YASH DEVELOPERS,MUMBAI vs. DCIT 27(3) , MUMBAI

This appeal by the assessee is directed against order dated 26.11.2021 passed by the Ld. Commissioner of Income-tax (Appeals) – National Faceless Appeal Centre, Delhi [in short ‘the Ld. CIT(A)] for assessment year 2009-10, in relation to rectification order passed by the Assessing Officer. The relevant grounds raised by the assessee are reproduced as under:

Yash Developers 2 ITA No. 3217/M/2022

“5.2 As regards the assessee's second contention that 5.2 As regards the assessee's second contention that 5.2 As regards the assessee's second contention that the mistake should be apparent from record and the the mistake should be apparent from record and the the mistake should be apparent from record and the same was barred by limitation it would suffice to say same was barred by limitation it would suffice to say same was barred by limitation it would suffice to say that the mistake was apparent from record on account t the mistake was apparent from record on account t the mistake was apparent from record on account of excess set off of the salary as per order u/s 143(3) of excess set off of the salary as per order u/s 143(3) of excess set off of the salary as per order u/s 143(3) dated: 21.11.2011. Further the assessee's assertion dated: 21.11.2011. Further the assessee's assertion dated: 21.11.2011. Further the assessee's assertion that the action u/S 154 is time barred it would be that the action u/S 154 is time barred it would be that the action u/S 154 is time barred it would be suffice to say that subsequent to the passing o suffice to say that subsequent to the passing of order f order us 143 the assessee had filed appeal before the us 143 the assessee had filed appeal before the us 143 the assessee had filed appeal before the CIT(A)-7. The CIT(A) vide his order No/IT 7. The CIT(A) vide his order No/IT-215/2013 215/2013-14 dated: 16.01.2014 given some relief to the assessee's . dated: 16.01.2014 given some relief to the assessee's . dated: 16.01.2014 given some relief to the assessee's . The effect to this order was given vide order dated The effect to this order was given vide order dated The effect to this order was given vide order dated 02.04.2014. Thus the period of limitat 02.04.2014. Thus the period of limitation of 4 years as ion of 4 years as contemplated in section 154 is to be reckoned fromthe contemplated in section 154 is to be reckoned fromthe contemplated in section 154 is to be reckoned fromthe end of the F.Y in which the effect to the order of the end of the F.Y in which the effect to the order of the end of the F.Y in which the effect to the order of the CIT(A) has been given. In this context reliance is placed CIT(A) has been given. In this context reliance is placed CIT(A) has been given. In this context reliance is placed upon the relevant decision of Delhi High Court ITA upon the relevant decision of Delhi High Court ITA upon the relevant decision of Delhi High Court of 2009 Commi No.196 of 2009 Commissioner of Income tax vs Tonly ssioner of Income tax vs Tonly Electronics Ltd. The same is reproduced herein below: Electronics Ltd. The same is reproduced herein below: Electronics Ltd. The same is reproduced herein below: 13. We find substance in the submissions of learned 13. We find substance in the submissions of learned 13. We find substance in the submissions of learned counsel for the Revenue. In fact, answer to the issue at counsel for the Revenue. In fact, answer to the issue at counsel for the Revenue. In fact, answer to the issue at Yash Developers 6 ITA No. 3217/M/2022 hand is provided by the judgment of the Supreme hand is provided by the judgment of the Supreme hand is provided by the judgment of the Supreme Court in Hind Court in Hind Wire Industries (supra). Dealing with the Wire Industries (supra). Dealing with the same provision, namely, sub same provision, namely, sub-section (7) of Section Section 154 of the Act, the Court was of the view that the of the Act, the Court was of the view that the of the Act, the Court was of the view that the answer rested on the word „Order answer rested on the word „Order‟ used in the used in the expression "fr expression "from the date of the order sought to be om the date of the order sought to be amended" occurring in sub amended" occurring in sub-section (7) of Section Section 154 of the Act. The Court categorically opined that the of the Act. The Court categorically opined that the of the Act. The Court categorically opined that the word „Order word „Order‟ had not been qualified in any way and it had not been qualified in any way and it does not necessarily mean the original order. It can be t necessarily mean the original order. It can be t necessarily mean the original order. It can be any order, including the amended or rectified order. any order, including the amended or rectified order. any order, including the amended or rectified order. The Court was further of the view that once a The Court was further of the view that once a The Court was further of the view that once a reassessment order or rectification order was passed reassessment order or rectification order was passed reassessment order or rectification order was passed giving effect to giving effect to the order of the appellate forum, the the order of the appellate forum, the original order ceases to operate. Following discussion original order ceases to operate. Following discussion original order ceases to operate. Following discussion on this aspect is relevant for our purpose : on this aspect is relevant for our purpose :- ""A similar expression in rule 38 of the Mysore sales ""A similar expression in rule 38 of the Mysore sales ""A similar expression in rule 38 of the Mysore sales Tax Rules fell for consideration in Tax Rules fell for consideration in International Cotton Cotton Corporation (P) Ltd. v. Commercial Tax Officer Corporation (P) Ltd. v. Commercial Tax Officer, (1975) , (1975) 35 STC 1; (1975) 2 SCR 345. Dealing with the point 35 STC 1; (1975) 2 SCR 345. Dealing with the point 35 STC 1; (1975) 2 SCR 345. Dealing with the point raised, this court held as under : raised, this court held as under : "The other attack that the rectification order is beyond "The other attack that the rectification order is beyond "The other attack that the rectification order is beyond the point of time provided in rule 38 of the Mysore the point of time provided in rule 38 of the Mysore the point of time provided in rule 38 of the Mysore Sales Tax Rules is also without substance. What was Sales Tax Rules is also without substance. What was Sales Tax Rules is also without substance. What was sought to be rectified was the assessment order sought to be rectified was the assessment order sought to be rectified was the assessment order rectified as a consequence of this court rectified as a consequence of this court‟s decision in ‟s decision in Yaddalam‟s case (1965) 16 STC 231. After such ‟s case (1965) 16 STC 231. After such ‟s case (1965) 16 STC 