TaxTMI 
TaxTMI 
2015 (11) TMI 650
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....dated order of the Commissioner of Income Tax (Appeals), Shimla dated 18.1.2010 relating to assessment years 1973-74 to 1980-81 against the order passed u/s 143(3) of Income Tax Act, 1961 and three appeals were filed by the assess against the consolidated order of the Commissioner of Wealth Tax (Appeals), Shimla dated 12.1.2010 relating to assessment years 1994-95 to 1996-97 against the order passed u/s 16(3) of Income Tax Act, 1961. 3. Three appeals under the Wealth Tax Act were allowed, whereas remaining appeals under the Income Tax Act as also Wealth Tax Act were partly allowed against which the assessee has filed the present appeals. 4. All these appeals were admitted on the following questions of law: i) Whether in the present facts and circumstances of the case the Ld. ITAT was justified in holding that the assessment order passed on 7.2.2007 is within the limitation period and hence a valid return ? ii) Whether under the present facts and circumstances of the case, the findings recorded by the Ld. ITAT is perverse in upholding the assessment order as valid and not barred by limitation?. We have the learned counsel for the parties and have gone through the records of t....
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....essment made to be framed de-novo. 23.5.2000 Date of demise of Raja Harmohinder Singh, assessee 1.9.2003 Civil suit between legal heirs of assessee and other persons was decreed by Ld. ADJ in favour of four claimants and also status of legal heirs decided. 20.4.2004 The Tribunal in the appeal filed by the Revenue upheld the order passed by CWT(A), Patiala and dismissed the appeal of the Revenue as the case was taken up for re-assessment as per the direction of CWT(A), Patiala. 1.12.2005 Interim order was passed by Hon'ble High Court staying the proceedings before WTO/ITO in Civil Writ Petition filed by the assessee 8.3.2006 The Hon'ble High Court of HP stayed the assessment proceedings in view of the civil proceedings pending before them concerning status of various claimants as legal representatives of late Raja Harmohinder Singh. 8.3.2006 The assessment proceedings were kept in abeyance 26.7.2006 Judgment delivered by the Hon'ble High Court in appeal in CS between legal heirs of the assessee. 11.12.2006 The interim order of the Hon'ble High Court of Himachal Pradesh was vacated 8.2.2007 Assessment completed in the hands of legal heir of late Raja Harmohinder Sin....
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....erty. This court accordingly held that the property was to be treated as self acquired property of Raja Harmohinder Singh vide its judgment dated 25.7.2006. 12. As observed earlier, the issue involved in RFA No. 271 of 2003 was the claim raised by Sh.Ajay Singh, wherein he claimed to be the son of Raja Harmohinder Singh which was negated by the trial court and even this court held that Ajay Singh had no right, title and interest to the assets of Raja Harmohinder Singh. The second issue which was decided in RFA No. 271 of 2003 was that three persons aforesaid were held entitled to 47% share of re-determined compensation under Section 28A of the Land Acquisition Act. It was thus held that the plaintiff in RFA No.310/2003 i.e. the assessee alone to the exclusion of the aforesaid three person was not entitled to succeed to the estate of Raja Harmohinder Singh by way of succession, whereas three purchasers were held entitled to 47% share in the re-determined compensation amount. This court further noted as under: "In RFA No.310 of 2003 Income Tax Department has filed an application for impleadment, being CMP No. 145 of 2005. Thereafter, it filed a second application, being CMP No. 37....
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.... and Chief CIT, Palampur not to take decision on the notices issued to the assessee. 16. The Income Tax department, through the ACIT, filed an application in CWP No.1251 of 2005, wherein it was pointed out that pursuant to the directions issued by CIT (Appeals) on 17.1.2000, the assessment proceedings would come time barred on 31.3.2006 and, therefore, they should be permitted to proceed with the assessment. On 8.3.2005, the interim order earlier passed on 1.12.2005 was modified and further proceedings before the respondent, i.e. Income Tax department in regard to the assessment of Raja Harmohinder Singh were directed to be stayed till the time, status of L.Rs is decided. 17. However, on 11.12.2006, this order was also vacated by observing as under: "In the present writ petition, the main dispute was with regard to the status of the legal representatives of Raja Harmohinder Singh father of the petitioner which was to be adjudicated upon in RFA No. 271 of 2003 and RFA No. 310 of 2003. Admittedly, these two appeals have been decided and the status of the parties has also been decided by this Court. We have been informed that Special Leave Petition against the judgment of this Cou....
