1996 (12) TMI 103 - AT - Income Tax

Assessing Officer Assessing Officer Assessment Order Assessment Order Assessment Year Assessment Year Time Limit For Completion Time Limit For Completion Tribunal s Order Tribunal s Order

Summary

Issues Involved:
1. Validity of reassessment under Section 147(a) of the IT Act.
2. Applicability of Section 150(1) and Section 150(2) of the IT Act.
3. Time-barred reassessment proceedings.

Issue-wise Detailed Analysis:

1. Validity of Reassessment under Section 147(a) of the IT Act:

The assessee argued that the reassessments for the assessment years 1975-76 to 1979-80 were invalid as the conditions under Section 147(a) were not satisfied. Specifically, there was no failure or omission on the part of the assessee to disclose any primary facts necessary for the assessments. The Assessing Officer issued notices under Section 148 after the Tribunal's order on 19-2-1988, which directed the spread of interest income over the relevant years. The assessee contended that the reassessments should have been initiated under Section 147(b) due to the change in judicial interpretation rather than under Section 147(a), as there was no failure to disclose material facts. The Tribunal agreed that the reassessments should have been initiated under Section 147(b) and not Section 147(a), as the change in judicial interpretation was the basis for the reassessments.

2. Applicability of Section 150(1) and Section 150(2) of the IT Act:

The revenue argued that the reassessments were valid under Section 150(1), which allows reopening of assessments at any time to give effect to a finding or direction contained in an appellate order. The Tribunal's order from 19-2-1988 contained a finding that interest attributable to each year should be spread over the relevant years. The Tribunal held that Section 150(1) applies, overriding the time limits prescribed in Section 149. However, Section 150(2) restricts this by ensuring that an order on appeal, revision, etc., cannot confer jurisdiction if the Assessing Officer did not possess it at the time of the original order. The Tribunal concluded that the relevant date for determining jurisdiction is when the original assessment order was passed by the Assessing Officer, not when the appellate order was issued.

3. Time-barred Reassessment Proceedings:

The Tribunal examined whether the reassessments were time-barred under Section 150(2). For the assessment years 1975-76, 1976-77, and 1977-78, the Tribunal found that the notices under Section 148 should have been issued before 31-3-1980, 31-3-1981, and 31-3-1982, respectively. As the notices were issued on 1-3-1989, the reassessments for these years were time-barred. However, for the assessment years 1978-79 and 1979-80, the Tribunal found that the notices were issued within the permissible time limits, making the reassessments valid for these years.

Conclusion:

The Tribunal allowed the assessee's appeals for the assessment years 1975-76, 1976-77, and 1977-78, canceling the reassessments for these years as they were time-barred. The appeals for the assessment years 1978-79 and 1979-80 were dismissed, upholding the reassessments for these years as valid.