T.S.Sivagnanam, J. - We have heard Mr.D.G.Hariprasath, learned counsel appearing on behalf of M/s.G.R.Associates, learned counsel on record for the appellant - assessee and Mr.T.R.Senthilkumar, learned Senior Standing Counsel assisted by Ms.K.G.Usharani, learned Junior Standing Counsel appearing for the respondent - Revenue.

2. This appeal, filed by the Revenue under Section 260A of the Income Tax Act, 1961 (for brevity, the), is directed against the order dated 06.1.2009 made in ITA.No.2442/Mds/2007 the file of the Income Tax Appellate Tribunal, Chennai 'A' Bench (for short, the Tribunal) for the assessment year 1997-98.

3. The Revenue filed this appeal by raising the following substantial questions of law :

"i. Whether, on the facts and circumstances of the case and in law, the Tribunal was justified in confirming the direction of the Commissioner (Appeal) to issue notice for reassessment under Section 149 of the Income Tax Act for the assessment year 1997-98 while deciding the merit of the appeal in respect of the assessment year 2002-03 of the Income Tax Act, 1961

ii. Whether, on the facts and circumstances of the case and in law, the Tribunal was justified in ignoring the contention that the Assessing Authority had simply followed and carried out the direction of the Commissioner (Appeal) ignoring the provision contained in Section 150(2), which makes it clear that the embargo on period of limitation lifted under Sub-Section (1) for the purpose of reassessment would not apply to the assessments, which have attained finality due to bar of limitation applicable at the relevant period of time

iii. Whether, on the facts and circumstances of the case and in law, the Tribunal was justified in ignoring the contention that the finding/direction by the Commissioner (Appeal) can be given only to the extent it is necessary for the disposal of the appeal in respect of the assessment of a particular year and thus the direction given in the matter for the assessment year 2002-03 cannot effect the assessment for the assessment year 1997-98 and

iv. Whether, on the facts and circumstances of the case and in law, the Tribunal was justified in ignoring the contention that the reassessment is barred by limitation and void ab initio because reopening of the assessment is after expiry of limitation by the relevant provisions of Statute"

4. The short issue, which falls for consideration in this appeal, is as to the validity of the reopening of assessment for the assessment year 1997-98.

5. The assessee - an individual filed her return of income for the assessment year under consideration namely 1997-98 on 31.3.1999 admitting an income of Rs.86,270/-. The return was processed under Section 143(1) of the. In respect of the assessment year 2002-03, the assessee filed an appeal before the Commissioner of Income Tax (Appeals)-I, Coimbatore [for short, the CIT(A)]. In that appeal, the CIT(A) noted that a sum of Rs.10 lakhs was received by the assessee from a firm in the year 1996 and out of the said sum of Rs.10 lakhs, the assessee accounted for a sum of Rs.4,41,551/- in the previous year ending 31.3.1997 towards commission received and the balance of Rs.5,58,449/- was shown as payable to the firm. The CIT(A) came to the conclusion that the assessee was liable to admit the difference of Rs.5,58,449/- as commission received for the assessment year 1997-98. Accordingly, by order dated 20.10.2005, the CIT(A) directed the Assessing Officer to assess the turnover of Rs.5,58,449/- for the assessment year 1997-98.

6. Pursuant to such a direction issued by the CIT(A), the Assessing Officer issued a notice dated 22.12.2005 under Section 148 of theproposing to reopen the assessment solely for the reason assigned in the order passed by the CIT(A) dated 20.10.2005. The assessee objected to the reopening on the ground that the same was barred by limitation and in support of her contention, she relied upon the decision of the Hon'ble Supreme Court in the case of K.M.Sharma Vs. ITO, (2002) 254 ITR 772 [LQ/SC/2002/472] ]. However, vide order dated 04.12.2006, the Assessing Officer rejected the contention advanced by the assessee and determined the income at Rs.6,44,720/- by including the said sum of Rs.5,58,449/- as directed by the CIT(A).

7. As against the order dated 04.12.2006 passed by the Assessing Officer, the assessee filed an appeal before the CIT(A), who dismissed the appeal vide order dated 05.10.2007 holding that the assessment for the year 1997-98 was completed as per the direction issued by the CIT(A) while deciding the appeal for the assessment year 2002-03.

8. Challenging the order passed by the CIT(A), the assessee filed further appeal before the Tribunal, which also dismissed the appeal by the impugned order on the ground that the assessee should have challenged the direction issued by the CIT(A) dated 20.10.2005 and in the absence of any challenge to the direction issued by the CIT(A) dated 20.10.2005, the same had become final and the assessee could not challenge the validity of the notice issued under Section 148 of thedated 22.12.2005. Challenging the impugned order, the assessee is before us by way of this appeal.

