By K. B. Bhujle, Advocate
New Page 1
44 Assessment : Limitation : S. 143, S. 144
and S. 154 of Income-tax Act, 1961 : A.Y. 1994-95 : Order giving effect to
Appellate order is order inherent in S. 143 and S. 144 : Not an order u/s.154 :
Limitation u/s.154(7) not applicable.
[Peninsula Land Ltd. v. CIT, 307 ITR 183 (Bom); 175
Taxman 58 (Bom)]
For the A.Y. 1994-95 the AO passed an order u/s.154 of the
Income-tax Act, 1961, on 9-6-2006 giving effect to the order of the Commissioner
(Appeals). In that order he allowed set-off of carried forward depreciation of
the preceding years. Subsequently, he passed another order u/s.154 dated
22-2-2007 withdrawing the earlier order u/s.154, dated 9-6-2006 claiming it to
be beyond the period of limitation as prescribed u/s.154(7). The Commissioner
rejected the revision application made u/s.264 of the Act.
The Bombay High Court allowed the writ petition filed by the
assessee and held as under :
“(i) It was clear from the order dated 9-6-2006, that the
set-off was granted in order to pass on to the assessee the benefit that it
had obtained under the order passed by the Appellate authority in the
statutory appeal. This order was not an order passed u/s.154 of the Act. The
power to pass such order was inherent in S. 143 or S. 144.
(ii) The power of the Income-tax Officer to amend the
assessment in consequence of decision in an appeal, revision, reference or by
a High Court or Supreme Court was not traceable to S. 154, but was inherent
and traceable to S. 143 and S. 144 of the Act. Therefore the limitation as
contained in S. 154(7) would not apply to the passing of such an order.
(iii) The finding that the order passed on 9-6-2006 was
beyond the period of limitation as prescribed u/s.154(7) was erroneous.”
