CIT Vs Ganga Textiles Ltd. (Madras High Court)
Madras High Court held that order passed u/s. 263(1) is with reference to issue covered by the original assessment order and not reassessment. Hence, limitation of two years prescribed u/s. 263(2) of the Act has to be reckoned from the date of the original assessment order. Accordingly, order is time barred.
Facts- Respondent/Assessee is a limited company. Original assessment order was passed on 31.08.2006. The assessment was reopened and was completed u/s. 143(3) r.w.s 147 of the Act on 30.12.2009 qua computation of capital gains regarding assessee’s sale of its land and building.
On 30.03.2012, appellant/Revenue, u/s. 263 of the Act, revised the assessment order passed u/s. 143(3) r.w.s. 147 of the Act for the said Assessment Year. Assessee challenged the said order, inter alia, on the ground that the order u/s. 263 of the Act was beyond the statutory period of two years prescribed u/s. 263(2) of the Act from the date of the original assessment order dated 31.08.2006. The Tribunal accepted the submissions of the assessee and set aside the order passed u/s. 263 of the Act. It is against this order, Revenue is on appeal.
Conclusion- The order passed under Section 143(3) on 31.08.2006 cannot be said to have been merged with the order of reassessment in respect of the deductions under Section 43B of the Act. The order passed under 263(1) of the Act is with reference to an issue which is covered by the original assessment order and not with regard to the issue in the reassessment. Hence, in our considered view, the limitation of two years prescribed under Section 263(2) of the Act has to be reckoned from the date of the original assessment order under Section 143(3) of the Act, which is 31.08.2006.
