Court quashes time-barred assessment notices for 1977-78, finding AO lacked jurisdiction.

The court allowed the writ petitions, quashing the notices issued by the Assessing Officer (AO) under section 148 for the assessment year 1977-78. The court held that the notices were time-barred under section 150(2) as the period of limitation had expired before the AO issued the notices. Consequently, the court found that the AO lacked jurisdiction to issue the notices on March 1, 1996, and ruled in favor of the petitioners, with no costs awarded.

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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.

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