9. The first issue, which needs to be considered, is as to whether the assessee could challenge the validity of the notice under Section 148 of the.

10. The CIT(A) as well as the Tribunal fell in error in holding that the assessee was estopped from challenging the validity of the notice under Section 148 of thedated 22.12.2005 on a wrong understanding of the legal position. The CIT(A) issued a direction in the order dated 20.10.2005 to the Assessing Officer to assess the turnover of Rs.5,58,449/- as commission received. There were two options open to the assessee. One was to prefer an appeal against the order passed by the CIT(A) dated 20.10.2005, which, in fact, was an order in an appeal filed for the assessment year 2002-03. The other option open to her was to contest the matter before the Assessing Officer upon issuance of the notice under Section 148 of the.

11. The assessee, in the case on hand, chose the second option, which, in law, was permissible to be done by the assessee. Therefore, both the CIT(A) as well as the Tribunal fell in error in holding that the assessee was estopped from challenging the validity of the notice under Section 148 of thedated 22.12.2005.

12. The next issue is as to whether the Assessing Officer, the CIT(A) and the Tribunal were right in holding that the period of limitation exceeded on the date of issuance of the notice under Section 148 of thedated 22.12.2005 for the assessment year 1997-98.

13. Once again, the Authorities below as well as the Tribunal committed an error of law in not extending the law of limitation in the manner it has to be interpreted.

14. An identical issue was considered by the Delhi High Court in the case of C.B.Richards Ellis Mauritius Ltd. Vs. Assistant Director of Income-tax,2012 21 Taxmann.com 535] wherein also, the assessment was sought to be reopened for the assessment year 1998-99. The Court, after taking note of the various decisions of the Hon'ble Supreme Court, held as follows :

"7. Having considered the contentions of the parties and the legal issues raised therein, we feel that the petitioner is entitled to succeed. Section 6 of General Clauses Act deals with effect of repeal of an enactment and stipulates that unless a different intention appears, the repeal will not affect the previous operation of any enactment so repealed or any right, privilege, obligation or liability acquired, accrued or affect any penalty, investigation, legal proceeding or remedy. The said Section deals with substantive rights and liabilities. It is also subject to intention to the contrary. Intention can be implied. The procedural law when it is repealed should be applied from the date the new provision or procedure comes into force. The reason is that no person has a vested right or an accrued right in the procedure. No obligation or liability is normally imposed by a procedure. Sometime distinction is drawn between the right acquired or accrued and legal proceedings to acquire a right. In the latter case, there is only hope which is destroyed by the repeal. What is protected is the preserved right and privileges acquired and accrued and corresponding obligation and liability incurred on the other party. The legal process or the procedure for the enjoyment of the said right is not protected. Section 6, normally does not apply to procedural law. The procedural law when amended or substituted is generally retroactive and applies from the day of its enforcement and to this extent it can be retrospective. The question raised is whether the amendment/substitution of the period with effect from 1.6.2001 in Section 149 of the Act, is procedural or substantive.

......

12. Law of limitation does not create any right in favour of a person or define or create any cause of action, but simply prescribes that the remedy can be exercised or availed of by or within the period stated and not thereafter. Subsequently, the right continues to exist but cannot be enforced. The liability to tax under the is created by the charging Section read with the computation provisions. The assessment proceedings crystallize the said liability so that it can be enforced and the tax if short paid or unpaid can be collected. If this difference between liability to tax and the procedure prescribed under the for computation of the liability (i.e. the procedure of assessment), is kept in mind, there would be no difficulty in understanding and appreciating the fallacy and the error in the primary argument raised by the Revenue. It is a settled position that liability to tax as a levy is normally determined as per statute as it exists on the first day of the assessment year, but this is not the issue or question in the present case. The issue or question in the present case relates to assessment i.e. initiation of re-assessment proceedings and whether the time/limitation for initiation of the re-assessment proceedings specified by the Finance Act, 2001 is applicable. We are not determining/deciding the liability to tax but have to adjudicate and decide whether the re-assessment notice is beyond the time period stipulated. This is a matter/issue of procedure i.e. the time period in which the assessment or re-assessment proceedings can be initiated. Thus the time period/limitation period prescribed on the date of issue of notice will apply. In our opinion, the answer is clear and has to be in affirmative, i.e. in favour of the assessee.

