# LG Electronics India Pvt. Ltd v. The Principal Commissioner Of Income Tax - **Citation:** (2016) 8 ILRA 295 - **Court:** High Court of Judicature at Allahabad - **Decided:** 2016-08-03 - **Bench:** Sudhir Agarwal, Dr. Kaushal Jayendra Thaker - **Source:** https://unisonlegal.in/judgment/allahabad-high-court/lg-electronics-india-pvt-ltd-v-the-principal-commissioner-of-income-tax-44247 - **Pages:** 11 ## Text 8 All. LG Electronics India Pvt. Ltd. Vs The Principal Commissioner Of Income Tax 295 (2016) 8 ILRA 295 ORIGINAL JURISDICTION CIVIL SIDE DATED: ALLAHABAD 03.08.2016 BEFORE THE HON'BLE SUDHIR AGARWAL, J. THE HON'BLE DR. KAUSHAL JAYENDRA THAKER, J. Writ Tax No.- 575 Of 2016 LG Electronics India Pvt. Ltd. ...Petitioner Versus The Principal Commissioner Of Income Tax ...Respondent Counsel for Petitioner: Suyash Agarwal, Rupesh Jain, Gaurav Jain Counsel for Respondent: C.S.C., Gaurav Mahajan This writ petition under Article 226 of the Constitution has been filed by LG Electronics India Pvt. Ltd. aggrieved by notice dated 08.06.2016 issued by Principal Commissioner of Income Tax, NOIDA, Gautambudh Nagar in exercise of power under Section 263 of Income Tax Act, 1961 in respect of Assessment Year 2007- ¬08. The only issue raised and pressed before this court is, "whether impugned notice is barred by limitation prescribed under Section 263(2) of Act, 1961 or not". Limitation prescribed under Section 263(2) for exercise power under sub¬section (1) thereof is two years from the end of financial year in which order sought to be revised was passed. Learned counsel for the petitioner submitted that for the purpose of Section 263(1) limitation will commence from the end of financial year when order dated 31.10.2011 was passed and that comes to 31.03.2012 and two years period would elapsed on 31.03.2014. Court held that that impugned notice dated 08.06.2016 issued by Principal Commissioner of Income Tax, NOIDA, Gautambudh Nagar is in reference to some discrepancy in original assessment order dated 31.10.2011 and not re¬assessment order dated 26.03.2015, therefore, limitation would run from the date of regular order of assessment and in that view of the matter, impugned notice, evidently is barred by limitation prescribed under Section 263(2) of Act, 1961. The writ petition is allowed. (Delivered by Hon'ble Sudhir Agarwal, J. & Hon'ble Dr. Kaushal Jayendra Thaker, J.) 296 INDIAN LAW REPORTS ALLAHABAD SERIES 1. Heard Sri Rupesh Jain, Advocate assisted by Sri Gaurav Jain and Sri Suyash Agarwal, Advocates for petitioner and Sri Gaurav Mahajan, learned counsel for respondents. 2. This writ petition under Article 226 of the Constitution has been filed by LG Electronics India Pvt. Ltd. (hereinafter referred to as the "petitioner") aggrieved by notice dated 08.06.2016 issued by Principal Commissioner of Income Tax, NOIDA, Gautambudh Nagar (hereinafter referred to as the "PCIT") in exercise of power under Section 263 of Income Tax Act, 1961 (hereinafter referred to as the "Act, 1961") in respect of Assessment Year 2007-08. 3. It is contended that notice itself is barred by limitation hence it is void ab initio and without jurisdiction. 4. Return for Assessment Year 2007-08 was filed by petitioner on 31.10.2007 declaring income of Rs. 2,68,82,20,341/-. It was selected for scrutiny and after verification/ examination draft assessment order under Section 143(3)/144C(1) of Act, 1961 was passed on 27.12.2010 proposing some disallowances and addition of income of Rs. 61,00,79,579/- being subsidy by way of sales tax incentive received under the scheme formulated by Government of U.P. The Assessing Officer (hereinafter referred to as the "AO") suggested that it is "revenue receipt" and not "capital receipt" as claimed by petitioner though in Maharashtra a similar incentive was treated as "capital receipt". 5. Aggrieved by draft assessment order dated 27.12.2010 petitioner filed objection before Dispute Resolution Panel (hereinafter referred to as the "DRP"), whereupon direction under Section 144C(5) was issued on 27.09.2011 to AO to pass final order. AO thereafter made final assessment on 31.10.2011 assessing total income to Rs. 5,83,91,17,785/- after making addition of Rs. 61,00,79,579/- on account of sales tax incentive treating it as revenue receipt. 