Law: Income Tax Act, 1961

Section: 147

(a) Income-tax-----Reassessment---Failure to disclose material facts necessary for assessment---Compulsory acquisition of land and receipt of compensation disclosed to Income-tax Authorities---Full Bench decision of jurisdictional High Court that land would be deemed to be agricultural if it could be used for agricultural purposes ---Assessees return of interest received on compensation amount rejected as invalid as it was filed beyond time limit under S.139(4)---Notice for reassessment on ground that land was not agricultural---Reversal of Full Bench decision by Supreme Court subsequent to issue of such notice---Reassessment proceedings were not valid---Indian Income Tax Act 1961, S.147(a) (b) Appeal to Supreme Court--- --Point not raised before Income-tax Authorities or High Court cannot be considered by Supreme Court. The appellant owned certain lands in a village near H. The Government of Andhra Pradesh acquired the same under the provisions of the Land Acquisition Act. A sum of Rs.25,240 was awarded as compensation by the Land Acquisition Officer, on November 20, 1965. On a reference at the instance of the appellant, the Civil Court enhanced the compensation to Rs.2,72,136 including solarium and interest. The same was affirmed on appeal by the High Court on October 16, 1970. The appellant filed a return under section 139(4) of the Income Tax Act, 1961 disclosing the interest on belated payment of compensation as her income. The said return was rejected as invalid by the Income-tax Officer under section 139(4) of the Act. The Income-tax Officer initiated proceedings under section 147(a) of the Act for the year ending March 31, 1965, in March, 1973 and issued a notice under section 148 on April 21, 1973. He sought the sanction of the Commissioner on the ground that the land acquired was not agricultural land as it had not been subjected to agricultural operations and the capital gains thereon were chargeable .to income-tax. The Income-tax Officer made an assessment raising a tax demand of Rs. 2,43,934 and initiated penalty proceedings. The Commissioner of Income-tax (Appeals) cancelled the order under section 147(a) and this was confirmed by the Tribunal.…

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