AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2015 (10) TMI 2721
X X X X Extracts X X X X
X X X X Extracts X X X X
..... 2003-04. 3. Whether on the facts & in the circumstances of the case, the Ld. CIT (A) has erred in holding that the provisions of section 150 (1) of the I.T. Act were not applicable in this case." 3. The above grounds are inter-connected, therefore, the same are disposed of together as under. 4. Brief facts of the case are that in the computation of taxable Income attached with the return of income for the year under consideration i.e. AY 2002-03, gross total income had been computed at Rs. 1,47,16,979/-. Out of this total income, the assessee has claimed two deductions under chapter VIA as under:- U/s 80HHC Rs. 1,02,21,587/- U/s 80-IA/B @ 30% Rs. 44,95,392/- The notice u/s 148 read with section 150 of the Income-tax Act, 1961 (hereinafter 'the Act') dated 15.03.2011 was issued to the assessee. In reply vide letter dated 24.03.2011, the assessee had submitted that no appeal had been preferred before any authority for the year under consideration i.e. AY 2002-03, therefore, no notice could be issued u/s 148 beyond the time limit mentioned in section 149 and submitted that as per section 149(1) (b) notice can be issued only within six years from the end of the assessment year,....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ount of Duty draw Back was liable to be excluded for the purposes of computation of deduction/s 80-I. The AO noticed that the assessee failed to exclude the receipts/income on account of Duty Draw back while computing deduction u/s 80-IB in this case. He observed that if this amount of Rs. 3,21,28,469/- was excluded, the resultant figure would be a huge loss of over Rs. 1,74,11,490/-. Thus, there would be a loss of over Rs. 1.74 crores from the Industrial Undertaking rendering the assessee ineligible for any deduction u/s 80-IA/IB of the Act. The assessee vide letter dated 07.11.2011 pointed out to the AO that in the Hon'ble High Court's order, there was no such direction that deduction u/s 80IA needs to be recomputed and the issue of deduction u/s 80IA after duty back or before duty drawback was not at all raised by the department and not even discussed in the Hon'ble High Court order. The assessee pleaded before the AO that in the absence of any such clear direction, deduction u/s 80 IA was not to be recomputed. But the AO did not accept the assessee's reply and following the decisions of the Hon'ble Supreme Court, the AO observed that this aspect was also covered by ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....r on appeal, etc. 150. (1) Notwithstanding anything contained in section 149, the notice under section 148 may be issued at any time for the purpose of making an assessment or reassessment or recompilation in consequence of or to give effect to any finding or direction contained in an order passed by any authority in any proceeding under this Act by way of appeal, reference or revision or by a Court in any proceeding 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" The object of enacting s. 150 (1) is to really give effect to the orders made by the superior authorities/courts under the Act or the Constitution and thus bring the assessments for the year or years, as the case may be....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t-matter of the appeal, the provisions of s. 150 (1) cannot be invoked for making an assessment or reassessment. It follows, therefore, that if the original order which was the subject-matter of appeal, reference or revision could not have been passed, when it was purported to have been passed by reason of its being barred by limitation, the same could not be revived u/s 150 (1). Reliance is placed on Gauri Shankar Choudhary v. Addl. CIT (1998) 234 ITR 865 (Pat) & CIT v, Vaikundom Rubber Co. Ltd., (2001) 249 ITR 19 (Ker.) 6.5 A three-judge bench of the Hon'ble Apex Court in K.M. Sharma vs. ITO, 254 ITR 772 (SC) points out that sub-so (2) aims at putting an embargo on reopening assessments, which have attained finality on the expiry of the prescribed period of limitation. Sub section (2), in putting such embargo, refers to the whole of sub-s (1), meaning thereby to insulate all assessments, which have become final and may have been found liable to reassessments or recomputation either on the basis of orders in proceedings under the Act or orders of courts passed under any other law. On a combined reading of sub-so (1) as amended w.e.f. April 1, 1989, and sub-so (2) of S. 150 as....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... The substance of the submissions of the ld. AR is as under :- (i) The notice u/s 148 read with section 150 was issued to the assessee. As no appeal had been passed by any authority in the year under consideration (AY 2002-03), therefore, no notice could be issued u/s 148 beyond the time limit mentioned in section 149. As per section 149(1) (b), notice can be issued only within six years from the end of the assessment year, therefore, last date for the issue of notice was 31-03-2009 whereas notice was issued on 15.03.2011 and, therefore, the notice is time barred. (ii) For the AY 2003-04 in the assessee's case, the Hon'ble Delhi High court held that deduction u/s 80HHC shall be computed only after deducting from the gross total income the deduction already allowed u/s 80-IA/IB of the Act. This order was for AY 2003-04 and there was no direction to reopen the case for any other year and despite that AO reopened the case for AY 02-03 u/s 150(1). Even the Department did not raise this issue before the Tribunal or Hon'ble High Court. (iii) Pursuant to reopening of the assessment for AY 2002-03 u/s 150(1), assessment order was passed and surprisingly deduction u/s 80IB was recomp....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... appellate order being passed in this case does not arise We also find that there is also no dispute that notice u/s 148 issued on 15.03.2011 which is clearly beyond the outer time limit of six years and is, therefore, hit by limitation. However, we find that the AO initiated the proceeding u/s 147 on the basis of the judgment of Hon'ble jurisdictional High Court in assessee's own case for AY 2003-04 wherein, it was held that the deduction under any other section of chapter VIA shall be computed only after deducting from the gross total income, the deduction already allowed u/s 80IA/IB of the Act. We find that on the said finding of the Hon'ble High Court, the AO relied upon the provisions u/s 150 (1) of the Act to reopen the case for the A.Y. 2002-03. We take note of the fact that there is also no dispute about the fact that the proceeding u/s 147 was initiated for the assessment year 2002-03 on the basis of order of Hon'ble High Court for assessment year pertains to 2003-04 and there is no order for the relevant A.Y. 2002-03 which is before us. After going through the provisions of Section 150, the ld CIT(A) has rightly interpreted that the object of enacting section 150 ....