231. After such rectification the original assessment order was no rectification the original assessment order was no rectification the original assessment order was no longer in force and that was not the order sought to be ger in force and that was not the order sought to be ger in force and that was not the order sought to be rectified. It is admitted that all the rectification orders rectified. It is admitted that all the rectification orders rectified. It is admitted that all the rectification orders would be within time calculated from the original would be within time calculated from the original would be within time calculated from the original rectification order. Rule 38 itself speaks of „any order rectification order. Rule 38 itself speaks of „any order rectification order. Rule 38 itself speaks of „any order‟ and there is no doubt that the rect and there is no doubt that the rectified order is also ified order is also „any order‟ which can be rectified under rule 38." ‟ which can be rectified under rule 38." ‟ which can be rectified under rule 38." This decision was endorsed in This decision was endorsed in Deputy Commissioner Deputy Commissioner of Commercial Taxes v. H.R. Sri Ramulu of Commercial Taxes v. H.R. Sri Ramulu, (1977) 39 , (1977) 39 STC 177 when this court observed STC 177 when this court observed there as follows : there as follows : "The reason for that is that once an assessment is "The reason for that is that once an assessment is "The reason for that is that once an assessment is reopened, the initial order for assessment ceases to be reopened, the initial order for assessment ceases to be reopened, the initial order for assessment ceases to be Yash Developers 7 ITA No. 3217/M/2022 operative. The effect of reopening the assessment is to operative. The effect of reopening the assessment is to operative. The effect of reopening the assessment is to vacate or set aside the initial order for assessment and vacate or set aside the initial order for assessment and vacate or set aside the initial order for assessment and to substitute in to substitute in its place the order made on its place the order made on reassessment. The initial order for reassessment reassessment. The initial order for reassessment reassessment. The initial order for reassessment cannot be said to survive, even partially, although the cannot be said to survive, even partially, although the cannot be said to survive, even partially, although the justification for reassessment arises because of justification for reassessment arises because of justification for reassessment arises because of turnover escaping assessment in a limited field or only turnover escaping assessment in a limited field or only turnover escaping assessment in a limited field or only with respect to a with respect to a part of the matter covered by the part of the matter covered by the initial assessment order. The result of reopening the initial assessment order. The result of reopening the initial assessment order. The result of reopening the assessment is that a fresh order for reassessment assessment is that a fresh order for reassessment assessment is that a fresh order for reassessment would have to be made including for those matters in would have to be made including for those matters in would have to be made including for those matters in respect of which there is no allegation of the turnover respect of which there is no allegation of the turnover respect of which there is no allegation of the turnover escaping assessment. As it is, we find that in the assessment. As it is, we find that in the assessment. As it is, we find that in the present present present case, case, case, the the the assessment assessment assessment orders orders orders made made made under section 12A section 12A were comprehensive orders and were comprehensive orders and were not confined merely to matters which had were not confined merely to matters which had were not confined merely to matters which had escaped assessment earlier. escaped assessment earlier. In the circumstances, the In the circumstances, the only orders which could be only orders which could be the subject matter of the subject matter of revision by the appellant were the orders made revision by the appellant were the orders made revision by the appellant were the orders made under section 12A section 12A of the Act and not the initial of the Act and not the initial assessment orders. assessment orders. (Emphasis supplied)" supplied)"

“The powers whicd the AAC exercises are not merely The powers whicd the AAC exercises are not merely The powers whicd the AAC exercises are not merely appellate powers which a normal appellate powers which a normal appellate authority appellate authority exercise because normally an appellate authority is exercise because normally an appellate authority is exercise because normally an appellate authority is called upon to deal with the grievance of the appellate called upon to deal with the grievance of the appellate called upon to deal with the grievance of the appellate which he makes is respect of the order passed by the which he makes is respect of the order passed by the which he makes is respect of the order passed by the subordinate authority. In addition to the general subordinate authority. In addition to the general subordinate authority. In addition to the general powers which an appellate powers which an appellate authority possesses, that authority possesses, that is, either confirming modifying or setting aside an is, either confirming modifying or setting aside an is, either confirming modifying or setting aside an order which in the case of an assessment has been order which in the case of an assessment has been order which in the case of an assessment has been described as the power to confirm, reduce or annual described as the power to confirm, reduce or annual described as the power to confirm, reduce or annual the assessment, the AAC has also been given the the assessment, the AAC has also been given the the assessment, the AAC has also been given the power to enhance the assess power to enhance the assessment. This power to ment. This power to enhance the assessment is, however, made subject to enhance the assessment is, however, made subject to enhance the assessment is, however, made subject to the proviso that the appellatu should be given a the proviso that the appellatu should be given a the proviso that the appellatu should be given a reasonable opportunity of showing cause against such reasonable opportunity of showing cause against such reasonable opportunity of showing cause against such enhancement. Thus, under sub enhancement. Thus, under sub-s. (3) of s. 31, apart , apart from dealing with the grievance which has been made from dealing with the grievance which has been made from dealing with the grievance which has been made by an assessee against the order of the ITO, the AAC by an assessee against the order of the ITO, the AAC by an assessee