanded to A.A. for limited purpose of arriving at fair market value on the date of transfer, by referring to Valuation Authority. Ground no. 4 related to disallowance of interest on account of debit balance appearing in the....
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....sment order dated 31.12.2009 was passed after remand by A.A., for the purpose of Section 154 (7), limitation would commence from that date. He submitted that CIT (A) and Tribunal, both erred in law, by observing that the purpose of Section 154, in the present case, limitation would commence from assessment order dated 31.03.2006 and not subsequent orders. Learned counsel for Assessee placed reliance on judgment of Supreme Court in Hind Wire Industries Ltd. Vs Commissioner of Income-Tax, (1995) 212 ITR 639 and Delhi High Court in Commissioner of Income-Tax Vs Tony Electronics Limited, (2010) 320 ITR 378. 10. In the assessment order dated 31.03.2006, we find that allowance or disallowance or set off to capital loss (long term) of Rs. 12,49,310/-, though under part (A) and (B) different kind of expenditures were considered and in part (C) interest paid and capital gain (long term) was considered, but there was no set off capital loss (long term) carried forward at all. In the appeal preferred by Assessee before CIT (A) against assessment order dated 31.03.2006, we do not find any claim made by Assessee in this regard. The issue therefore died with the order of assessment dated 31.0....
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....judgment which does not even exist." (emphasis added) 15. However, in taxing statutes like Act, 1961, Legislature has not thought it fit to apply general 'Doctrine of Merger', but 'Doctrine of 'Partial Merger' has also been adopted. Once the issue of merger is governed by statutory provisions, then, obviously, it is the statute which shall prevail over general doctrine of 'merger'. Herein 'doctrine of partial merger' we find in Explanation 'C' of Section 263(1) of Act, 1961. This Explanation, having sub clauses (a) and (b) was inserted by Taxation Laws (Amendment Act, 1984) with effect from 01.10.1984. Thereafter, entire explanation was substituted by Finance Act, 1988 with effect from 01.06.1988, which had Clause (c) also. Some minor amendments came to be made in Explanation (c) by Finance Act, 1989, which was given effect from 01.06.1988. Section 263(1) with explanation as it stands after aforesaid amendments, read as under: "263. (1) The Commissioner may call for and examine the record of any proceedings under this Act, and if he considers that any order passed therein by the Assessing Officer is erroneous in so far as it i....
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....,844/-. Assessing Officer made certain additions and denied two deductions and one loss, as disclosed by assessee. Assessee preferred appeal to the extent Assessing Officer made additions and disallowance and refused to accept income and loss disclosed by assessee. Appeal was decided by Commissioner (A) on 15th December, 1979. In respect of three items which Assessee declared and accepted by assessing officer, substantially there was no appeal since finding with respect to those items was in favour of Assessee. It is in respect of these three items, Commissioner sought to exercise revisional power under Section 263 of Act, 1961. An argument was advanced firstly, that amendment has come into force w.e.f. 01.06.1988, therefore, would not apply to assessment order and order of appeal, finalised long back. Secondly, that after merger of order of assessment in the appellate order, Section 263 cannot be invoked. Relying on Explanation Clause (c) and holding that it will cover all earlier matters, Court said as under : "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 alw....
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....ommissioner under Section 263(1) shall be extended to that extent. After referring to various authorities this Court in para 31 observed as under:- "Now looking to the facts of present case, in the light of exposition of law discussed above, we find that claim of assessee seeking exemption under Section 10B of Act, 1961 for assessment year 2011-12, was not doubted by Assessing Officer. Applicability of Section 10B of Act, 1961 for assessment year 2011-12, as claimed by assessee, was accepted by him. Thus, this aspect was not in appeal at any stage. It is only on the question of "quantum of profit" for which exemption was claimed that the appeal was filed. The Assessing Officer discussed the matter and found that instead of Rs. 4,97,28,163.45 which was claimed by assessee, it was entitled to exemption to the extent of Rs. 4,61,90,179.58 under Section 10B and there is taxable income of Rs. 3537980/-. On taxability of aforesaid amount, assessee preferred appeal and only that aspect was considered by CIT(A) as also Tribunal. At no stage, the issue whether assessee was entitled to claim exemption under Section 10B at all or not, having already exhausted beyond the period of exe....
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....e "amended" or "rectified order". Assessee therein had sought rectification of order dated 12.07.1982 and Court held that word 'order' under Section 154 (7) would include even "rectified order". 24. In Commissioner of Income-Tax Vs Tony Electronics Limited (supra), Court has held that judgment in Hind Wire Industries Ltd. (supra) lays down that once an order is rectified, initial order ceases to operate and it is no more in existence. Relevant observation reads as under:- "What follows from the aforesaid is that after the rectification order, the initial order of assessment ceases to operate. It is no more in existence and is substituted by the fresh assessment order passed. The court, thus, categorically held that the word "any' in the expression "order sought to be amended" would mean even the rectified order." (emphasis added) 25. With respect to Delhi High Court judgment, the inference drawn from reading of judgment in Hind Wire Industries Ltd. (supra) is much more that what has actually been said therein. Supreme Court very clearly has said that; "word "order" has not been qualified in any way and it does not necessarily mean the or....