TaxTMI 
TaxTMI 
2024 (12) TMI 1274
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....ons 147, 260 and 144B of the IT Act. Assessment Year relevant to the impugned orders is A.Y. 2012-13. 3. The necessary facts as the petition would set out, need to be noted:- The petitioner is a limited liability partnership firm, which was initially incorporated as a Private Limited Company on 27 November 1995 and thereafter converted into a limited liability partnership (LLP) on 30 March 2011. It is regularly filing its income tax returns since its incorporation. 4. For the assessment year 2012-13, the petitioner filed its return of income on 29 September 2012. On 03 October 2013, an intimation was issued to the petitioner under Section 143 (1) of the IT Act. After a long period of time that is on 12 November 2018, a notice under Section 133 (6) was issued by the DDIT (I & CI), Unit-2(2) calling for details like share of the petitioner in the sale proceeds, from the sale of land, computation of capital gains, etc. The petitioner, by its letter dated 27 November 2018, replied to the said notice in which it furnished all the details which were called for. On 07 December 2018, the petitioner filed further details as also requested that a personal hearing be granted to....
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.... continued till the Division Bench heard the parties on 21 September 2021 when it passed the following order disposing of the writ petition in terms of paragraph 3 with the concurrence of learned counsel. "1. Mr. Walve states that an affidavit of one Biju Thomas, Assistant Commissioner of Income Tax sworn on September 17, 2021 has been filed in compliance with the order dated September 14, 2021. We have considered the affidavit and we accept the explanation given therein. 2. The assessment order dated May 19, 2021 is hereby quashed and set aside. Naturally, consequential notices, if any, are also quashed and set aside. 3. Keeping open the rights and contentions of the parties, we pass the following order with the concurrence of the counsel. (A) The impugned order dated November 25, 2019 (Exhibit 'P' to the petition) disposing the objection raised against reopening of assessment under Section 147 of the Income Tax Act, 1961 (the 'Act') is quashed and set aside. (B) The matter is remanded to the concerned authority to reconsider the objection dated May 6, 2019 and pass further orders. Should petitioner wish to file any further submissions ....
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....pondent no.1 rejected the objections of the petitioner. Also, the petitioner was not furnished with a copy of the approval under Section 151 of the IT Act, although it was specifically sought by the petitioner. Thereafter the assessment proceedings were transferred to the National Faceless Assessment Centre, Delhi as per the intimation dated 08 September 2022. The petitioner contends that a show cause notice dated 12 September 2022 was issued to the petitioner by posting such notice on the Income Tax portal. Also a notice under Section 142 (1) of the IT Act dated 12 September 2022 was lodged on the portal. The petitioner contends that it was not aware about the issuance of the show cause notice as also the notice under Section 142 (1) both dated 12 September 2022, hence, the same remained to be responded by the petitioner. 11. On 20 September 2022, a communication was addressed by respondent no.3/Assistant Commissioner of Income-tax, National Faceless Assessment Centre (for short, "NFAC") to the petitioner enclosing therewith a show cause notice dated 20 September 2022 inter alia recording that the variations, which were intended to be made, prejudicial to the interest of the pe....
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.... Maval, Pune. The SRO had provided another Index-II of another transaction amount of Rs. 108,25,00,000/- which was also registered on 16.08.2011. On perusal of Index-II, it is found that Shri. Darayas Lovaji Frezar acted as Power of Attorney holders in respect of sellers namely Noshir D Talati, Rashna Talatia nd M/s Zenriba Estate & Investment P. Ltd. Whereas Shri. Sanjay B. Jadhav acted as POA holder for Wavy Construction LLP. On perusal of Index-II, it is found that Mis Wavy Construction LLP was one of the seller. It is further learnt that the entire sale transaction had taken place in three stages as detailed below Description of Property Area in Sq. Mt. Date of conveyance Total sale value in Rs. Amount received Plot A 17615.93 10.08.2011 9,00,00,000 8,75,00,000 Plot B 214879.95 10.08.2011 108,25,00,000 107,00,00,000 N.A. Land 12 Mtrs Internal Road of Plot A 8330 10.08.2011 3,25,00,000 3,25,00,000 While calculating the LTCG the assessee has taken into consideration expenses viz. cost of acquisition of and improvement, professional fees, supervisory charges etc. to curtail the amount of receipts of the ....
