RAVI SHANKER Vs. JOINT COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THESE 8 appeals have been filed by the assessed on 26 -9 -2000, against the order of the learned Commissioner (Appeals) -I, Meerut, dated 27 -7 -2000, in the case of the assessed in relation to assessment order under section 143(3) read with section 148 for assessment years 1987 -88 to 1994 -95. These appeals relate to the interest received by the assessed on delayed payment of compensation to the assessed for acquisition of its agricultural lands. Facts of the case leading to these appeals briefly are that original assessments under section 143(3)/143(l) were completed in the case of the assessed for assessment years 1987 -88 to 1994 -95 in regular course. Subsequently, according to the learned assessing officer, during the course of assessment proceedings for assessment year 1995 -96 it was noticed that the assessed had received enhanced compensation amounting to Rs. 35,29,710 in respect of assessed's lands situated at Nangla Battu, Meerut. Besides, the assessed had also received interest amounting to Rs. 37,72,921 for the period 21 -8 -1986 to 28 -2 -1994. The assessing officer thereafter issued notices under section 148 to bring to tax the interest received by the assessed on accrual basis. The assessed replied by his letter dated 27 -9 -1999, that he had included the entire amount of interest and compensation in the return of income for assessment year 1995 -96. The assessment for assessment year 1995 -96 had already been completed including the amount of enhanced compensation as also interest. He Therefore, objected to the assessments under section 147 for assessment year 1987 -88 to 1994 -95. The assessing officer, however, turned down the contentions of the assessed relying upon the judgment of the Hon'ble Supreme Court in the case of Smt. Rama Bai & Ors. v. : [1990]181ITR400(SC) . He completed the assessment orders for the assessment years 1987 -88 to 1994 -95 after adding to the income originally assessed, the amount of accrued interest on enhanced compensation as worked out by him.

(2.) DURING the proceedings before the Commissioner (Appeals) the assessed argued that enhanced compensation of Rs. 35,29,710 and interest thereon of Rs. 37,72,921 had been received by the assessed in assessment year 1995 -96 and the assessed had shown the entire amount in assessment year 1995 -96 on receipt basis. The assessment for assessment year 1995 -96 had been completed after including these amounts in the total income on protective basis. The assessed argued that in this view of the matter there was no escapement of income and, Therefore, proceedings under section 147 could not be initiated. The assessed also argued that there was no omission or failure on his part to fully and truly disclose all material facts necessary for completion of assessment. The learned Commissioner (Appeals) relied upon amended provisions of section 147 with effect from 1 -4 -1989, and held that proceedings under section 147 were rightly taken. He further held that merely because the entire income had been assessed in assessment year 1995 -96 on actual receipt basis, the assessments in various years on accrual basis could not be prevented. The assessment for assessment year 1995 -96 was on protective basis only. There was no dispute that the interest pertained to different assessment years from 1987 -88 to 1995 -96 if charged on accrual basis. He, Therefore, dismissed the assessed's appeals for an the years. Still aggrieved, the assessed is in appeal before us.

(3.) IN the appeals before us, the assessed has disputed reopening of assessment under section 147 on the ground that the entire amount of interest on enhanced compensation was shown in the return of income for assessment year 1995 -96 on receipt basis and, Therefore, there was no escapement of any income chargeable to tax. The assessments in various years on accrual basis amounted to change of opinion and, Therefore, proceedings under section 147 were bad in law. The assessed also objected to levy of interest under Income Tax Act in the assessment orders under section 147 for all these assessment years.