TMI Blog1994 (10) TMI 91X X X X Extracts X X X X X X X X Extracts X X X X ..... ssing order under section 254 of the Income-tax Act. " 2. In the original assessment completed under section 143(3) on 23-12-1980 the additional compensation of Rs. 42,79,012 received by the assessee in respect of the land compulsorily acquired by the Government under the Land Acquisition Act, 1976 was not brought to assessment under the head 'Capital Gains' because the additional compensation itself was received only in the year 1983. It appears that there were appeals on certain other points which were ultimately decided by the Tribunal by order dated 24-3-1983. This order was recalled by the Tribunal on the assessee's application.There after the Tribunal passed an order on 10-2-1986. It was a common order for the assessment years 1975- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Accordingly we deem fit to set aside the orders of the authorities below in respect of this dispute before us and to restore the matter to the file of the ITO for fresh disposal after bringing all the relevant facts and basic materials on record and after giving the assessee adequate opportunity of being heard. The assessee is at liberty to place any material evidence before the ITO before the case is disposed of afresh as indicated above. We, therefore, set aside the orders of the authorities below for the above purpose." 3. On 18-5-1987 the Assessing Officer passed an order under section 143(3) read with section 254. In this order the amount of Rs. 42,79,012 was brought to assessment with the narration " further compensation received ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the additional compensation must be held referable to section 155(7A) and should be upheld on that basis. It is further stated that the inclusion of the amount of additional compensation in the order dated 18-5-1987 must be taken as a mere irregularity or a curable defect in view of section 292B. It is not possible to accept the contention. Firstly, the CIT (Appeals) is right in his view that the amount of additional compensation cannot be brought to tax in the order passed to give effect to the Tribunal's order since the Tribunal's order gave the Income-tax Officer authority only to examine the applicability of section 74A with reference to certain facts. The Tribunal did not set at large the entire assessment with unlimited powers to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 155(7A) leaves the other provisions of section 154 untouched and unmodified. The requirement of giving notice to the assessee and an opportunity of being heard with regard to the proposed rectification, when it involves an enhancement of assessment, prescribed by section 154(3) is not in any way abridged or taken away. That being so, the entire issue is one of jurisdiction. If the necessary jurisdictional facts are not present the whole proceedings must be taken to be invalid. We have not been referred to any notice issued by the Assessing Officer before he brought the additional compensation to assessment in his order dated 18-5-1987. There is no discussion in this order regarding the facts relating to the assessment of the addition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le to the Second Proviso to section 54E(1) and since the same came into the effect only by the Taxation Laws (Amendment) Act, 1984 with effect from 1-4-1984 the benefit thereof cannot be extended to the assessee for the assessment year 1977-78. We are unable to accept the contention. The Second Proviso only refers to a situation where the full amount of compensation awarded for the acquisition is not received by the assessee on the date of the transfer. It does not apply to a situation where the full amount of compensation originally awarded was received but the additional compensation claimed by the assessee was received at a much later period. Such a situation is governed by sub-section (3) of section 54E. This sub-section was introduced ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ovision intended to mitigate the hardship caused by the delay in receipt of additional compensation and, therefore, has to be treated only as a procedural provision taking retrospective effect. This means that it will apply for the assessment year 1977-78 also since the additional compensation has been received after 1-4-1978. It is to be remembered that the circular advisedly and significantly does not stipulate that sub-section (3) will be applicable from the assessment year 1978-79, which is normally done in such circulars explaining the newly introduced statutory provisions. It only states that the provision will take effect from 1-4-1978 which means that the benefit thereof is available to all assessees who received additional compensa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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