Eskay K’n’ IT (India) Ltd vs. DCIT (Bombay High Court)

DATE: August 11, 2014 (Date of pronouncement)
DATE: December 4, 2014 (Date of publication)
AY: 1993-94
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S. 147/ 150(1): A "finding" is one that is necessary for the disposal of an appeal in respect of an assessment of a particular year

The issue for our examination is whether there is any finding in the order of the Tribunal which is being given effect to and/or as consequence thereof, the impugned notice has been issued. It is only when the answer to the above question is in the affirmative i.e. there is a finding that the issue of impugned notice would be saved from the bar of limitation by virtue of Section 150(1) of the Act:

(i) The issue of what is a ‘finding’ in an adjudicatory/ appellate order is no longer res integra. The Supreme Court while dealing with a provision similar to Section 150 of the Act found in Section 34(3) of the Income Tax Act, 1922 in ITO v/s. Murlidar B. Deo 52 ITR 335 has explained the meaning of ‘finding’ thus:

“ …. …. ….. A ‘finding’, therefore, can be only that which is necessary for the disposal of an appeal in respect of an assessment of a particular year. The Appellate Assistant Commissioner may hold, on the evidence, that the income shown by the assessee is not the income for the relevant year and thereby exclude that income from the assessment of the year appeal. The finding in that context is that that income does not belong to the relevant year. He may incidentally find that the income belongs to another year, but that is not a finding necessary for the disposal of an appeal in respect of the year of assessment in question.”

(ii) In view of the above and particularly the law laid down by the Apex Court in Murlidhar Bhagwan Das (supra), it is very clear that the Tribunal in its order dated 25th October 2002 was concerned with an appeal from orders passed in block Assessment and held that the ambit/ scope for assessment for the block period under Chapter XIVB is only to assess the undisclosed income for the block period and not for the total income or loss suffered in the previous year which is subject matter of regular assessment. The only finding of the Tribunal in its order is that the extent of claim for depreciation made by the assessee/ petitioner would not be a subject matter of enquiry in the block assessments. This is for the reason that the claim for higher depreciation cannot be said to be undisclosed income for the purpose of block assessment. The Tribunal had in its order while dealing with order passed in a block assessment had no occasion to examine whether or not the depreciation as claimed was permissible. It may also be pointed out that the Tribunal has recorded a finding of fact that no material was found during the course of search to establish that the claim for depreciation made was incorrect. Therefore, we are of the view that there is no finding given by the Tribunal which would enable the Assessing Officer to extend the period of limitation as provided under Section 150 of the Act for the purpose of issuing impugned notice in respect of Assessment Year 1993-94.

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