THE COMMISSIONER OF IT vs. M/S OCM INDIA LTD

ITA/425/2005HC Punjab & HaryanaPHHC01076378200512 October 2006Author: MR. JUSTICE RAJESH BINDAL,MR. JUSTICE ADARSH KUMAR GOEL3 pages
AI SummaryRemanded

What did the High Court hold?

The High Court held that the bar contained in the Proviso to Section 143(2) of the Act could not be invoked for reassessment proceedings initiated under Section 148 of the Act, especially in view of the amendment by the Finance Act 2006. The Court noted that the assessee's counsel conceded that the Proviso to Section 143(2) could no longer be invoked in light of the subsequent amendment, although the notice was still required to be within the limitation prescribed under Section 147. However, this specific aspect of the matter had not been examined by the Tribunal as the appeal was decided on another issue. Consequently, the High Court did not express an opinion on the question sought to be raised by the assessee, as no finding was recorded by the Tribunal. Since other issues raised before the Tribunal had not been gone into, the High Court deemed it appropriate to remand the case to the Tribunal for a fresh decision in accordance with the law.

What were the facts?

The Revenue (Commissioner of Income Tax-I, Amritsar) appealed against an order of the Income Tax Appellate Tribunal (ITAT), Amritsar Bench, for assessment year 1992-93. The Assessing Officer (AO) initially completed the assessment at Nil income on 25.1.1995. Subsequently, a notice under Section 148 of the Income Tax Act, 1961, was issued on 18.5.2001, alleging escapement of income. The assessee, M/s. OCM India Limited, Amritsar, filed a return on 19.6.2001. The AO then issued a notice under Section 143(2) on 17.3.2003, and completed the reassessment under Section 143(3) read with Section 147 on 28.3.2003, determining a total income of Rs.79,723/-. The assessee appealed to the CIT(A), arguing that the notice under Section 143(2) was time-barred.

What were the issues?

1. Whether, on the facts and in the circumstances of the case, the ITAT was right in law in setting aside the CIT(A)'s order on the ground that notices issued under Section 143(2)/142(1) were beyond the time provided under Section 143(2)(ii), ignoring the provisions of Section 153(2) of the Income Tax Act, 1961, which refer to the date of issue of notice under Section 148 for reckoning such time limit? Assessee's Contention: The assessee contended that the notice under Section 143(2) was issued beyond the 12-month period from the end of the month of furnishing the return, as stipulated by the Proviso to Section 143(2)(ii). The return was furnished on 19.6.2001, making the notice dated 17.3.2003 beyond time. Revenue's Contention: The Revenue argued that once the assessment was re-opened under Section 147, the limitation prescribed under the Proviso to Section 143(2) was not applicable. They also pointed to an amendment in the Finance Act 2006, effective from 1.10.1991, to clarify this position. The Revenue submitted that the Tribunal's view, relying on contrary judicial opinion, was unsustainable.

Which sections of the Income-tax Act were involved?

Section 143(2),Section 142(1),Section 153(2),Section 148,Section 147,Section 143(3)

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances
ITA No.425 of 2005 1 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH ITA No.425 of 2005 Date of decision:12.10.2006 The Commissioner of Income Tax-I, Amritsar ....Appellant versus M/s. OCM India Limited, Amritsar ....Respondent CORAM: HON'BLE MR. JUSTICE ADARSH KUMAR GOEL HON'BLE MR. JUSTICE RAJESH BINDAL Present: Dr. N.L.Sharda, Advocate for the appellant. Ms.Radhika Suri, Advocate for the respondent.

JUDGMENT:

1.

This appeal has been preferred by the revenue against the order of the Income Tax Appellate Tribunal, Amritsar Bench, Amritsar in ITA No.235(ASR)/2004, in respect of assessment year 1992-93, proposing following substantial question of law:- “Whether on the facts and in the circumstances of this case, ITAT is right in law in setting aside CIT(A) order on the ground that notices issued under section 143(2)/ 142(1) were beyond time provided under section 143(2) (ii) ignoring the provisions of section 153(2) of Income Tax Act, 1961 which refer to the date of issue of notice under section 148 for reckoning such time limit?”

2.

The Assessing Officer completed assessment under section 143(3) of the Income Tax Act, 1961 (for s

The order continues below.

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