1998 (12) TMI 72 - HC - Income Tax

Summary

Issues Involved:
1. Validity of notices issued u/s 148 of the Income-tax Act, 1961.
2. Applicability of section 147 for reopening assessments.
3. Bar of limitation u/s 150(2) for issuing notices u/s 148.

Summary:

1. Validity of Notices Issued u/s 148:
The petitioners challenged the notices issued by the Assessing Officer (AO) u/s 148 for the assessment year 1977-78. The AO had issued these notices based on the Tribunal's observation that the capital gains should have been assessed in the year possession of the land was taken, i.e., 1977-78, not 1978-79.

2. Applicability of Section 147 for Reopening Assessments:
The petitioners argued that the Tribunal did not direct the AO to initiate action u/s 147, and hence, the AO's action was not justified. The court examined the Tribunal's order and found that the Tribunal had indeed recorded a finding that the capital gains were assessable in the year possession was taken. This constituted a "finding" within the meaning of section 150(1), empowering the AO to issue notices u/s 148.

3. Bar of Limitation u/s 150(2):
The petitioners contended that the notices were time-barred as per section 150(2). The court agreed, noting that the period of limitation for issuing notices for the assessment year 1977-78 had expired on March 31, 1982. The appellate orders of the Commissioner, which were the subject-matter of appeal before the Tribunal, were passed after this date, and thus, the AO had no jurisdiction to issue notices u/s 148 on March 1, 1996.

Conclusion:
The court allowed the writ petitions, quashing the notices issued by the AO u/s 148 for the assessment year 1977-78, as they were issued beyond the period of limitation. No order as to costs.