DY. COMMISSIONER OF INCOME TAX, CIRCLE-3(2), HYDERABAD vs. SUMTOTAL SYSTEMS INDIA PRIVATE LIMITED, HYDERABAD

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ITA 487/HYD/2019Status: DisposedITAT Hyderabad31 July 2019AY 2005-063 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal upheld the CIT(A)'s decision that the consequential order passed by the AO was void ab initio due to being time-barred. Therefore, the appeal filed by the revenue was dismissed.

What were the facts?

The Assessing Officer (AO) passed a consequential order after a delay of 21 months, which was beyond the time limit stipulated by Section 153 of the Income-tax Act. The assessee contested that the order was time-barred.

What were the issues?

Whether the consequential order passed by the AO was barred by limitation as per Section 153 of the Act. The validity of an order passed beyond the prescribed time limit.

Which sections of the Income-tax Act were involved?

Section 153,Section 143(3),Section 92CA(3),Section 254

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, HYDERABAD BENCH “A”, HYDERABAD

Before: SMT. P. MADHAVI DEVI & SHRI S. RIFAUR RAHMAN

For Respondent: Shri Y.V.S.T. Sai, Shri Ravi Bharadwaj
Hearing: 30/07/2019Pronounced: 31/07/2019

PER S. RIFAUR RAHMAN, A.M.:

This appeal filed by the revenue is directed against the order of CIT(A) – 3, Hyderabad, dated 16/01/2019 for AY 2005-06 wherein the revenue has raised the following grounds of appeal: “1. The Ld. CIT (A) erred both in law and on facts of the case. 2. The Ld. CIT(A) erred in holding that the order passed by AO giving effect to the order of Hon'ble ITAT is barred by limitation without appreciating the fact that the provisions of Sec.153(3)(ii) clearly speaks otherwise. 3. The Ld.CIT(A) erred in deleting the addition without adjudicating the issue on merits, which, even in the 2nd round of litigation, are in favor of the Department. 4. Any other ground(s) that may be urged at the time of hearing.” 2. Brief facts of the case are, the AO passed the consequential order u/s 143(3) rws 92CA(3) rws 254 of the Income-tax Act, 1961 ( in short ‘the Act’) to the order of the ITAT in ITA No. 473/Hyd/2011, dated 26/09/2012, after a lapse of 21 months, which should have

2 ITA No. 487/Hyd/19 Sum Total Systems India Pvt. Ltd., Hyd. been passed on 31st December, 2014, but, the AO passed the said order on 14th February, 2018.

3.

Against the said order, the assessee preferred an appeal before the CIT(A) contesting that the order passed by the AO was time barred as per section 153 of the Act.

4.

The CIT(A) after considering the submissions of the assessee, held that the consequential order passed by the AO was beyond the time limit stipulated under law and hence the order is void ab-initio and hence, allowed the appeal of the assessee.

5.

Aggrieved by the order of CIT(A), the revenue is in appeal before us.

6.

Considered the rival submissions and perused the material on record. As per the provisions of section 153(3), the time limit for completion of assessment, reassessment and re-computation in pursuance of an order under section 254 or section 263 or section 264, setting aside or cancelling an assessment, may be made at any time before the expiry of nine months from the end of the FY in which the order u/s 254 is received by the respective jurisdictional Commissioner. In the case under consideration, the AO passed the consequential order after a period of 21 months, which is time barred. Therefore, we do not find any infirmity in the order of CIT(A) in allowing the appeal of the assessee by holding that the consequential order passed by the AO is void ab-initio and accordingly, grounds raised by the revenue in this regard are dismissed.

3 ITA No. 487/Hyd/19 Sum Total Systems India Pvt. Ltd., Hyd.

7.

In the result, appeal of the revenue is dismissed.

Pronounced in the open Court on 31st July, 2019.

Sd/- Sd/- (P. MADHAVI DEVI) (S. RIFAUR RAHMAN) JUDICIAL MEMBER ACCOUNTANT MEMBER

Hyderabad, Dated: 31st July, 2019 kv

Copy to:- 1) DCIT, Circle – 3(2), 7th Floor, Signature Towers, White Fields, Kondapur, Opp. Botanical Gardens, Hyderabad. 2) M/s Sum Total Systems India Pvt. Ltd., 7th Floor, Building No. 2B, Maximus Towers, K. Raheja IT Park, Hyderabad 3) CIT(A) – 3 Hyderabad. 4) Pr. CIT - 3, Hyd. 5) The Departmental Representative, I.T.A.T., Hyderabad. 6) Guard File

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