K.m Sharma v. Income Tax Officer, Ward 13 (7) New Delhi

K.M. SHARMA INCOME TAX OFFICER, WARD 13 (7) NEW DELHI APRIL 11, 2002 [S.P. BHARUCHA, CJ., N. SANTOSH HEGDE AND D.M. DHARMADHIKA13J, JJ.] Income Tax Act, 1961 : Sections 147, 148 and 149. Section 150(1) [As amended with effect from 1.4.1989} and Section c 150(2). Income Tax-Assessee---Receipt of interest on compensation for· land acquisition-Assessment-Limitation-Reassessment to levy tax-Permissibility o~Held amendment to Section 150(1) does not empower authorities to reopen assessment which have become final due to bar of liniitation prior to amendment~Section 150(2) is also applicable to court orders apart from income-tax proceedings. Fiscal statute-Interpretation of-Provision imposing liability-Held such a law is not retrospective in the absence of contrary intendment. Section 150(1) of the Income Tax Act, 1961, as amended by Direct Tax Laws (Amendment) Act, 1987 w.e.f. 1.4.1989 provides that the period of limitation prescribed in Section 149 is not applicable, if the reassessment is proposed on the basis of any Order passed by any 'authority in any proceedings under the Act by way of appeal, reference or revision or by a F Court in any proceedings under any other law.' The question involved in this appeal is whether Section 150(1) can be availed for re-opening assessments, which have attained finality and could not be re-opened due to bar of limitation, that was attracted at the relevant time to the proposed reassessment proceedings under the provisions of Section 149. For acquisition of his land the appellant was paid between 15.10.1992 and 26.5.1993 compensation and G interest thereon. Revenue issued notices to the appellant for reassessment to levy tax on the increased amount of interest for the assessment years 1968 to 1969 to 1971-72 and 1981-1982. The appellant-assessee challenged the validity of these notices contending that the provision contained in sub-section (2) of Section 150 is in the nature of clarification or explanation to sub-section (I). 1048 SUPREME COURT REPORTS [2002] 2 S.C.R. A Sub-section (2) makes it clear that i~he embargo of period of limitation lifted under sub-section (1) for proposed reassessments based on Order in proceedings, appeal, reference or revision, as the case may be, would not apply to assessments which have attained finality due to bar of limitation applicable at the relevant time. The High Court upheld the validity of the assessment proceedings on the ground that on the amendment introduced with effect from B 1.4.1989 in sub-section (1), which enables reopening of assessment based on any Order of 'Court in any proceedings in any law', there is no corresponding amendment made in sub-section (2) of Section 150 to bar reassessment based on Order of Court passed in any proceedings in any law in cases where prescribed period of litigation for reassessment had already expired. In appeal to this Court it was contended on behalf of the appellant-assessee that the provisions contained in Section 150(1) and (2) do not permit the authorities to reopen assessments, which have become final and reassessment of which had become barred by time before 1.4.1989 when Section 150(1) was amended. Allowing the appeal and setting aside the impugned judgment, the Court HELD: 1. Sub-section (1) of Section 150 of the Income Tax Act, 1961 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 E and this position is applicable equally to reassessments proposed on the basis of Orders passed under the Act or under any other law. [1056-D) 1048 1049 150(2). 1048 (1055-)