IMPORTANT POINT
The provisions of Section 150(1) of I.T. Act, 1961 (as amended w.e.f. 1.4.89) cannot be availed of for re-opening assessments prior to 1-4-89 which had attained finality and could not be reopened due to bar of limitation, under Section 149 of the Act as the provision of Section 150(1) are not retrospective in operation.

Headnote:Income Tax Act, 1961-Sections 150(1) (as amended with effect from 1.4.1989)-Whether retrospective in operation for a period prior to 1-4-1989? (No)-Revenue availed of Section 150(1) for re-opening assessments, which had attained finality and could not be re-opened due to bar of limitation under Section 149 of the Act -High Court upheld it-Whether correct? (No)-Appeal allowed-(I.T. Act, 1961-Sections 142, 147 and 149).
       Held : 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 1.4.1989, would amount to giving sub-section (1) a retrospective operation which is neither expressly nor impliedly intended by the amended sub-section. (Para 14)
       Held further : 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 retrospectively than is expressly mentioned so as to enable the Authorities to affect 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 with effect from 1.4.1989, does not enable the Authorities to reopen assessments, which have become final due to bar of limitation prior to 1.4.1989 and this position is applicable equally to reassessments proposed on the basis of Orders passed under the Act or under any other law. (Para 20)
       Held finally : As a result of the discussion aforesaid, the appeal is allowed. The Judgment of the High Court of Delhi dated 24.5.1996 is hereby set aside. As prayed in the petition, the impugned notices issued by the respondent of the Income Tax Department under Sections 148 and 142 of the Act against the appellant for the assessment years 1968-69 to 1971-72 and 1981-82 are hereby quashed. The appeal stands allowed with costs. (Para 21)

JUDGMENT

Dharmadhikari, J.-In this appeal, which is filed after obtaining special leave, the Order dated 24th May, 1996 of the High Court of Delhi has been assailed. The main question involved is on the application and interpretation of the provisions of Section 150 of the Income Tax Act, 1961 (hereinafter referred to as the Act).

The relevant facts necessary for deciding the legal question raised are as under:-

1. The appellant s lands were acquired under Section 6 of the Land Acquisition Act and an award was passed on 2.12.1967 by the Chief Commissioner of Delhi granting compensation in favour of the appellant. The Additional District Judge by Judgment dated 20.5.1980 held the appellant entitled to 1/32 share of the compensation awarded under various awards and the appellant was granted total compensation in the sum of Rs. 1,18,810/- approximately in the year 1981.

2. On a reference under Section 18 of the Land Acquisition Act, the learned Additional District Judge, Delhi vide his judgment dated 31.7.1991 awarded a sum of Rs. 1,10,20,624/-. The amount was paid to the appellant between 15.10.1992 and 26.5.1993. The amounts paid represented principal sum of compensation of Rs. 41,96,496/- and interest in the sum of Rs. 76,84,829/- upto 18.5.1992. Before making the above payments, tax was deducted at source amounting to Rs. 8,60,701/.-.

3. Since the lands acquired were agricultural lands and were acquired prior to 1.4.1970, capital gains tax was not leviable but tax was leviable on interest earned on the amount awarded on year to year basis.

4. The appellant through counsel sent a letter dated 17.9.1993 informing the ITO that he had received interest amount of Rs. 76,84,829/- and interest accrued from year to year was assessable in each year. Year-wise break up of the interest was also given in the letter. According to the appellant, no tax was leviable on interest accruing up to 31.3.1982 as assessment for it had become barred by time. The appellant, therefore, requested that necessary action be taken under Section 147 of the Act to enable the appellant as assessee to file his Income Tax Return and pay tax accordingly.

5. On 31-3-1994, the appellant was served with impugned notices under Section 148 of the Act for 16 assessments years i.e., 1968-69 to 1971-72 and assessments years 1981-82 to 1992-93.

6. The appellant, in the High Court, assailed the notices issued under Section 148 of the Act for reassessment for the assessment years 1968-69 to 1971-72 and for the year 1982-83 on the ground that the proposed reassessment for those assessment years had already become barred by time under Section 149 of the Act, for which in the relevant periods maximum period of four years or seven years limitation was prescribed depending upon the quantum of liability towards tax.

7. The High Court by the impugned Judgment accepted the contention of the Department that the provisions of Section 150(1) of the Act, as amended with effect from 1.4.1989, could be resorted to for reassessment to levy tax on the increased amount of interest earned by the appellant in the relevant assessment years. It was held that bar of limitation prescribed under Section 149 of the Act was not attracted by virtue of the provisions of Section 150(1) because notices for such reassessments are based on the awards passed in the land acquisition proceedings by the Court of the Additional District Judge on a reference under Section 18 of the Land Acquisition Act. Upholding the validity of the assessment proceedings initiated by the Department under Section 148 of the Act, the High Court rejected the contention of the assessee that sub-section (2) of Section 150 of the Act is an explanation to sub-section (1) and proceedings for reassessment, which had already become barred by time under Section 149 of the Act before 1.4.1989, could not have been commenced on the amended provisions of sub-section (1) of Section 150.

8. To appreciate the contentions advanced by learned counsel for