Madras High Court
The Commissioner Of Income Tax vs The Lakshmi Vilas Bank Ltd on 13 June, 2022
TCA.Nos.923 to 925 of 2010
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED : 13.06.2022
CORAM
THE HONOURABLE MR. JUSTICE R. MAHADEVAN
AND
THE HONOURABLE MR. JUSTICE MOHAMMED SHAFFIQ
T.C.A.Nos.923 to 925 of 2010
The Commissioner of Income Tax,
Trichy. .. Appellant
Versus
The Lakshmi Vilas Bank Ltd,
Salem Road, Kathaparai,
Karur. .. Respondent
Appeals filed under Section 260 (A) of the the Income Tax Act, 1961
against the order of the Income Tax Appellate Tribunal “A” Bench, Chennai,
dated 18.12.2009 in I.T.A.Nos.551/Mds/2009, 552/Mds/2009 and 553/Mds/2009
respectively.
For Appellant : Mr.N.Swaminathan
(In all cases) Mrs.N.Pushpa
For Respondent : Mr.R.Vijayaraghavan
(In all cases) for Subbaraya Aiyar
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TCA.Nos.923 to 925 of 2010
COMMON JUDGMENT
(Order of the court was made by MOHAMMED SHAFFIQ, J.)
The short question that arises for consideration is, whether the
limitation for the purpose of invoking jurisdiction under Section 263 of the
Income Tax Act, 1961 (hereinafter referred to as "the Act") in respect of items/
income assessed originally and remaining untouched by reassessment, ought to
be reckoned from the date of the original order of assessment or from the date of
revised assessment.
2. The assessee company is a banking company, which filed its Return
of Income for the assessment years 1999-2000, 2001-2002 and 2002-2003 on
28.03.2002, 29.10.2001 and 28.01.2002 respectively. The case was selected for
scrutiny and notice under Section 143(2) of the Act came to be issued for the
assessment years in question. Thereafter, assessment was completed under
Section 143(3) read with Section 147 for the assessment years in question on
28.03.2002, 30.03.2004 and 27.08.2004 respectively. Subsequently, the
Assessing Officer reopened the assessment for the years 1999-2000, 2001-2002
and 2002-2003 and passed orders under Section 143 (3) read with 147 of the Act
on 26.12.2006, 31.12.2007 and 31.12.2007 respectively.
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TCA.Nos.923 to 925 of 2010
3. Thereafter, the Commissioner of Income Tax issued show cause
notices under Section 263 of the Act and passed orders by setting aside the 2nd
assessment orders for the assessment years 1999-2000, 2001-2002 and
2002-2003 on 27.03.2009, 27.03.2009 and 27.03.2009 respectively.
4. Challenging the aforesaid orders passed under section 263 of the
Act, the assessee carried the matter by way of appeals to the Income Tax
Appellate Tribunal, wherein, the question of limitation was raised as a
preliminary issue on the premise that the principle of merger of original
assessment with the reassessment order, does not apply, when the issues settled in
the original assessment order remain untouched in the reassessment order.
Consequently, the limitation to invoke jurisdiction under Section 263 of the Act
in respect of the issues that stood resolved in the original assessment, ought to be
reckoned from the date of original assessment. Agreeing with the said
submission, the Tribunal allowed the appeals, holding that the assessments are
barred by limitation by placing reliance on the judgment of the Hon'ble Supreme
Court in the case of CIT v. Alagendran Finance Ltd. [(2007) 293 ITR 1 (SC)]
wherein it was held as under:
"25....We therefore, are clearly of the opinion that keeping in view of the
facts and circumstances of this case and, in particular, having regard to the fact
that the Commissioner of Income-tax exercising his revisional jurisdiction
reopened the order of assessment only in relation to lease equalization fund
which being not the subject of the reassessment proceedings, the period of
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TCA.Nos.923 to 925 of 2010
limitation provided for under sub-section (2) of Section 263 of the Act would
begin to run from the date of the order of assessment and not from the order of
reassessment. The revisional jurisdiction having, thus, been invoked by the
Commissioner of Income-tax beyond the period of limitation, it was wholly
without jurisdiction rendering the entire proceeding a nullity"
Aggrieved against the order of the Tribunal dated 18.12.2009, the appellant /
Revenue preferred these tax case appeals.
5. We find that the order of the Tribunal holding that the exercise of
power under Section 263 of the Act by the Commissioner of Income Tax is
barred by limitation in terms of the judgment of the Hon'ble Supreme Court in
the case of Alagendran Finance Ltd. (supra), does not warrant any interference.
6. Therefore, the substantial question of law relating to limitation is
answered against the Revenue. Accordingly, the appeals stand dismissed.
However, the substantial question of law pertaining to deduction of 10% of
cumulative advances under section 36(1)(viia) raised herein, is left open for
adjudication in appropriate cases. No costs.
[R.M.D., J.] [M.S.Q., J.]
13.06.2022
Index : Yes/No
Speaking/Non-Speaking Order
psa
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TCA.Nos.923 to 925 of 2010
To:
1.The Commissioner of Income Tax,
Trichy.
2.Income Tax Appellate Tribunal “A” Bench,
Chennai.
3.The Assistant Commissioner of Income Tax,
Company Circle -I, Tiruchirapalli.
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TCA.Nos.923 to 925 of 2010
R. MAHADEVAN, J.
and
MOHAMMED SHAFFIQ, J.
psa
TCA Nos.923 to 925 of 2010
13.06.2022
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