HON'BLE RAJES KUMAR, J.
(Delivered by Hon'ble Yatindra Singh, J.)
1. The main question involved in these writ petitions is, should the initiation for the assessment of escaped income--on the basis of capital gains due to acquisition of petitioner's land--be nipped in the bud at the threshold?
THE FACTS Relating to acquisition of land
2. The petitioner's 27,225 square yards of land was acquired by the Meerut Development Authority (the MDA) under the Land Acquisition Act in the year 1987.
3. The Special Land Acquisition Officer, Meerut (the SLAO) made an award on 22.2.1990. He awarded Rs. 50 per square yard. In pursuance of the award, the petitioner received Rs. 21,26,757/- as compensation on 30.6.1990.
4. The petitioner filed an application under section 18 of the Land Acquisition Act for referring the matter to the district court for enhancement of compensation. The case was referred and the reference was allowed on 11.5.1992. The IIIrd Addl. District Judge, Meerut (the ADJ) enhanced the rate of compensation to Rs. 240/- per square yard.
5. The MDA filed an appeal against the award of the ADJ dated 11.5.1992. It was numbered as First Appeal No. 1050 of 1992. During pendency of the appeal, the petitioner received the additional compensation, solatium, and interest amounting to Rs. 1,22,56,473/- on 16.8.1993 without any security or guarantee.
6. The appeal filed by the MDA before the High Court was partly allowed on 12.1.1995 and the market value of the land was reduced to Rs. 75/- per square yard.
7. The petitioners as well as some other tenure holders filed appeals before the Supreme Court. Their appeals were allowed on 30.4.1997. The Supreme Court enhanced the rate of compensation to Rs. 175/ per square yards. It was more than the compensation awarded by the High Court but less than that by the ADJ.
Relating to Income Tax
8. The petitioner had neither filed any income tax returns nor was she assessed for any of the years. The income arising out capital gains by compulsory acquisition was also never disclosed to the Income Tax Department by the petitioner.
9. The Commissioner, Income Tax, Meerut (the CIT) initially issued a notice under sub section 6 of section 133 {section 133(6)} of the Income Tax Act (the Act) on 25.4.2003 in respect of assessment year (AY) 1998-99 requiring information from the petitioner about the acquisition of the land and the compensation received in pursuance thereof.
10. The petitioner filed her objection against the notice on 7.7.2003 stating that the initial compensation or the enhanced compensation was received before AY 1998-99. So the question of assessment due to capital gains or payment of tax in AY 1998-99 did not arise.
11. Subsequently, the Assessing Officer (the AO) issued notice under section 148 of the Act on 15.10.2003 for the assessment year 1998-99 stating therein that this was being issued after obtaining the necessary satisfaction of the Addl. Commissioner, Range, Meerut (the Addl. Commissioner).
12. The petitioner filed her returns for assessment year 1998-99 under protest on 17.11.2003 showing nil income
13. Subsequently, the petitioner filed a writ petition no. 54 (Tax) of 2004 (the first WP) challenging the notice under section 148 of the Act for the assessment of the escaped income for AY 1998-99.
14. In the first WP, the notice were issued on 19.1.2004 and the interim order was granted that the proceeding for assessment may go on, however, the final order may not be passed.
15. During pendency of the first WP, the notices dated 1.5.2006 were issued for the AY 1989-90 to