against the order of the ITO, the AAC can go further and look into the correctness of the can go further and look into the correctness of the can go further and look into the correctness of the order of assessment made by the ITO and if the AAC is order of assessment made by the ITO and if the AAC is order of assessment made by the ITO and if the AAC is satisfied that there was satisfied that there was a case for enhancing the a case for enhancing the assessment he can make an order enhancing the assessment he can make an order enhancing the assessment he can make an order enhancing the assessment, Thus, if the AAC's satisfied that the ITO assessment, Thus, if the AAC's satisfied that the ITO assessment, Thus, if the AAC's satisfied that the ITO has granted either excessive relief or the assessment has granted either excessive relief or the assessment has granted either excessive relief or the assessment of income and tax is in any way erroneous, he has the of income and tax is in any way erroneous, he has the of income and tax is in any way erroneous, he has the power to make on order power to make on order enhancing the assessment enhancing the assessment while deciding the appeal filed by the assessee. In that while deciding the appeal filed by the assessee. In that while deciding the appeal filed by the assessee. In that sense, it is possible to say that the entire assessment sense, it is possible to say that the entire assessment sense, it is possible to say that the entire assessment proceedings are open before the AAC. It is common proceedings are open before the AAC. It is common proceedings are open before the AAC. It is common knowledge that while making as assessment and knowledge that while making as assessment and knowledge that while making as assessment and bringing the income o bringing the income of the assessee to tax, the ITO has f the assessee to tax, the ITO has to deal with several contentions made by the assessee to deal with several contentions made by the assessee to deal with several contentions made by the assessee for determining the taxable income and the tax for determining the taxable income and the tax for determining the taxable income and the tax Yash Developers 12 ITA No. 3217/M/2022 payable having regard to the several provisions of payable having regard to the several provisions of payable having regard to the several provisions of the I.T. Act. It i . It is only in respect of claims with regard it s only in respect of claims with regard it which the ITO passes an order adverse to the which the ITO passes an order adverse to the which the ITO passes an order adverse to the assessee that the assessee goes in appeal to the AAC. assessee that the assessee goes in appeal to the AAC. assessee that the assessee goes in appeal to the AAC. If the assessee is satisfied with a part of the If the assessee is satisfied with a part of the If the assessee is satisfied with a part of the assessment order, he does not make that part a assessment order, he does not make that part a assessment order, he does not make that part a subject of appeal. subject of appeal. It is thus open to the AAC deals with It is thus open to the AAC deals with the appeal, it is mainly that part of the order of the ITO the appeal, it is mainly that part of the order of the ITO the appeal, it is mainly that part of the order of the ITO which has been challenged by the assessee which is which has been challenged by the assessee which is which has been challenged by the assessee which is dealt with by the AAC. The exercise of his appellate dealt with by the AAC. The exercise of his appellate dealt with by the AAC. The exercise of his appellate jurisdiction is normally limited to the grievance made jurisdiction is normally limited to the grievance made jurisdiction is normally limited to the grievance made by the assessee unless of course the AAC choose to by the assessee unless of course the AAC choose to by the assessee unless of course the AAC choose to exercise his power of enhancing the assessment, it the exercise his power of enhancing the assessment, it the exercise his power of enhancing the assessment, it the AAC disposes of the appeal and deals with the AAC disposes of the appeal and deals with the AAC disposes of the appeal and deals with the grievance made by the assessee and confirms the grievance made by the assessee and confirms the grievance made by the assessee and confirms the assessment, nothing more is required to be done assessment, nothing more is required to be done assessment, nothing more is required to be done further by the ITO after the order of the AAC. But if the by the ITO after the order of the AAC. But if the by the ITO after the order of the AAC. But if the ACC, while disposing of the appeal, reduces the ACC, while disposing of the appeal, reduces the ACC, while disposing of the appeal, reduces the assessment, then the ITO has to give effect to the assessment, then the ITO has to give effect to the assessment, then the ITO has to give effect to the directions of the AAC. These directions are restricted to directions of the AAC. These directions are restricted to directions of the AAC. These directions are restricted to the order made by the AAC because a part of the the order made by the AAC because a part of the the order made by the AAC because a part of the assessment has not been made the subject of appeal ssessment has not been made the subject of appeal ssessment has not been made the subject of appeal by the assessee, in a given case, if the AAC wishes to by the assessee, in a given case, if the AAC wishes to by the assessee, in a given case, if the AAC wishes to enhance the assessment, even though the assessee enhance the assessment, even though the assessee enhance the assessment, even though the assessee has not made any part of the assessment order the has not made any part of the assessment order the has not made any part of the assessment order the subject of appeal, in view of the special provisions subject of appeal, in view of the special provisions subject of appeal, in view of the special provisions in s. 31(3), it is permissible for him to interfere with , it is permissible for him to interfere with , it is permissible for him to interfere with that part of the order of the ITO. The scheme of the that part of the order of the ITO. The scheme of the that part of the order of the ITO. The scheme of the provision of provision of s. 31(3) is, however, clear that the at the assessee is entitled to challenge a part of the assessee is entitled to challenge a part of the assessee is entitled to challenge a part of the assessment order by which he feels aggrieved and assessment order by which he feels aggrieved and assessment order by which he feels aggrieved and where the AAC does not decide to scrutinise the where the AAC does not decide to scrutinise the where the AAC does not decide to scrutinise the remaining part or any other aspect of the assessment. remaining part or any other aspect of