TaxTMI 
TaxTMI 
TaxTMI 
2019 (6) TMI 481
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....inising the return was sent to the petitioner for making assessment under Section 143(3) of the Act. After further process, the assessment order under Section 143(3) was made on 24.03.1993 determining the petitioner's total income at Rs. 8,05,67,450/- 5. On 31.01.1995, the second respondent issued a notice under Section 263 of the Act to the petitioner, proposing to revise the assessment made on the petitioner under Section 143(3) of the Act, on the ground that the order of the Assessing Authority was erroneous and prejudicial to the interest of revenue. The petitioner had raised his objections to the proposed revisions which came to be overruled by the Commissioner by an order dated 28.02.1995. The petitioner herein had not chosen to file an appeal against the order passed under Section 263 and thus, the order became final. After about 8 ½ years, the Assessing Authority issued a notice on 18.09.2003 to give effect to the order passed under Section 263 dated 28.02.1995 proposing to revise the assessment order under Section 143(3) dated 24.03.1993. This notice dated 18.09.2003 is under challenge in the present writ petition. 6. The learned counsel for the Assessee put f....
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....ntion of the petitioner is concerned, the crucial aspect would be to determine, as to whether the revision sought to be made under the impugned notice by the Assessing Authority, would fall under Section 153(2A) or 153(3) of the Act? 10. For the sake of convenience, the provision of Section 153 (2A) & (3) as it stood in the year 1995, is extracted hereunder:- "153. Time limit for completion of assessments and reassessments:- (2A) Notwithstanding anything contained in sub-sections (1) and (2), in relation to the assessment year commencing on the 1st day of April, 1971, and any subsequent assessment year, an order of fresh assessment under section, 146 or in pursuance of an order, under section 250, section 254, section 263 or section 264, setting aside or cancelling an assessment, may be made at any time before the expiry of two years from the end of the financial year in which the order under section 146 cancelling the assessment is passed by the Assessing] Officer or the order under section 250 or section 254 is received by the Chief Commissioner or Commissioner] or, as the case may be, the order under section 263 or section 264 is passed by the Chief Commissioner or Commissi....
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....s. 5,08,423 allowed wrongly on moulds which are entitled to 33 1/3% only." 13. The Commissioner of Income Tax, dealt with the above five issues in the following manner: (i) Insofar as the excess deduction in Clause (i) is concerned, the Commissioner had held that the excess deduction of Rs. 7,43,245/-was held to be erroneous and prejudicial to the interest of revenue and had therefore, directed the Assessing Officer to withdraw this excess deduction. (ii) In Clause (ii), the allowance of unascertained liability of Rs. 40,634/- was also held to be erroneous and prejudicial to the interest of revenue and therefore, directed the Assessing Officer to disallow the sum of Rs. 40,634/-. (iii) Likewise in Clause (iii)(a), the donation of Rs. 35,300/-allowed by the Assessing Officer was held to be erroneous and prejudicial to the interest of revenue and thereby, directed the Assessing Officer to disallow this amount. (iv) In Clause (iii)(b), the expenditure towards registration fee and expenses was found to be in the nature of capital, which should not have been allowed as a deduction from business income and therefore, it was held that this expenditure was erroneous and pr....
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.... the order under Section 263. Clause (v): Since the Commissioner had rendered a finding in his order under Section 263 that the expenditure towards liquidated damages Rs. 33,19,335/- was allowed without obtaining any details or making an enquiry or not obtaining break-ups of this huge sum, the Assessing Officer was required to recompute the liquidated damages based on the findings rendered in para 8 of the order under Section 263. Clause (vi): The Assessing Officer is required to recompute the deduction under Section 80HHC in the light of the findings rendered by the Commissioner in para 9 of his order under Section 263. Clause (vii): The Assessing officer was required to comply with the direction to recompute the depreciation of the items mentioned in para 10 of the Commissioner's order under Section 263, at the rate of 33 1/3%. 16. Thus, it is seen that in furtherance of the order under Section 263, the Assessing Officer is now required to reassess or recompute the assessment made, in order to give effect to the findings rendered by the Commissioner and to comply with the directions therein. 17. When Sub Section (2A) is read along with Sub Section (3), it is app....
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....herein, the Assessing Officer is directed to make a fresh determination after some of the assessments or the assessment order is set aside, such an exercise would squarely fall under Section 153(2A) of the Act. 21. In the instant case in hand, the Commissioner had given certain directions with determined findings and thereby, directed the Assessing Officer to carry out such directions. In consequence to these findings and directions of the Commissioner, the Assessing Officer will be required to exercise his powers under Section 153 (3) and not under Section 153 (2A). As such, it cannot be said that the impugned proceedings now initiated by the Assessing Officer is barred by limitation under Section 153(2A) of the Act. The first ground raised by the learned counsel for the petitioner is answered accordingly. 22. The alternate ground raised by the petitioner is that the assessment proceedings requires to be made within a reasonable time and as such, the delay of 8 years and 7 months is inordinate and unreasonable and therefore, the petitioner is entitled to succeed. One of the settled proposition of law, as decided in various decisions of the Hon'ble Apex Court as well as many ....
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....ly and his bound to complete the proceedings within a reasonable time. Nevertheless, it has also been held in various decisions that such a reasonable period would depend on the facts and circumstances of each and every case. 25. With this proposition in mind, the reasons assigned by the respondents for the delay of 8 years and 7 months was analysed from the averments made in the counter affidavit. According to the respondents, after the Commissioner had passed orders under Section 263, the Assessee had consistently changed its name on various occasions which resulted in the delay. A further vague reason has also been stated in the counter that after the original assessment order was passed, appeals came to be filed before the Commissioner of Income Tax and ITAT. Thereafter, when the Assessee sought for refund, the old files of the Assessee were retrieved. 26. Such an explanation cannot be at any stretch of imagination deemed to be sufficient cause for the delay. Insofar as the consistent change of the Assessee's name is concerned, it is nobody's case that the PAN number of the Assessee was also undergoing a change. When the relevant files and documents pertaining to the ....