Delhi High Court

Dy. Cit vs Satya Prakash (Individual) & ... on 13 March, 2004

Equivalent citations: (2004) 91 TTJ Del 90

ORDER

P.N. Parashar, J.M.:

These are five appeals of the revenue and the cross-objections of the assesses pertaining to assessment year 1993-94 in the case of co-owners. Since identical issues are involved in these appeals and the cross- objections, these are decided by a common order for the sake of convenience.

2. Smt. Parwinder Kaur, learned Departmental Representative, appeared for the revenue and Shri Anand Prakash, learned counsel represented the assessed.

ITA No. 208/Del/2002 & C. O. No. 363/Del/2002

3. The department has taken as many as four grounds in this appeal, but the main issue involved is as to whether the interest received by the assessed on delayed payment were of compensation is a capital receipt or a revenue receipt.

4. The facts concerning this matter have been given in detail in the assessment order, dated 29-3-2001, and the appellate order dated 7-11-2001, in the case of Mahesh Chand (Indl.). However, we would like to narrate the relevant facts for deciding the issue involved in this appeal in the following manner :

5. The agricultural land of the assessed and others situated at village, Dasna and Sardarpur were subjected to acquisition proceedings by the Collector/SL AO(I) Ghaziabad, during the financial year 1988-89. The relevant dates concerning these proceedings are as under :

S. No.

Particulars about date of issue of orders/notification

Dated

Notification under section 4 of Land Acquisition Act

16-8-1988

Declaration under section 6 of Land Acquisition Act

3-10-1988

Publication of notice under section 9(l) of Land Acquisition Act

9/10-12-1988

Date of taking over possession as per award order dt. 7-12-1990 of SL AO (Irrigation), Gzb.

14-12-1988

Date of award

7-12-1990

6. The assessed received the following amounts of compensation/interest and TDS during the financial year 1992-93.

Date of deposit

Amount deposited in the court

Compensation amount

Interest Amount

TDS

8-5-1992

Rs. 19,87,269.29

17,78,899.24

2,08,360.05

20,835.00

20-8-1992

Rs. 5,91,413.63

Nil

5,91,413.53

66,238.30

19-1-1993

Rs. 6,46,937.20

3,51,774.59

1,95,162.61

21,858.20

Total

Rs. 31,25,610.02

21,30,673.83

9,94,936.19

1,08,931.50

7. In the case of the assessed, the original assessment was filed on 31-3-1995, declaring income of Rs. 2,30,663 and the agricultural income at Rs. 1,500. The return was processed under section 143(l)(a) of the Act on 29-3-1996. In this return, the assessed had attached a note where by it was informed that the assessed received an amount of Rs. 25,74,869 being his 1/3rd share from the Collector/Special Land Acquisition Officer (Irrigation) (hereinafter referred to as SL AO(I), out of which, a sum of Rs. 87,337 was deducted as TDS on a sum of Rs. 8,00,144 which was paid to the assessed as interest on delayed payment of compensation on acquisition of his land. The detailed note to this effect has been reproduced in para 3.2 of the appellate order at pp. 2 to 3. Hence, we need not reproduce the same here.

8. The AO issued notice under section 148 on 3-4-1995, and the copy of the reasons was provided to the assessed. It may be pointed out here that the assessed challenged the dates of recording of reasons as shown by the department. According to the assessed, the reasons were recorded on 22-4-1996, whereas the notice was issued on 3-4-1996 which shows that the reasons were recorded subsequent to the issuance of notice. According to the assessed, the original date of recording of reasons was 22-4-1996 which was subsequently interpolated and made to be 3-4-1996 to cover up the illegality committed by the department.

9. The Commissioner (Appeals) has reproduced the reasons in para 3.4 of the appellate order. We do not consider to reproduce the same here.

10. The assessment under section 147/143 was completed on 6-4-1998, on a total income of Rs. 10,30,807 and this income included a sum of Rs. 8,00,144 on account of interest received by the assessed for delay in grant of compensation for acquisition of land.

