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TMI Blog2020 (9) TMI 924X X X X Extracts X X X X X X X X Extracts X X X X ..... ng substantial questions of law : "i. Whether, on the facts and circumstances of the case and in law, the Tribunal was justified in confirming the direction of the Commissioner (Appeal) to issue notice for reassessment under Section 149 of the Income Tax Act for the assessment year 1997-98 while deciding the merit of the appeal in respect of the assessment year 2002-03 of the Income Tax Act, 1961 ? ii. Whether, on the facts and circumstances of the case and in law, the Tribunal was justified in ignoring the contention that the Assessing Authority had simply followed and carried out the direction of the Commissioner (Appeal) ignoring the provision contained in Section 150(2), which makes it clear that the embargo on period of limitation lifted under Sub-Section (1) for the purpose of reassessment would not apply to the assessments, which have attained finality due to bar of limitation applicable at the relevant period of time ? iii. Whether, on the facts and circumstances of the case and in law, the Tribunal was justified in ignoring the contention that the finding/direction by the Commissioner (Appeal) can be given only to the extent it is necessary for the disposal of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9/- as directed by the CIT(A). 7. As against the order dated 04.12.2006 passed by the Assessing Officer, the assessee filed an appeal before the CIT(A), who dismissed the appeal vide order dated 05.10.2007 holding that the assessment for the year 1997-98 was completed as per the direction issued by the CIT(A) while deciding the appeal for the assessment year 2002-03. 8. Challenging the order passed by the CIT(A), the assessee filed further appeal before the Tribunal, which also dismissed the appeal by the impugned order on the ground that the assessee should have challenged the direction issued by the CIT(A) dated 20.10.2005 and in the absence of any challenge to the direction issued by the CIT(A) dated 20.10.2005, the same had become final and the assessee could not challenge the validity of the notice issued under Section 148 of the Act dated 22.12.2005. Challenging the impugned order, the assessee is before us by way of this appeal. 9. The first issue, which needs to be considered, is as to whether the assessee could challenge the validity of the notice under Section 148 of the Act. 10. The CIT(A) as well as the Tribunal fell in error in holding that the assessee was estoppe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be implied. The procedural law when it is repealed should be applied from the date the new provision or procedure comes into force. The reason is that no person has a vested right or an accrued right in the procedure. No obligation or liability is normally imposed by a procedure. Sometime distinction is drawn between the right acquired or accrued and legal proceedings to acquire a right. In the latter case, there is only hope which is destroyed by the repeal. What is protected is the preserved right and privileges acquired and accrued and corresponding obligation and liability incurred on the other party. The legal process or the procedure for the enjoyment of the said right is not protected. Section 6, normally does not apply to procedural law. The procedural law when amended or substituted is generally retroactive and applies from the day of its enforcement and to this extent it can be retrospective. The question raised is whether the amendment/substitution of the period with effect from 1.6.2001 in Section 149 of the Act, is procedural or substantive. ...... 12. Law of limitation does not create any right in favour of a person or define or create any cause of action, but s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gkok in the year relative to Assessment Year 1942-43. That lady was assessable in respect of this sum under Section 4(2) of the Income Tax Act. She did not file a return. If the case stood governed by the 1939 Amendment the period applicable would have been four years if she had not concealed the particulars of the income. She had of course not deliberately furnished inaccurate particulars thereof. If the case was governed by the 1948 Amendment she would come within the eight-year rule because she had failed to furnish a return. Now, we do not think that we can treat the different periods indicated under Section 34 as periods of limitation, the expiry of which grant prescriptive title to defaulting tax-payers It may be said that an assessment once made is final and conclusive except for the provisions of Sections 34 and 35 but it is quite a different matter to say that a "vested right" arises in the assessee. On the expiry of the period the assessments, if any, may also become final and conclusive but only so long as the law is not altered retrospectively. Under the scheme of the Income Tax Act a liability to pay tax is incurred when according to the Finance Act in force the amo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 49 ITR 70 (SC), CIT v. Janabha Muhammad Hussain Nachiar Ammal AIR 1963 SC 1401 and in ITO v . Murlidhar Bhagwan Das [1964] 52 ITR 335 (SC). 