Limitation for agricultural income-tax reassessment barred revenue recovery where the amended order was passed beyond the statutory period.

Revenue recovery proceedings based on a reassessment under the repealed Agricultural Income-tax Act were unsustainable because the reassessment was made beyond the statutory limitation period. For the 1988-1989 assessment year, Section 99(3) of the 1991 Act preserved application of the 1950 Act for pre-1991 proceedings, and Section 35(2) required completion of assessment within five years from the end of the year in which the income was first assessable. As the amended assessment order was passed on 06.09.1997, it was time-barred. The recovery proceedings founded on that assessment were therefore quashed.

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Issues: Whether revenue recovery proceedings initiated against the petitioner were sustainable when the reassessment leading to those proceedings was made beyond the limitation period prescribed for completing agricultural income tax assessment under the repealed enactment.

Analysis: The assessment year in question was 1988-1989. Section 99(3) of the Agricultural Income-tax Act, 1991 preserved the application of the repealed 1950 Act for initiation and completion of proceedings relating to periods prior to 1991. Under Section 35(2) of the Agricultural Income-tax Act, 1950, assessments had to be completed within five years from the end of the year in which the agricultural income was first assessable. Since the amended assessment order was passed only on 06.09.1997, it was beyond the permissible five-year period. The basis for the impugned recovery proceedings was therefore time-barred.

Conclusion: The revenue recovery proceedings were untenable and were quashed.

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