11. The said assessment was set aside by the Commissioner (Appeals) vide order dated 6-11-1998. The Commissioner (Appeals) also issued certain directions. These directions have also been reproduced in para 3.6 of the appellate order.

12. In compliance to the order of the Commissioner (Appeals), fresh assessment was made by the AD under sections 143(3)/147 and 251 of the Act, on 29-3-2001. This is a detailed order running into 43 pages. It may be pointed out that during the course of assessment proceedings, the AD as well as assessed, sought directions from Addl. CIT, Ghaziabad, under section 144A of the Income Tax Act.

13. In view of the directions of Commissioner (Appeals) and the directions dated 18-3-1998, issued by the Addl. CIT, Ghaziabad, under section 144A, the AO proceeded to adjudicate various issues which were raised by the assessed during the course of assessment proceedings. His findings on the various issues are as under :

(a) Notice under section 148 was valid as the reasons were recorded on 3-4-1996 and not on 22-4-1996 and the proceedings were, therefore, initiated on the validity and legality on the same on which the reasons were recorded. The AO has made a detailed discussion on this issue and has also made reference to certain decisions in support of his finding. In addition, he has also observed that by virtue of the provisions contained under section 292B, if any mistake or defect was there, then the same stands covered as the substance and effect of the proceedings was to be seen. The AO has also given detailed reasons in para 12 of his order.

(b) According to him, the effect on various writs/petitions filed before the concerned Government authorities and the courts was, though possession taken on 14-12-1988 remained intact and final and, therefore, the contentions of the assessed that since the possession of the land was with him, the grant of interest on delayed compensation was a receipt and as such not taxable, was not acceptable. And thus, the arguments of the assessed that he was in possession even after 14-12-1988, was a futile exercise. Regarding year of taxability of the compensation and interest, he held that it was in assessment year 1992-93 and, therefore, was taxable in that year.

(c) assessing officer has also discussed various decisions including the decision in the case of Dr. Shyam Lal Narula v. CIT (1964) 53 ITR 151 (SC) and other decisions and came to the conclusion that interest received by the assessed on delayed compensation was a revenue receipt.

14. The assessed filed appeal before the Commissioner (Appeals) against the order of the assessing officer and took as many as 11 grounds.

15. Ground Nos. 1, 2 and 6 challenged the findings of the assessing officer in rejecting the validity of the proceedings initiated under section 148 of the Act. Ground Nos. 6 to 9 challenged the finding of the assessing officer on the plea that the interest of compensation amounting to Rs. 8,00,144 was revenue receipt and was taxable in the assessment year 1993-94. Ground Nos. 10 and 11 were in relation to other points.

16. The Commissioner (Appeals) upheld the validity of the proceedings under section 148 and rejected the grounds of the assessed taken before him. So far as the nature of the amount received by the assessed is concerned, the Commissioner (Appeals) has decided the issue in favor of the assessed by holding that the interest which was received by the assessed is to be considered in relation to the right to retain the possession and, therefore, the same was not taxable because it became a capital receipt at the hands of the assessed. He, thus gave relief of Rs. 8,00,144. In doing so, the Commissioner (Appeals) has also placed reliance on the order of the Tribunal in the case of J.D. Singhal v. Income Tax Officer rendered in ITA Nos. 8259 to 8262/Del/1992, dated 24-5-1995, and also on the decision of Dr. Shamlal Narula (supra) and the other decisions referred to in the appellate order.

17. Whereas the assessed has challenged the findings of the Commissioner (Appeals) in rejecting his objections to assail the validity of proceedings under section 148 by filing a cross-objection in cross- objection, the department has filed an appeal to challenge the finding of Commissioner (Appeals) on the issue relating to taxability of the amount of Rs. 8,00,144.

18. Learned Departmental Representative, has argued the matter at length to challenge the view taken by the Commissioner (Appeals). He has placed reliance on the various decisions.

