TaxTMI 
TaxTMI 
2010 (9) TMI 380
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....992. The IIIrd Addl. District Judge, Meerut (the ADJ) enhanced the rate of compensation to Rs. 240/- per square yard. 5. The MDA filed an appeal against the award of the ADJ dated 11.5.1992. It was numbered as First Appeal No. 1050 of 1992. During pendency of the appeal, the petitioner received the additional compensation, solatium, and interest amounting to Rs. 1,22,56,473/- on 16.8.1993 without any security or guarantee. 6. The appeal filed by the MDA before the High Court was partly allowed on 12.1.1995 and the market value of the land was reduced to Rs. 75/- per square yard. 7. The petitioners as well as some other tenure holders filed appeals before the Supreme Court. Their appeals were allowed on 30.4.1997. The Supreme Court enhanced the rate of compensation to Rs. 175/ per square yards. It was more than the compensation awarded by the High Court but less than that by the ADJ. Relating to Income Tax 8. The petitioner had neither filed any income tax returns nor was she assessed for any of the years. The income arising out capital gains by compulsory acquisition was also never disclosed to the Income Tax Department by the petitioner. &nb....
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..... POINTS FOR DETERMINATION 19. We have heard Sri RR Agrawal and Sri Suyash Agrawal, counsel for the petitioner; Sri Shambhu Chopra and Sri Ashok Kumar for the respondents.1 The following points arise for determination in the case. (i) Whether the Assessing Officer had valid reasons to believe that any income chargeable to tax has escaped assessment; (ii) Whether the notices are barred by time; (iii) Whether the notices are required to be issued by Joint Commissioner; (iv) Whether the notices for assessment year 1989-90 to 94-95 are bad due to lack of satisfaction by the joint commissioner; (v) Whether section 151 of the Act is applicable to the cases covered under section 150 of the Act; (vi) Whether the satisfaction/ sanction of the Addl. Commissioner for AY 1998-99 for issuing notice is valid? 1st POINT: HAD VALID REASONS 20. The notices in the three writ petitions relate to AYs 1998-99, 1994-95, and 1989-90 to 1993-94 respectively. The reasons to believe that income had escaped assessment for these years are interconnected, however they are different. 21. In substance, the reason that income has escaped assessment in, (i) AY 1998-99, involved in t....
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....it was received under section 45(5)(b) of the Act. It was on 16.8.1993 (AY 1994-95) The income could be assessed in the AY 1998-99. 23. The counsel for the respondents submitted that: The appeal of the MDA was allowed by the High Court on 21.1.1995 and the amount was reduced; The appeal of the petitioner was allowed by the supreme court on 30.4.1997 and the petitioner was entitled to receive further amount in pursuance of the order of the Supreme Court dated 30.4.1997 in AY 1998-99; The compensation could be assessed in the year 1998-99. 24. The WPs do not arise out of the proceeding against any assessment under the Act. They are against the notice for initiating the assessment proceedings. Whether the petitioner is liable to pay any income tax for the AYs for which notices have been issued is not to be decided in these proceedings. The only question to be decided in the WPs is, whether there was any material before the AO to believe that income had escaped assessment. 25. The Supreme Court decision relating to acquisition of petitioner's land came in the AY 1998-99. By the decision, the appeal of the petitioner was allowed and compensation was enhanced. In ....
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....be issued at any time or in other words there is no limitation, if assessment, reassessment, or re-computation was being undertaken in order to give effect to any finding or direction contained in any order passed by, Any authority in proceeding under the Act; or A court in proceeding under any other law. 33. This shows that time limit prescribed under section 149 of the Act did not apply, where assessment, reassessment or re-computation was required in pursuance of any finding in any order passed, under the Act, or by a court in any proceeding under any other law. 34. In these cases, the assessment proceeding is being taken in pursuance of the award regarding compensation by the Supreme Court under the Land Acquisition Act. The assessment is in pursuance of the finding recorded by a court under the other law within the meaning of section 150(1) of the Act. This section is applicable to the present proceedings and there is no limitation for issue of notice. 35. In our opinion, The notice for AY 1998-99 is not only covered by section 150(1) of the Act but is also within the limitation provided under section 149 of the Act; The notices for other AYs 1989-90 to....
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....issued by the Joint Commissioner but could be issued by the AO. The only requirement is that after expiry of 4 years, the Joint Commissioner should be satisfied on the reasons recorded by the AO. 4th & 5th POINT: NOTICE AYs 1989-90 TO 1994-95--INVALID 44. While deciding the third point, we have indicated that in case notice under section 148 is being issued after four years then the Joint Commissioner should be satisfied on the reasons recorded by the AO (see footnote 3). In this case, the Addl. Commissioner was satisfied under section 151 of the Act for issuing notice for the AY 1998-99. This section uses the word 'Joint Commissioner'. However, this does not make any difference. 45. Section 2 of the Act is the definition section. Its sub section 28C {Section 2 (28C} defines the word 'Joint Commissioner' and explains that it means a person appointed to be Joint Commissioner of Income Tax or Addl. Commissioner of Income Tax under sub-section 1 of section 107. In view of this, the Joint Commissioner includes an Addl. Commissioner as well. 46. There is no illegality in the notice for AY 1998-99 on this account. However, the same cannot be said about the....
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....s 'Notwithstanding anything contained in section 149, the notice under section 148 may be issued at any time....; subject to the conditions mentioned in section 150. If the legislature wanted section 151 of the Act not to apply to cases covered under section 150 then words would have been 'Notwithstanding anything contained in section 149 and section 151'. 54. The fact that the section 151 as indicated in the preceding paragraph is not mentioned in section 150 shows that section 151 of the Act is applicable to the cases covered not only under section 149 but also to the cases covered under section 150 of the Act. 55. It is correct that Section 149(2) of the Act (see below)6 provides that notice under section 149(1) is subject to section 151 of the Act and there is no such provision in section 150 but it does not make any difference. Section 149(2) of the Act is merely clarificatory even if it was not there, the result would have been the same. 56. In our opinion, if a case falls under section 150 then the notice can be issued at any time, without regard to the time limits mentioned in section 149. However, the previous satisfaction/sanction of the Joint Comm....
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....s, the approval to initiate proceedings afresh in respect of these items could not be given'. 63. The facts of the present case are entirely different. Here the earlier reassessment proceeding were never quashed. On the contrary, it was a case where the petitioner received a huge amount of compensation that was liable to be taxed as capital gains and yet she chose not to disclose the same. The MunnoLal case is not applicable to the present case. RajKishore case 64. In the RajKishore case, the division bench of our court held that the initiation of proceedings for reopening the assessment was barred by time. The notice for reassessment was quashed on this ground. 65. It was observed by the court as a passing remark (obiter dicta) that when the notice was barred by time then the Commissioner ought not to have been satisfied, or granted sanction/ approval--as the satisfaction is not mechanical. 66. In the RajKishore case, the notice for reassessment was barred by time. This is not the case here. The RajKishore case is distinguishable. 67. In our opinion, satisfaction of the Addl. Commissioner on the reasons recorded by the Assessing Officer is n....