6. Petitioner preferred appeal being ITA No. 5140/Del/2011 before Income Tax Appellate Tribunal, New Delhi under Section 253(1)(d) of Act, 1961. Tribunal allowed appeal partly vide order dated 08.12.2014. It confirmed addition of Rs. 61,00,79,579/- towards sales tax subsidy treating it as "revenue receipt". Against this order petitioner filed further appeal before this Court, i.e., ITA No. 89 of 2015 which is pending. 7. The AO reopened assessment under Section 147 and issued notice dated 21.03.2014 under Section 148 alleging that in assessment year in question there is a escaped assessment on account of failure to disallow expenditure on purchases from overseas in terms of Section 40(a)(i) of Act, 1961 for non-deduction of tax at source from such payment. Re-assessment order was passed on 26.03.2015 after making disallowance of purchase of Rs. 13,89,59,995/-. Aggrieved thereto petitioner has filed appeal before Commissioner of Income Tax (Appeals) (hereinafter referred to as the "CIT(A)") under Section 246A(1)(b), which is pending. 8. Now respondent-PCIT has issued impugned notice dated 08.06.2016 under Section 263 on the ground that assessment order dated 26.03.2015 passed under Section 143(3) was erroneous and prejudicial to the interest of Revenue inasmuch as sales tax subsidy of Rs. 20,58,34,234/- 8 All. LG Electronics India Pvt. Ltd. Vs The Principal Commissioner Of Income Tax 297 accruing to petitioner under scheme of Government of Maharashtra had not been brought to tax as "revenue receipt". It is contended that aforesaid notice dated 08.06.2016 is barred by limitation under Section 263 of Act, 1961. 9. The only issue raised and pressed before this court is, "whether impugned notice is barred by limitation prescribed under Section 263(2) of Act, 1961 or not". 10. Section 263 of Act, 1961 reads as under: "263. (1) The Commissioner may call for and examine the record of any proceeding under this Act, and if he considers that any order passed therein by the Assessing Officer is erroneous in so far as it is prejudicial to the interests of the revenue, he may, after giving the assessee an opportunity of being heard and after making or causing to be made such inquiry as he deems necessary, pass such order thereon as the circumstances of the case justify, including an order enhancing or modifying the assessment, or cancelling the assessment and directing a fresh assessment. Explanation: For the removal of doubts, it is hereby declared that, for the purposes of this sub-section, - (a) an order passed on or before or after the 1st day of June, 1988, by the Assessing Officer shall include - (i) an order of assessment made by the Assistant Commissioner or Deputy Commissioner or the Income-tax Officer on the basis of the directions issued by the Joint Commissioner under section 144A; (ii) an order made by the Joint Commissioner in exercise of the powers or in the performance of the functions of an Assessing Officer conferred on, or assigned to, him under the orders or directions issued by the Board or by the Chief Commissioner or Director General or Commissioner authorised by the Board in this behalf under section 120; (b) "record" shall include and shall be deemed always to have included all records relating to any proceeding under this Act available at the time of examination by the Commissioner; (c) where any order referred to in this sub-section and passed by the Assessing Officer had been the subject-matter of any appeal filed on or before or after the 1st day of June, 1988, the powers of the Commissioner under this sub-section shall extend and shall be deemed always to have extended to such matters as had not been considered and decided in such appeal. (2) No order shall be made under sub-section (1) after the expiry of two years from the end of the financial year in which the order sought to be revised was passed. 298 INDIAN LAW REPORTS ALLAHABAD SERIES (3) Notwithstanding anything contained in sub-section (2), an order in revision under this section may be passed at any time in the case of an order which has been passed in consequence of, or to give effect to, any finding or direction contained in an order of the Appellate Tribunal, National Tax Tribunal, the High Court or the Supreme Court. Explanation: In computing the period of limitation for the purposes of sub-section (2), the time taken in giving an opportunity to the assessee to be reheard under the proviso to section 129 and any period during which any proceeding under this section is stayed by an order or injunction of any court shall be excluded." (emphasis added) 11. Limitation prescribed under Section 263(2) for exercise power under sub-section (1) thereof is two years from the end of financial year in which order sought to be revised was passed. 