19. Learned counsel for the assessed on the other hand, has supported the order of the Commissioner (Appeals). He has also placed reliance on various decisions including the following :

1. Chowgule & Co. (Hind) (P) Ltd. v. CIT (1990) 182 ITR 189 (Bom)

2. Motilal Chaddami Lal Jain v. CIT (1980) 122 ITR 949 (All)

3. S. Appala lVarsamma v. CIT (1987) 168 ITR 17 (AP)

20. In addition to the above, learned counsel for the assessed, Shri Anand Prakash also submitted that in the case of Bharat Bhushan (HUF) the Tribunal vide order dated 4-11-2003, rendered in ITA No. 612/Del/2002 for assessment year 1993-94 (reported at (2004) 91 TTJ (Del) 82-Ed.) has quashed the order of the Commissioner (Appeals) under section 263 and, therefore, the order of the assessing officer in that case upholding the claim of the assessed that receipt of interest on delayed compensation was capital receipt has become final and, therefore, in view of that final assessment order also the stand of the assessed is strengthened.

21. We have carefully considered the facts and circumstances of the case and the rival submissions. The crucial question is as to whether the possession of the land was taken over by the Collector within the four corners and in compliance to the provisions of section 17 and whether on the basis of the factual aspect of this matter the alleged takeover of possession on 14-12-1988, will have the legal effect of divesting the appellant of his interest in the land and free from all encumbrances.

22. For proper examination of the controversy, we have to make reference to the requirement of various provisions of the Land Acquisition Act. These are as under

(i) For acquisition of land, a preliminary investigation is to be conducted and for that purpose publication of preliminary notification is to be made under section 4. Under section 6, declaration is to be made that the land is acquired for public purposes.

(ii) Section 9 requires that the Collector shall then make a public notice to be given at convenient places or near the land to be taken stating to intend to take the possession of land and that claims to compensation for all interest and as such land may be made to him. Such notice is to be served on the occupier of the land also.

(iii) Section 16 empowers the Collector to take possession when the award has been made under section 11.

(iv) There is special provision contained under section 17 which relates to cases of urgency. Since in the instant case, the powers contained under section 17 have been invoked, we would like to reproduce the relevant portion of the provision which is as under :

Section 17 Special powers in cases of urgency-(1) In cases of urgency, whenever the appropriate Government so directs though no such award has been made, may, on the expiration of fifteen days from the publication of the notice mentioned in section 9, sub-section (1), (take possession of any land needed for public purpose). Such land shall thereupon vest absolutely in the Government, free from all encumbrances.

"Provided that the Collector shall not take possession of any building or part of a building under this sub-section without giving to the occupier thereof at least forty eight hours notice of his intention so to do, or such longer notice as may be reasonably sufficient to enable such occupier to remove his moveable property from such building without unnecessary inconvenience.

(3) In every case under either of the preceding sub-sections the Collector shall at the time of taking possession offer to the persons interested compensation for the standing crops and trees (if any) on such land and for any other damage sustained by them caused by such sudden dispossession and not excepted in section 24; and, in case such.offer is not accepted, the value of such crops and trees and the amount of such other damage shall be allowed for in awarding compensation for the land under the provisions herein contained.

(3A) Before taking possession of any land under sub-section (1) or sub-section (2), the Collector shall, without prejudice to the provisions of sub-section (3) :

(a) Tender payment of eighty per centurn of the compensation for such land as estimated by him to t4e persons interested entitled thereto, and

(b) Pay it to them, unless prevented by some one or more of the contingencies mentioned in section 31, sub-section (2),

And where the Collector is so prevented, the provisions of section 31, sub-section (2), (except the second proviso thereto), shall apply as they apply to the payment of compensation under that section.

(3B) The amount paid or deposited under sub-section (3A), shall be taken into account for determining the amount of compensation required to be tendered under section 31, and where the amount so paid or deposited exceeds the compensation awarded by the Collector under section 11, the excess may, unless refunded within three months from the date of the Collector's award, be recovered as an arrear of land revenue.

(4) In the case of any land to which, in the opinion of the appropriate Government, the provisions or sub-section (1) of sub-section (2) are applicable, the appropriate Government may direct that the provisions of section 5A shall not apply, and if it does so direct, a declaration may be made under section 6 in respect of the land at any time after the date of the publication of the notification under section 4 sub-section (1).

