Section 154(8) of the income tax act
This query is : Resolved
19 July 2014
The section 154(8) clearly stat that
the ld. AO shall pass the order within six months form month in which application u/s 154 of the act has been made either making amendments as per application or declining the same after giving opportunity of hearing otherwise the application may be held as deemed to be allowed.
is there any judgment regarding this issue?
the ld. AO shall pass the order within six months form month in which application u/s 154 of the act has been made either making amendments as per application or declining the same after giving opportunity of hearing otherwise the application may be held as deemed to be allowed.
is there any judgment regarding this issue?
19 July 2014
As it is written in ACT, no need for judgement. If AO failed to pass order within time frame, it is deemed as allowed.
19 July 2014
I beg to differ. non-passing of rectification order within time-limits prescribed under 154(8) doesn't result in automatic acceptance of assessee's application.
You may refer Desai Investment Pvt Ltd Case IN THE INCOME TAX APPELLATE TRIBUNAL
"D" Bench, Mumbai Before Shri R.K. Gupta, Judicial Member and Shri B. Ramakotaiah, Accountant Member ITA No. 6447/Mum/2008
(Assessment Year: 1998-99)
You may refer Desai Investment Pvt Ltd Case IN THE INCOME TAX APPELLATE TRIBUNAL
"D" Bench, Mumbai Before Shri R.K. Gupta, Judicial Member and Shri B. Ramakotaiah, Accountant Member ITA No. 6447/Mum/2008
(Assessment Year: 1998-99)
23 July 2014
THANKS FOR REPLY
SIMILAR SECTION 254(2) OF THE ACT
KINDLY REFER TO THE MADRAS HIGH COURT JUDGMENT IN THE CASE OF CIT V SHREE AYYANAR SPINNING IN WHICH HON'BLE HIGH COURT HELD THAT "In fine, without going into the merits of the case, we hold that the order passed by the Appellate Tribunal
is barred by limitation. Accordingly, the order impugned and the consequential order dated 12.6.2003 are set
aside as it is settled that when initiation of proceedings under a statute lacks jurisdiction, the final or
consequential order is also liable to be struck down."
SIMILAR SECTION 254(2) OF THE ACT
KINDLY REFER TO THE MADRAS HIGH COURT JUDGMENT IN THE CASE OF CIT V SHREE AYYANAR SPINNING IN WHICH HON'BLE HIGH COURT HELD THAT "In fine, without going into the merits of the case, we hold that the order passed by the Appellate Tribunal
is barred by limitation. Accordingly, the order impugned and the consequential order dated 12.6.2003 are set
aside as it is settled that when initiation of proceedings under a statute lacks jurisdiction, the final or
consequential order is also liable to be struck down."
23 July 2014
I beg to differ to Nikil, if there is clear provision on statute which bars the action after completion of certain time period, it should be treated as time barred.
Whatever may be the judgement of ITAT, I will prefer to go to HC if such type of decision is given by ITAT in my case.
Whatever may be the judgement of ITAT, I will prefer to go to HC if such type of decision is given by ITAT in my case.
23 July 2014
Umesh,
that is your discretion. You have all the rights to challenge an ITAT judgment in a higher court but it would have been preferable if you could have shared any such judgment here.
Please note that no where does 154(8) gives implicit acceptance of rectification application.
The reference to 254(2) is erroneous. The corresponding section to 254(2) is 154(7) and not 154(8).
254(2) and 154(7) only provide the time limit for moving the application. Please refer Rajasthan High Court judgment in the case of Harshwardhan Chemicals and Minerals Limited (256 ITR 767). The Madras High court dissented from this judgment.
The mistake querist has made is that he has not done a forward reference to the Madras High Court Judgment.
The revenue challenged the Madras High Court Judgment in the Supreme Court of India (CIT v. Sree Ayyanar Spinning & Weaving Mills Limited, 301 ITR 434 (SC)
The court held that Madras High Court was wrong and the rajasthan High court was right.
The same argument should further be applied to 154(8) given the same tenor and scope of the sections.
So you may go to High Court, but Supreme Court judgment and analysis should prevail over.
The only sections where implicit assent is given is Section 12AA(2) and time-barred assessments. However, even in assessment cases, you get reassessment options (which though are further time-barred)
that is your discretion. You have all the rights to challenge an ITAT judgment in a higher court but it would have been preferable if you could have shared any such judgment here.
Please note that no where does 154(8) gives implicit acceptance of rectification application.
The reference to 254(2) is erroneous. The corresponding section to 254(2) is 154(7) and not 154(8).
254(2) and 154(7) only provide the time limit for moving the application. Please refer Rajasthan High Court judgment in the case of Harshwardhan Chemicals and Minerals Limited (256 ITR 767). The Madras High court dissented from this judgment.
The mistake querist has made is that he has not done a forward reference to the Madras High Court Judgment.
The revenue challenged the Madras High Court Judgment in the Supreme Court of India (CIT v. Sree Ayyanar Spinning & Weaving Mills Limited, 301 ITR 434 (SC)
The court held that Madras High Court was wrong and the rajasthan High court was right.
The same argument should further be applied to 154(8) given the same tenor and scope of the sections.
So you may go to High Court, but Supreme Court judgment and analysis should prevail over.
The only sections where implicit assent is given is Section 12AA(2) and time-barred assessments. However, even in assessment cases, you get reassessment options (which though are further time-barred)
23 July 2014
I HAVE CHECK THE CASE RECORDS AS MENTIONED BY NIKHIL.
HE IS RIGHT IN HIS OPINION.
THE OTHER RELEVANT SECTION IS 12AA(2)
HON'BLE MADRAS HIGH COURT HAS HELD THAT IN THE CASE OF CIT-I, SALEM V SHEELA CHRISTIAN CHARITABLE TRUST "SIX MONTH TIME LIMIT IS ONLY DIRECTORY"
PLEASE UPDATE IF ANY FRESH JUDGMENT COME ACROSS REGARDING 154(8) OR 12AA(2) OR 264(6) WHERE COMPETENT AUTHORITY PLEASED TO ALLOW AS DEEMED TO BE ACCEPTED/GRANTED IF NOT ENTERTAINED WITHIN STIPULATED TIME LIMIT
HE IS RIGHT IN HIS OPINION.
THE OTHER RELEVANT SECTION IS 12AA(2)
HON'BLE MADRAS HIGH COURT HAS HELD THAT IN THE CASE OF CIT-I, SALEM V SHEELA CHRISTIAN CHARITABLE TRUST "SIX MONTH TIME LIMIT IS ONLY DIRECTORY"
PLEASE UPDATE IF ANY FRESH JUDGMENT COME ACROSS REGARDING 154(8) OR 12AA(2) OR 264(6) WHERE COMPETENT AUTHORITY PLEASED TO ALLOW AS DEEMED TO BE ACCEPTED/GRANTED IF NOT ENTERTAINED WITHIN STIPULATED TIME LIMIT
23 July 2014
Ankur,
You don't have to worry about 12AA(2). The opinion for the same is final. The logic is a simple one 12AA(2) doesnt bestow any benefit to the assessee as the final tax exemption is provided only at the time of assessment whereas under 254, 154 etc, no implicit acceptance is given as it could result in prejudice to revenue's interest for factors often beyond AO's control.
You don't have to worry about 12AA(2). The opinion for the same is final. The logic is a simple one 12AA(2) doesnt bestow any benefit to the assessee as the final tax exemption is provided only at the time of assessment whereas under 254, 154 etc, no implicit acceptance is given as it could result in prejudice to revenue's interest for factors often beyond AO's control.
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