the assessment. remaining part or any other aspect of the assessment. Which has not been made the subject of appeal, the Which has not been made the subject of appeal, the Which has not been made the subject of appeal, the AAC is not called upon to deal with that part made the AAC is not called upon to deal with that part made the AAC is not called upon to deal with that part made the subject of appeal the AAC is not called upon to deal subject of appeal the AAC is not called upon to deal subject of appeal the AAC is not called upon to deal with that part of the assessment order. Only that part with that part of the assessment order. Only that part with that part of the assessment order. Only that part of the order of the ITO is, therefore, affected by the of the order of the ITO is, therefore, affected by the of the order of the ITO is, therefore, affected by the order of the AAC in respect of which order of the AAC in respect of which the AAC has the AAC has exercised his appellate jurisdiction which may consist exercised his appellate jurisdiction which may consist exercised his appellate jurisdiction which may consist of confirming, reducing, enhancing or annulling the of confirming, reducing, enhancing or annulling the of confirming, reducing, enhancing or annulling the assessment. If the AAC has not been called upon or assessment. If the AAC has not been called upon or assessment. If the AAC has not been called upon or has not actually dealt with any part of the assessment has not actually dealt with any part of the assessment has not actually dealt with any part of the assessment Yash Developers 13 ITA No. 3217/M/2022 order made by the ITO. There is order made by the ITO. There is no question of that no question of that part of the order mergino or being superseded by the part of the order mergino or being superseded by the part of the order mergino or being superseded by the order of the AAC. The effect of order of the AAC. The effect of s. 31(3), therefore, , therefore, appears to us, having regard to the provisions of appears to us, having regard to the provisions of appears to us, having regard to the provisions of the I.T. Act, to be that only that part of the order of the , to be that only that part of the order of the , to be that only that part of the order of the ITO merges or stands superseded by the order of the ITO merges or stands superseded by the order of the ITO merges or stands superseded by the order of the AAC in respect of which the AAC has exercised his AAC in respect of which the AAC has exercised his AAC in respect of which the AAC has exercised his appellate jurisdiction. So far as the remaining part of appellate jurisdiction. So far as the remaining part of appellate jurisdiction. So far as the remaining part of the order of as the order of assessment is concerned to have its sessment is concerned to have its independent existence unaffected by the AAC. The independent existence unaffected by the AAC. The independent existence unaffected by the AAC. The doctrine of merger, therefore is not wholly applicable in doctrine of merger, therefore is not wholly applicable in doctrine of merger, therefore is not wholly applicable in the case of such orders made the the case of such orders made the I.T. Act. It is important to no It is important to noticd another aspect of the ticd another aspect of the provisions relating to rectification of mistakes, the provisions relating to rectification of mistakes, the provisions relating to rectification of mistakes, the provisions of provisions of s. 35 of the Indian I.T. Act, 1922, and of the Indian I.T. Act, 1922, and the corresponding provisions of the corresponding provisions of s. 154 of the I.T. Act, of the I.T. Act, 1961, 1961, 1961, give give give a a a power power power of of of rectification rectification rectification to to to the the the Commissioner, the AAC and the ITO only in respect of Commissioner, the AAC and the ITO only in respect of Commissioner, the AAC and the ITO only in respect of the orders passed by them. The ITO can exercise his the orders passed by them. The ITO can exercise his the orders passed by them. The ITO can exercise his power of rectification in respect power of rectification in respect of the order made by of the order made by him. The AAC can exercise the powers of rectification him. The AAC can exercise the powers of rectification him. The AAC can exercise the powers of rectification only in respect of the orders made by him, when the only in respect of the orders made by him, when the only in respect of the orders made by him, when the statute has given powers of rectification to the ITO in statute has given powers of rectification to the ITO in statute has given powers of rectification to the ITO in respecd of his own order, the position is that he is able respecd of his own order, the position is that he is able respecd of his own order, the position is that he is able to rectify his to rectify his own order within the prescribed period if own order within the prescribed period if the whole of the order or a part of the order has not the whole of the order or a part of the order has not the whole of the order or a part of the order has not been subjected to appeal. If the theory of merger is been subjected to appeal. If the theory of merger is been subjected to appeal. If the theory of merger is accepted as being attracted wholly, the provision accepted as being attracted wholly, the provision accepted as being attracted wholly, the provision relating to rectification of mistake by the ITO in a cas relating to rectification of mistake by the ITO in a cas relating to rectification of mistake by the ITO in a case where even a part of the assessment order is made the where even a part of the assessment order is made the where even a part of the assessment order is made the subject of appeal is likely to become nugatory. It, subject of appeal is likely to become nugatory. It, subject of appeal is likely to become nugatory. It, therefore, clearly appears to us that the provisions of therefore, clearly appears to us that the provisions of therefore, clearly appears to us that the provisions of the I.T. Act contemplates that in a case where an where an assessment is made the subject of an appeal, the assessment is made the subject of an appeal, the assessment is made the subject of an appeal, the assessment orders made by the ITO do not wholly assessment orders made by the ITO do not wholly assessment orders made by the ITO do not wholly merge with the orders of the appellate authority but merge with the orders of the appellate authority but merge with the orders of the appellate authority but that the merger would take place only in respect of that the merger would take place only in respect of that the merger would take place only in respect of that part of the order in respect of which th that part of the order in respect of which the AAC has e AAC has exercised his appellate jurisdiction. exercised his appellate jurisdiction.”