23. The contention of the assessed, on the basis of the requirements of law as laid down in section 17 is two-fold

(i) that the possession in this case has been taken by the Collector before the expiry of 15 days of the publication of the notice under section 9(l); and

(ii) that the Collector has not made payment of 80 per cent of the estimated compensation for the land for which action under section 17 of the Land Acquisition Act was taken and possession of which was taken under sub-section (1) of section 17.

24. On the, basis of these two irregularities, it is asserted on behalf of the assessed that the consequences of vesting follows only on strict compliance of the requirements of the legal provisions as laid down under section 17 of the Act and consequently the vesting of land in the State Government cannot be taken to be from the date of possession.

25. In support of this contention, learned counsel for the assessed has placed reliance on several decisions, copies of which have been enclosed in the paper book. We have already made reference to these cases in the list of cases relied upon by the learned counsel for the assessed and have been reproduced above.

26. So far as effect of taking possession is concerned, learned counsel for the assessed also placed reliance on the award dated 7-12-1990, a copy of which is available at pp. 106-126. In this award on p. 2, date of taking of possession is mentioned as 14-12-1988. In the affidavit of Shri Rajinder Kumar, legal assistant, Ghaziabad Development Authority, Ghaziabad, available at pp. 223229 which were filed before the Hon'ble High Court of judicature of Allahabad in WP No. 10931 of 1991 in para 7 deposed that public notice of section 6, declaration was given in the village on 10-12-1988. In para 8 also, similar facts have been repeated.

So far as point of possession is concerned, the answer to the question of the assessed and others on the application dated 17-11-1997, given by the SL, AO on 24-11-1997, is available at p. 222. According to it, notice under sections 9(l) and (2) was issued on 25-11-1988, and the same was published in local publication on 9-12-1988 and 10-12-1988. According to this reply, the possession of the land was taken over on 14-12-1988, and was also transferred on the same date to GDA. The District Judge, Ghaziabad, while deciding the execution cases filed by the assessed and others has also considered the dates of publication of notice and possession in his order dated 18-4-2003 (copy of which is available at pp. 54-62). In para 3 of his order, he too has made mention of questionnaire dated 17-11-1997 and 24-11-1997, and has observed that the notification was given in local publication and the notice under section 9(1) and (2) was published on 9-12-1988 and 10-12-1988, in respect of village Sardarpur and Dasna and the possession of the acquired land was shown to have been obtained under section 17(l) on 14-12-1988.

27. In view of the above referred material, the factual position on the following points remains undisputed :

(i) That in the case of the assessed the notice under section 9(l) of Land Acquisition Act was published on 9th-10-12-1988, and possession was taken before the expiry of 15 days from the publication of that notice, i.e., on 14-12-1988.

(ii) Payment of 80 per cent of the compensation was not made before or at the time of taking the possession; the contention of the assessed as narrated in para. 23 above is, therefore, found to be correct.

It may be pointed out that the department has not produced any document to prove the contrary.

28. In view of the above factual position, we also examined the legal provisions and the case laws. In the case of Jethmull Bhojraj v. State of Bihar AIR 1972 SC 1363, the Hon'ble court has observed as follows :

"10, 1 The next point that arises for decision is whether delivery of the lands notified for acquisition was taken under section 17(l) as contended by the appellant. The Government becomes the owner of the lands notified for acquisition only when the Collector takes possession of those lands either under section 16 or under section 17(l). Both those provisions provide that when the Collector takes possession under those provisions the lands notified for acquisition shall vest absolutely in the Government free from all encun-Mbrances. Until and unless possession is taken under either of those provisions, the lands notified for acquisition do not vest in the Government. Section 48(l) of the Act provides :

"Except in the case provided for in section 36, the Government shall be at liberty to withdraw from the acquisition of any land of which possession has not been taken. "