13. This question is not debatable or res integra and was examined and answered with lucid and clear reasoning in the opinion expressed by Hidayatullah, J. on behalf of himself and Raghubar Dayal, J. in S.C. Prashar v. Vasantsen Dwarkadas Hungerfor Investment Trust Ltd, (1963) 49 ITR 1(SC). The relevant portion reads:- 9/11/2020 www.taxmann.com 6/7 "93. ....If the 1948 Amendment could be treated as enabling the Income Tax Officer to take action at any point of time in respect of back assessment years within eight years of March 30, 1948 then such cases were within his power to tax. We have such a case here in CA No. 509 of 1958 where the notice was issued in 1949 to the lady whose husband had remitted Rs 9180 to her from Bangkok in the year relative to Assessment Year 1942-43. That lady was assessable in respect of this sum under Section 4(2) of the Income Tax Act. She did not file a return. If the case stood governed by the 1939 Amendment the period applicable would have been four years if she had not concealed the particulars of the income. She had of course not deliberately furnished inaccurate particulars thereof. If the case was governed by the 1948 Amendment she would come within the eight-year rule because she had failed to furnish a return. Now, we do not think that we can treat the different periods indicated under Section 34 as periods of limitation, the expiry of which grant prescriptive title to defaulting tax-payers It may be said that an assessment once made is final and conclusive except for the provisions of Sections 34 and 35 but it is quite a different matter to say that a "vested right" arises in the assessee. On the expiry of the period the assessments, if any, may also become final and conclusive but only so long as the law is not altered retrospectively. Under the scheme of the Income Tax Act a liability to pay tax is incurred when according to the Finance Act in force the amount of income, profits or gains is above the exempted. That liability to the State is independent of any consideration of time and, in the absence of any provision restricting action by a time limit, it can be enforced at any time. What the law does is to prevent harassment of assessees to the end of time by prescribing a limit of time for its own officers to take action. This limit of time is binding upon the officers, but the liability under the charging section can only be said to be unenforceable after the expiry of the period under the law as it stands. In other words, though the liability to pay tax remains it cannot be enforced by the officers administering the tax laws. If the disability is removed or according to a new law a new time limit is created retrospectively, there is no reason why the liability should not be treated as still enforceable. The law does not deal with concluded claims or their revival but with the enforcement of a liability to the State which though existing remained to be enforced... ** ** ** 95. .....It says that the limit of time mentioned in Section 34 is removed in certain cases that is to say, action can be taken at any time in these cases. In our judgment, each case of a notice must be judged according to the law existing on the date the notice was issued or served, as the law may require. So long as the notice where the notice is in question, and the assessment, where the assessment is in question, are within the time limited by the law, as it exists when the respective actions are taken, the actions cannot be questioned provided the law is clearly retrospective. The only case in which no further action can be taken is one in which action was not taken under the old law within the period prescribed by that law and which is not also within the period mentioned in the new law if its operation is retrospective. All other cases are covered by the law in force at the time action is taken. It is from these viewpoints that these appeals, in our opinion, should be judged."

14. In the said case, question of validity of notice had arisen because of repeated/ frequent changes made in the period in which re-assessment proceedings could be initiated under Section 34 of the income Tax Act, 1922 during the years 1939-59. Revalidation Act had also been enacted. This ratio was followed and applied in CIT v. Sardar Lakhmir Singh, (1963) 49 ITR 70 (SC), CIT v. Janabha Muhammad Hussain Nachiar Ammal, (1963) AIR SC 1401 and in ITO v . Murlidhar Bhagwan Das, (1964) 52 ITR 335 (SC).

15. Referring to this decision in Hussain Bhai v. CIT, (1971) 80 ITR 477 [LQ/SC/1971/249] the Supreme Court examined whether Section 4 of the Income Tax (Amending) Act of 1959 saves a fresh notice under Section 34 from the bar of limitation. It was held that Section 4 of the Income Tax (Amending) Act, 1959 does not save the fresh notice. It was observed as under:- 'We are supported in the view we have taken by certain observations of Sarkar J., as he then was, in S.C. Prashar v. Vasantsen Dwarkadas (1). The court in that case was not concerned with assessment years in respect of which a notice could be issued under section 34(1)(a) of the Act, as amended by the Finance Act of 1956, but the present case was visualised by Sarkar J. in that case. He observed : "So, though section 4 of the 1959 Act freed a notice from the bar of limitation in respect of it imposed by the 1948 amendment, it did not altogether do away with all prescriptions of time. In spite of section 4, a notice contemplated by it would be subject to the prescription of time as to its issue under the 1939 Act and may be, under section 34 as it stood before the 1939 amendment. If the notice was issued after 9/11/2020 www. Taxmann.com 7/7 the 1956 amendment, it would also be subject to the prescription as to time provided by that amendment. [Emphasis supplied] Then it was said that if section 4 applied to a notice issued more than eight years after the year in which the income escaped assessment but before the 1956 amendment came into force in a case where the escaped income of the year was less than Rs. 1,00,000, the position would be curious. A notice issued in a similar case after the 1956 amendment would be bad under section 34 as it then stood and section 4 could not save it for it saved notices only from the effect of the 1948 amendment. The position then would be that in a case involving the same amount of escaped income for the same year, a notice issued before the 1956 amendment and invalid under the 1948 amendment would be validated and a more recent notice equally invalid under both the earlier and present laws would remain invalid. Assume that the position is somewhat curious or incongruous. But that seems to me to be the result of the words used. For all we know that might have been intended. However strange, if at all, the result may be, I do not think the courts can alter the plain meaning of the language of the statute only on the ground of incongruity if there is nothing in the words which would justify the alteration. As I have said earlier, in this case there is nothing to justify the alteration of the plain meaning.'