Yash Developers 14 4.2 We further find that the Tribunal in the case of We further find that the Tribunal in the case of We further find that the Tribunal in the case of DCIT v. Godrej Industries in ITA No. 4339/Mum/2015 following the Godrej Industries in ITA No. 4339/Mum/2015 Godrej Industries in ITA No. 4339/Mum/2015 finding of the Hon’ble Bombay High Court in the case of Sakseria finding of the Hon’ble Bombay High Court in the case of Sakseria finding of the Hon’ble Bombay High Court in the case of Sakseria Cotton Mills Ltd. (supra Cotton Mills Ltd. (supra) and also following the decision of the ) and also following the decision of the Hon’ble Supreme Court in the case of Hon’ble Supreme Court in the case of Alagendran Finance Alagendran Finance Ltd.(supra) held that issue held that issue which has not been decided in has not been decided in reassessment order, t , the limitation for rectification same will start from the original assessment or the original assessment order passed u/s 143(3) of the Act and der passed u/s 143(3) of the Act and not from the date of reassessment order passed u/s 147 of the Act. not from the date of reassessment order passed u/s 147 of the Act. not from the date of reassessment order passed u/s 147 of the Act. The relevant finding of the Tribunal The relevant finding of the Tribunal(supra) is reproduced as under: is reproduced as under:

“8. After hearing both the sides and going through the 8. After hearing both the sides and going through the 8. After hearing both the sides and going through the facts of the case, we find th facts of the case, we find that the issue raised in the at the issue raised in the present appeal of the Revenue is whether the order of present appeal of the Revenue is whether the order of present appeal of the Revenue is whether the order of the AO under section 154 of the Act dated 29 the AO under section 154 of the Act dated 29-03- -2014 to rectify the order giving effect to the Tribunals order to rectify the order giving effect to the Tribunals order to rectify the order giving effect to the Tribunals order dated 13-04 04-2009 is bar by limitation or not? The 2009 is bar by limitation or not? The assessee has f assessee has filed chronology of events of order which iled chronology of events of order which reads as under: reads as under: -

against the AO.” ground of appeal against the AO.”

10. We notice from the provision of Section 154(1A) of 10. We notice from the provision of Section 154(1A) of 10. We notice from the provision of Section 154(1A) of the Act which provides that the AO ca the Act which provides that the AO can rectify the n rectify the order in respect of a matter other than the matter order in respect of a matter other than the matter order in respect of a matter other than the matter which has been considered and decided by the which has been considered and decided by the which has been considered and decided by the appellate/revisional authority. In the instant case appellate/revisional authority. In the instant case appellate/revisional authority. In the instant case since the issue of diminution in value of an asset for since the issue of diminution in value of an asset for since the issue of diminution in value of an asset for calculating book profit was not a subje calculating book profit was not a subject matter of ct matter of appeal or revision, the original order u/s. 143(3) of the appeal or revision, the original order u/s. 143(3) of the appeal or revision, the original order u/s. 143(3) of the Act dated 27th February 2004 is the order which can Act dated 27th February 2004 is the order which can Act dated 27th February 2004 is the order which can be rectified by the AO and since the order passed in be rectified by the AO and since the order passed in be rectified by the AO and since the order passed in 2004 cannot be rectified after a period of 4 years, the 2004 cannot be rectified after a period of 4 years, the 2004 cannot be rectified after a period of 4 years, the Yash Developers 17 ITA No. 3217/M/2022 order passed under 154 o order passed under 154 of the Act dated 29th March f the Act dated 29th March 2014 is barred by section 154(7) of the Act. The 2014 is barred by section 154(7) of the Act. The 2014 is barred by section 154(7) of the Act. The Revenue in its submissions filed before the Tribunal Revenue in its submissions filed before the Tribunal Revenue in its submissions filed before the Tribunal also accepts that they cannot rectify the order also accepts that they cannot rectify the order also accepts that they cannot rectify the order u/s.143(3) of the Act. It is the case of the Revenue that u/s.143(3) of the Act. It is the case of the Revenue that u/s.143(3) of the Act. It is the case of the Revenue that what is sought to be what is sought to be rectified is the order giving effect rectified is the order giving effect to the Tribunal's order dated 13th April 2009 and to the Tribunal's order dated 13th April 2009 and to the Tribunal's order dated 13th April 2009 and therefore the order under 154 of the Act dated 29th therefore the order under 154 of the Act dated 29th therefore the order under 154 of the Act dated 29th March 2014 is within limitation. If this proposition is March 2014 is within limitation. If this proposition is March 2014 is within limitation. If this proposition is accepted then the effect would be that the AO is sitting accepted then the effect would be that the AO is sitting accepted then the effect would be that the AO is sitting in appeal over the Tribunal's order and more so when ppeal over the Tribunal's order and more so when ppeal over the Tribunal's order and more so when the issue of diminution in the value of an asset for the issue of diminution in the value of an asset for the issue of diminution in the value of an asset for calculating book profit was not the subject matter of calculating book profit was not the subject matter of calculating book profit was not the subject matter of the Tribunal's order. It is a settled position that the AO the Tribunal's order. It is a settled position that the AO the Tribunal's order. It is a settled position that the AO while giving effect to the Tribunal's ord while giving effect to the Tribunal's order cannot go er cannot go beyond the directions of the Tribunal and since in the beyond the directions of the Tribunal and since in the beyond the directions of the Tribunal and since in the instant case the issue of calculation of book profit qua instant case the issue of calculation of book profit qua instant case the issue of calculation of book profit qua diminution in the value of anasset was not the subject diminution in the value of anasset was not the subject diminution in the value of anasset was not the subject matter of the appeal, the Revenue is not justified in matter of the appeal, the Revenue is not justified in matter of the appeal, the Revenue is not justified in contending that the or contending that the order is within the time limit. 11. der is within the time limit.

