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Issues:
1. Interpretation of time limitation for assessment under Agricultural Income-tax Act, 1950. 2. Application of new Act provisions to pending assessments from old Act. Interpretation of Time Limitation for Assessment: The High Court of Kerala addressed the issue of time limitation for assessment under the Agricultural Income-tax Act, 1950. The court considered whether the revised assessment completed in the respondent-assessee's case for the assessment year 1986-87 was time-barred. The assessee did not file a return for the relevant assessment year, and the officer did not issue any notice proposing the assessment of escaped income until the AIT Act, 1950 was repealed and substituted by the AIT Act, 1991. The Tribunal held that the assessment was time-barred, considering the limitation to be computed from the end of the previous year, which the court did not entirely agree with. However, the court upheld the Tribunal's decision based on different reasons related to the new Act coming into force on April 1, 1991, and the provisions allowing the completion of pending proceedings under the old Act. Application of New Act Provisions to Pending Assessments: The court analyzed the application of the new Act provisions to pending assessments from the old Act. Section 99 of the new Act provided for the repeal of the Agricultural Income-tax Act, 1950, but retained certain rights, obligations, and liabilities acquired under the old Act. The court highlighted that the new Act allowed the completion of pending proceedings under the old Act, including the assessment of escaped agricultural income. The court emphasized that the provisions of the repealed Act could still be used for assessment, collection, and recovery of tax, even for completed assessments that needed to be reopened for escaped income assessment. Ultimately, the court concluded that since the escaped assessment in the petitioner's case was not completed within the time limit specified under the old Act, the assessment was deemed time-barred and therefore illegal and unenforceable. The court rejected the argument that the provisions of the new Act could be applied retroactively to validate assessments completed under the old Act, upholding the Tribunal's decision on the time limitation issue for the petitioner's assessment for 1986-87.
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