JUDGMENT R.K. Agrawal, J.
1. By means of the present writ petition filed under Article 226 of the Constitution of India, the petitioner, Ashwani Dhingra, seeks a writ, order or direction in the nature of certiorari quashing the notices issued by the ITO, Ward-1, Noida, respondent No. 4, on 20th Nov., 2003 under Section 148 of the IT Act, 1961, hereinafter referred to as the Act, for the asst. yrs. 1989-90 to 1994-95, collectively filed as Annex. 8 to the writ petition and other consequential reliefs.
2. Briefly stated, the facts giving rise to the present petition are as follows :
According to the petitioner, he was initially residing in the State of Punjab. His land, which was in Fazilka, district Ferozepur, was acquired by the Government of Punjab on 20th Aug., 1973 under the provisions of the Land Acquisition Act, 1894. The compensation was awarded to him on 12th Sept., 1990 and 29th May, 1993 under the orders passed by the Punjab & Haryana High Court. He was paid interest only on 21st Aug., 2001 from the date of taking over the possession of the land. The petitioner had shifted to Noida, in the district of Gautam Budh Nagar in the year 1991 and since then he is staying at Noida and doing business there. After receiving the amount of interest on compensation on 21st Aug., 2001 the petitioner filed revised returns on 14th Jan., 2001 for the asst. yrs. 1995-96 to 2001-02. He deposited the amount of income-tax due on the aforesaid income on 30th Dec., 2001 and 31st Dec., 2001. The returns had been accepted by the AO on 9th Oct., 2002. He also charged interest under Sections 234A, 234B and 234C of the Act. The petitioner had filed an application for waiver under Section 273A r/w Section 119 of the Act before the Chief CIT, Meerut on 3rd Jan., 2003. The application has been rejected vide order dt. 23rd July, 2003 treating it to be premature. The ITO issued demand notice on 19th Aug., 2003 calling upon the petitioner to pay a sum of Rs. 16,22,303 for the asst. yrs. 1995-96 to 2000-01. The orders dt. 23rd July, 2003 and 19th Aug., 2003 were subject-matter of challenge in Civil Misc. Writ Petn. No. 1001 of 2003 which had been disposed of by this Court vide order dt. 29th Oct., 2003 with certain directions. On 7th 'Nov., 2003, the petitioner served a copy of the order dt 29th Oct., 2003 with the request that the application be registered and the bank accounts which have been seized be released. According to the petitioner, immediately thereafter the respondent No. 4 issued notices dt. 20th Nov., 2003 purporting to be under Section 148 of the Act in respect of the asst. yrs. 1989-90 to 1994-95. The said notices are under challenge in the present writ petition on the ground that the respondent No. 4 has got no right and jurisdiction to issue notices to the petitioner under Section 148 of the Act as the same is barred by the limitation provided under Section 149(1)(b) and Section 150(1) and (2) of the Act. Further ground of challenge is that no reasons have been recorded as required under Section 148(2) of the Act before issuing notices in question.
3. We have heard Sri C.B. Yadav, learned counsel appearing for the petitioner and Sri Govind Krishna, learned standing counsel for the respondents.
4. Learned counsel for the petitioner submitted that notices are barred by limitation as provided under Sections 149(1)(b) and 150(1) and (2) of the Act. He relied upon a decision of the apex Court in the case of KM. Sharma v. ITO (2002) 254 ITR 772 (SC).
Sri Govind Krishna, learned counsel, submitted that in view of the provisions of Section 150(1) and (2) of the Act, notices in question are well within limitation as the same have been issued in consequence of the order passed by the Court in the land acquisition proceedings. lie submitted that the decision of the apex Court in the case of K.M, Sharma (supra) is of no assistance to the petitioner, on the other hand it helps the Revenue.
5. Having heard the learned counsel for the parties, we find that the apex Court in the case of K.M. Sharma (supra) had considered the amendment made in Section 150(1) of the Act by Direct Tax Laws (Amendment) Act, 1987 w.e.f. 1st April, 1989. The words "or by a Court in any proceeding under any other law" were inserted by Direct Tax Laws (Amendment) Act, 1987 w.e.f. 1st April, 1989. After its amendment Section 150 of the Act reads as follows :
"150(1). Notwithstanding anything contained in Section 149, the notice under Section 148 may be issued at any time for the purpose of making any assessment or reassessment or recomputation in consequence of or to give effect to any finding or direction contained in an order passed by any authority in any proceeding under this Act by way of appeal, reference or revision or by a Court in any proceeding under any other law.