11. We also find that this issue of doctrine of merger came We also find that this issue of doctrine of merger came We also find that this issue of doctrine of merger came for consideration of the Hon’ble Bombay High Court in for consideration of the Hon’ble Bombay High Court in for consideration of the Hon’ble Bombay High Court in the case of Seksaria Cotton Mills (Supra). The Hon'ble the case of Seksaria Cotton Mills (Supra). The Hon'ble the case of Seksaria Cotton Mills (Supra). The Hon'ble High Court has on similar facts held by applying the High Court has on similar facts held by applying the High Court has on similar facts held by applying the doctrine of merger theory that the limitation will be rine of merger theory that the limitation will be rine of merger theory that the limitation will be recognized from date of the original order in respect of recognized from date of the original order in respect of recognized from date of the original order in respect of points not subjected to appellate jurisdiction. A similar points not subjected to appellate jurisdiction. A similar points not subjected to appellate jurisdiction. A similar issue arose before the Hon’ble Bombay High Court in issue arose before the Hon’ble Bombay High Court in issue arose before the Hon’ble Bombay High Court in the case of Ratilal Bacharilal & Sons 2 the case of Ratilal Bacharilal & Sons 282 ITR 457 82 ITR 457 (page 32 of case law compilation) wherein after (page 32 of case law compilation) wherein after (page 32 of case law compilation) wherein after applying the doctrine of merger theory, the Hon'ble applying the doctrine of merger theory, the Hon'ble applying the doctrine of merger theory, the Hon'ble High Court held that since the deduction u/s.35B of High Court held that since the deduction u/s.35B of High Court held that since the deduction u/s.35B of Rs. 563,350/ Rs. 563,350/- was not the subject matter of appeal, was not the subject matter of appeal, the CIT was justified in exercising juris the CIT was justified in exercising jurisdiction u/s 263 diction u/s 263 of the Act qua Rs. 563,350/ of the Act qua Rs. 563,350/- although deduction under although deduction under 35B on Rs. 327,326/ 35B on Rs. 327,326/- was in appeal.

12. We have gone through the judgment of Hon’ble 12. We have gone through the judgment of Hon’ble 12. We have gone through the judgment of Hon’ble Supreme Supreme Supreme Court Court Court in in in the the the case case case of of of Hind Hind Hind Wire Wire Wire Industries(Supra), wherein the Apex Court was posed Industries(Supra), wherein the Apex Court was posed Industries(Supra), wherein the Apex Court was posed with the interpretation of section 154(1)(a) of the Act interpretation of section 154(1)(a) of the Act interpretation of section 154(1)(a) of the Act and not section 154(1A) of the Act with which this and not section 154(1A) of the Act with which this and not section 154(1A) of the Act with which this appeal is concerned because in Hind Wire Industries appeal is concerned because in Hind Wire Industries appeal is concerned because in Hind Wire Industries Yash Developers 18 ITA No. 3217/M/2022 the original order was not the subject matter of appeal the original order was not the subject matter of appeal the original order was not the subject matter of appeal and what was sought to be rectified was the order and what was sought to be rectified was the order and what was sought to be rectified was the order u/s.143(3) read with 154 of the Act. The relevant facts u/s.143(3) read with 154 of the Act. The relevant facts u/s.143(3) read with 154 of the Act. The relevant facts are as under: are as under: (i) The assessee was assessed to tax vide the original (i) The assessee was assessed to tax vide the original (i) The assessee was assessed to tax vide the original assessment order dated September 21, 1979. assessment order dated September 21, 1979. (ii) There was a mistake in the said order, and (ii) There was a mistake in the said order, and (ii) There was a mistake in the said order, and consequent thereto, the assessee filed consequent thereto, the assessee filed a petition for a petition for rectification of the said order under section 154 of the rectification of the said order under section 154 of the rectification of the said order under section 154 of the Act. (iii) Consequent thereto, the assessment order was (iii) Consequent thereto, the assessment order was (iii) Consequent thereto, the assessment order was rectified on July 12, 1982 rectified on July 12, 1982 (iv) However, there was a mistake in the said (iv) However, there was a mistake in the said (iv) However, there was a mistake in the said rectification rectification rectification order, order, order, and and and consequent consequent consequent thereto, thereto, thereto, the the the assessee again applied for rectification of the fresh ssee again applied for rectification of the fresh ssee again applied for rectification of the fresh order dated July 12, 1982, vide letter dated July 4, order dated July 12, 1982, vide letter dated July 4, order dated July 12, 1982, vide letter dated July 4, 1986. (v) The Income Tax Officer dismissed the claim of the (v) The Income Tax Officer dismissed the claim of the (v) The Income Tax Officer dismissed the claim of the assessee, saying that it was time barred, and such assessee, saying that it was time barred, and such assessee, saying that it was time barred, and such order was confirmed by the Commissioner (A order was confirmed by the Commissioner (Appeals). ppeals). (vi) The Tribunal however upheld the contention of the (vi) The Tribunal however upheld the contention of the (vi) The Tribunal however upheld the contention of the assessee that the rectification application was within assessee that the rectification application was within assessee that the rectification application was within the time period as per the statute. the time period as per the statute. (vii) The High Court once again reversed the order of (vii) The High Court once again reversed the order of (vii) The High Court once again reversed the order of the Tribunal, and held that the period of fou the Tribunal, and held that the period of four years r years was to be counted from the date of the initial was to be counted from the date of the initial was to be counted from the date of the initial assessment, and not from the fresh order passed on assessment, and not from the fresh order passed on assessment, and not from the fresh order passed on July 12, 1982. July 12, 1982. (viii) On the basis of these facts, the Supreme Court (viii) On the basis of these facts, the Supreme Court (viii) On the basis of these facts, the Supreme Court held that the assessment order dated July 12, 1982 held that the assessment order dated July 12, 1982 held that the assessment order dated July 12, 1982 could be rectified as per the could be rectified as per the application dated July 4, application dated July 4, 1986, in view of the fact that there was a mistake in 1986, in view of the fact that there was a mistake in 1986, in view of the fact that there was a mistake in the order dated July 12, 1982 and consequent thereto, the order dated July 12, 1982 and consequent thereto, the order dated July 12, 1982 and consequent thereto, the application for rectification dated July 4, 1986 was the application for rectification dated July 4, 1986 was the application for rectification dated July 4, 1986 was not time barred. not time barred.

