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TMI Blog1997 (5) TMI 79X X X X Extracts X X X X X X X X Extracts X X X X ..... 993 in the case of Smt. Kapoori Devi Smt. Reshma Devi (the present respondent) for assessment year 1986-87, the following are required to be highlighted. 4. In the return filed for assessment year 1986-87, the assessee appended the following note : " During the year under assessment, the assessee received enhanced compensation in respect of land acquired earlier alongwith com pensation. She also received interest till 30-9-1985. Assessee has declared in the interest on compensation on accrual basis which come to Rs. 29,411.00 for the year under assessment. Assessee received total interest of Rs. 719,628.36 for the period from 5-9-1973 to 30-9-1985. Assessment of previous years can be revised by including the interest accrued during the relevant assessment year. Assessee's claim is based on certain High Court judgments. [Emphasis supplied] 5. The Assessing Officer did not accept the stand of the assessee and brought to tax the entire amount of interest during assessment year 1986-87 on receipt basis. On further appeal before the CIT(A), the assessee stated that--- (1) revised returns had been filed for assessment years 1975-76 to 1978-79 in which interest on compensation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e year under consideration. " 7. Being aggrieved with the order of the CIT(A), the revenue came up in appeal before the Tribunal which upheld the view expressed by the CIT(A). 8. In order to give effect to the order of the Tribunal aforesaid the Assessing Officer took up the case for verification/consideration. It transpired that some of the interest income had been credited on accrual basis and some on receipt basis. The assessee furnished evidence regarding filing of revised returns for assessment years 1975-76 to 1979-80 and for the other years it was stated that the same could not be collected from the previous counsel. 9. Keeping in view the judgments of the Hon'ble Supreme Court in the cases of Rama Bai v. CIT [1990] 181 ITR 400 and K.S. Krishna Rao v. CIT [1990] 181 ITR 408, the Assessing Officer worked out the year-wise interest on accrual basis for assessment years 1974-75 to 1986-87. The figure for the last assessment year coming to Rs. 29,985. The taxable income for assessment year 1986-87 was recomputed at a figure of Rs. 71,060 vide order dated 22-10-1993. It is an accepted position between the parties that this order has become final. 10. On the basis of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and only interest pertaining to the respective year has to be assessed ". In concluding, the Ld. DR urged that the consolidated order of the Assessing officer under section 154/155 be restored. 13. Ld. Council for the assessee on the other hand strong by supported the orders of the DCIT(A) on grounds of limitation according to him, the assessee was not precluded in law from challenging the orders of the Assessing Officer both under section 143(3) for assessment year 1986-87 (the first order) as also the consolidated order under section 154/155 since the Assessing Officer had not accepted the stand of the assessee at the first instance to have the interest income taxed on accrual basis. Referring to the order of the Tribunal dated 18-1-1993 the Ld. Counsel contended that the assessment had to be framed as per law and the power of any appellate authority could be exercised only with reference to the year under appeal and no directions could be given for any other year or years not in appeal. Without prejudice to aforesaid it was stated that no such direction had been given by the Tribunal and there was a reference to verification of the " method of accounting " alone. 14. The L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the order of the Tribunal contained directions for earlier years I am of the view that nothing can be done in the present proceedings since directions even if not valid in law are final till modified or reversed by a superior Court. The decisions relied upon by the Ld. Counsel do not come to his aid. 17. Coming to the question of limitation, the Ld. DR has rightly pointed out to the provisions of section 153(3)(ii) which read as under : " (3) The provisions of sub-section (1) and (2) shall not apply to the following classes of assessments, reassessments and recomputations which may, (subject to the provisions of sub-section (2A) be completed at any time--- (ii) where the assessment, reassessment or recomputation is made on the assessee or any person in consequence of or to give effect to any finding or direction contained in an order under sections 250, 254, 260, 262, 263 or 264 (or in an order of any Court in a proceeding otherwise than by way of appeal or reference under this Act) : 17A. It is apparent on a reading of the aforesaid provisions that the normal time limit for completion of assessment or reassessment as contained in section 153(1) and (2) will not apply ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nvalidate the same as it is quite apparent that it is an order passed to give effect to a " finding or direction " contained in the order of the Tribunal dated 18-1-1993 for assessment year 1986-87 read with the order of the CIT(A) for the same year and as already held earlier no time limit applies to such an order. 19. It may also be not out of place to mention that pursuant to order of the Tribunal dated 18-1-1993 the Assessing Officer passed an order on 22-10-1993 to give effect to the order of the Tribunal for assessment year 1986-87 and the entire matter has been discussed with reference to even the earlier years including the quantum of interest that relates to each of these years as also the views expressed by the CIT(A) and the Tribunal. There is also a reference to filing of revised returns for certain earlier assessment years showing interest on accrual basis. This order as accepted by the parties became final not challenged by the assessee. 20. I am also of the view that the Assessing Officer rightly by passing a consolidated order for earlier years as all facts and figures were clear and available and it was not necessary to resort to any other proceedings under t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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