TaxTMI 
TaxTMI 
2003 (6) TMI 18
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....ear 1980-81. The amount payable to the petitioner in terms of the award was sought to be taxed to capital gains in the assessment year 1980-81. The matter reached the Income-tax Appellate Tribunal (for short "the Tribunal"). The Tribunal passed an order and in the said order, the Tribunal notices the fact that the transaction by way of agreement was within the knowledge of the Assessing Officer while concluding the assessment for the assessment year 1976-77 and inasmuch as the amount arising from the agreement of Rs. 2 lakhs which was received during the calendar year 1975 was offered to tax for the assessment year 1976-77. Purporting to act upon the above decision of the Tribunal, the respondent issued a notice dated November 17, 1998, for the assessment year 1976-77 under section 148 of the Act in terms of annexure B. In the notice, it is stated that the Department has reason to believe that the income chargeable to tax for the assessment year 1976-77 as escaping tax within the meaning of section 148 of the Act. On receipt of the notice, the petitioner submitted a detailed reply objecting to the said notice. The petitioner also raised a question of limitation with regard to the ....
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....sections are section 149, section 147, section 148, section 143(3), section 151 and section 152. Section 143 provides for assessment. Sub-section (3) provides for an order in writing in the matter of assessment. Section 145 provides for method of accounting. Section 146 deals with reopening of assessment at the instance of the assessee in respect of escaped assessment. Section 147 is income escaping assessment. Section 148 provides for issue of notice where income has escaped assessment. Section 149 provides for a time limit for notice. Section 150 deals with provision for cases where assessment is in pursuance of an order on appeal. A combined reading of all these provisions would show that before making the assessment, reassessment or recomputation under section 147, a notice is required to be furnished. Section 149 provides for time limit for notice. Section 150, as I mentioned earlier is a provision for cases where assessment is in pursuance of an order on appeal. The said provision reads as under: "150. (1) Notwithstanding anything contained in section 149, the notice under section 148 may be issued at any time for the purpose of making an assessment or reassessment....
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....n 149. Section 149 provides for four years in terms of section 149(1)(a)(i) and sub-clause (ii) of section 149(1)(a) provides not more than seven years if four years have elapsed from the end of the relevant assessment year. In the case on hand, the admitted facts reveal payments in the year 1975 and the taxing of such amount took place in the assessment year 1976-77 proceedings. Therefore, the four year period in terms of section 147 read with section 148 ends on March 31, 1981, that is four years from March 31, 1977. Sri Prasad, learned counsel is therefore right in his submission that the period of limitation is already over in the case on hand and, therefore, the notices are barred by time in terms of the statutory provisions. However, the defence put forth by the respondent is sub-section (2) of section 150 of the Act. Section 150 provides for a notice being issued under section 148 notwithstanding anything contained in section 149. Sub-section (2) makes it very clear that the provisions of section 148 shall not apply in any case where any such assessment, reassessment or recomputation as is referred to in that sub-section relates to an assessment year in respect of which r....
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....n the date of the order which is the subject-matter of the appeal, reference or revision in which the finding or direction is contained. Section 153 provides the time limits for completion of assessments and reassessments. Explanations 2 and 3 to section 153 merely illustrate and clarify the meaning of the words 'in consequence of or to give effect to any finding or direction' contained in an appellate, revisional or any other order. Explanations 2 and 3 do not purport to obliterate or remove the restriction contained in sub-section (2) of section 150. They no doubt refer to section 150, but for a limited purpose. Hence, initiation of reassessment proceedings would be bad, even when they are initiated in consequence of or to give effect to any finding or direction contained in the appellate order, if such initiation of reassessment proceedings is barred by any other provision of the Act on the date of the order which was the subject-matter of appeal." The Andhra Pradesh High Court also in the last paragraph has ruled as under: "Now, coming to the facts of the case before us, the finding in consequence of which notice under section 148 has been given, was recorded by the Appellate....
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....ions 147, 149 and 150. After noticing, the Punjab High Court has ruled as under: "'149. Time limit for notice.--(1) No notice under section 148 shall be issued... (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.' In the light of the aforesaid provision specifying the period of limitation as four years from the end of the relevant assessment year, the case of the assessee for the purposes of issuance of notice for reassessment for the assessment year 1977-78 is found to be barred by limitation. The period of four years from the end of the assessment year 1977-78 expired on March 31, 1982. The assessment for the assessment year 1978-79, which was the subject matter of appeal before the Tribunal, was made in the case of Nand Kishore on March 23, 1989. The appellate order was passed by the Commissioner on December 27, 1989. Thus, the subject-matter of appeal before the Tribunal was the order of the Commissioner dated December 27, 1989. On the date of the appellate order of the Commissioner, i.e., December 27, 1989, the Assessing Officer had no jurisdiction to issue a notice under section 14....