TaxTMI 
TaxTMI 
2004 (11) TMI 52
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....share was assessed as Rs. 9,58,192. Not being satisfied, the matter was taken for reference under section 18 of the Land Acquisition Act and finally this court by judgment in L.L.A No. 247 of 1980 dated January 28, 1987, awarded compensation including solatium of Rs. 17,59,342 as the petitioner's share with interest as provided under the Land Acquisition Act. On receipt of the amount, the petitioner was advised that they would be liable to pay tax on the interest granted on the compensation. Hence, it filed returns on January 3, 1990, showing the interest awarded as its income. The dispute in this case pertains to the assessment years 1979-80 to 1984-85 for which also he filed returns on January 3, 1990. In these years, the petitioner had no other income than the interest from this amount. In M. Jairam v. CIT [1979] 117 ITR 638 (Ker) a Division Bench of this court held that the entire amount of interest has to be assessed in the year in which it was received. But, the above view was overruled by a Full Bench of this court in Peter John v. CIT [1986] 157 ITR 711. The Supreme Court in Rama Bai v. CIT [1990] 181 ITR 400 finally held that interest on enhanced compensation for land com....
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..... As held in Wm. Cory and Son Ltd. v. IRC [1965] 1 All ER 917 (HL), a taxing or a fiscal statute demands strict construction. It must never be stretched against a taxpayer. So long as the natural meaning for the charging section is adhered to and when the law is certain, then, a strange meaning thereto should not be given. The above principle is accepted in India also as can be seen from CCE v. Acer India Ltd. (No. 2) [2004] 8 SCC 173; [2004] 3 RC 421. Therefore, before going into the disputed question, we shall go through the relevant provisions before and after the amendment in 1989. Section 147 before amendment was as follows: "147. Income escaping assessment.- If- (a) the Assessing Officer has reason to believe that, by reason of the omission or failure on the part of an assessee to make a return under section 139 for any assessment year to the Assessing Officer or to disclose fully and truly all material facts necessary for his assessment for that year, income chargeable to tax has escaped assessment for that year, or (b) notwithstanding that there has been no omission or failure as mentioned in clause (a) on the part of the assessee, the Assessing Officer has in consequenc....
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....assessment amounts to or is likely to amount to rupees fifty thousand or more for that year; (b) in cases falling under clause (b) of section 147, at any time after the expiry of four years from the end of the relevant assessment year..." Section 149 was also substituted with effect from April 1, 1989. Under the new section, in case there is no original assessment, time limit mentioned in issuing notice is ten years where the demand is more than Rs. 50,000. First we may consider the question whether section 147(a) or section 147(b) will apply if the notice was issued before the Amendment in 1989. In the revisional order (exhibit P 13), it can be seen from paragraph 3 that the assessee specifically contended that even though notice was issued under section 147(a), it can be made only under section 147(b). That was dealt with by the Commissioner in paragraph 4. The relevant portion is quoted below: "... Since the assessee itself filed the returns for the assessment years 1980-81 to 1984-85 admitting the incomes, the Assessing Officer was fully justified in invoking the provisions of section 147 for these years. In this connection it may be mentioned that since no assessment were ....
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....upreme Court held as follows: "In considering whether the amended statute applies, the question is one of interpretation, i.e., to ascertain whether it was the intention of the Legislature to deprive a taxpayer of the plea that action for assessment or reassessment could not be commenced, on the ground that before the amending Act became effective, it was barred. Therefore the view that even when the right to assess or reassess has lapsed on account of the expiry of the period of limitation prescribed under the earlier statute, the Income-tax Officer can exercise his powers to assess or reassess under the amending statute which gives an extended period of limitation, was not accepted in Calcutta Discount Company's case [1953] 23 ITR 471 (Cal). As we have already pointed out, the right to commence a proceeding for assessment against the assessee as an agent of a nonresident party under the Income-tax Act before it was amended, ended on March 31, 1956. It is true that under the amending Act by section 18 of the Finance Act, 1956, authority was conferred upon the Income-tax Officer to assess a person as an agent of a foreign party under section 43 within two years from the end of th....
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....om Rubber Co. Ltd. [2001] 249 ITR 19. We are of the view that the matter is beyond the controversy in view of the Supreme Court decision in this matter explaining the effect of very same amendment of sections 149 and 150 in K. M. Sharma v. ITO [2002] 254 ITR 772 (SC). Dicta of the above decisions have to be followed here. There, the Supreme Court relied on S. S. Gadgil's case [1964] 53 ITR 231 (SC) and held as follows: "A fiscal statute, more particularly a provision such as the present one regulating period of limitation must receive strict construction. The law of limitation is intended to give certainty and finality to legal proceedings and to avoid exposure to risk of litigation to litigants for an indefinite period on future unforeseen events. Proceedings, which have attained finality under existing law due to bar of limitation cannot be held to be open for revival unless the amended provision is clearly given retrospective operation so as to allow upsetting of proceedings, which had already been concluded and attained finality. The amendment to sub-section (1) of section 150 is not expressed to be retrospective and, therefore, has to be held as only prospective. The amendmen....