TaxTMI 
TaxTMI 
2022 (7) TMI 75
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....tion of jurisdiction by the Pr. CIT u/s. 263 of the I.T Act, 1961 was not valid and justified. 2. The learned Pr. CIT erred in setting aside to the file of the assessing officer, the order u/s. 147 r.w.s. 143 (3) of the I. Tax Act, 1961 dt. 25.09.2018, which action of the Hon. Pr. CIT being not justified, the order u/s. 263 dt. 23.03.2021 be held to be invalid, bad in law and be quashed. 3. The appellant craves leave to add, alter, amend and/or vary any of the grounds at any time before the decision of the appeal." 3. Brief facts of the case shows that assessee filed its return of income on 25th September, 2011, for Assessment Year 2011-12 declaring a total income of Rs. 7,221,720/- and same was processed under Section 143 (1) of the Act on 28th January, 2012. Subsequently, the case was selected in scrutiny through CASS, the assessment was completed under Section 143 (3) of the Act, on 28th February, 2014 assessing the total income of the assessee at Rs. 7,322,700/-. 4. Subsequently, the case of the assessee was reopened by issue of notice under Section 148 of the Act, on 27th March, 2018. On 25th September, 2018 the Assessing Officer passed an order dropping the proceedings ....
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....y the PCIT on 23/3/2021 is in time. 11. The learned authorized representative stated that issue is squarely covered in favour of the assessee by the order of the coordinate bench in case of R.K. steel Syndicate Vs. Income Tax Officer reported in (2007) 14 SOT 158 (Mum) wherein it has been held that when the order passed by the assessing officer was only an order dropping reassessment proceedings, time limit for exercise of commissioner's power under section 263 must be computed with reference to original assessment order passed. He therefore stated that this decision of the coordinate bench covers the issue in favour of the assessee. 12. We have carefully considered the rival contentions and perused the orders of the lower authorities. We find that originally the income of the assessee was assessed under section 143 (3) of the act on 28/2/2014. Subsequently another order was passed u/s. 147 read with Section 143 (3) of the Act on 25/9/2018 wherein the learned assessing officer passed following order:- "Proceedings initiated u/s. 147 vide issue of notice u/s. 148 dated 27/3/2018 are hereby dropped." 13. The principal Commissioner of income tax has been bestowed upon with a p....
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....Commissioner to revise the assessment framed by the Assessing Officer on the points which are not even touched by this order. It is incorrect to plead that such an order can be viewed as anything but an order dropping the reassessment proceedings. It cannot be viewed as an assessment order, though termed so, in the eyes of the law. Let us also not lose sight of the scheme and spirit of section 292B of the Act. This section, inter alia, provides that no proceedings purported to have been taken in pursuance of any of the provisions of the Income-tax Act shall be invalid, or shall be deemed to be invalid, merely by the reason of any mistake, defect or omission in the proceedings if such proceeding is "in substance and effect in conformity with or according to the intent and purpose of this Act". It would thus follow that what is to be really looked at is the 'substance' and not the 'form' alone, and that legal rights of the parties are to be settled as per substance of the proceedings irrespective of whatever nomenclature is assigned to the proceedings. This approach to interpretation of the Income-tax Act, which is embedded in the Act itself by the virtue of a specifi....
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....roceedings or as an reassessment order per se. That is how, in our considered view, we have powers to decide whether or not what is termed as reassessment order can indeed be viewed as an assessment order or is to be viewed as an order dropping the reassessment proceedings. In case we are to view this order as an assessment order, and compute the time-limit on that basis, we will end up upholding the prejudice caused to the assessee on account of his not doing something which he is not permitted to do anyway, i.e., raise an academic question about validity of reassessment proceedings when no additions are made to his income in the course of such reassessment proceedings. The time-limit for exercise of Commissioner's powers, therefore, must be computed with reference to the assessment order passed on 14th February, 2000. 8. We would arrive at this very destination even if we were to traverse along a different dialectic. Let us analyze these facts from another perspective. In order to exercise powers under section 263, two conditions are to be satisfied - first, the order sought to be revised should be erroneous; and - second, that the order sought to be revised should be preju....