15. Referring to this decision in Hussain Bhai v. CIT [1971] 80 ITR 477 the Supreme Court examined whether Section 4 of the Income Tax (Amending) Act of 1959 saves a fresh notice under Section 34 from the bar of limitation. It was held that Section 4 of the Income Tax (Amending) Act, 1959 does not save the fresh notice. It was observed as under:- 'We are supported in the view we have taken by certain observations of Sarkar J., as he then was, in S.C. Prashar v. Vasantsen Dwarkadas (1). The court in that case was not concerned with assessment years in respect of which a notice could be issued under section 34(1)(a) of the Act, as amended by the Finance Act of 1956, but the present case was visualised by Sarkar J. in that case. He observed : "So, though section 4 of the 1959 Act freed a notice from the bar of limitation in respect of it imposed by the 1948 amendment, it did not altogether do away with all prescriptions of time. In spite of section 4, a notice contemplated by it would be subject to the prescription of time as to its issue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h Court in the case of Brahm Datt Vs. Assistant Commissioner of Income-tax [reported in (2018) 100 Taxmann.com 324] wherein the Court followed the decision of the Hon'ble Supreme Court in the case of K.M.Sharma. The relevant portions in the decision in the case of Brahm Datt read as follows : "13. In KM Sharma's case (supra) the assessee's land was acquired under the Land Acquisition Act, 1894 and an award was passed in 1967 granting compensation in favour of the assessee. Thereafter, the Additional District Judge by judgment dated 20.05.1980 held the assessee to be entitled to 1/32th share of the compensation and the assessee was granted total compensation of Rs. 1,18,810 in the year 1981. Subsequently, by another judgment dated 31.07.1991, the assessee was awarded sum of Rs. 1,10,20,624, which was received by it between 15.10.1992 and 25.05.1993. The said amount comprised of principal compensation as well as interest up to 18.05.1992. As land acquired was agricultural land, principal amount was not chargeable to tax; however, interest amounting to Rs. 76,84,829 was chargeable on year to year basis. The assessee claimed that proceedings till assessment year 1982-83 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en amended to lift bar of limitation for reassessment. 13. Fiscal statute, more particularly a provision such as the present one regulating period of limitation must receive strict construction. The law of limitation is intended to give certainty and finality to legal proceedings and to avoid exposure to risk of litigation to litigant for indefinite period on future unforeseen events. Proceedings, which have attained finality under existing law due to bar of limitation cannot be held to be open for revival unless the amended provision is clearly given retrospective operation so as to allow upsetting of proceedings, which had already been concluded and attained finality. The amendment to subsection (1) of section 150 is not expressed to be retrospective and, therefore, has to be held as only prospective. The amendment made to sub-section (1) of section 150 which intends to lift embargo of period of limitation under section 149 to enable authorities to reopen assessments not only on the basis of orders passed in proceedings under the Act but also on order of a Court in any proceedings under any law, has to be applied prospectively on or after 1.4.1989 when the said amendment was i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... riminatory in its application to assessments sought to be reopened on the basis of Orders under the IT Act and other assessments proposed to be reopened on the basis of Orders under any other law. Interpretation, which creates such unjust and discriminatory situation, has to be avoided. We do not find that sub-section (2) of section 150 has that result. Subsection (2) intends to insulate all proceedings of assessments, which have attained finality due to the then existing bar of limitation. To achieve the desired result it was not necessary to make any amendment in sub-section (2) corresponding to sub-section (1), as is the reasoning adopted by the High Court. 18. Sub-section (2) aims at putting embargo on reopening assessments, which have attained finality on expiry of prescribed period of limitation. Sub-section (2) in putting such embargo refers to whole of sub-section (1) meaning thereby to insulate all assessments, which have become final and may have been found liable to reassessments or re-computation either on the basis of Orders in proceedings under the Act or Orders of Courts passed under any other law. The High Court, therefore, was in error in not reading whole of am ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat in the absence of an express provision or clear implication, the legislature does not intend to attribute to the amending provision a greater retrospectivity than is expressly mentioned, nor to authorise the Income-tax Officer to commence proceedings which before the new Act came into force had by the expiry of the period provided become barred.' 20. On a proper construction of the provisions of Section 150 (1) and the effect of its operation from 1.4.1989, we are clearly of the opinion that the provisions cannot be given retrospective effect prior to 1.4.1989 for assessments which have already become final due to bar of limitation prior to 1.4.1989. Taxing provision imposing a liability is governed by normal presumption that it is not retrospective and settled principle of law is that the law to be applied is that which is in force in the assessment year unless otherwise provided expressly or by necessary implication. Even a procedural provision cannot in the absence of clear contrary intendment expressed therein be given greater retrospectivity than is expressly mentioned so as to enable the Authorities to affect finality of tax assessments or to open up liabilities, w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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