S/s. 148, 150, 153, 254 – A notice u/s. 148 may be issued at any time for the purpose of making a reassessment in consequence of or to give effect to any finding or direction contained in an order. For the purpose of section 150(2), the “order which was the subject matter of appeal” is the assessment order and not the order of CIT(A). Reassessment may be completed at any time where the reassessment is made in consequence of or to give effect to any finding/direction of an order passed u/s. 254(<

S/s. 148, 150, 153, 254 – A notice u/s. 148 may be issued at any time for the purpose of making a reassessment in consequence of or to give effect to any finding or direction contained in an order. For the purpose of section 150(2), the “order which was the subject matter of appeal” is the assessment order and not the order of CIT(A). reassessment may be completed at any time where the reassessment is made in consequence of or to give effect to any finding/direction of an order passed u/s. 254(1) of the Act i.e. an order of the ITAT.

Aggrieved the assessee preferred an appeal to CIT(A) who noted that the assessee had not offered capital gains on sale of property even in AY 2002-03. CIT(A) held that since the property was registered with the Registrar on 30-07-2003, transfer took place in AY 2004-05 and was correctly taxed by the AO.

Aggrieved the assessee preferred an appeal to the Tribunal and contended that the transfer u/s. 2(47) had taken place in the financial year relevant to assessment year 2002-03 and not 2004-05. Reliance was placed on decision in Arundhati Balkrishna & Anr. vs. CIT 138 ITR 245 (Guj) for the proposition that transfer is effective from the date of execution of the document and not from the date of registration. Revenue relied on the decision of the Apex Court in the case of Suraj Lamp & Industries 14 taxmann. com 103 (SC) for the proposition that transfer of an immovable property is enforceable only from the date of registration of the document.

On the possibility of making the assessment for AY 2002-03, it was submitted on behalf of the assessee that provisions of section 150 can only be attracted in respect of an order which is a subject matter of appeal and in this case order which is the subject matter of appeal is the order of cit9a0 which was dated 25-03-2011, hence the period of six years is to be computed considering the date of pronouncement of the order of CIT(A). Revenue contended that the assessment order is the subject matter of appeal which is dated 28-12-2007, hence direction can be given after considering the said date of assessment order.

Held
Considering the provisions of section 2(47)(v) and following the ratio of the decision of Bombay High Court in the case of Chaturbhuj Dwarkadas Kapadia v CIT 260 ITR 491 (Bom) the tribunal held that transfer had taken place in previous year relevant to assessment year 2002-03. It observed that since the decision of the Apex Court in the case of Suraj Lamps (supra) has been decided in a different context and the income-tax provisions were not adjudicated upon, the reliance placed by the revenue on the said precedent was misplaced.

The Tribunal noted the ratio of the decision of the Gujarat High Court in the case of Kalyan Ala Barot vs. M. H. Rathod 328 ITR 521 (Guj) and also the provisions of section 150 and observed that a notice u/s. 148 may be issued at any time for the purpose of making a reassessment in consequence of or to give effect to any finding or direction contained in an order. Further, in s/s. (v) of section 150, a limitation is prescribed that the clause of re-opening in s/s. (1) of section 150 shall not apply where any such reassessment relates to an assessment year in respect of which an assessment could not have been made at the time of order, which was subject matter of appeal, or as the case may be, was made by reason of any other provision of limiting the time within which any action for reassessment may be taken. The Tribunal held that assessment order is the order which is the subject matter of appeal. It also clarified that a co-joint reading with section 153(3) reveals that a reassessment may be completed at any time where the reassessment is made in consequence or to give effect to any finding / direction of an order passed u/s. 254(1) of the Act i.e. an order of the ITAT.

The appeal filed by the assessee was allowed subject to the direction mentioned above.