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.... to the show cause notice inter alia recording that the notices/letters as issued by the respondents and the reassessment proceedings were time barred, bad in law, void ab initio and illegal. In this context, the petitioner contended that the notice under Section 148 was issued on 29 March 2019 for assessment year 2012-13. It was stated that as per provisions contained in Section 153 (2), the last date for passing the assessment order in cases of notice being issued under Section 148 before 01 April 2019, was 31 December 2019 i.e. 9 months from the end of the financial year in which notice under Section 148 was served. It was stated that for such reason, in the assessee's case, the last date for passing the assessment order was 31 December 2019. The petitioner pointed out that Writ Petition No. 3368 of 2019 was filed by the petitioner on which this Court had granted ad-interim stay on 13 December 2019 which was continued till the writ petition was disposed of i.e. on 21 September 2021. It was thus contended that the assessment proceedings had remained stayed by this Court from 13 December 2019 till 21 September 2021. Considering such fact, it was contended by the petitioner that as....
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....tember 2022, an assessment order was passed under Section 143 (3) read with Sections 147, 260 and 144B of the IT Act making addition of Rs. 4,69,02,981/- to the total income of the petitioner. 15. It is on the aforesaid facts, the present petition is filed praying for the following substantive reliefs:- "(a) that this Hon'ble Court may be pleased to issue a writ of certiorari or a writ in the nature of certiorari or any other appropriate writ, order or direction under Article 226 of the Constitution of India calling for the records of the case leading to the passing order of the Respondent No.1 dated 14 October, 2021 rejecting the objections of the Petitioner (Ex. 'J') and the assessment order u/s. 143 (3) r. w. sections 147, 260 and 144B of the Act dated 30" September, 2022 for A.Y. 2012-13. (Ex. 'Q') and after going through the same and examining the question of legality thereof to quash, cancel and set aside the order of the Respondent No.1 dated 14" October, 2021 rejecting the objections of the Petitioner (Ex. 'J') and the assessment order u/s. 143 (3) r. w. sections 147, 260 and 144B of the Act dated 30% September, 2022 for A.Y. 2012-13 (Ex. 'Q'). (b) ....
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..... Mr. Mistri submits that the impugned notices issued by respondent no.3 from 8 September 2022 till 27 September 2022 for the reassessment proceedings being initiated and thereafter in passing the impugned assessment order under Section 143 (3) read with Sections 147, 260 and 144B of the IT Act on 30 September 2022 are bad in law and without jurisdiction, as the same had been issued after the expiry of the limitation period prescribed in Section 153 (2) of the IT Act along with Explanation 1 below proviso to Section 153 (9) of the IT Act. 18. In supporting such contention, it is submitted that as per Section 153 (2), the Assessing Officer was required to pass such order within nine months from the end of the financial year in which the notice under Section 148 was served. The submission is that the notice under Section 148 was issued on 29 March 2019. The financial year ended on 31 March 2019, and the nine months period from 01 April 2019 ended on 31 December 2019. This would have been the normal position. However, Writ Petition No. 3368 of 2019 was filed by the petitioner in this Court challenging the notice under Section 148 of the IT Act, in which this Court had granted inter....
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....quashed and set aside; (ii) the High Court quashed the order disposing of the objections dated 25 November 2019 and held that the petitioner can file any further objections in addition to its letter dated 06 May 2019 objecting to the notice under Section 148 of the IT Act. (iii) the High Court asked the Assessing Officer to dispose of the objections of the petitioner after giving a personal hearing to the petitioner. 20. It is hence submitted that the High Court has neither given directions nor recorded any findings and on the contrary, the High Court observed - "We clarify that we have not made any observations on merits of the case." Supporting such contentions on the proceedings being barred by limitation under the provisions of Section 153, Mr. Mistri has placed reliance on the decisions of the Supreme Court in Income-tax Officer vs. Murlidhar Bhagwan Das 52 ITR 335 SC, Rajinder Nath v. Commissioner of Income-Tax, Delhi 120 ITR 14, SC and on the decision of the Division Bench of Karnataka High Court in Principal Commissioner of Income-Tax & Anr. vs. Tally India Pvt. Ltd. 435 ITR 137 Kar. 21. It is next submitted that the impugned notice under Section 148....
