Time limit for notice where assessment is in pursuance of an order on appeal, etc-Section 150(1)
Notwithstanding anything contained in section 149, the notice under section 148 may be issued at any time for the purpose of making an assessment or reassessment or recomputation in consequence of or to give effect to any finding or direction contained in an order passed
by any authority in any proceeding under this Act by way of appeal, reference or revision
or by a Court in any proceeding under any other law.
Direction The expression ‘direction’ as held by the Supreme Court in ITO v Murlidhar Bagwan Das (1964) 52 ITR 335, must be collated to the direction which the Deputy Comm. (Appeals) can give u/s 251 or which the Commissioner or the Tribunal is empowered to give under the relevant sections.
In Rajinder Nath v CIT (1979) 120 ITR 14 (SC), it was observed that a direction by a statutory authority is in the nature of an order requiring positive compliance. When it is left to the option and discretion of the AO whether or not to take action, it can’t be described as a direction.
Once AAC had come to conclusion that AO had no jurisdiction to reopen assessment under section 147(a), and order of assessment was liable to be quashed, he had no jurisdiction to make any further direction for recomputing amount of capital gains because such direction was not necessary for the disposal of the appeal before the AAC.CIT v Agha Abdul Jabbar Khan (1991) 187 ITR 587 (MP)
In Consequence of ‘In consequence of’ requires not merely a remote connection between the appellate order and an item of income but a causal connection.
The notice u/s 148 must automatically or directly flow from the concerned appellate order. Durga Prasad v ITO (1965) 57 ITR 583 (All)
Finding and direction-Court Courts have repeatedly pointed out that the finding is one which should be necessary for the disposal of an income tax matter before it. Rajinder Nath v CIT (1979) 120 ITR 14 (SC); CIT v Tarajan Tea Co (P.) Ltd. (1999) 236 ITR 477 (SC)
Exception to Section 150(1)-Section 150(2)
The provisions of section 150(1) shall not apply in any case where any such assessment, reassessment or recomputation as is referred to in section 150(1) relates to an assessment year in respect of which an assessment, reassessment or recomputation could not have been made at the time the order which was the subject-matter of the appeal, reference or revision, as the case may be, was made by reason of any other provision limiting the time within which any action for assessment, reassessment or recomputation may be taken.
The provision of section 150, although appears to be of very wide amplitude, but would not mean that recourse to reopening of the proceedings in terms of sections 147 and 148 can be initiated at any point of time whatsoever. Such a proceeding can be initiated only within the period of limitation prescribed therefor as contained in section 149. Section 150(1) is an exception to the aforementioned provision. It brings within its ambit only such cases where reopening of the proceedings may be necessary to comply with an order of the higher authority. For the said purpose, the records of the proceedings must be before the appropriate authority. It must examine the records of the proceedings. If there is no proceeding before it or if the assessment year in question is also not a matter which would fall for consideration before higher authority, section 150 will have no application. It is, thus, evident that jurisdiction to issue directions is limited. CIT v Greenworld Corporation (2009) 314 ITR 81 (SC)