TaxTMI 
TaxTMI 
2016 (7) TMI 1543
X X X X Extracts X X X X
X X X X Extracts X X X X
....ces. The return of income for the year was filed on 29/11/2000, declaring total income at Rs. 21. 64 Crores. The AO completed the assessment u/s. 143(3) of the Act, on 31/01/2003, assessing the total income of the assessee at Rs. 26. 91 Crores. Matter travelled up to the Tribunal. Vide its order dated 16/08/2007(ITA/5832/ Mum/2003), it set aside the assessment order passed on 31/01/2003 on the issue of quantification of disallowance u/s. 14A of the Act. The assessee moved an application u/s. 254(2) before the Tribunal and vide its order dated 16/08/2007, the application was disposed. In pursuance of the order of the Tribunal, the AO completed the assessment u/s. 143 (3) read with section 254 of the Act, on 02/12/ 2008, determining the income of the assessee at Rs. 23. 30 Crores. The assessee preferred an appeal before the First Appellate Authority (FAA), who partly allowed the appeal filed by the assessee. On 17/02/2009, the AO passed rectification order u/s. 154 of the Act, determining the income of the assessee at Rs. 46. 07Crores for the year under consideration. The assessee challenged the rectification order before the FAA, who held that the appeal filed by the assessee was in....
X X X X Extracts X X X X
X X X X Extracts X X X X
..... 2008-09 and subsequent years, that the ends of justice will be met if the interest expenditure of Rs. 4 Crores was held to be attributable to making investment in shares yielding exempt income which is disallow - ing u/s. 14A(1) of the Act, that the interest is expenditure had been considered giving credit to the huge amount available to the assessee in form of dividend on profit on sale of investment during the year and possibility of utilising capital partly for investment in shares. In respect of admitted to and managerial expenses, the FAA held that the assessee's argument was not acceptable that no expenditure was incurred at all for the purpose of earning exempt income, that administrative expenses to be incurred on the investment activities depended on the number of scripts held quantity of shares in each script sold in purchase, that a perusal of the balance sheet showed the there were investments in subsidy companies as well as in other companies, that there were investment in only to subsidiary companies and other fifteen entities, that the number of scripts held was not very large, that the assessee had argued that maximum disallowance in that regard could be made of R....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... issue of time limit has been dealt at length. Facts of the case were that the assessee -company had filed its return of income declaring a total income of Rs. 2, 09, 106/-that the return was taken in scrutiny, that the AO framed scrutiny assessment on 31. 03. 1989, determining a total income of the assessee at Rs. 13, 22, 030/-, that the AO had questioned two separate amounts of commission paid by the petitioner to two different agencies and claimed deduction thereof from its total income, that he held that a sum of Rs. 9, 27, 672/-paid by way of commission to one person and a sum of Rs. 1, 85, 000/- paid by way of service charges to the other person should be disallowed, that matter travelled up to the Tribunal and the issue was remanded back to the file of the AO. While doing so, the Tribunal passed the following order : "3. Upon going through the material on record and keeping in mind the submissions made before us by the assessee's counsel, we deem it fit and proper in order to do substantial justice to the asses see, we remit the matter to the file of the AO with a direction to summon those two parties again and allow the assessee an opportunity to cross-examine them s....
X X X X Extracts X X X X
X X X X Extracts X X X X
....limitation for completion of assessments under sub-section (1) and sub-section (2) of section 153. Sub- section (3) of section 153, however, provided that the provisions of subsections (1) and (2) shall not apply to classes of assessments, reassessments and recomputations provided in clauses (i) to (iii) of sub-section (3) of section 153. Such classes included a case of fresh assessment made u/s. 146 ; a case of assessment, reassessment or recomputation in consequence of or to give effect to any finding or direction contained in an order u/s. 250, 254, 260, 262, 263 or 264, as also in the case of a firm, where an assessment is made on a partner of the firm in consequence of an assessment made on the firm u/s. 147. 18. Prior to the introduction of sub-section (2A) of section 153 of the Act, it may have been open for the Revenue to contend that all cases of assessments, reassessments or recomputations made in the case of the assessee or any person in consequence of or to give effect to any finding or direction of the appellate orders passed in consequences mentioned in clause (ii) thereof, would not be governed by the limitation provided in sub-section (1) and sub-section (2) and ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... of the Act are made subject to the provisions of section (2A) of section 153 of the Act. 22. Under the circumstances, the class of cases of fresh assessment to be made pursuant to order u/s. 250, etc. , would fall under sub-section (2A) of section 153 of the Act and the period of limitation prescribed therein would operate. In those cases where there is no need for a fresh assessment and are not covered under sub-section (2A) of section 153 of the Act but are covered under clauses (i), (ii) and (iii) of section 153, the limitation prescribed under subsection (2A) of section 153 would not apply and the expression "assessment, reassessment and recomputation be completed at any time" may enable the Revenue to continue the proceedings of assessment even beyond the period prescribed under sub-sections (1) and (2) of section 153 of the Act and would also not be hindered by the prescription of limitation u/s. (2A) of section 153 of the Act. 23. We may notice that the Delhi High Court in the case of CIT v. Bhan Textile P. Ltd. [2008] 300 ITR 176 (Delhi) also adopted a similar view. The High Court held as under (page 180) : "In so far as the applicability of section 153(3)(ii) of ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ary. We may record that such commissions paid to the two agencies was the sole dispute between the assessee and the Department. In the original assessment, the Assessing Officer discussed only this issue and made corresponding disallowance. In essence, thus, the Assessing Officer was required to pass a fresh order of assessment which was necessary on account of an order passed by the Tribunal u/s. 254 of the Act cancelling the assessment framed by the Assessing Officer. The period of limitation prescribed in section 153(2A), therefore, would apply. While such an order was served on the Commissioner on August 3, 1994, within a period of two years of the end of such financial year, a fresh order of assessment had to be passed by the Assessing Officer. The same not having been done, in our view, such proceedings have become time-barred. The assessment placed before the Assessing Officer by the Tribunal's order, therefore, must be treated as having abated. In that view of the matter, the declaration prayed for by the petitioner must be granted. 26. In the result, the petition is allowed. The assessment proceedings for the assessment year 1988-89 in the case of the present assess....
X X X X Extracts X X X X
X X X X Extracts X X X X
....f Consistency requires us to follow the orders of the coordinate benches of this Tribunal till there is a change in either of the factual situation or the legal position. In the case before us, subsection (2) and (3) of section 14 A a were not available on the statute book when the orders were passed by this Tribunal in the assessee's own case for the earlier two years. Besides, other relevant decisions rendered by the Tribunal in the cases cited supra were also not brought to the notice of this Tribunal at the time when Department's appeal for the earlier two years in the assessee's own case were disposed off. " 6. After going through the above order, we are of the opinion that the Tribunal had restored the matter to the file of the AO for a 'fresh decision'. It was not a case of simple direction to the AO, wherein he has to give appeal effect only. If the Tribunal directs the Revenue Authorities to verify certain facts like arithmetic calculations or to decide a particular ground of appeal that remained to be adjudicated, it can safely be said that the time limit prescribed by the section 153(2A) of the Act would not be applicable. But, in a case like this, where the AO had to ....