Ordinary possession of any land notified for acquisition is taken when the Collector has made an award under section 11 and not before it. But an exception is provided under section 17(l). In cases of urgency, if the Government so directs, the Collector may, though no award has been made under section 11, on the expiration of the 15 days from the publication of the notice mentioned in section 9(1) take possession of any waste or arable land and the land shall thereupon vest absolutely with the Government free from all encumbrances. From this provision, it is plain that the Collector cannot take possession of the land in question unless the Government directs him to do so. The Government can direct him to do so only in cases of urgency. Even when the Government directs the Collector to take possession, he cannot do so until expiration of 15 days from the publication of a notice under section 9(1). There is no material on record to show that the Government, had given to the Collector any direction under section 17(l); nor is there any material to show that the lands in question had been taken possession of by the Collector under section 17(l). It is true that in the order-sheet maintained by the Land Acquisition Officer, a note was made on 17-10-1959."

29. From the above observations, it is clear that under the provisions of sections 9 and 17, possession of land is to be taken after the expiry of 15 days from the publication of notice. In the case of Banwari Lal & Sons (P) Ltd. v. Union of India & Ors. 1992 LAL 1 in CWP No. 2385 of 1988, the Hon'ble Delhi High Court also considered the issue relating to the compliance of section 17(1)/17(3A) and has held that these are mandatory requirements and non-compliance of the same renders the acquisition itself bad in law. In that case also, the Collector did not offer 80 per cent of the proposed compensation under sub-section (3A) of section 17 and it was held that provisions of section 17(l) cannot be utilised to cover up laxity or lethargy of the administration to take appropriate steps in time. Relevant observation of the Hon'ble court contained in para 9 is as under :

"9. The notification under section 17(l) is also bad in law for non-compliance of the requirement of sub-section (3A) of section 17 of the Land Acquisition Act. The said subsection mandates the Collector to tender payment of 80 per cent of he compensation for the land, as estimated by him, before taking possession of the land. "

30. In the case of Dr. Shamlal Narula v. CIT (supra), the Hon'ble Supreme Court has made reference to the decision in the case of P.V Kurien v. CIT (1962) 46 ITR 288 (Ker) and the decisions in the case of Revenue Divisional Officer, Trichmopoly v. Venkatararna Ayyar and made the following observation in regard to legal position :

"In the former, the judicial committee directed the purchaser who had taken delivery and possession of the property he had purchased before the sale to pay interest to the vendor on the purchase money from the date he had taken possession on the ground that 'the right to receive interest takes the place of the right to retain possession and is within the rule'; and in the latter, though it arose under the Land Acquisition Act, possession was taken by the Government under circumstances falling outside the scope of sections 16 and 17 of the said Act. In both the cases the title did not pass to the vendee in one case and to the State in the other when possession was taken by them and, therefore, it may be said that the owner was given interest in place of his right to retain possession of the property. But in the case where the title passes to the State, the statutory interest provided thereafter can only be regarded either as representing the profit which ihe owner of the land might have made if he had the use of the money or the loss he suffered because he had not that use. In no sense of the term can it be described as damages or compensation for the owner's right to retain possession, for he has no right to retain possession after possession was taken under section 16 or 17 of the Act. We, therefore, hold that the statutory interest paid under section 34 of the Act is interest paid for the delayed payment of the compensation amount and, therefore, is a revenue receipt liable to tax under the Income Tax Act."

31. In the case of CIT v. Periyar & Pareekanni Rubbers Ltd. (1973) 87 ITR 666 (Ker), the Hon'ble Kerala High Court has also brought out the distinction between the possession of land assumed under the provisions of Land Acquisition Act, 1894 and possession otherwise taken and has made the following observations regarding the nature of receipt of interest :

"In the former case sections 16 and 17 of the Act stipulate that on possession being taken, the property will vest in the Government. In the absence of any such statutory provision, when possession is assumed by the Government, whether under some provisions of law or by agreement or unauthorisedly, there is deprivation of property and interest paid by the Government is merely compensation for deprivation of property. The fact that such compensation is calculated as a percentage of interest on that amount does not affect the question. It is still compensation for deprivation of property.

