The main legal point established in the judgment is the application of Section 150(1) and (2) of the Income-tax Act, 1961, to determine the validity of notices issued under Section 148 and the bar of limitation for initiating proceedings under Section 147(b).

N.K.Sud, J.

1. This order will dispose of 13 writ petitions, viz., C.W.P. Nos. 4000 to 4012 of 1984, involving common question of law arising out of identical facts.

2. Challenge in these writ petitions is to the notices issued under Section 148 of the Income-tax Act, 1961, dated March 27, 1984, by which proceedings for reassessment have been initiated for the assessment years 1967-68 to 1979-80.

3. The assessees land measuring 787 kanals 12 marlas and 1 kanal 12 marlas in the Revenue Estate of Village Balahgarh, District Gurgaon, was acquired by the State and possession thereof taken on October 21, 1966. The Land Acquisition Collector gave the award on October 21, 1966. The petitioner applied for a reference under Section 18 of the Land Acquisition Act and, ultimately, the matter came up to the High Court which, vide order dated June 1, 1977, enhanced the compensation. Letters Patent Appeal filed by the State was also dismissed vide order dated March 20, 1979. As a consequence thereof, the assessee was paid enhanced compensation amounting to Rs. 14,64,006. A further sum of Rs. 10,30,320 was paid to him as interest for the period October 21, 1966, to June 30, 1979.

4. Similarly, another tract of land measuring 26 acres 1 kanal 10 marlas belonging to the petitioner in the Revenue Estate of Balabgarh was also acquired in respect of which the award was given on April 9, 1973. The compensation was enhanced on a reference under Section 18 of the Land Acquisition Act and the enhanced compensation of Rs. 2,68,830 was paid during the accounting period relevant to the assessment year 1980-81. The assessee was also paid a sum of Rs. 80,966.50 as interest for the period April 9, 1973 to April 6, 1979. The compensation was further enhanced by the High Court vide order dated May 21, 1980. Consequently, the assessee received a sum of Rs. 13,38,688 as enhanced compensation and a sum of Rs. 6,07,534 as interest from April 9, 1973, to March 1, 1983, during the accounting period relevant to the assessment year 1983-84.

5. While completing the assessment for the assessment year 1980-81, the Assessing Officer treated the entire interest on enhanced compensation received by the assessee during the accounting period relevant to the assessment year 1980-81 as income for that year. He, therefore, vide his order dated July 19, 1983, added a sum of Rs. 12,57,753 to the total taxable income of the assessee on this score.

6. Against the assessment order dated July 19,1983, the assessee preferred an appeal before the Commissioner of Income-tax (Appeals), Jalandhar, in which amongst other grounds, the addition of Rs. 12,57,753 was also challenged. The assessee, firstly pointed out that the amount of interest received by him during the accounting period relevant to the assessment year 1980-81 was Rs. 10,30,320 and Rs. 80,966.50 whereas the Assessing Officer had included a sum of Rs. 12,57,753. He further pleaded that even the aforesaid two amounts were not taxable as the same were in the nature of damages for depriving the owner of the usufructus of agricultural land and, thus, represented agricultural income and not interest. In the alternative, it was pleaded that even if the said amount was to be treated as interest, the entire amount could not be assessed in the assessment year 1980-81 in view of the judgment of this Court in CIT v. Dr. Sham Lai Narula , in which it has been held that interest on enhanced compensation accrues from year to year. The Commissioner of Income-tax (Appeals) by his order dated January 16, 1984, partly accepted the claim of the assessee. He held that the interest received by the assessee was not in the nature of damages or agricultural income but was interest liable to be included in his taxable income. He, however, accepted the claim of the assessee that such interest was assessable only on accrual basis and, therefore, only interest pertaining to the accounting period relevant to the assessment year 1980-81 could be a