Yash Developers 19 ITA No. 3217/M/2022 But in the instant case, since the original or But in the instant case, since the original order was der was subjected to appeal and hence provisions of section subjected to appeal and hence provisions of section subjected to appeal and hence provisions of section 154(IA) of the Act would be applicable and the decision 154(IA) of the Act would be applicable and the decision 154(IA) of the Act would be applicable and the decision of Hon’ble Supreme Court will not apply on facts of the of Hon’ble Supreme Court will not apply on facts of the of Hon’ble Supreme Court will not apply on facts of the case. Hon’ble Supreme Court in the case of Alagendran case. Hon’ble Supreme Court in the case of Alagendran case. Hon’ble Supreme Court in the case of Alagendran Finance Ltd(Supra) was dealing Finance Ltd(Supra) was dealing with section 263(2) of with section 263(2) of the Act read with clause(c) to Explanation 263(1) which the Act read with clause(c) to Explanation 263(1) which the Act read with clause(c) to Explanation 263(1) which is identical to section 154(1A) of the Act. The Hon'ble is identical to section 154(1A) of the Act. The Hon'ble is identical to section 154(1A) of the Act. The Hon'ble Supreme Court held that since issue of lease Supreme Court held that since issue of lease Supreme Court held that since issue of lease equalization fund was not the subject matter of equalization fund was not the subject matter of equalization fund was not the subject matter of reassessment proceedings, t reassessment proceedings, the limitation for revising he limitation for revising the assessment order qua lease equalization fund will the assessment order qua lease equalization fund will the assessment order qua lease equalization fund will start from the original assessment order passed u/s. start from the original assessment order passed u/s. start from the original assessment order passed u/s. 143(3) of the Act and not from the date of 143(3) of the Act and not from the date of 143(3) of the Act and not from the date of reassessment order passed u/s. 147 of the Act. reassessment order passed u/s. 147 of the Act. reassessment order passed u/s. 147 of the Act. Therefore, according to us the f Therefore, according to us the facts of the instant acts of the instant appeal are identical to thecase of Alagendran Finance appeal are identical to thecase of Alagendran Finance appeal are identical to thecase of Alagendran Finance Ltd. and therefore the issue is squarely covered Ltd. and therefore the issue is squarely covered Ltd. and therefore the issue is squarely covered against the Revenue and in favor of the assessee. against the Revenue and in favor of the assessee. against the Revenue and in favor of the assessee. Hence, we confirm the order of CIT(A) and this appeal Hence, we confirm the order of CIT(A) and this appeal Hence, we confirm the order of CIT(A) and this appeal of Revenue is dismissed. of Revenue is dismissed.” 4.3 We find that in the above decision, the Tribunal has also We find that in the above decision, the Tribunal has also We find that in the above decision, the Tribunal has also distinguished decision of the decision of the Hind Wire Industries - -which has been discussed by the Hon’ble Delhi High Court in the case relied upon discussed by the Hon’ble Delhi High Court in the case relied upon discussed by the Hon’ble Delhi High Court in the case relied upon the Ld. Assessing Officer. Further, we note that the Tribunal in the the Ld. Assessing Officer. Further, we note that the Tribunal in the Ld. Assessing Officer. Further, we note that the Tribunal in case of Jani Properties Pvt. Ltd. in Jani Properties Pvt. Ltd. in ITA No. 3640/M/2018 for Jani Properties Pvt. Ltd. in ITA No. 3640/M/2018 assessment year 2008 assessment year 2008-09 again held that the time limit for 09 again held that the time limit for rectification u/s 154 is be considered from the date of the original rectification u/s 154 is be considered from the date of the original rectification u/s 154 is be considered from the date of the original or in subsequent rectification order only or in subsequent rectification order only, if the said rectif if the said rectification deals with the order, which is deals with the order, which is sought to be rectified. The relevant sought to be rectified. The relevant finding of the Tribunal finding of the Tribunal (supra) is reproduced as under: is reproduced as under:

“14. Now adverting to the facts of the present case, the 14. Now adverting to the facts of the present case, the 14. Now adverting to the facts of the present case, the first rectification order was passed by the AO on first rectification order was passed by the AO on first rectification order was passed by the AO on Yash Developers 20 ITA No. 3217/M/2022 13.03.2012 at the 13.03.2012 at the instance of assessee. Admittedly no instance of assessee. Admittedly no issue of book profit under section 115JB was the issue of book profit under section 115JB was the issue of book profit under section 115JB was the subject matter of the rectification order passed on subject matter of the rectification order passed on subject matter of the rectification order passed on 13.03.2012. The AO issued show cause notice for 13.03.2012. The AO issued show cause notice for 13.03.2012. The AO issued show cause notice for rectifying the order on the issue of book profit only for rectifying the order on the issue of book profit only for rectifying the order on the issue of book profit only for the second p the second proposed rectification. From the above roposed rectification. From the above discussions, it