12. Learned counsel for the petitioner submitted that for the purpose of Section 263(1) limitation will commence from the end of financial year when order dated 31.10.2011 was passed and that comes to 31.03.2012 and two years period would elapsed on 31.03.2014. 13. Learned Standing Counsel appearing for respondent, on the contrary, submitted that period of limitation would run from the date of re-assessment order dated 26.03.2015 and, therefore, impugned notice is within limitation. 14. Sri Jain, learned counsel for the petitioner, argued that original assessment order accepted sales tax subsidy by way of refund of VAT received under Maharashtra State Government as "capital receipt" and not chargeable to tax. Accepting same, AO passed assessment order dated 31.10.2011 after due inquiry. Re-assessment order did not refer to aforesaid aspect of the matter and instead re-assessment proceedings have been initiated on the ground of "escaped assessment" due to certain purchases made from outside India since no tax was deducted at source in respect thereto. He submitted that notice under Section 263 has been issued raising an issue which relates to not re-assessment order but original assessment order dated 31.10.2011 and, therefore, it is barred by limitation. Reliance is placed on Commissioner of Income Tax Vs. Alagendran Finance Ltd., 2007(293) ITR 1 (SC); Commissioner of Income Tax, Delhi-I Vs. Bharti Airtel Ltd., 2013(37) taxmann.com 218 (Delhi); Commissioner of Income Tax Vs. Shriram Engineering Construction Co. Ltd., 2011(330) ITR 568 (Mad); Ashoka Buildcon Ltd. Vs. Assistant Commissioner of Income Tax and another, 2010(325) ITR 574 (Bom); Commissioner of Income Tax Vs. Lark Chemicals Ltd, 2014(368) ITR 655 (Bom); and, Commissioner of Income Tax Vs. ICICI Bank Ltd., 2012(343) ITR 74 (Bom). 15. Per contra, learned Standing Counsel submitted that Sections 2(8) and (40) of Act, 1961 defines terms "assessment" and "regular assessment". Assessment includes re-assessment. Assessment made under Sections 143 or 144 is termed as "regular assessment", therefore, it does not include re-assessment made under Section 147. The meaning of "assessment", therefore, has to be seen in this context. 8 All. LG Electronics India Pvt. Ltd. Vs The Principal Commissioner Of Income Tax 299 16. It is submitted that for the purpose of Section 263 period of two years is from the date of "assessment" and if read with Section 2(8) it would be the date of "re-assessment" and not "original assessment". It is contended that any other view would vitiate the plain and unambiguous language of Section 263(2). 17. Facts are not in dispute hence we proceed to consider, "whether here is a case where limitation under Section 263(2) would commence from regular assessment order dated 31.10.2011 or re-assessment order dated 26.03.2015". 18. Assessment order dated 31.10.2011 is on record as Annexure-B to the writ petition. In computation of income the AO has made following additions: "Additions-as discussed above 1. Sales Tax Subsidy Rs. 61,00,79,579/- 2. Provision for Service Warranty Rs. 7,79,04,573/- 3. Royalty Rs. 81,98,02,800/- 4. International Transaction Rs.2,26,61,73,676/-" 19. AO also allowed following deductions: "Less : Deductions: 1. Depreciation as claimed Rs. 81,44,24,056/- 2. Gain on fixed assets Rs. 1,27,10,222/- 3. Weighted deduction Rs. 13,77,25,422/- u/s 35(2AB) 5. Deduction u/s 35D Rs. 2,10,272/- 6. Incentive from Maharashtra Rs. 20,58,34,234/- VAT as claimed 7. Expenses u/s 43B as claimed Rs. 8,68,12,113/- 8. Sums disallowed u/s 40a(ia) Rs. 6,76,72,351/- in AY 06-07 now claimed 300 INDIAN LAW REPORTS ALLAHABAD SERIES 9. Provision of Expenses W/o in Rs. 4,90,76,047/- AY 07-08 but not allowed as deduction in AY 06-07 10.Sales Tax receipt claimed in Rs. 61,00,79,579/- revised return as exempt is disallowed Para No. 2. 20. The proceedings for "re-assessment" were initiated vide notice dated 19.06.2014 issued under Section 147 and the same is on record as Annexure-D to the writ petition. AO has given reasons for initiating "re-assessment" proceedings stating that petitioner is a permanent establishment of LG Electronics, Korea and its other Associated Enterprises. Its business connection and income is taxable as per Section 4, 5 and 9 of Act, 1961 and Articles 5 and 7 of Indo Korea DTAA. Petitioner had made certain remittances during Financial Year 2006-07 (Assessment Year 2007-08) to its parent Company Korea and other Associated Enterprises on which no TDS was deducted. Such expenses are disallowable under Section 40(a)(i) of Act, 1961. Details of remittances are given in a chart which totalled to Rs. 18,08,65,60,127/-. 