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....missioner of Income-Tax, Delhi (supra) as according to Mr. Sharma, it would not be a correct understanding/reading of the High Court's order that it has simply set aside the assessment order dated 19 May 2021, as it provides for a further action to be undertaken as per the directions as contained in paragraph 3(A) to 3(D) which, according to Mr. Sharma, were necessarily required to be adhered by the Revenue in passing fresh orders. Hence, the original period of limitation was no more available and it is the extended period of limitation as provided by sub-section (6) of Section 153 which was available for a fresh order to be passed. It is, therefore, Mr. Sharma's submission that the petitioner is not correct in its submission relying on the decision to support its contentions that the extended period of limitation was not available to pass the impugned assessment order dated 30 September 2022. He accordingly submits that the Writ Petition be dismissed. 23. We have heard Mr. Mistri, learned senior counsel for the petitioner and Mr. Sharma, learned counsel for the respondents. With their assistance, we have perused the record. Reasons and conclusion 24. In the facts and circ....
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....der of assessment under section 143 or section 144 may be made at any time before the expiry of [twelve] months from the end of the financial year in which such return was furnished.] [(1B) Notwithstanding anything in sub-section (1), where a return is furnished in consequence of an order under clause (b) of sub-section (2) of section 119, an order of assessment under section 143 or section 144 may be made at any time before the expiry of twelve months from the end of the financial year in which such return was furnished.] (2) No order of assessment, reassessment or recomputation shall be made under section 147 after the expiry of nine months from the end of the financial year in which the notice under section 148 was served: Provided that where the notice under section 148 is served on or after the 1st day of April, 2019, the provisions of this sub-section shall have effect, as if for the words "nine months", the words "twelve months" had been substituted. (3) Notwithstanding anything contained in sub-sections (1), (1A) and (2), an order of fresh assessment [or fresh order under section 92CA, as the case may be,] in pursuance of an order under [....
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....ll be extended by twelve months. (5) Where effect to an order under section 250 or section 254 or section 260 or section 262 or section 263 or section 264 is to be given by the Assessing Officer [or the Transfer Pricing Officer, as the case may be,] wholly or partly, otherwise than by making a fresh assessment or reassessment [or fresh order under section 92CA, as the case may be], such effect shall be given within a period of three months from the end of the month in which order under section 250 or section 254 or section 260 or section 262 is received by the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner, as the case may be, the order under section 263 or section 264 is passed by the 45[Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner, as the case may be] : Provided that where it is not possible for the Assessing Officer 44[or the Transfer Pricing Officer, as the case may be,] to give effect to such order within the aforesaid period, for reasons beyond his control, the Principal Commissioner or Commissioner on receipt of such request in writing from the Assessing Officer 46....
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.... the Assessing Officer, within the time specified in the said sub-sections, and such order has been received or passed, as the case may be, by the income-tax authority specified therein before the 1st day of June, 2016, the Assessing Officer shall give effect to such order, finding or direction, or assess, reassess or recompute the income of the assessee, on or before the 31st day of March, 2017. (8) Notwithstanding anything contained in the foregoing provisions of this section, sub-section (2) of section 153A or sub-section (1) of section 153B [or section 158BE], the order of assessment or reassessment, relating to any assessment year, which stands revived under sub-section (2) of section 153A [or sub-section (5) of section 158BA], shall be made within a period of one year from the end of the month of such revival or within the period specified in this section or sub-section (1) of section 153B [or section 158BE], whichever is later. (9) The provisions of this section as they stood immediately before the commencement of the Finance Act, 2016, shall apply to and in relation to any order of assessment, reassessment or recomputation made before the 1st day of June, ....
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....ing with the date on which the order under sub-section (3) of that section is made by him; or (vii) in a case where an application made before the Income-tax Settlement Commission is rejected by it or is not allowed to be proceeded with by it, the period commencing from the date on which an application is made before the Settlement Commission under section 245C and ending with the date on which the order under sub-section (1) of section 245D is received by the Principal Commissioner or Commissioner under sub-section (2) of that section; or (viii) the period commencing from the date on which an application is made before the Authority for Advance Rulings or before the Board for Advance Rulings under sub-section (1) of section 245Q and ending with the date on which the order rejecting the application is received by the Principal Commissioner or Commissioner under sub-section (3) of section 245R; or (ix) the period commencing from the date on which an application is made before the Authority for Advance Rulings or before the Board for Advance Rulings under sub-section (1) of section 245Q and ending with the date on which the advance ruling pronounced by it i....
