TaxTMI 
TaxTMI 
2018 (1) TMI 809
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.... the question of limitation for completion of assessment, on a remand made under Section 263 of the Act. At the time of hearing an additional question was raised, of satisfaction of the A.O. being necessitated under Section 153C. Though the additional question is not raised in the instant appeals, we are inclined to consider it too, for, it strikes at the very root of the matter, being an essential requirement to initiate and proceed with the assessment; in the absence of which the proceedings stand fatally vitiated. We are re-framing the questions of law as follows: (i) Ought not the Tribunal have found that the A.O should have completed the fresh assessment, on a remand under Section 263, within the period of limitation, as provided under Section 153B of the Act? (ii) Whether on a remand made under Section 263 the limitation provided under Section 153B would stand automatically extended, and would not that do violence to the specific period of limitation provided in the Statute? (iii) Whether it was proper for the Commissioner to have remanded the matter for fresh assessment, when the time for assessment under Section153B stood expired; especially when ....
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.... from the end of the financial year, i.e., from 31.03.2006, till 31.12.2007. With respect to 'other person' there is a further period available, but, that need not be looked into, since, admittedly, the orders passed for six years and the one for the seventh year, are on 27.12.2007, within the period of limitation provided. 6. The Commissioner under Section 263 of the Act suo motu revised the assessments, after serving notice on the assessee, by order dated 12.03.2010. Under Section 263 the limitation provided, for revision of orders prejudicial to revenue, by sub section (2), is a period of two years from the end of the financial year in which the order sought to be revised was passed. The assessment order having been passed on 27.12.2007, the limitation commences from 31.03.2008 and expires only on 31.03.2010. The Commissioner passed the order within the limitation period, on 12.03.2010. Now the controversy arises as to whether the fresh assessment completed for all the years on 30.12.2010 is barred by limitation or not. If the period under Section 153B is taken definitely, limitation bars the proceeding. 7. The learned Counsel for the appellant contends that the Co....
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....by way of appeal, reference or revision, at any time, subject only to sub-section (2). There was no difficulty in making such a provision, extending the limitation under Section 153B, in the event of a remand under Section 263. The same having not been provided, there is no ground for permitting the assessments beyond the limitation period as provided under Section 153B. 10. The learned Senior Counsel, Government of India (Taxes), submits that since there is no limitation provided for completion of an assessment, on a remand made under Section 263 of the Act, there could be no specific time indicated, and then, it would have to be completed only within a reasonable period of time. It is also contended that the appellant had waived his right to rely on the ground of limitation, since he conceded to the fresh assessment at the hands of the A.O; before whom, he never raised the specific objection. The learned Senior Counsel would rely on Director of Inspection of Income-Tax (Investigation) v. Pooran Mall & Sons - (1974) 96 ITR 390 to contend that when an assessment order is revised suo motu within two years from its date, and there is specific power so conferred on the Commissioner....
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....er to make modifications or enhancement. If the argument is accepted, then, there could be no remand and it can only be understood as the legislature having conferred a power, which is ineffective and unworkable; which cannot be. 15. Then, the question would arise as to what should be the limitation under Section 263 of the Act. Under Section 263, as was noticed, the limitation provided for revision of orders prejudicial to revenue, is a period of two years from the end of the financial year in which the order sought to be revised was passed. The revision could be made by the Commissioner enhancing or modifying the assessment or canceling the assessment and directing a fresh assessment. It is true that by Section 150 a carte blanche is granted to the A.O insofar as proceeding at any time to complete an assessment, re-assessment or re-computation in consequence or to give effect to an order passed by an authority in a proceedings under this Act. Sub section (2A) of Section 153 provides for a limitation of one year to comply with an order passed under Section 263. If such a provision has not been made under Section 153B, then, it cannot be said that the assessment on remand being ....
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....ent. If the grounds are valid, we are of the opinion that, the mere fact that it was not raised before the A.O at the first instance cannot preclude the assessee from raising it in appeal or even before this Court. As has been held in Tax Appeal No.1254/2014, the distinction is between an 'irregularity' and a 'nullity'. If the prerequisite for proceeding is the 'satisfaction', then, proceeding without entering a satisfaction would be a nullity. Likewise, if the order is passed beyond the limitation provided, then, again, it cannot be sustained. 18. In the present case there was an original assessment made and the Commissioner exercising power of suo motu revision, cancelled the assessment and remanded it for fresh assessment. Section 153C speaks of a satisfaction, which has to be entered into at the first point, when, on recovery of materials on a search conducted in a partnership firm's business, the 'other person', the appellant, was issued with notice. There is no requirement for a further satisfaction for a fresh assessment on a remand made under Section 263. The A.O, on the materials received, at the initial stage, had entered his satisfa....
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....was concerned with Chapter XIVB, Special Procedure For Assessment Of Search Cases, applicable prior to 2003 (31.05.2003) and Section 251. There pursuant to a search, assessment was completed under Section 158 BC. On first appeal, under Section 251, favouring the assesses contention that the assessment ought to have been under Section 158BD, the matter was remanded. Section 251 did not confer the Appellate Authority with any power to remand the matter; which power was earlier available but specifically taken away by amendment. The fresh assessment was beyond the period of limitation as provided under Section 158BE. What distinguishes the instant case is the specific power of remand, in Section 263, evident from the words: 'cancellation of the assessment and directing fresh assessment'. As is found by us, there is no limitation provided to carry out the assessment. The fresh assessment cannot be said to be possible only within the limitation provided under Section 153B, since the power to revise extends to two years while that under Section153B is far lesser. The legislature cannot be said to have conferred a power redundant, ineffective and unworkable. 22. In taking this ....