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....section shall have effect as if for the words "two years", the words "twenty-one months" had been substituted] (2) No order of assessment or reassessment shall be made under section 17 after the expiry of [one year] from the end of the financial year in which the notice under sub-section (1) of that section was served: [Provided that where the notice under sub-section (1) of section 17 was served on or after the 1st day of April, 1999 but before the 1st day of April, 2000, such assessment or reassessment may be made at any time up to the 31st day of March, 2002:] [Provided further that where the notice under subsection (1) of section 17 was served on or after the 1st day of April, 2005, the provisions of this subsection shall have effect as if for the words "one year", the words "nine months" had been substituted.] (3) Notwithstanding anything contained in subsections (1) and (2), an order of fresh assessment in pursuance of an order passed on or after the 1st day of April, 1975, under section [23A], section 24 or section 25, setting aside or cancelling an assessment, may be made at any time before the expiry of [one year] from the end of the financial year in which the ord....
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....22D is received by the 188 Chief Commissioner or Commissioner] under sub-section (2) of that section, shall be excluded: [Provided that where immediately after the exclusion of the aforesaid time or period, the period of limitation referred to in sub-sections (1), (2) and (3) available to the Assessing Officer, for making an order of assessment or reassessment, as the case may be, is less than sixty days, such remaining period shall be extended to sixty days and the aforesaid period of limitation shall be deemed to be extended accordingly:] [Provided further that where a proceeding before the Settlement Commission abates under section 22HA, the period of limitation referred to in this section available to the Assessing Officer for making an order of assessment or reassessment, as the case may be, shall, after the exclusion of the period under sub-section (4) of section 22HA, be not less than one year; and where such period of limitation is less than one year, it shall be deemed to be extended to one year.] Explanation 2. -Where, by an order referred to in sub-section (4), any asset is excluded from the net wealth of one person and held to be the asset of another person, then,....
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....ut before the 1st day of April, 2000, such an order of fresh assessment may be made at any time up to the 31st day of March, 2002. (3) The provisions of sub sections (1) and (2) shall not apply to the following classes of assessment, reassessment and recomputations which may, (subject to the provisions of sub section (2A) be completed at any time- (i) (***) (iI) where the assessment, reassessment or recomputation is made on the assessee or any person in consequence of or to give effect to any finding or direction contained in an order under section 250, 254, 260, 262, 263, or 264 (or in an order of any court in a proceeding otherwise than by way of appeal or reference under this Act; (iii) where, in the case of a firm, an assessment is made on a partner of the firm in consequence of an assessment made on the firm under section 147. Explanation1- In computing the period of limitation for the purposes of this Section- (i) the time taken in reopening the whole or any part of the proceeding or in giving an opportunity to the assessee to be re-heard under the proviso to section 129, or (ii) the period during which the assessment proceeding is stayed by an order or injuncti....
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....g an order of assessment, reassessment or recomputation, as the case may be, is less than sixty days, such remaining period shall be extended to sixty days and the aforesaid period of limitation shall be deemed to be extended accordingly: Explanation 2.-Where, by an order referred to in clause (ii) of sub-section (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 sub-section (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 to give effect to any finding or direction contained in the said order, provided such other person was given an opportunity of being heard before the said order was passed." 20. On a careful reading of Sectio....
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....an definitely be held to have been completed within the prescribed time frame. 24. The matter can be looked at from a different angle. It is not in dispute that till and so long conflicting claims of the legal heirs of the original assessee were pending adjudication before the courts, the issue of service of notice on the said L.Rs was open to debate and, therefore, could not have been concluded. As per the admitted case of the parties, all these questions regarding L.Rs and other controversies came to be set at knot only when CWP No. 1251 of 2005 was disposed of on 11.12.2006 and immediately thereafter the assessment order was passed by the Assessing Officer on 7.2.2007. 25. Notably, it was the assessee himself who had filed CWP No. 1251 of 2005 challenging therein the notice issued by the Assessing Officer dated 27.10.2005 for finalization of the assessment proceedings relating to various orders under the Wealth Tax Act and Income Tax Act. It is also pertinent to observe here that though the assessee made extensive pleadings before this court, but, no where did he question the validity of the notice of hearing issued by the Assessing Officer and further did not even raise the p....