Where land was compulsorily acquired by Government on the basis of any agreement between the assessed and the Government on 2-9-1961, and the award in the case was made on 31-8-1962, and, interest was paid to the assessed for the period between the acquisition and the date of the award."

Held, that the interest paid was a capital receipt and hence not assessable. (Interest from the date of the award up to the date of payment of compensation awarded has been held to be revenue receipt.)

32. As pointed out above, the Addl. District Judge/EC Act, Ghaziabad, has also investigated the issue relating to vesting of land in the State and has concluded by observing as under :

"Accordingly, I hold that the said possession taken by the State Government on 14-12-1988 in the above case of applicant/decree-holder is contrary to the directions of State Government issued in the declaration of 8. 6 and is not in accordance with the provisions of sections 17(l), 17(3A) and 32A(l) of Land Acquisition Act and is unlawful and unauthorised and the same is beyond the purview of section 17 and the land acquired, by such possession, cannot be deemed to have vested in the Government."

33. In view of the conclusion drawn by the learned Addl. District Judge, the vesting of the land did not take place on the basis of possession which was taken on 14-12-1988, because such possession was not in accordance with the provisions of section 17 of the Act.

34. In the case of J.D. Singhal v. Income Tax Officer (supra), on which the reliance has been placed by the learned counsel for the assessed, the Tribunal vide order dated 24-5-1995, rendered in ITA Nos. 8259 to 8262/Del/1992 has made the following observations :

"As regards the argument of the learned Departmental Representative that payment is not sine qua non, I would like to mention here that from the reading of sections 17(3A) and 32A, it will make it clear that for taking possession under the Land Acquisition Act, there are certain conditions attached with it which should be necessarily complied with. The compliance of condition is sine qua non; if these conditions have not been complied with then the possession taken by the Government would fall out from the side of the scope of sections 16 and 17 of the Act. As regards the reliance on the Hon'ble Supreme Court decision in the case of Rama Bai v. ClT & Ors. is concerned, the question before the Hon'ble Supreme Court was regarding taxability of interest on accrued basis or it should be taxed when it was received in lump sum, in a year of receipt. The issue in the present case is regarding taxability of interest received for delayed compensation. Therefore, the facts of the present case are distinguishable from the facts of the case of Rama Bai (supra)."

35. It may also be pointed out while deciding the validity of the powers invoked under section 263 in the case of Mahesh Chand (HUF), the Tribunal has justified the action of the assessing officer by observing that the view taken by him was a possible view.

36. In view of the above discussion and in particular in the light of our findings recorded in para 27 of this order, regarding factual and legal position, we are of the considered opinion that findings of Commissioner (Appeals) recorded in this case on the issue relating to the nature of receipt of interest are fully justified because the interest received by the assessed on delayed compensation was on account of deprivation of the possession of land. It may be pointed out that by making reference to the report of Amin of civil court and various orders of the Hon'ble High Court and civil court, the department has tried to demonstrate that the physical possession was retained by the assessed and, therefore, the assessed cannot be allowed to say that the possession was taken on'14-12-1988, and hence the stand of the assessed is contradictory. It may be possible that despite taking of formal possession by the SL AO, the assessed might have retained the physical possession or re-entered into possession or the possession of the assessed may be that of a trespasser, but for the purposes of deciding the issue of vesting, we have to decide the issue as to whether the formal possession taken by the Government was in accordance with the provisions of law. It may again be repeated that it is not the case of the department that after the assessed retained the possession after 14-12-1988, or re-entered into possession after that date and the possession was subsequently taken by the Government or SL AO at any other stage after the above dates or any other action was taken against the assessed for doing so.

