Limitation Period us 153-Contention was that ITAT had set aside Assessment order of CIT-A only and not that of the AO-Allahabad HC

Limitation Period us 153-Contention was that ITAT had set aside Assessment order of CIT-A only and not order of the Assessing Officer-Allahabad HC Judgment

ABCAUS Case Law Citation:
ABCAUS 1123 (2017) (02) HC

Important Case Laws Cited/relied upon:
CIT Vs Purshottamdas T. Patel, reported in 209 ITR 52 (Guj.)

Substantial Question raised by the Revenue:

1. Whether under the facts and circumstances of the case, the learned Income Tax Appellate Tribunal vide order dated 31.08.2016 has erred in law and on facts by upholding the applicability of Section 153(2A) for ascertaining the limitation period for the consequential order passed by the Assessing Officer, when the Ld. ITAT by its earlier order dated 18.11.2011 had setaside the appellate order of the CIT(A) and not the order of assessment completed by the Assessing Officer.

2. When under the facts and circumstances of the case, the learned Income Tax Appellate Tribunal had erred in law by not adjudicating upon the applicability of Section 153(3) of the Act to the consequential order dated 26.03.2014 passed by the Assessing Officer on the directions given by Ld. ITAT’s earlier order dated 18.11.2011 to consider additional evidences filed before the CIT(A).

3. When under the facts and circumstances of the case, the learned Income Tax Appellate Tribunal is justified in applying section 153(2A) by ignoring that the earlier assessment order was not set aside by the ITAT itself and the limitation provided u/s 153(2A) will not applicable

Brief Facts of the Case:
The original assessment order in the case of the assessee was passed on 28-12-2007 under section 144/147 of the Income Tax Act, 1961 (“the Act”) determining net taxable income at an amount which was 25 times higher than the income declared.

The Assessee preferred an appeal before Commissioner of Income Tax (Appeals),Lucknow (‘CIT(A)’) which was dismissed. The assessee took the matter to the Tribunal and the Tribunal vide judgment and order dated 18.11.2011 allowed the appeal of the assessee and set aside the order passed by CIT(A) and remanded the matter to Assessing Officer with direction to adjudicate upon issue afresh after affording opportunity of hearing to Assessee.

The said order of the Tribunal was received by CIT(A) on 09.12.2011 and thereafter assessment was made and fresh order was passed on 26.03.2014 i.e. after expiry of one year (as applicable to relevant assessment year) the from the end of financial year of assessment year and therefore, the Tribunal, relying on the Hon’ble Gujrat High Court judgment held that assessment was made beyond the period of limitation.

Contention of the Appellant Revenue:
The Revenue submitted that there was no order of setting aside original assessment and therefore, provisions of Section 153(2A) will not apply instead it was a case covered by section 153(3) wherein no period of limitation has been provided.

Contentions of the Respondent Assessee:
The assessee submitted that order of assessment dated 26.03.2014 was patently barred by limitation under Section 153 (2A) of the Act hence it has rightly been set aside by Tribunal and no substantial question of law has arisen from impugned judgment.

Observations made by the Hon’ble High Court:
The Hon’ble Allahabad High Court (Lucknow Bench) observed that the Revenue could not dispute that the order passed by the Tribunal had directed the Assessing Authority to decide issues afresh and pursuant thereto fresh assessment was made by Assessing Officer. Thus it was not a case under Section 153(3)

Held:
The Hon’ble Court dismissed the appeal of the Revenue holding that no substantial question of law had arisen.

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