TMI Blog2003 (6) TMI 18X X X X Extracts X X X X X X X X Extracts X X X X ..... Fonseca Private Limited agreed to transfer the shares. The issue relates to the liability to tax in respect of the consideration payable under this agreement. Payments were made in instalments over a period of time. The implementation of the agreement was the subject matter of a dispute and it was finally resolved through arbitration. Arbitration was concluded in the previous year relevant for the assessment year 1980-81. The amount payable to the petitioner in terms of the award was sought to be taxed to capital gains in the assessment year 1980-81. The matter reached the Income-tax Appellate Tribunal (for short "the Tribunal"). The Tribunal passed an order and in the said order, the Tribunal notices the fact that the transaction by way of agreement was within the knowledge of the Assessing Officer while concluding the assessment for the assessment year 1976-77 and inasmuch as the amount arising from the agreement of Rs. 2 lakhs which was received during the calendar year 1975 was offered to tax for the assessment year 1976-77. Purporting to act upon the above decision of the Tribunal, the respondent issued a notice dated November 17, 1998, for the assessment year 1976-77 under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in terms of the proviso to section 150 of the Act. He says that section 150(2) comes to the rescue of the Department. According to him, the present order is passed in the light of the order passed by the Tribunal. After hearing counsel, I have carefully perused the material on record. It is unnecessary for me to refer to the other facts in the light of counsel confining their arguments only to limitation. The relevant sections are section 149, section 147, section 148, section 143(3), section 151 and section 152. Section 143 provides for assessment. Sub-section (3) provides for an order in writing in the matter of assessment. Section 145 provides for method of accounting. Section 146 deals with reopening of assessment at the instance of the assessee in respect of escaped assessment. Section 147 is income escaping assessment. Section 148 provides for issue of notice where income has escaped assessment. Section 149 provides for a time limit for notice. Section 150 deals with provision for cases where assessment is in pursuance of an order on appeal. A combined reading of all these provisions would show that before making the assessment, reassessment or recomputat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1976-77 and not in the assessment year 1980-81. The Tribunal allowed the appeal filed by the Department and the cross appeal filed by the assessee stood dismissed. The admitted facts reveal that the assessments are being reopened in terms of the appellate order on November 17, 1998, in terms of section 148. As I mentioned earlier, notice is under section 148 in the matter of escaped assessment under section 147. It is subject to section 149. Section 149 provides for four years in terms of section 149(1)(a)(i) and sub-clause (ii) of section 149(1)(a) provides not more than seven years if four years have elapsed from the end of the relevant assessment year. In the case on hand, the admitted facts reveal payments in the year 1975 and the taxing of such amount took place in the assessment year 1976-77 proceedings. Therefore, the four year period in terms of section 147 read with section 148 ends on March 31, 1981, that is four years from March 31, 1977. Sri Prasad, learned counsel is therefore right in his submission that the period of limitation is already over in the case on hand and, therefore, the notices are barred by time in terms of the statutory provisions. However, the d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... escribed in section 149 shall not apply, and that notice under section 148 can be issued at any time. Sub-section (2), however, is again in the nature of a proviso to sub-section (1). It says that the provisions of sub-section (1) shall not apply where, by virtue of any other provision limiting the time within which action for assessment, reassessment or recomputation may be taken, such assessment, reassessment, or recomputation is barred on the date of the order which is the subject-matter of the appeal, reference or revision in which the finding or direction is contained. Section 153 provides the time limits for completion of assessments and reassessments. Explanations 2 and 3 to section 153 merely illustrate and clarify the meaning of the words 'in consequence of or to give effect to any finding or direction' contained in an appellate, revisional or any other order. Explanations 2 and 3 do not purport to obliterate or remove the restriction contained in sub-section (2) of section 150. They no doubt refer to section 150, but for a limited purpose. Hence, initiation of reassessment proceedings would be bad, even when they are initiated in consequence of or to give effect to any fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in ITO v. Eastern Coal Co. Ltd. [1975] 101 ITR 477, even then the result would not be different, because the order of assessment in this case was made on March 29, 1972, which too is beyond March 31, 1971." The said judgment is squarely applicable to the facts of this case. I must also notice another judgment of the Punjab High Court in Parveen Kumari v. CIT [1999] 237 ITR 339. In that case also, the Division Bench noticed the scope of sections 147, 149 and 150. After noticing, the Punjab High Court has ruled as under: "'149. Time limit for notice.--(1) No notice under section 148 shall be issued... (b) in cases falling under clause (b) of section 147, at any time after the expiry of four years from the end of the relevant assessment year.' In the light of the aforesaid provision specifying the period of limitation as four years from the end of the relevant assessment year, the case of the assessee for the purposes of issuance of notice for reassessment for the assessment year 1977-78 is found to be barred by limitation. The period of four years from the end of the assessment year 1977-78 expired on March 31, 1982. The assessment for the assessment year 1978-79, which was ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
