TaxTMI 
TaxTMI 
2019 (2) TMI 1730
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....adjudication. 3. The assessee (in ITA Nos.409 & 410/RJT/2017) for AYs 1996-97 and 1997-98 has raised the following common additional ground of appeal: The notice issued u/s.148, pursuant to which the impugned assessment order is framed, is barred by limitation prescribed u/s.149 of the Act and therefore assessment framed pursuant to such invalid notice is void ab initio. 3.1. The Revenue (in ITA Nos.450 & 451/RJT/2017) for AYs 1996-97 and 1997-98 has raised the following common ground of appeal: On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in law and/or on facts in virtually setting aside the order of the A.O. passed u/s.143(3) r.w.s.147 of the Income Tax Act, 1961 dated 27.02.2015, whereas no such power rests with him under the Act. 3.2. The Revenue has also raised the following additional ground of appeals in both the assessment years: "On the facts and in the circumstances of the case and in law, the Ld.CIT(A) has erred in holding that as per the provisions of section 5 of the Income Tax Act, 1961 the 'funds' of the assessee outside India would not be taxable in the hands of the appellant if his status was Resident but not....
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....e to tax has escaped assessment in any assessment year. 5. Since the assessee is having a bank account in HSBC Republic Bank, (Suisse), S.A. Geneva and having substantial amount deposited in the said account during the F.Y. 1995-96 relevant to A.Y. 1996-97, the same is asset located outside India with the meaning of explanation 2(d) to section 147 of the I.T.Act. Since these asset has not been disclosed to the Department, the income chargeable to tax has escaped assessment within the meaning of section 147 of the I.T. Act. Issue notice u/s.148 of the I.T.Act." The Learned Counsel for the appellant in this regard has contended that the re-opening is on the basis of borrowed satisfaction or on the basis of finding of other authorities and not on the satisfaction of the AO initiating reassessment and hence bad in law. For this proposition various case laws are cited." 5.1. Accordingly, notice was issued on 25/03/2013 for the year under appeal as also subsequent years. The assessee by way of additional ground challenged the re-opening on the ground that notice is issue beyond jurisdiction. For this proposition, the Ld.AR cited a judgement of Hon'ble Gujarat High Court in the c....
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....resaid amendments are beyond the law making powers of the government or that the same are contrary to the constitutional right granted to the appellant. Therefore the case law relied by the appellant in this regard are distinguishable on facts. Since the re-opening is within the statutory provision amended with effect from 1.7.2012 and since the Notice for re-opening has been issued on 25.3.2013, the same is valid in eye of law. Therefore, challenge to the validity of assumption of jurisdiction u/s.147 on both the counts fails and accordingly the grounds raised in this regard are dismissed. 6. The assessee is therefore by way of second appeal is before us. 7. The Ld.AR for the assessee reiterated the submissions made before the Ld.CIT(A) and also relied upon the decisions cited therein which are at page numbers 1 to 13 of the paper-book. He vehemently relied upon recent decision of Hon'ble Delhi High Court in the case of Brahm Datt vs. ACIT 100 taxmann.com 324 (Delhi). It was contended that identical issue arose before Hon'ble Delhi High Court in the case of Brahm Datt, wherein Court was quashed the notice issued u/s.148 of the Act for AY 1998-99 where the notice u/s.148 was is....
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.... case, Hon'ble Gujarat High Court in the case of Induprasad Bhatt(supra) held as under: "We are, therefore, of the view that on a true construction of s. 297(2)(d)(ii), the ITO cannot issue a notice under s. 148 in order to reopen the assessment of an assessee in cases where the right to reopen the assessment was barred under the old Act at the date when the new Act came into force. The right of the ITO to reopen the assessment of the petitioner in the present case was admittedly barred under s. 34(1)(a) at the commencement of the new Act and it was, therefore, not competent to the ITO to issue a notice under s. 148 in order to reopen the assessment of the petitioner and to reassess the income of the petitioner by relying on the provision enacted in s. 297(2)(d)(ii). The notice dt. 13th Nov., 1963, was, therefore, beyond jurisdiction and must be set aside. Along with that notice, the subsequent notice dt. 9th Jan., 1964, must also fail." 9.1. On further appeal by the Revenue against in quashing the notice u/s.148 of the Act, the Hon'ble Supreme Court approving the judgement of Hon'ble Gujarat High Court in the case of J.P. Jani vs. Induprasad Devshankar Bhatt (72 ITR 595) hel....
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...., the proceedings had become barred under the unamended provision. At page 240 of the report, Shah, J., speaking for the Court, observed as follows : "As we have already pointed out, the right to commence a proceeding for assessment against the assessee as an agent of a non-resident party under the IT Act before it was amended, ended on 31st March, 1956. It is true that, under the amending Act, by s. 18 of the Finance Act, 1956, authority was conferred upon the ITO to assess a person as an agent of a foreign party under s. 43 within two years from the end of the year of assessment. But the authority of the ITO under the Act before it was amended by the Finance Act of 1956, having already come to an end, the amending provision will not assist him to commence a proceeding even though at the date when he issued the notice it is within the period provided by that amending Act. This will be so, notwithstanding the fact that there has been no determinable point of time between the expiry of the time provided under the old Act and the commencement of the amending Act. The legislature has given to s. 18 of the Finance Act, 1956, only a limited retrospective operation, i.e., up to 1st Ap....
