TaxTMI 
TaxTMI 
2017 (12) TMI 663
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....Ground No. 1 is regarding the validity of reopening. The assessee is an HUF and proprietor of M/s Tirupati Automobiles. The assessee filed its return of income declaring income of Rs. 1,88,040/- on 31.03.2003 which was processed U/s 143(1). Subsequently the case was reopened U/s 147/148 and assessment was completed U/s 143(3) r.w.s. 147 vide order dated 20.03.2003 on total income of Rs. 4,16,370. A survey U/s 133A of the Act was carried out in the business premises of M/s Tirupati Automobiles Pvt. Ltd. in which the Karta of the assessee HUF was a director. During the survey, a printout of cash book of M/s Tirupati Automobiles Pvt. Ltd. for the period 01.04.2001 to 28.06.2001 was found. As per the said print out the AO of the said company found that there was an excess payment of Rs. 11,44,658/- and accordingly, the addition of the said amount was made in the hands of the company for want of satisfactory explanation. The said addition was confirmed by the ld. CIT(A) vide his order dated 15.07.2009. The Company carried the matter to this Tribunal and vide its order dated 26.03.2010 in ITA No. 603 & 637/JP/07 the Tribunal deleted the said addition in the hands of Tirupati Authomobiles....
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....s provided U/s 150(2) is mandatory on the part of the AO before issuing the time barred for initiation of reassessment proceeding. Subsection (2) of Section 150 lays down the exception that no appellate or revisional authority can give a direction to make assessment or reassessment which would have been time barred as on the date of direction by the reason of any other provisions limit the time within which any action for assessment or reassessment may be taken. The Assessing Officer has acted upon the order of this Tribunal dated 26.03.2010 whereas the time limit for issuing notice u/s 148 had already expired on 31.03.2009. He has relied upon the decision of Haiderabad Benches of this Tribunal in case of S. Sankara Reddy v/s AO (2005) 92 TTJ 223 (Hyd). He has also relied upon the following decisions:- * ACIT vs. G. Viswanatham 73 CTR 123 (AP) * Sunil Malik Vs ACIT (2009) 123 TTJ 208 (Del) * Col. Sir Harinder Singh Brar vs. ITO (2006) 282 ITR 371 (P &H) Thus, the ld. AR has reiterated that the relaxation provided U/s 150(1) was not available to the AO because of the restriction provided U/s 150(2) and in the case where the reassessment relates to asses....
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....s not covered under the provisions of Section 149 of the Act. Section 150 of the Act has an overriding effect on Section 149 and therefore, the notice U/s 148 may be issued any time for the purpose of making assessment or reassessment. He has relied upon the orders of the authorities below. The ld. DR has also relied upon the decision of Honble Calcutta High Court in case of CIT vs. Glass Equipment (India) Ltd. 366 ITR 59 as well as decision of Hon'ble Delhi High Court in case of PP Engineering work 369 ITR 433. 5. We have considered the rival submissions as well as relevant material on record. The AO proposed to reopen the assessment of these two assessment years i.e. 2001-02 & 2002-03 vide notice U/s 148 dated 30.07.2010. Thus, it is apparent that the notice issued U/s 148 for initiation of reassessment proceedings is beyond the limitation provided U/s 149 as exist at the relevant point of time. For reading reference we quote the provisions of Section 149 as under:- "149. Time limit for notice.- (1) No notice under section 148 shall be issue for the relevant assessment year,- (a) if four years have elapsed from the end of the relevant assessment year, unless ....
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....g under any other law]. (2) The provisions of sub- section (1) shall not apply in any case where any such assessment, reassessment or recomputation as is referred to in that sub- section relates to an assessment year in respect of which an assessment, reassessment or recomputation could not have been made at the time the order which was the subject- matter of the appeal, reference or revision, as the case may be, was made by reason of any other provision limiting the time within which any action for assessment, reassessment or recomputation may be taken." Thus, as per Sub-section (1) of Section 150 the limitation provided Under section 149 is not applicable if notice U/s 148 is issued in consequence or to give effect to any findings or directions contained in an order passed by any authority in the proceedings under this Act by way of appeal, reference or revision or by a court in any proceeding in other law. This enlargement of time period for issuing the notice U/s 148 as contemplated U/s 150(1) is also not absolute and unlimited but subject to the conditions and restrictions as provided Under sub-section (2) of section 150 of the Act. Therefore, even as per direction....
