2008 (8) TMI 930 - HC - Income Tax

Summary

Issues involved:
The appeal challenges the order passed by the commissioner of Income Tax Appeals and confirmed by the Income tax appellate Tribunal for the assessment year 1979-80. The main issue is whether the assessment order for the said year was barred by limitation under Section 150(1) of the Income Tax Act.

Facts of the case:
The respondent assessee purchased land which was initially treated as HUF property by the Assessing Officer. The assessee contended that it was personal property, not HUF. The Commissioner of Income Tax Appeals agreed with the assessee, holding the land as individual property. Subsequently, a notice under Section 148 of the Income Tax Act was issued for the assessment year 1979-80, which the assessee claimed was barred by limitation. The Assessing Officer relied on Section 150(1) to proceed with the assessment.

Legal analysis:
The Court examined Section 150 of the Income Tax Act, which allows for assessment or reassessment based on orders passed in appeal or other proceedings. The Court noted that Section 150(2) specifies that such provisions do not apply if the assessment relates to a year where no action could have been taken due to time limitations. The Court emphasized that orders or directions can only be enforced against parties involved in the earlier proceedings, not against third parties. The Court rejected the argument that the word "person" should be liberally construed to include different entities, stating that assessments must be made against the relevant parties. The Court cited a Supreme Court judgment to support this interpretation.

Judgment:
The Court upheld the decisions of the Tribunal and Commissioner of Income Tax Appeals, ruling that the notice issued under Section 148 was indeed barred by limitation. It was concluded that Section 150 of the Income Tax Act did not save the limitation for assessing the present assessee. Therefore, the appeal by the revenue was dismissed.