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....riod of limitation referred to in sub-sections (1), (1A), (2), (3) and sub-section (8) available to the Assessing Officer for making an order of assessment, reassessment or recomputation, as the case may be, is less than sixty days, such remaining period shall be extended to sixty days and the aforesaid period of limitation shall be deemed to be extended accordingly: Provided further that where the period available to the Transfer Pricing Officer is extended to sixty days in accordance with the proviso to sub-section (3A) of section 92CA and the period of limitation available to the Assessing Officer for making an order of assessment, reassessment or recomputation, as the case may be, is less than sixty days, such remaining period shall be extended to sixty days and the aforesaid period of limitation shall be deemed to be extended accordingly: Provided also that where a proceeding before the Settlement Commission abates under section 245HA, the period of limitation available under this section to the Assessing Officer for making an order of assessment, reassessment or recomputation, as the case may be, shall, after the exclusion of the period under sub-section (4)....
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....erated at the Bar is qua the applicability of the provisions of sub-sections (2) and (6) of Section 153, and Explanation 1 below sub-section (9) (supra), and as underscored by us. Section 153 provides for "Time limit for completion of assessment, reassessment and recomputation". Sub-section (1) thereof provides that no order of assessment shall be made under section 143 or section 144 at any time after the expiry of twenty-one months from the end of the assessment year in which the income was first assessable. Sub-section (2) which is relevant for the context in hand, provides that no order of assessment, reassessment or recomputation shall be made under section 147 after the expiry of nine months from the end of the financial year in which the notice under section 148 was served. The proviso below sub-section is not applicable, as it applies only in a case where the notice under section 148 is served on or after the 1st day of April, 2019, which is not the case. Sub-section (6) is the debated provision which the Revenue intends to apply when it contends that the extended period of limitation of 12 months from the end of the month in which the Court had passed the order (dated 21 S....
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....notice under section 148 was served. Applying such provision and assuming that there was no stay order passed to the notice under Section 148, the period of nine months from the date of issuance of notice under Section 148 (29 March 2019) was to expire on 31 December 2019 i.e. on a strict application of the limitation as prescribed by sub-section (2). However, Section 148 notice and the reasons recorded for reopening of the assessment, as objected by the petitioner being rejected by the Assessing Officer vide an order dated 25 November 2019, were challenged by the petitioner by filing Writ Petition No. 3368 of 2019, on 13 December 2019 on which an interim order was passed by this Court granting stay to the notice issued under Section 148 i.e. prohibiting the Assessing Officer to pass a reassessment order under Section 147. Such order came to be effected on 21 September 2021. 28. The controversy which arises is as to what is the nature of the order passed by this Court and whether the order passed by this Court would be required to be construed to fall within the provisions of sub-section (6) of Section 153, so as to provide the extended period of limitation of twelve months as c....
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....ted that the sum objected should be deleted from the assessment for the year ending 1949-50 and included in the assessment for the year ending 1948-49. Pursuant to the said direction issued by the Appellate Assistant Commissioner, the Income-tax Officer initiated proceedings under Section 34 (1) of the Act in respect of the assessment year 1948-49. The notice issued under such section was served on the respondent on 5 December 1957. The assessee filed a petition under Article 226 of the Constitution in the High Court of Judicature at Allahabad praying for quashing of the proceedings, mainly on the ground that the proceedings were initiated beyond the time prescribed by Section 34 of the Act. The High Court accepted the contention and quashed the proceedings initiated by the Income-tax Officer. It is assailing such orders passed by the High Court, the proceedings reached the Supreme Court. In such context, the Constitution Bench of the Supreme Court examined as to what is the true meaning of the terms of the second proviso to Section 34 (3) of the Act, which is quite similar to the provisions of Clause (i) of sub-section (6) of Section 153 of the IT Act. The second proviso to Sectio....
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....mmissioner can give under Section 31. It was observed that the expression "directions" in the proviso could only refer to the directions which the Appellate Assistant Commissioner or other Tribunals can issue, under the powers conferred on him or them under the respective sections. It was observed that therefore the expression "finding" and the expression "direction" can be given full meaning, namely, that the finding is a finding necessary for giving relief in respect of the assessment of the year in question and the "direction" is a direction which the appellate or revisional authority, as the case may be, is empowered to give under the provisions. The Court also considered the words "in consequence of or to give effect to" to observe that these words do not create any difficulty, for they have to be collated with, and cannot enlarge, the scope of the finding or direction under the proviso. It was observed that if the scope is limited in such manner, the said words also must be related to the scope of the findings and directions. The relevant observations of the Supreme Court are required to be noted which read thus:- "Now, let us scrutinize the expressions on which stro....
