TMI Blog1998 (12) TMI 72X X X X Extracts X X X X X X X X Extracts X X X X ..... is order dated November 9, 1976, deposited the amount of compensation in the United Commercial Bank, Civil Lines, Ludhiana. The Assessing Officer, while completing the assessment for the assessment year 1978-79 brought the amount of compensation to tax by his order dated March 23, 1989. The assessee went in appeal before the Commissioner of Income-tax (Appeals), who, by his order dated December 27, 1989, annulled the assessment on the ground that the amount of compensation received by the petitioner was assessable in the year in which possession of land was taken by the State Government. The Commissioner relied upon the decisions of the Supreme Court while taking the view that title to the land vested in the State Government on the date of possession. Since possession of the land was taken on November 5, 1976, by the Improvement Trust, Ludhiana, the amount of compensation and interest was held to be not assessable in the year 1978-79. The Revenue, against the order of the Commissioner, went in appeal before the Income-tax Appellate Tribunal, Chandigarh Bench (for short, the "Tribunal"), but did not succeed. The Tribunal, by its order dated December 14, 1995, upheld the view ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ered the submissions of both the sides. We agree with learned counsel for the assessee that the capital gains is exigible in the year in which the possession was taken. The facts in the present case show that the possession was taken by the acquisition authorities on November 5, 1976. The Assessing Officer could have taken proceedings for assessment of the capital gains in the hands of the assessee-firm for the assessment year 1977-78. He, however, took action in the year relevant to the assessment year 1978-79. The case law relied on by learned counsel for the assessee referred to above supports the case of the assessee that the relevant year for assessing capital gains in respect of compulsory acquisition of lands is the date of possession. We accordingly hold that the Assessing Officer was not justified in assessing the capital gains in the hands of the assessee for the assessment year 1978-79 and the learned Commissioner of Income-tax (Appeals) was perfectly justified in annulling the assessment for the assessment year 1978-79." The Income-tax Officer, on the basis of the aforesaid observation recorded by the Tribunal in its appellate order, issued notices to both the petitio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ority in any proceeding under the Act. The Tribunal, while deciding the Department's appeal for the assessment year 197879, had explicitly recorded a finding that the amount of compensation and interest was assessable in the preceding assessment year, Therefore, The Assessing Officer rightly exercised jurisdiction under section 147 read with section 150 of the Act. It would be relevant to read section 150 of the Act : "150. Provision for cases where assessment is in pursuance of an order on appeal etc.--(1) Notwithstanding anything contained in section 149, the notice under section 148 may be issued at any time for the purpose of making an assessment or reassessment or recomputation in consequence of or to give effect to any finding or direction contained in an order passed by any authority in any proceeding under this Act by way of appeal, reference or revision. (2) The provisions of sub-section (1) shall not apply in any case where any such assessment, reassessment or recomputation as is referred to in that sub-section relates to an assessment year in respect of which an assessment, reassessment or recomputation could not have been made at the time the order which was the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al, reference or revision under the Act. Two other situations have also been specified in sub-section (3), where the bar of limitation is not attracted. We are here not concerned with the other situations. Explanations 2 and 3 containing the deeming provisions in respect of an assessment or reassessment which is sought to be made in consequence of or to give effect to any finding or direction contained in an order under the Act read as under : "Explanation 2.--Where, by an order referred to in clause (ii) of subsection (3), any income is excluded from the total income of the assessee for an assessment year, then, an assessment of such income for another assessment year shall, for the purposes of section 150 and this section, be deemed to be one made in consequence of or to give effect to any finding or direction contained in the said order. Explanation 3.--Where, by an order referred to in clause (ii) of subsection (3), any income is excluded from the total income of one person and held to be the income of another person, then, an assessment of such income on such other person shall, for the purposes of section 150 and this section, be deemed to be one made in consequence of or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... year 1966-67. The Tribunal rejected the argument and held that the entire interest amount of Rs. 62,000 had accrued to the assessee, during the previous year relevant to the assessment year under appeal and ought to have been assessed accordingly. However, there was no appeal by the Department before the Tribunal. In the circumstances, the Tribunal merely dismissed the appeal preferred by the assessee. The Income-tax Officer reopened the assessment under section 147 of the Act with a view to including the balance of the interest amount in the income of the said assessment year. The assessee objected to the reopening of the assessment. It was held by the High Court that the finding recorded by the Tribunal that the entire interest amount of Rs. 62,000 had accrued in the assessment year 1966-67 was a finding within the meaning of section 150(1) of the Act. The finding recorded by the Tribunal in the case in hand, in our opinion, is a finding as envisaged in sub-section (1) of section 150 read with Explanation 2 below section 153(3) of the Act. The first plea raised by Shri A. K. Mittal, learned counsel for the petitioner, is, therefore, found to be devoid of any merit. It is held ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e appeal, the provisions of section 150(1) cannot be invoked to the aid of the Revenue for making an assessment or reassessment. In CIT v. G. Viswanatham [1988] 172 ITR 401, the Andhra Pradesh High Court also examined the provisions of sub-section (2) of section 150 of the Act and held that an action for reassessment was barred by time if such action could not be initiated at the time when the order, which was the subject-matter of appeal, was made. Section 149 specifies the various time limits for issuing a notice under section 148 of the Act. Prior to the amendment effective from April 1, 1989, limitation of four years from the end of the relevant assessment year was provided in a case which fell under clause (b) of section 147 of the Act. Since this is a case where clause (b) of section 147 is attracted, the relevant provisions in section 149(1)(b) will have to be seen, which read 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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