37. Learned Departmental Representative has made reference to certain case law, but in our view the same are not applicable to the facts of the present case. In the case of Chowgule & Co. (Hind) (P) Ltd. (supra), the matter related to imposition of penalty under section 271(1)(c) and this case is not applicable. So far as in the case of S. Appala Narsamma (supra) is concerned, the issue involved was of capital gains. In that case, possession of land was given voluntarily on 25-3-1970, and award was passed on 22-3-1971, and it was held that transfer of possession took place on 22-3-1971, when the award was passed. The case did not relate to taking of possession under section 17(l) of the Act. In the decision in the case of Motilal Chaddami Lal Jain (supra), it was held that interest received for delay in payment of compensation was a revenue receipt. In that case, the Addl. District Judge enhanced the compensation of award and also allowed the assessed a sum of Rs. 1, 1, 09,492 by way of interest @ 6 per cent. The Tribunal held that the amount of compensation was a capital receipt, but the interest was of a revenue nature and directed the Income Tax Officer to tax that part of interest which related to assessment year under consideration.

38. In view of the above, the contentions of the learned Departmental Representative raised before us to assail the findings of Commissioner (Appeals) are not acceptable. Hence, we find sufficient force in the contentions of the learned counsel for the assessed, taken in support of the order of the Commissioner (Appeals).

In view of the above, all the grounds taken by the department are rejected.

39. In these appeals, the revenue has taken identical grounds. Hence, following our findings recorded while deciding ITA No. 208, we reject the grounds taken by the revenue in these appeals.

40. In the cross -objections filed by the assessed, the following common grounds have been raised :

"1. The Commissioner (Appeals) has erred on facts and in law, in not permitting the assessed to lead additional evidence under r. 46A of the IT Rules, 1962, in the form of hand writing expert's opinion despite the fact that the assessing officer had not given proper opportunity of leading the said additional evidence before him.

2. The Commissioner (Appeals) has erred in holding that there was no manipulation of the date, namely, 22-4-1996 to 3-4-1996. The reasons under section 148(2) were originally recorded on 22-4-1996 and this date was later changed to 3-4-1996, by overwriting and cutting.

3. The Commissioner (Appeals) has erred on facts and in law, in holding that the proceedings under section 148 were validly initiated."

41. So far as ground No. 1 is concerned, it is submitted by the learned counsel for the assessed that the Commissioner (Appeals) was not justified in not permitting the assessed to lead additional evidence of handwriting expert. The assessed also filed documents to show that opinion of the expert was taken. It may be pointed out that for making a reference to the expert, no permission was taken by the assessed and this exercise appears to be suo motu.

42. The Commissioner (Appeals) has considered the issue in paras 3.11 and 3.12. After going through para 31.16 of his order, we find that the Commissioner (Appeals) was fully justified in not admitting the fresh evidence filed-in the shape of expert's report. Hence, we don't find any scope to interfere with his findings on this issue. Therefore, the ground taken in the cross-objection is not, allowable. This ground is rejected.

43. Ground Nos. 2 and 3 taken in the cross- objections, assail the findings of the Commissioner (Appeals) in holding that the proceedings under section 148 were validly initiated. The Commissioner (Appeals) has discussed the issue in detail in his order and has discussed the objection of the assessed relating to manipulation of dates, etc. and the reasons recorded. His conclusions are based on appreciation of evidence.

44. The learned counsel for the assessed made detailed submissions and pointed out that the reasons were recorded subsequent to the issuance of notice under section 148 of the Income Tax Act and hence the entire proceedings are vitiated.

45. We have examined the entire matter and in particular, the assessment order dated 29-3-2001, in the case of Mahesh Chand (supra) for assessment year 1993-94 and the impugned order and find that there was sufficient scope for initiating proceedings under section 147/148 of the Act, because the assessed had not truly and fully disclosed the particulars relating to income received/accrued on compensation and interest on delayed compensation. We fully endorse the view taken by the Commissioner (Appeals) and uphold the validity of initiation of the assessment proceedings.

46. In view of the above, all the grounds taken in the cross-objection No. 363 on various issues are rejected. Since in other cross-objections, i.e., 360, 361, 362 and 364, the assesses have taken identical grounds, following our findings on the grounds taken in cross-objection No. 363, we reject all the grounds taken in these cross-objections.

47. In the result, all the appeals of the revenue and all the cross-objections by the assessed are dismissed.