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....quently, by another judgment dated 31.07.1991, the assessee was awarded sum of Rs. 1,10,20,624, which was received by it between 15.10.1992 and 25.05.1993. The said amount comprised of principal compensation as well as interest up to 18.05.1992. As land acquired was agricultural land, principal amount was not chargeable to tax; however, interest amounting to Rs. 76,84,829 was chargeable on year to year basis. The assessee claimed that proceedings till assessment year 1982-83 had already attained finality and therefore, filed letter requesting the assessing officer to initiate proceedings for subsequent assessment years for bringing to tax interest component relatable to the said assessment years. The assessee was, however, issued notices under section148 of the Act for fifteen assessment years, viz., assessment years 1968-69 to 1971-72 and assessment years 1981-82 to 1992-93 which were challenged on the ground of limitation. This court declined to exercise jurisdiction; on appeal, the Supreme Court held that the provision regulating period of limitation ought to receive strict construction. The Supreme Court held that the law of limitation was intended to give certainty and finalit....
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.... 150 is not expressed to be retrospective and, therefore, has to be held as only prospective. The amendment made to subsection (1) of section 150 which intends to lift embargo of period of limitation under section 149 to enable authorities to reopen assessments not only on the basis of orders passed in proceedings under the Act but also on order of a Court in any proceedings under any law, has to be applied prospectively on or after 1.4.1989 when the said amendment was introduced to sub-section (1). The provision in sub-section (1), therefore, can have only prospective operation to assessments, which have not become final due to expiry of period of limitation prescribed for assessment under section 149. 14. To hold that the amendment to sub-section (1) would enable the authorities to reopen assessments, which had already attained finality due to bar of limitation prescribed under section 149 as applicable prior to 1.4. 1989, would amount to give sub section (1) a retrospective operation which is neither expressly nor impliedly intended by the amended sub-section. 15. On behalf of the assessee before the High Court and in this Court reliance has been placed on the provisions c....
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....ening assessments, which have attained finality on expiry of prescribed period of limitation. Sub-section (2) in putting such embargo refers to whole of sub-section (1) meaning thereby to insulate all assessments, which have become final and may have been found liable to reassessments or re-computation either on the basis of Orders in proceedings under the Act or Orders of Courts passed under any other law. The High Court, therefore, was in error in not reading whole of amended sub-section (1) into subsection (2) and coming to the conclusion that reassessment proposed on the basis of order of Court in proceedings under Land Acquisition Act could be commenced even though the original assessments for the relevant years in question have attained finality on expiry of period of limitation under Section 149of the Act. On a combined reading of sub-section (1) as amended with effect from 1.4.1989 and sub-section (2) of Section 150 as it stands, in our view, a fair and just interpretation would be that the Authority under the Act has been empowered only to reopen assessments, which have not already been closed and attained finality due to the operation of the bar of limitation under Sectio....
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....l presumption that it is not retrospective and settled principle of law is that the law to be applied is that which is in force in the assessment year unless otherwise provided expressly or by necessary implication. Even a procedural provision cannot in the absence of clear contrary intendment expressed therein be given greater retrospectivity than is expressly mentioned so as to enable the Authorities to affect finality of tax assessments or to open up liabilities, which have become barred by lapse of time. Our conclusion, therefore, is that sub-section (1) of Section 150, as amended with effect from 1.4.1989, does not enable the Authorities to reopen assessments, which have become final due to bar of limitation prior to 1.4.1989 and this position is applicable equally to reassessments proposed on the basis of Orders passed under the Act or under any other law." 14. The ratio of K.M Sharma and S.S. Gadgil, in the opinion of this court covers the facts of this case. Reassessment for 1998-99 could not be reopened beyond 31.03.2005 in terms of provisions of Section 149 of the Act as applicable at the relevant time. The petitioner‟s return for assessment year 1998-99 became b....
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....imposition of a tax operates so harshly as to violate fundamental rights under article 19(1)(g), the factors considered relevant include the context in which retroactivity was contemplated such as whether the law is one of validation of taxing statute struck-down by courts for certain defects; the period of such retroactivity, and the decree and extent of any unforeseen or unforeseeable financial burden imposed for the past period etc." 18. In Govinddas v Income Tax Officer AIR 1977 SC 552the Supreme Court held that Section 171 (6) of the Income Tax Act was prospective and inapplicable for any assessment year prior to 1st April, 1962, the date on which the Act came into force and observed that: "11. Now it is a well settled rule of interpretation hallowed by time and sanctified by judicial decisions that, unless the terms of a statute expressly so provide or necessarily require it, retrospective operation should not be given to a statute so as to take away or impair an existing right or create a new obligation or impose a new liability otherwise than as regards matters of procedure. The general rule as stated by Halsbury in Vol. 36 of the Laws of England (3rd Edn.) and reiter....