21. After considering reply of Assessee and examining the matter in detail, AO made addition of Rs. 13,89,59,995/- under Section 40(a)(i) of Act, 1961 bringing total assessed income to Rs. 5,97,80,77,790/-. Thus "re-assessment" order was not for review or re-assessment of entire case but only in respect of a particular item, i.e., transactions outside India on which no TDS was deducted, hence were disallowable under Section 40(a)(i). In all other respect, original assessment order was maintained, and addition made by re-assessment order dated 26.03.2015 was added in income assessed in "original assessment" order and that is how it comes to Rs. 5,97,80,77,790/-. This is also evident from operative part of "re-assessment" order of AO, which reads as under: "After due verification of available facts and records and examination of assessee submissions, income of the assessee is computed as under: Income as per order u/s 143(3)144C Rs. 583,91,17,790/- dated 31.10.2011 Addition as per para (2) above Rs. 13,89,59,995/- Assessed Income Rs. 597,80,77,785/- Or say Rs. 597,80,77,790/-" 22. Now the notice under Section 263(1) shows that respondent, though has referred to "reassessment order" showing total taxable income determined therein but in fact has referred to discrepancy in "assessment order", i.e., regular assessment order dated 31.10.2011, wherein incentive of VAT from Maharashtra Government received by petitioner was allowed to be deducted. This incentive has no concern with "re-assessment" proceedings result in order dated 26.03.2015. 8 All. LG Electronics India Pvt. Ltd. Vs The Principal Commissioner Of Income Tax 301 23. We have discussed the items on which re-assessment proceedings were initiated by AO. Notice under Section 263(1) has been issued with reference to re-assessment, apparently to cover up bar of limitation. The reason obvious is that judicial precedents have made out a difference in a case where entire assessment is reopened and a fresh re-assessment order is passed and in a case where one or two items of assessment order are re-assessed and reconsidered and in other respect, initial assessment order is maintained. In a case where except one or a few items, original assessment order is maintained, it has been held that assessment order continue to remain subject to addition or modification by re-assessment order and if a notice under Section 263(1) has been issued with reference to an item of assessment order and not reassessment order, for the purpose of limitation it has to be seen whether it involves an issue of escaped assessment under original assessment order or re-assessment order. 24. Learned counsel appearing for respondent when confronted with this factual background, did not and could not, dispute that notice under Section 263(1) has been issued with reference to a discrepancy occurred in assessment order dated 31.10.2011 and it has nothing to do with re-assessment order dated 26.03.2015. 25. Now in the light of above facts we may examine the judicial authorities, whether limitation in such a case, for the purpose of notice under Section 263(1), will commence from original "assessment order", discrepancy whereof is the foundation for notice under Section 263(1), or "re-assessment order" which is on a different subject. 26. We find that this issue is clinched by a Supreme Court judgment in Commissioner of Income Tax Vs. Alagendran Finance Ltd. (supra). The question formulated by Court in above case reads as under: "Whether for the purpose of computing the period of limitation envisaged under subsection (2) of Section 263 of the Income Tax Act, 1961 (for short "the Act"), the date of order of assessment or that of the reassessment, is to be taken into consideration." (emphasis added) 27. Therein also for Assessment Years 1994-95, 1995-96 and 1996-97, assessment was completed on 27.02.1997; 12.03.1997; and, 30.03.1998, respectively. In all the assessment years, assessee's return under the head "Lease Equalisation Fund" was accepted. Assessing Officer initiated re-assessment proceedings under Section 148 in respect of following three items: "(i) the expenses claimed for share issue, (ii) bad and doubtful debts and (iii) excess depreciation on gas cylinders and goods containers." 