INCOME TAX ACT, 1961

Section 154(7)

Rectification - Under section 154 - Bar of limitation -

The claim of deduction under section 80-IA was granted by AO in the original assessment order under section 143(3) dated 26-3-2013. This claim was not disturbed by AO in the first rectification order passed under section 154 on 10-3-2014. AO in the second rectification order dt. 27-3-2018 withdrew assessee's claim for deduction under section 80-IA in respect of profits of the Thermal Power Plant by invoking the provisions of sub-section (12A) thereof. Assessee challenged the order as barred by limitation.Held: The order dated 27-3-2018 was passed by AO under section 154 whereby it had rectified assessment order dated 26-3-2013 passed under section 143(3) per section 154(7). Time limit to rectify the order expired on 31-3-2017 being four years from the end of the financial year in which said assessment order was passed. Therefore, second rectification order was passed under section 154 dated 27-3-2018 wherein claim of deduction under section 80-IA was denied to assessee by applying provisions of section 80-IA(12A) was clearly barred by limitation.

Followed:Vedantham Raghaviah v. Addl.Third ITO (1963) 49 ITR 314 (Mad) : 1963 TaxPub(DT) 433 (Mad-HC), CIT v. Alagendran Finance Ltd. (2007) 293 ITR 1 (SC) : 2007 TaxPub(DT) 1408 (SC), Hind Wires Ltd. v. CIT (1995) 212 ITR 639 (SC) : 1995 TaxPub(DT) 976 (SC) and Ashu Engineers and Plastics Pvt. Ltd. v. Dy. CIT ITA No.3453/Mum/2010 for assessment year 2001-02 dated 29/04/2011.

REFERRED :

FAVOUR : In assessee's favour.

A.Y. : 2010-11

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