(2) The provisions of Sub-section (1) shall not apply in any case where any such assessment, reassessment or recomputation as is referred to in that sub-section relates to an assessment year in respect of which an assessment, reassessment or recomputation could not have been made at the time the order which was the subject-matter of the appeal, reference or revision, as the case may be, was made by reason of any other provision limiting the time within which any action for assessment, reassessment or recomputation may be taken."
The apex Court after considering the provisions of Section 149 and 150 of the Act has held as follows :
"Section 149 of the Act prescribes a maximum period of four or seven years depending upon the quantum of tax as mentioned in the said section for initiating reassessment proceedings. Section 150(1) states that the period of limitation prescribed in Section 149 is not applicable, if the reassessment is proposed on the basis of any order passed by any "authority in any proceedings under the Act by way of appeal, reference or revision" or "by a Court in any proceeding under any other law". Sub-section (2) of Section 150, however, makes it clear that reassessment permissible under Sub-section (1) of Section 150 would not be available to the Department where the period of limitation for such assessment or reassessment has expired at the time it is proposed to be reopened. In Sub-section (1) of Section 150, by the Direct Tax Laws (Amendment) Act, 1987, w.e.f. 1st April, 1989, the words "or by a Court in any proceeding under any other law" were inserted which are shown in brackets with underline in the section reproduced above.
The main question that has been raised on behalf of learned counsel appearing for the parties is whether the provisions of Sub-section (1) of Section 150 as amended can be availed of for reopening assessments, which have attained finality and could not be reopened due to bar of limitation, that was attracted at the relevant time to the proposed reassessment proceedings under the provisions of Section 149 of the Act."
It has further held as follows :
"A 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 litigants for an 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 Sub-section (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 the embargo of period of limitation under Section 149 to enable the authorities to reopen assessments not only on the basis of orders passed in proceedings under the IT Act but also on the order of a Court in any proceedings under any law has to be applied prospectively on or after 1st April, 1989, when the said amendment was introduced to Sub-section (1). The provision in sub-s, (1) therefore can have only prospective operation to assessments, which have, already become final due to expiry of the period of limitation prescribed for assessment under Section 149 of the Act.
To hold that the amendment to Sub-section (1) would enable the authorities to reopen assessments, which had already attained finality due to bar of limitation prescribed under Section 149 of the Act as applicable prior to 1st April, 1989, would amount to giving Sub-section (1) a retrospective operation which is neither expressly nor impliedly intended by the amended sub-section".
It has further held as follows :
"On a proper construction of the provisions of Section 150(1) and the effect of its operation from 1st April, 1989, we are clearly of the opinion that the provisions cannot be given retrospective effect prior to 1st April, 1989, for assessments which have already become final due to the bar of limitation prior to April, 1989. The taxing provision imposing a liability is governed by the normal presumption that it is not retrospective and the 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 the finality of tax assessments or to open up liabilities, which have become barred by lapse of time. Our conclusion, therefore, is that Sub-section (1) of Section 150, as amended w.e.f. 1st April, 1989, does not enable the authorities to reopen assessments, which have become final due to bar of limitation prior to 1st April, 1989, and this position is applicable equally to reassessments proposed on the basis of orders passed under the Act or under any other law."
6. The assessment years involved in the present case are from 1989-90 to 1994-95, i.e., all are after 1st April, 1989 when the amendment in Section 150(1) of the Act had already taken place and the bar of limitation provided in Section 149 of the Act had been lifted. The submission that, as under Section 149 of the Act, limitation for making assessment/reassessment for these years had already expired and no notice under Section 148 can be issued is misconceived. The apex Court had already held that the amendment made in Section 150(1) is operative from 1st April, 1989 and it will not enure for assessment which had already become final due to bar of limitation prior to 1st April, 1989.