28. Re-assessment has nothing to do on items relating to "Lease Equalization Fund". CIT invoked revisional jurisdiction under Section 263(3) vide notice dated 29.03.2004 stating that depreciation of leased assets claimed as goods depreciation and disallowed in computation income was not correct and order of Assessing Officer is prejudicial to interest of Revenue as the lease rentals had not been properly brought to 302 INDIAN LAW REPORTS ALLAHABAD SERIES tax. Assessee contended that said order of Commissioner under Section 263 was barred by limitation,, and in appeal, preferred before Tribunal, he succeeded. Tribunal held that error pointed out in revisional order under Section 263 was in the order of Assessing Authority passed in regular assessment and not re-assessment, therefore, barred by limitation under Section 263(2). Appeal preferred by Revenue also failed before Madras High Court, who following its decision in CWT vs. A.K. Thanga Pillai, 2001(252) ITR 260, dismissed appeal. Before Supreme Court, Revenue sought to argue that order of assessment would merge with order of re-assessment and, therefore, for the purpose of notice under Section 263, limitation would commence from the date when "re-assessment order" was passed. After referring to Section 263, Court held: "A bare perusal of the order passed by the Commissioner of Income Tax would clearly demonstrate that only that part of order of assessment which related to lease equalization fund was found to be prejudicial to the interest of the Revenue. The proceedings for reassessment have nothing to do with the said head of income. Doctrine of merger, therefore, would not apply in a case of this nature." (emphasis added) 29. Court referred to Section 263(1), Explanation (C) providing that doctrine of merger would apply only in respect of such items which were subject matter of appeal and not which were not to fortify its view. 30. Distinction in the words "assess" and "re-assess" was considered in CIT Vs. Sun Engineering Works P. Ltd., 1992(198) ITR 297 (SC). Therein issue was raised by assessee contending that once jurisdiction under Section 147 is invoked, whole assessment proceedings become re-opened. It was negatived by Court holding as under: "Thus, under Section 147, the assessing officer has been vested with the power to "assess or reassess" the escaped income of an assessee. The use of the expression "assess or reassess such income or recompute the loss or depreciation allowance" in section 147 after the conditions for reassessment are satisfied, is only relatable to the preceding expression in Clauses (a) and (b) viz., "escaped assessment". The term "escaped assessment" includes both "non- assessment" as well as "under assessment". Income is said to have "escaped assessment" within the meaning of this section when it has not been charged in the hands of an assessee in the relevant year of assessment. The expression "assess" refers to a situation where the assessment of the assessee for a particular year is, for the first time, made by resorting to the provisions of Section 147 because the assessment had not been made in the regular manner under the Act. The expression "reassess" refers to a situation where an assessment has already been made but the Incometax Officer has, on the basis of information in his possession, reason to believe that there has been under assessment on account of the existence of any of the grounds contemplated by the provisions of Section 147(b) read with the Explanation (I) thereto." (emphasis added) 31. Referring to above exposition of law, Court in Commissioner of Income Tax Vs. Alagendran Finance Ltd. (supra) further held: "There may not be any doubt or dispute that once an order of assessment is reopened, the previous underassessment will be held to be set aside and the whole proceedings would start afresh but the 8 All. LG Electronics India Pvt. Ltd. Vs The Principal Commissioner Of Income Tax 303 same would not mean that even when the subject matter of reassessment is distinct and different, the entire proceeding of assessment would be deemed to have been reopened." "We may at this juncture also take note of the fact that even the Tribunal found that all the subsequent events were in