Commissioner of Income-tax, Jaipur v. Jugal Kishore Garg
[Citation -2017-LL-0509-70]

Citation 2017-LL-0509-70
Appellant Name Commissioner of Income-tax, Jaipur
Respondent Name Jugal Kishore Garg
Court HIGH COURT OF RAJASTHAN
Relevant Act Income-tax
Date of Order 09/05/2017
Judgment View Judgment
Keyword Tags reassessment proceedings • barred by limitation
Bot Summary: Another appeal has been admitted on the following questions of law - i) Whether the ITAT was right and justified in quashing the assessment order by holding ity to be barred by limitation, inspite of the fact that the order was passed within the limitation and the said issue was never raised by the assessee before the first appellant authority ii) Whether the ITAT was justified in observing that the AO has initiated reassessment proceedings during the pendency of a fresh assessment of the set aside case, ignoring the fact that in the present case the ITAT vide its earlier order dated 29.05.98 has held the assessment made under Section 144 as invalid and not legally correct and thus, in the present case there was no issue of set aside assessment 4. We have gone through the order of the CIT(A) as well as the Tribunal. We have considered the arguments advanced by the parties in view of orders of the lower authorities and the decisions relied upon by the Ld. AR. The proviso to sub-section to section 153 of the Act has come in effect from 01.06.2001 ITA-160/2008 substituted by the Finance Act, 2001. In the present case before us the order in the appeal in the first round was passed on 29.05.1998 which might have been received by the Chief Commissioner or Commissioner well before 01.04.1999 as no such objection has been raised by the department in the present case that the order of the Tribunal was received on or after 01.04.1999 and before 01.04.2000. Thus the computation of limitation of time for passing of assessment order in compliance of the order of the Tribunal will not come within the ambit of the proviso to sub-section(2A) to section 153 of the Act, as submitted by the Ld. DR. The prescribed time limitation for passing of assessment order in compliance of the order of the Tribunal as per sub- section to section 153 of the Act before its amendment with effect from 01.06.2001 was two years from the end of the financial year in which the order u/s 254 is received by the chief commissioner or commissioner. The assessment order however has been passed on 28.03.2002 i.e. much after the expiry of the time limit. Income cannot be said to have escaped assessment within the meaning of section 147, if the assessment proceeding in respect of income are still pending and have not yet ITA-160/2008 terminated in a final order.


HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR D.B. Income Tax Appeal No. 160 / 2008 Commissioner Of Income Tax Jai ----Appellant Versus Shri Jugal Kishore Garg ----Respondent Connected With D.B. Income Tax Appeal No. 170 / 2008 Commissioner Of Income Tax Jai ----Appellant Versus Shri Jugal Kishore Garg Jaipur ----Respondent For Appellant(s) : Mr. Anil Mehta For Respondent(s) : Mr. Gunjan Pathak with Mr. Aditya Bohra HON'BLE MR. JUSTICE K.S. JHAVERI HON'BLE MR. JUSTICE VIJAY KUMAR VYAS Judgment 09/05/2017 Both these appeals involve common question of law and facts, hence, are decided by this common judgment. 1. By way of these appeals, department has assailed judgment and order of Tribunal whereby Tribunal has dismissed appeal preferred by department and partly allowed appeal preferred by assesseee. (2 of 4) [ ITA-160/2008] 2. This Court while admitting appeal (160/2008) on following substantial question of law:- Whether ITAT was right and justified in dismissing appeal as having become infructuous and not deciding same on merits, on ground that asseessment order has been quashed on ground of being barred by limitation? 3. Another appeal (170/2008) has been admitted on following questions of law - i) Whether ITAT was right and justified in quashing assessment order by holding ity to be barred by limitation, inspite of fact that order was passed within limitation and said issue was never raised by assessee before first appellant authority? ii) Whether ITAT was justified in observing that AO has initiated reassessment proceedings during pendency of fresh assessment of set aside case, ignoring fact that in present case ITAT vide its earlier order dated 29.05.98 has held assessment made under Section 144 as invalid and not legally correct and thus, in present case there was no issue of set aside assessment? 4. Counsel for appellant contended that Tribunal has seriously committed error in dismissing appeal preferred by department and appeal preferred by assessee has wrongly been partly allowed. 5. However, we have gone through order of CIT(A) as well as Tribunal. Tribunal in para 2.5 observed as under:- 2.5. We have considered arguments advanced by parties in view of orders of lower authorities and decisions relied upon by Ld. AR. proviso to sub-section (2A) to section 153 of Act has come in effect from 01.06.2001 (3 of 4) [ ITA-160/2008] substituted by Finance Act, 2001. In this proviso it has been made clear that where order u/s 250 or section 254 is received by Chief Commissioner or Commissioner or, as case may be, order u/s 263 or section 264 is passed by Chief Commissioner or Commissioner, on or after first day of April, 1999 but before first day of April, 2000, such order of fresh assessment may be made at any time upto 31st day of March, 2002. In present case before us order in appeal in first round was passed on 29.05.1998 which might have been received by Chief Commissioner or Commissioner well before 01.04.1999 as no such objection has been raised by department in present case that order of Tribunal was received on or after 01.04.1999 and before 01.04.2000. Thus computation of limitation of time for passing of assessment order in compliance of order of Tribunal will not come within ambit of proviso to sub-section(2A) to section 153 of Act, as submitted by Ld. DR. prescribed time limitation for passing of assessment order in compliance of order of Tribunal as per sub- section (2A) to section 153 of Act before its amendment with effect from 01.06.2001 was two years from end of financial year in which order u/s 254 is received by chief commissioner or commissioner. After amendment of this sub section with fact from 01.06.2001 this time limit has been reduced to 1 year. Thus in present case time limit for passing assessment order before AO was upto 31.03.2001. assessment order however has been passed on 28.03.2002 i.e. much after expiry of time limit. Besides above we find substance in submission of Ld. AR that in view of decision of Hon ble Supreme Court in case of CIT Vs. Rao Thakur Narayan Singh (supra) assessment cannot be reopened merely to get over adverse finding given by any appellate authority in original assessment proceedings. It is also unestablished position of law that in case assessment had been completed by AO and same is set aside in appeal, in such situation, initiation of reassessment proceeding is not possible till fresh assessment of set aside case has been completed. This is so because, so long as assessment, as per appellate direction, or otherwise, is pending, AO cannot have any reason to believe that income for year has escaped assessment. Income cannot be said to have escaped assessment within meaning of section 147, if assessment proceeding in respect of income are still pending and have not yet (4 of 4) [ ITA-160/2008] terminated in final order. In this regard we find support from decision of Hob ble Supreme Court in case of Ghanshyam Das Vs. Regional Asst. Comm. Of S.T. (supra) and of Hon ble Allahabad High Court in case of S.P. Kochhar Vs. ITO (supra) relied on by Ld. AR. We thus hold that assessment order dated 28.03.02 in present case is barred by limitation. same is thus quashed. ground Nos. 1 to 3 are thus decided in favour of assessee. 6. Taking into consideration decision of Supreme Court in case of Ghanshyam Das vs. Regional Assistant Commissioner of S.T. (1964) 51 ITR 557 (Sc) and decision of Allahabad High Court in case of S.P. Kochar vs. ITO, (1984) 145 ITR 255,264 (All.), in our considered opinion, Tribunal has not committed any error. 7. issue is answered in favour of assessee and against department. 8. appeals stand dismissed. copy of this order be placed in each file. (VIJAY KUMAR VYAS),J. (K.S. JHAVERI),J. A.Sharma/84-85 Commissioner of Income-tax, Jaipur v. Jugal Kishore Garg
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