subsequent reversal of legal position by judgment passed by Supreme Court would not authorize Department to re-open the assessment which stood closed on the basis of law at that relevant period of time

Summary: Subsequent reversal of the legal position by the judgment of the Supreme Court does not authorize the Department to re-open the assessment, which stood closed on the basis of the law, as it stood at the relevant time.

BEFORE THE SUPREME COURT OF INDIA

Deputy Commissioner of Income-tax

vs.

Simplex Concrete Piles (India) Ltd.

S.H. KAPADIA, CJI.

AND MADAN B. LOKUR, J.

CIVIL APPEAL NOS. 2329 TO 2331 OF 2006

& 6404 OF 2012

S.L.P. (C) NO. 18237 OF 2006

SEPTEMBER 11, 2012

ORDER

Civil Appeal No. 2339 of 2006 and Civil Appeal No. 6404 of 2012 @ S.L.P. (C) No. 18237 of 2006:

1. Heard learned counsel on both sides.

2. Leave granted.

3. We see no error in the observation made by the Division Bench of the High Court in the impugned judgement that once limitation period of four years provided under Section 147/149(1A) of the Income Tax Act, 1961, [for short, `the Act'] expires then the question of re-opening by the Department does not arise. In any event, at the relevant time, when the assessment order got completed, the law as declared by the jurisdictional High Court, was that the civil construction work carried out by the assessee would be entitled to the benefit of Section 80HH of the Act, which view was squarely reversed in the case of CIT v. N.C. Budharaja & Co. [1993] 204 ITR 412 (SC). The subsequent reversal of the legal position by the judgment of the Supreme Court does not authorise the Department to re-open the assessment, which stood closed on the basis of the law, as it stood at the relevant time.

4. The civil appeals are, accordingly, dismissed.

5. No order as to costs.

Civil Appeal No.2331 and Civil Appeal No.2330 of 2006:

6. Since the tax amount is meagre, the civil appeals are dismissed.

7. No order as to costs.

In favour of assessee.