7. It is well-settled that the interest on compensation awarded under the Land Acquisition Act is of the nature of income as held by the apex Court in the cases of Dr. Shamlal Natula v. CIT (1964) 53 ITR 151 (SC), T.N.K. Govindaiaju Chetty v. CAT (1967) 66 ITR 465 (SC), K.S. Krishna Rao v. CIT (1990) 181 ITR 408 (SC), Bikram Singh and Ors. v. Land Acquisition Collector and Ors. (1997) 224 ITR 551 (SC).
It is also well-settled that the interest on enhanced compensation ordered by the Court accrues from the date when possession of the land is taken and it accrues from year to year as held by the apex Court in the cases of CIT v. T.N.K. Govindarajulu Chetty (1987) 165 ITR 231 (SC), Smt. Rama Bai v. CIT (1990) 181 ITR 400 (SC) and K.S. Krishna Rao v. CIT (supra).
8. In the counter affidavit, the reasons for Issuing notices under Section 148 of the Act for the asst. yrs. 1989-90 to 1994-95 has been stated that the interest income has escaped assessment and that is why notices have been issued. It may be mentioned here that the reasons are not required to be recorded in the notice issued under Section 148 of the Act but before issuing notice reasons ought to be recorded in writing. Thus, the plea that the notices do not contain any reasons is misconceived.
9. Sri. C.B. Yadav, learned counsel for the petitioner further submitted that the provisions of Section 150(1) of the Act would not be attracted in the present case as the reassessment is not being made in consequence of any order of any Court. According to him, the order passed by the Punjab & Haryana High Court directing for payment of interest would not be covered under Section 150(1) of the Act. He relied upon the decision of the Patna High Court in the case of Gauri Shankar Choudhaiy v. Addl. CIT and Anr. (1998) 234 ITR 865 (Pat) and the Kerala High Court in the case of CIT v. Vaikundam Rubber Co. Ltd. (2001) 249 ITR 19 (Ker).
10. In the present case reassessment notices under Section 148 of the Act have been issued in consequence of the order passed by the Punjab & Haryana High Court awarding interest on the amount of compensation paid to the petitioner. It related to the petitioner. In the case of Gauri Shankar Choudhary (supra), the Patna High Court has held that appeal, reference or revision or any other proceedings before a Court under Section 150(1) of the Act must relate to the assessee in question and not any direction or assessment made in appeal, reference or revision in the case of any other assessee or in a proceeding in which the assessee in question is not a party.
Similarly in the case of Vaikundam Rubber Co. Ltd. (supra), the Kerala High Court has held as follows :
".....According to us, the words "at the time the order which was the subject-matter of the appeal, reference or revision, as the case may be, was made," in Section 150(2) are significant. It is because of the word "appeal" that, it is contended that the subject-matter should be construed as the original order. There are two tiers of appeals from the assessment order; one to the CIT and another to the Tribunal. But, the next word is reference. Reference is made under Section 256(1) of the Act. What is referred is the subject-matter of the order of the Tribunal. Can we say that when the Tribunal refers the matter to the High Court, the order that was considered by the Tribunal is the order of the AO ? No. It is the order of the Tribunal that is being referred. For example, in this case, where there is a reference to the High Court against the order of the Tribunal, it will be the order of the Tribunal that will be material. Further, according to us, when an order is passed by the original authority and an appeal is filed, the order passed by the original authority merges with that of the order of the appellate authority. When a second appeal is filed, the subject-matter is the order of the appellate authority. So also, when the order of the Tribunal is challenged, what is the subject-matter, is the order of the Tribunal. If that be so, there is no difficulty in construing Section 150(2). Then, in this case, the order which was the subject-matter of appeal is to be construed as the order passed by the CIT(A) on 1st March, 1984. If so, the reassessment for 1978-79 will also be barred."
The aforesaid decision is not at all applicable in the present case as in the present case the action has been taken in consequence of the orders passed by the Punjab & Haryana High Court. Thus, the submission of Sri C.B. Yadav is misconceived.
11. In view of the foregoing discussion, we do not find any merit in the pleas raised by the learned counsel for the petitioner. The writ petition fails and is hereby dismissed. However, the parties shall bear their own costs.