respect of the matters other than the allowance of 'lease equalization fund'. The said finding of fact is binding on us. Doctrine of merger, therefore, in the fact situation obtaining herein cannot be said to have any application whatsoever. It is not a case where the subject matter of reassessment and subject matter of assessment were the same. They were not." (emphasis added) 32. Court also upheld judgment of Madras High court in CWT vs. A.K. Thanga Pillai (supra) and pointed out that same view was taken by Calcutta High Court in CIT vs. Kanubhai Engineers (P) Ltd., 2000(241) ITR 665. Operative part of judgment in Commissioner of Income Tax Vs. Alagendran Finance Ltd. (supra) reads as under: "We, therefore, are clearly of the opinion that keeping in view the facts and circumstances of this case and, in particular, having regard to the fact that the Commissioner of Income Tax exercising its revisional jurisdiction reopened the order of assessment only in relation to lease equalization fund which being not the subject of the reassessment proceedings, the period of limitation provided for under Subsection (2) of Section 263 of the Act would begin to run from the date of the order of assessment and not from the order of reassessment. The revisional jurisdiction having, thus, been invoked by the Commissioner of Income Tax beyond the period of limitation, it was wholly without jurisdiction rendering the entire proceeding a nullity." (emphasis added) 33. This decision in Commissioner of Income Tax Vs. Alagendran Finance Ltd. (supra) has been followed by Delhi High Court in Commissioner of Income Tax, Delhi-I Vs. Bharti Airtel Ltd. (supra) wherein also re-assessment order dealt with the issue of non deduction of tax at source on payment of interest to ABN Amro Bank, Stockholm Branch. Second addition was made on account of ESOP expenses. Subsequently Commissioner of Income Tax issued order under Section 263 for failure to deduct TDS under Section 194H on three air time provided to distributors and under Section 194J on roaming charges paid to other network operators. These issues were different than the subject matter of re-assessment order. Delhi High Court held that subject matter is different since Commissioner has found error in regular assessment order, hence limitation shall commence for regular assessment order. 34. To the same effect is the Division Bench judgment of Bombay High Court in Ashoka Buildcon Ltd. Vs. Assistant Commissioner of Income Tax (supra) delivered by Dr. D.Y. Chandrachud, J., (as His Lordship then was). Therein, Commissioner of Income Tax issued notice dated 30.04.2009 under Section 263. Assessment order was passed on 27.12.2006 under Section 143(3) for Assessment Year 2004-05. It was sought to be re-opened on 06.03.2007 in regard to benefit of Section 72A which deals with carry forward and set off of accumulated losses and unabsorbed depreciation allowances in cases, inter alia, of amalgamation and merger was wrongly allowed. Commissioner of Income Tax issued notice dated 30.04.2009 under Section 263 though referring to re-assessment order but in effect pointing out an error in regular assessment order dated 27.12.2006. Relying on Commissioner of Income Tax Vs. Alagendran Finance Ltd. (supra), Delhi High Court said as under: 304 INDIAN LAW REPORTS ALLAHABAD SERIES "Section 263 empowers the Commissioner to call for and examine the record of any proceedings under the Act and to pass such orders as the circumstances of the case justify, including an order enhancing, modifying or cancelling the assessment and directing a fresh assessment, if he considers that any order passed by the Assessing Officer is erroneous in so far as it is prejudicial to the interest of the Revenue. Sub-section (2) of Section 263 stipulates that no order shall be made under sub-section (1) after the expiry of two years from the end of the financial year in which the order sought to be revised was passed. That period of two years from the end of the financial year in which the original order of assessment dated 27 December 2006 was passed, has expired on 31 March 2009. Hence the exercise of the revisional jurisdiction in respect of the original order of reassessment is barred by limitation." "The substantive part of section 147 as well as Explanation 3 enables the Assessing Officer to assess or reassess income chargeable to tax which he has reason to believe had escaped assessment and other income