Date of Order of CIT(A) considered as Relevant Date for Determining Limitation u/s 150: Delhi HC [Read Order]

Assessee - Delhi - Limitation - Intec - Delhi High Court - Taxscan

The Delhi High Court in the case of Intec Corporation v ACIT held that the period of limitation under Section 150 would be considered from the date of order of CIT (A).

The petitioner engaged in the manufacturing and marketing of Roof Mounted Package Air Conditioners, in order to expand set up a new unit and claimed deduction of profits, under Section 80-IC to be rejected by the AO on non-fulfillment of the provisions of Section 80-IC. While the matter was in appeal before the ITAT, AO issued the impugned notice under Section 147/150 of the Act for a reassessment of the return filed by the Petitioner.

A challenge to the notice on the ground that the AO did not have jurisdiction to issue the notice beyond 6 years from the end of relevant AY has been made by the petitioner.

The petitioner submitted that as per Section 149, notice under Section 147 could have been issued within a maximum period of 6 years from the end of the relevant assessment year and the said period of six-year in the present case had ended. Further, Section 150 cannot be invoked for the re-opening of the assessment. The use of the word ‘effect’ in Section 150(1) has been interpreted to mean ‘final finding/direction’ and since the order of the ITAT is subject to a final adjudication by the High Court or Supreme Court, the ITAT cannot be given effect to.

The Coram comprising of Justices Vipin Sanghi and Sanjeev Narula held that the reopening of the assessment under Section 147 read with Section 150 was within the period of limitation. It held that in terms of Section 150(2) and the observations in Praveen Kumari, the date relevant for deciding the question of limitation would be the date of order of CIT(A). Thus, the limitation of six years under Section 149, must be alive on the date of passing of the order of CIT (A).

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