Direct Tax

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

08 November 2010 suppose an expense "P" has been disallowed by A.O. for an assesee "R".

"R" files an appeal against the same to CIT(A).

CIT(A) confirms to the assessment made by
A.O.

Further assesse "R" files an appeal to ITAT.
ITAT allows the expense "P" and thus overules the order of CIT(A).

Revenue does not make any further appeal.

Now after 5 years of passing of the above order of ITAT u/s 254 an amendment comes in finance act disallowing expense "P".

MY QUERY : under what section will the case of "R" wil be reopened? How wil the expense "P" wil be diallowed subsequently which was allowed by ITAT.

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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08 November 2010 Two things may be checked first viz.,

1) Whether the AO has given effect to the ITAT order in accordance with the IT Act,1961.
2) Whether the amendment made in the subsequnent finance act has retrospective effect on completed assessments.

If the above two conditions are satisfied as far to the AO is concerned, he can very well, to my understanding, reopen the assessment under section 147 and complete the reassessment as per sections 148 to 153 of the Income tax Act,1961.

Aditya Maheshwari

Aditya Maheshwari (Expert)
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08 November 2010 Continuing with the above the order of the ITAT could be reviewed only within 4 years by passing a miscellaneous application for the same. Also in your case it seems that time has passed.

Also there are very dim chances of your case being repoened as 6 years time period for reopening u/s 147 also seems to be over as already 5 years has passed when ITAT order was passed. So there are very less chances for your case being reopened now.

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Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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08 November 2010 Thanks to Aditya Ji. Initially I had a doubt regarding the time limit. Even then I answered ,generally, for wnat of clarity in the querry and just for a thought for the querist ,among others.

Querist : Anonymous

Querist : Anonymous (Querist)

08 November 2010 Respected sir
(B.Chackrapani)

say in my query amendment has retrospective effect on completed assessments.

but still according to PROVISO to sec 147 no matter can be opened by the AO which are subject matter of appeal.
So how can AO open the case u/s 147?

please revert

thank you

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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08 November 2010 Appeal is not pending. ITAT had decided it. Therfore, the case is not under subjudice, hence not a subject matter of appeal.

Querist : Anonymous

Querist : Anonymous (Querist)

08 November 2010 thank u so much sir.

my freind asked me this query and evn i replied him with the same answer that the appeal is not pending and hence not the subject matter of appeal.

but he was of he opnion that once an appeal is filed it becomes subject matter of appeal no matter whether its decided or not.

but now i can actually show him this n prove him wrong.

thank you so much