is clear that the legal position is that the discussions, it is clear that the legal position is that the discussions, it is clear that the legal position is that the time limit for rectification of mistake under section time limit for rectification of mistake under section time limit for rectification of mistake under section 154(7) is to be considered from the date of the original 154(7) is to be considered from the date of the original 154(7) is to be considered from the date of the original order or in subsequent rectification order onl order or in subsequent rectification order only if the y if the said rectification order dealing with the same which is said rectification order dealing with the same which is said rectification order dealing with the same which is sought to be rectified. In this view of the matter and sought to be rectified. In this view of the matter and sought to be rectified. In this view of the matter and having noted that the first rectification order dealt with having noted that the first rectification order dealt with having noted that the first rectification order dealt with entirely different, it is clear that the time limit for entirely different, it is clear that the time limit for entirely different, it is clear that the time limit for passing the impugned passing the impugned order indeed expired on expiry order indeed expired on expiry of four years from the end of the financial year, in of four years from the end of the financial year, in of four years from the end of the financial year, in which, the original order sought to be rectified was which, the original order sought to be rectified was which, the original order sought to be rectified was passed i.e. on 31.3.2009. Considering the aforesaid passed i.e. on 31.3.2009. Considering the aforesaid passed i.e. on 31.3.2009. Considering the aforesaid decisions of Tribunal and respectfully following the decisions of Tribunal and respectfully following the decisions of Tribunal and respectfully following the decision of co decision of coordinate bench of the Tribunal in Ashu ordinate bench of the Tribunal in Ashu Engineers & Plastic Pvt Ltd (supra), we are of the view Engineers & Plastic Pvt Ltd (supra), we are of the view Engineers & Plastic Pvt Ltd (supra), we are of the view that the rectification order passed u/s 154 dated 08 that the rectification order passed u/s 154 dated 08 that the rectification order passed u/s 154 dated 08- 07-2014 is clearly beyond the prescribed limitation of 2014 is clearly beyond the prescribed limitation of 2014 is clearly beyond the prescribed limitation of period provided u/s 154(7). Therefore, we accept the period provided u/s 154(7). Therefore, we accept the period provided u/s 154(7). Therefore, we accept the additional ground of appeal raised by assessee and additional ground of appeal raised by assessee and additional ground of appeal raised by assessee and hold that the rectification order dated 30 hold that the rectification order dated 30-03-2016 is 2016 is beyond the time limit prescribed u/s 154(7) and the beyond the time limit prescribed u/s 154(7) and the beyond the time limit prescribed u/s 154(7) and the same is invalid. same is invalid.”

5. Before us, the Ld. Departmental Representative (DR) did not Before us, the Ld. Departmental Representative (DR) did not Before us, the Ld. Departmental Representative (DR) did not bring any other decision of the Hon’ble Jurisdictional High Court cision of the Hon’ble Jurisdictional High Court cision of the Hon’ble Jurisdictional High Court contrary to the above decision and therefore, contrary to the above decision and therefore, we being we being in the jurisdiction of the Hon’ble Bombay High Court jurisdiction of the Hon’ble Bombay High Court, are bound to follow are bound to follow the decision of the jurisdictional High Court. Accordingly, following jurisdictional High Court. Accordingly, following jurisdictional High Court. Accordingly, following the decision of the Hon’ble Bombay High Court in the case of the decision of the Hon’ble Bombay High Court in the case of the decision of the Hon’ble Bombay High Court in the case of Sakseria Cotton Mills Ltd. (supra), Sakseria Cotton Mills Ltd. (supra), we hold that in the case we hold that in the case limitation for expiry of 4 years for the purpose of section 154(7) of limitation for expiry of 4 years for the purpose of section 154(7) of limitation for expiry of 4 years for the purpose of section 154(7) of Yash Developers 21 the Act has to be reckoned from the original assessment u/s 143(3) be reckoned from the original assessment u/s 143(3) be reckoned from the original assessment u/s 143(3) of the Act which is dated 21.11.2011 whereas the order u/s 154 of the Act which is dated 21.11.2011 whereas the order u/s 154 of the Act which is dated 21.11.2011 whereas the order u/s 154 has been passed on 29.06.2017 has been passed on 29.06.2017, which is clearly beyond the period which is clearly beyond the period of four years specified and therefore, the 154 order passed by the of four years specified and therefore, the 154 order passed by the of four years specified and therefore, the 154 order passed by the Assessing Officer is beyond the period of the limitation provided. ng Officer is beyond the period of the limitation provided. ng Officer is beyond the period of the limitation provided. Accordingly, same is Accordingly, same is invalid in law and thus it is invalid in law and thus it is quashed. The grounds of appeal of the assessee are accordingly allowed. grounds of appeal of the assessee are accordingly allowed. grounds of appeal of the assessee are accordingly allowed.