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2020 (1) TMI 20 - HC - Income TaxReopening of assessment - notices issued to 'representative assessee' as per the provisions of Section 160 - HELD THAT:- The notice dated 14.03.2005 under Section 148 of the IT Act was issued within the prescribed period of limitation as obtained on the date of its issuance. Section 149(3) of the IT Act, inter alia, provides that if the person on whom a notice under section 148 is to be served is a person treated as the agent of the NRI under section 163, then, the notice on such agent of the NRI, shall not be issued after the expiry of a period of two years from the end of the relevant assessment year. In this case, however, from the clarification contained in the communication dated 21.6.2006, it is apparent that the notice issued to Mr. P.P. Mahatme, was not in his capacity as the agent of the NRI-Assessee, but the same was issued to him as the power of attorney holder of the NRI-Assessee. In such a situation, the period of limitation for issuance of the notice was always 6 years. Therefore, the notice dated 14.03.2005 being within 6 years from the end of relevant assessment year, which is 1999-2000, was well within the period of limitation, as then prevalent. The provisions of Section 149(3) of the IT Act were amended by the Finance Act, 2012 with effect from 1/7/2012. The amendment extended the period of limitation for issuance of notice under Section 148, even upon the agent of the NRI, from 2 years to 6 years. Looking to the width of the aforesaid explanation, it is not possible to accept Mr. Naniwadekar's contention that the extended period of limitation will apply only to the assessments for the Assessment Year 2010-11 or 2011-12. The explanation refers to any assessment year beginning on or before the 1st day of April, 2012. The explanation has been introduced specifically for the purpose of removal of doubts or to clarify the position with regard to the applicability of the amended provisions. First substantial question of law is required to be answered against the Appellant and in favour of the Revenue. Transfer of assets attracting tax on capital gains - family arrangement approved by the Civil Court - HELD THAT:- The findings of fact, in the present case, concurrently recorded by all the three authorities indicate that there was no issue of any 'preexisting right' as between the Appellants, Cristovam and Alvaro, who are alleged to have usurped the immovable property belonging to the Appellants. In fact, the record which has been assessed in detail by the the Commissioner of Income-tax (Appeals), establishes that the properties of Xavier Pinto were allocated to his three sons Jose, Rosario and Antonio who, in turn, had one son each by name of Alvaro, Cristovam and Anthony. Anthony migrated to England along with his father Antonio. Margaret (present assessee) is the wife of Anthony. They had three daughters Lorna, Julia and Siobhan who are the Appellants in the connected Appeals. Since there was already a partition of the properties owned by Xavier Pinto between his three sons Jose, Rosario and Antonio sometime in 1950s, obviously Alvaro and Cristovam had no right whatsoever in the immovable properties exclusively belonging to Antonio and after his demise, his son Anthony. After demise of Anthony, the properties were exclusively inherited by the present Appellants, who are the wife and daughter of said Anthony. In the present case, there is clear and cogent material available on record to establish that Cristovam and Alvaro had no right in the immovable property which was the subject matter of dispute and consequently the settlement between the Appellant and the said two persons can hardly be described as a family settlement. The settlement may be enforceable inter-parties now that the same is incorporated in the consent terms, based upon a consent decree may have been issued. However such settlement, cannot be called as a family settlement or family arrangement. Merely because dispute involved some family members and such dispute is ultimately settled by filing consent terms, the same cannot be styled as a family arrangement or family settlement and on such basis, it cannot be held that the consideration received as a result of such settlement, does not constitute capital gain. Decided in favour of the Revenue and against the Assessee.
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