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....far as limitation for reassessment of the income of the assessee in pursuant to the directions of the Tribunal. He has further contended that even if the limitation is considered on the date of the order which is subject matter of appeal then the assessment order dated 29.12.2005 in case of M/s Tirupati Automobiles Pvt. Ltd. is the relevant order for counting the limitation and as such notice issued U/s 148 on 30.07.2010 is within the period of limitation as provided U/s 149 (1)(b) r.w.s. 150(2) of the Act. As far as the contention of the ld. AR that the limitation as per Subsection (2) of Section 150 has to be counted as on the date of the Tribunal order. We find that this is not true intent of the legislature as per Sub-section (2) of Section 150 as it is meant for providing a chech on the Assessing Authority against the misuse of power for assessment, reassessment or re-computation as provided U/s 150(1) of the Act. For example if the Assessing Officer instead of assessing the income in the hands of the correct assessee assessed the same in the hands of the wrong assessee then, the Assessing Officer is not permit for misuse the provisions of law for assessment or reassessment of....
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....he two questions to be decided in this case are whether the reassessment was under s. 147(a) or s. 147(b) ? The counsel for the Department tried to argue that it comes under s. 147(a). According to them, the assessee has not disclosed about the pendency of the appeal in the Madras High Court for enhanced compensation. This is a circumstance which could be made use of for reopening the assessment. According to us, this submission cannot be accepted. It is an admitted case that the earlier view was that as per the judgment in Jayaram vs. CIT (supra), interest on the compensation amount is liable to be assessed in the year in which it is received. It was only by a later decision in Peter John's case (supra) a Full Bench of this Court held that interest is liable to be spread over. Hence, we agree with the Tribunal that it cannot be said that the assessee failed to disclose all materials before the AO. If that be so, the assessment cannot be under s. 147(a). Then it can be only under s. 147(b). Here, it was by virtue of the decision of the Tribunal on 19th Feb., 1988, that information was received by the AO that interest can be spread over. There was a contention as to actually whe....
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....7(a) is accepted. Since that is rejected, we agree with the Tribunal and hold that reassessment for the years 1975-76, 1976-77 and 1977-78 is barred. So, the next two years are 1978-79 and 1979-80. The Department has found that so far as these two years are concerned, there is no bar of limitation if the date is taken from 27th Jan., 1983. But, the assessee contends that if 1st March, 1984, is taken, the reassessment, for 1978-79 and 1979-80 would have been barred. So, the question to be considered is the meaning of the words, "at the time the order which was the subject-matter of appeal, reference or revision". Learned counsel for the assessee would rely on the decision of the Andhra Pradesh High Court in CIT vs. G. Viswanatham (1988) 73 CTR (AP) 123: (1988) 172 ITR 401(AP) : TC 51R.2015. Even though in that case, the Court observed as follows : "The judgment of the Tribunal in second appeal is dt. 9th Sept., 1974. According to sub-s. (2) of s. 150, the initiation of reassessment proceedings would be bad, even when they are initiated in consequence of or to give effect to any finding or direction contained in the appellate order, if such initiation of reassessment proceed....
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...., is the order of the Tribunal. If that be so, there is no difficulty in construing s. 150(2). Then, in this case, the order which was subject-matter of appeal is to be construed as the order passed by the CIT(A), on 1st March, 1984. If so, the reassessment for 1978-79 will also be barred. 6. In the result, the question of law raised at the instance of the Revenue for the years 1975-76 to 1977-78 are answered in the affirmative, in favour of the assessee and against the Revenue. With regard to the question of law raised at the instance of the assessee, we answer the question in the negative, in favour of the assessee and against the Department." The Hon'ble High Court has clearly held that when the directions were passed by the Tribunal then the order of ld. CIT(A) was the subject matter of appeal before the Tribunal and therefore, the order of ld. CIT(A) is relevant for the purpose of Section 150(2) of the Act and not the assessment order. Since, no contrary decision has been brought to our notice on this point, therefore, we are bound to follow the decision of Hon'ble kerala High Court in case of CIT Vs. Vaikundam rubber Co. Ltd. (supra) and accordingly hold that the limita....