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....reby exclude that income from the assessment of the year under appeal. The finding in that context is that that income does not belong to the relevant year. He may incidentally find that the income belongs to another year, but that is not a finding necessary for the disposal of an appeal in respect of the year of pecht in question the expendreciof an in of must be collated to the directions which the Appellate Assistant Commissioner can give under section 31. Under that section he can give directions, inter alia, under section 31 (3) (b), (c) or (e) or section 31(4). The expression "direction" in the proviso could only refer to the directions which the Appellate Assistant Commissioner or other tribunals can issue under the powers conferred on him or them under the respective sections. Therefore, the expression "finding" as well as the expression "direction" can be given full meaning namely, that the finding is finding necessary for giving relief in respect of the assessment of the year in question and the direction is a direction which the appellate or revisional authority, as the case may be, is empowered to give under the sections mentioned therein. The words "in consequence of o....
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....xpressions "finding" and "direction" are limited in meaning. A finding given in an appeal, revision or reference arising out of an assessment must be a finding necessary for the disposal of the particular case, that is to say, in respect of the particular assessee and in relation to the particular assessment year. To be a necessary finding, it must be directly involved in the disposal of the case. It is possible in certain cases that in order to render a finding in respect of A, a finding in respect of B may be called for. For instance, where the facts show that the income can belong either to A or B and to no one else, a finding that it belongs to B or does not belong to B would be determinative of the issue whether it can be taxed as A's income. A finding respecting B is intimately involved as a step in the process of reaching the ultimate finding respecting A. If, however, the finding as to A's liability can be directly arrived at without necessitating a finding in respect of B, then a finding made in respect of B is an incidental finding only. It is not a finding necessary for the disposal of the case pertaining to A. The same principles seem to apply when the question ....
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....taka High Court in Principal Commissioner of Income Tax & Anr. Vs. Tally India Pvt. Ltd. (supra) wherein the Court, in the context of the provisions of Section 153 (1) (a) and Section 153 (3) (ii) of the IT Act, was considering the contention as urged by the assessee that no direction / finding has been issued by the High Court in the order dated 7 March 2012 passed in the Writ Petition and when a direction was issued to remit the matter asking the assessee to appear before the Assessing Officer on a particular date did not tantamount to either issuing a direction / finding within the meaning of Section 153 (3) (ii) of the IT Act. The Court applying the decisions of the Supreme Court in Income Tax Officer vs. Murlidhar Bhagwan Das (supra) and Rajinder Nath vs. Commissioner of Income Tax, Delhi (supra) observed that these provisions are concerned only when a finding is given in an appeal, revision or reference are concerned, arising out of an assessment and it must be a finding necessary for disposal of a particular case and similarly, a direction must be an expressed direction necessary for disposal of the case before authority or Court and must also be a direction which the author....
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.... discussed: (i) The purport of the order can be seen from the contents of paragraph 3(A) to 3(D). In paragraph 3(A), the order impugned in the said writ petition dated 25 November 2019 disposing of the objections raised against the reopening of the assessment under Section 147 of the IT Act, is quashed and set aside. (ii) In paragraph 3(B) of the order, the matter stoold remitted to the concerned authority to reconsider the objection of the petitioner dated 5 May 2019 and for passing further orders, while permitting the petitioner to file any "further submissions" in response to the letter dated 23 April 2019 giving reasons for reopening of the assessment for Assessment Year 2012-13, to be complied with within two weeks from the date of the order. (iii) Paragraph 3(C) provides that if the petitioner seeks any clarification regarding the figures which are mentioned in the reasons for reopening, the concerned authority shall provide the same within two weeks of receiving the communication from the petitioner. (iv) Finally in paragraph 3(D) of the order, it is observed that the concerned authority "may" further dispose of the objection to the reopen....
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....essarily required to be an order which not only guides, but controls the course of such assessment, reassessment or recomputation, and not otherwise. In reaching to this conclusion, we are supported by what has been held by the Supreme Court in Income Tax Officer vs. Murlidhar Bhagwan Das (supra) when the Supreme Court observed that the words "in consequence of or to give effect to" do not create any difficulty, for they have to be collated with, and cannot enlarge, the scope of the finding or direction under the proviso. It was further observed that if the scope is limited in such event, the said words also must be related to the scope of the findings and directions. 35. Thus, considering such consequence which would be brought about by the provisions of sub-section (6)(i) of Section 153 of the IT Act, we are not persuaded to accept Mr. Sharma's contention that this would not be the case which would fall within the provisions of the first proviso below Explanation 1 of Section 153. In fact as the order dated 21 September 2021 passed by this Court on the petitioner's writ petition (supra) do not, in any manner, record a finding or issues directions as understood in terms of clau....