which has escaped assessment and which comes to his notice subsequently in the course of the proceedings under the section. There is nothing on the record of the present case to indicate that there was any other income which had come to the notice of the Assessing Officer as having escaped assessment in the course of the proceedings under Section 147 and when he passed the order of reassessment. The Commissioner, when he exercised his jurisdiction under Section 263, in the facts of the present case, was under a bar of limitation since limitation would begin to run from the date on which the original order of assessment was passed. We must however clarify that the bar of limitation in this case arises because the revisional jurisdiction under Section 263 is sought to be exercised in respect of issues which did not form the subject matter of the reassessment proceedings under Section 143(3) read with 147. In respect of those issues, limitation would commence with reference to the original order of assessment. If the exercise of the revisional jurisdiction under Section 263 was to be in respect of issues which formed the subject matter of the reassessment, after the original assessment was reopened, the commencement of limitation would be with reference to the order of reassessment. The present case does not fall in that category." (emphasis added) 35. The judgments in Commissioner of Income Tax Vs. Shriram Engineering Construction Co. Ltd. (supra); Commissioner of Income Tax Vs. Lark Chemicals Ltd. (supra); and, Commissioner of Income Tax Vs. ICICI Bank Ltd. (supra) are also in the same line. 36. In these facts and circumstances and considering the fact that impugned notice dated 08.06.2016 issued by Principal Commissioner of Income Tax, NOIDA, Gautambudh Nagar is in reference to some discrepancy in original assessment order dated 31.10.2011 and not re-assessment order dated 26.03.2015, therefore, limitation would run from the date of regular order of assessment and in that view of the matter, impugned notice, evidently is barred by limitation prescribed under Section 263(2) of Act, 1961. 37. In the result, writ petition is allowed. Impugned notice dated 08.06.2016 is hereby quashed. Petitioner shall also be entitled to costs, which we quantify to Rs. 20,000/-. ----------- 8 All. Vodafone South Limited Vs State Of U.P. & Ors. 305 (2016) 8 ILRA 305 ORIGINAL JURISDICTION CIVIL SIDE DATED: ALLAHABAD 24.08.2016 BEFORE THE HON'BLE SUDHIR AGARWAL, J. THE HON'BLE DR. KAUSHAL JAYENDRA THAKER, J. Writ Tax No.- 622 Of 2015 & Connected With Other Cases Vodafone South Limited ...Petitioner Versus State Of U.P. & Ors. ...Respondents Counsel for Petitioner: Ashish Mishra,S.D. Singh Counsel for Respondents: C.S.C., Rahul Sahai Held When a subsequent set of rules (Rules, 2009) supersedes earlier rules (Rules, 2005), and the subsequent rules are later declared ultra vires, the earlier rules do not automatically revive. Supersession of earlier rules is an independent legislative act; even if the new rules are struck down, the earlier rules remain extinguished unless expressly revived. The doctrine of revival applies only in limited situations, such as: Where legislation is void due to lack of legislative competence, or Constitutional amendments being struck down. It does not apply where delegated legislation is invalidated due to procedural irregularities. Where a rule is substituted or repealed, it ceases to exist; striking down the substituting rule does not revive the earlier rule. Since Rules, 2009 were struck down for non-compliance with mandatory procedure (and not lack of competence), the doctrine of "still-born" does not apply, and hence no revival of Rules, 2005 occurs. Consequently, no valid rules existed for levy of advertisement tax for the relevant period; therefore, the demand raised is without jurisdiction and illegal. The action of authorities in assuming automatic revival of Rules, 2005 is a manifest legal error. All impugned demand notices are quashed, and any recovered amount must be refunded. CASE LAW CITED Anurag Bansal vs. State of U.P. (2011 (5) ADJ 879) - Rules, 2009 declared ultra vires. Supreme Court Advocates-on-Record Association vs. Union of India (2016 (5) SCC 1) N.P.V. Sundara vs. State of Andhra Pradesh (AIR 1958 SC 468) Sagir Ahmad vs. State of U.P. (AIR 1954 SC 728) Deep Chand vs. State of U.P. (AIR 1958 SC 648) Mahendra Lal Jaini vs. State of U.P. (AIR 1963 SC 1019)