| The Tax Publishers2019 TaxPub(DT) 5093 (Hyd-Trib) INCOME TAX ACT, 1961
Section 150 Section 147 Section 148/149
Where for reopening AO issued notice after expiry of 6 years and initiated the proceedings only on observations made by the ITAT in its order section 150 was also not attracted in this case and proceedings initiated for reopening after period of limitation under section 149 were therefore, void.
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Reassessment - Limitation - Observation of Tribunal not finding - Initiation of proceedings under section 147 after six years
AO while completing the assessment in the case of D. V. Krishna Reddy, partner of SVK Project, had made addition under section 69. CIT(A) not only considered the submission of assessee and rejected same, but also enhanced the addition. ITAT vide order in ITA No. 79/Hyd/2012, dated 29-11-2013 had inter alia observed that there was no hesitation in deleting the amount in the hands of assessee. If there was any incriminating material or doubt about sources, revenue was free to enquire in the 'hands of M/s. SVK, if required, but this was only an observation but not a direction. With these observations, addition made in the hands of assessee stands deleted. AO initiated the proceedings under section 147 after expiry of 6 years. AO initiated the proceedings by heavily relying on provisions of section 150.Held: Considering overall facts of the case, it was clear that AO had initiated proceedings under section 147 after expiry of 6 years and had not brought on record any failure on the part of the assessee. Further, AO applied the provisions of section 150, when the findings of the coordinate Bench were not direction but observation. Therefore, the proceedings initiated under section 147 beyond 6 years were void ab-initio as the notice under section 148 cannot be issued after the expiry of 6 years as per the time limit prescribed under section 149. In this case. AO issued the notice after expiry of 6 years and initiated the proceedings only after the observations made by the ITAT in its order. Section 150 was also not attracted in this case. The proceedings were initiated for reopening after period of limitation under section 149 was, therefore, void.
REFERRED : ITO v. Arun Kumar Kapoor (2011) 16 Taxman.com 373 (Amritsar) : 2012 TaxPub(DT) 473 (Asr-Trib) and CIT v. Bharat Engineering & Construction Co. (1972) 83 ITR 187 (SC) : 1972 TaxPub(DT) 297 (SC).
FAVOUR : In assessee's favour.
A.Y. : 2007-08
IN THE ITAT, HYDERABAD BENCH
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