16. Going back a little in point of time in J.P. Jani, ITO v. Induprasad Devshaner Bhatt, (1969) 72 ITR 595(SC), it was held that the Income Tax Officer cannot issue notice under Section 148 of the Act, where the right to re-open an assessment was barred under the Income Tax Act, 1922 on the date when the 1961 Act came into force. This is a separate issue and aspect which need not be examined and dealt with in this case. The issue/question in Induprasad Devshanker Bhatt's case (supra) was what would be the legal position in case the period prescribed for initiation of the re-assessment proceedings is enhanced or extended under the new statute. We are not required to and do not examine or consider this aspect/question."

15. The above decision was relied upon and followed in the decision of the Delhi High Court in the case of Brahm Datt Vs. Assistant Commissioner of Income-tax,2018 100 Taxmann.com 324 wherein the Court followed the decision of the Hon'ble Supreme Court in the case of K.M.Sharma. The relevant portions in the decision in the case of Brahm Dattread as follows :

"13. In KM Sharma's case (supra) the assessee's land was acquired under the Land Acquisition Act, 1894 and an award was passed in 1967 granting compensation in favour of the assessee. Thereafter, the Additional District Judge by judgment dated 20.05.1980 held the assessee to be entitled to 1/32th share of the compensation and the assessee was granted total compensation of Rs. 1,18,810 in the year 1981. Subsequently, by another judgment dated 31.07.1991, the assessee was awarded sum of Rs. 1,10,20,624, which was received by it between 15.10.1992 and 25.05.1993. The said amount comprised of principal compensation as well as interest up to 18.05.1992. As land acquired was agricultural land, principal amount was not chargeable to tax; however, interest amounting to Rs. 76,84,829 was chargeable on year to year basis. The assessee claimed that proceedings till assessment year 1982-83 had already attained finality and therefore, filed letter requesting the assessing officer to initiate proceedings for subsequent assessment years for bringing to tax interest component relatable to the said assessment years. The assessee was, however, issued notices under section148 of the for fifteen assessment years, viz., assessment years 1968-69 to 1971-72 and assessment years 1981-82 to 1992-93 which were challenged on the ground of limitation. This court declined to exercise jurisdiction; on appeal, the Supreme Court held that the provision regulating period of limitation ought to receive strict construction. The Supreme Court held that the law of limitation was intended to give certainty and finality to legal proceedings and therefore, proceedings, which had attained finality under the existing law due to bar of limitation, could not be held to be open for revival unless the amended provision was clearly given retrospective operation so as to allow upsetting of proceedings, which had already been completed and attained finality. The observations of the Supreme Court are reproduced hereunder:

'10. The main question that has been raised on behalf of the learned counsels appearing for the parties is whether the provisions of sub-section (1) of section 150 as amended can be availed for reopening assessments, which have attained finality and could not be reopened due to bar of limitation, that was attracted at the relevant time to the proposed reassessment proceedings under the provisions of section149.

11. The submission made on behalf of the appellant is that neither the provisions of sub-section (1) nor sub-section (2) can be read as giving more than intended operation to the said provision. The provisions, it is argued, do not permit the authorities to reopen assessments, which have become final and reassessment of which had become barred by time before 1.4.1989 when section 150(1) was amended Reliance is placed on the decision in S.S. Gadgil v. Lal & Co., (1964) 53 ITR 231. [LQ/SC/1964/171]

12. The learned counsel appearing on behalf of the department has made an effort to persuade this Court to accept his construction of the provisions of section 150(1)and (2). It is argued that it is for the specific purpose of assessing income, which might accrue on the basis of any decision of any Court in any proceeding in any other law, that the provision has been amended to lift bar of limitation for reassessment.

13. Fiscal statute, more particularly a provision such as the present one regulating period of limitation must receive strict construction. The law of limitation is intended to give certainty and finality to legal proceedings and to avoid exposure to risk of litigation to litigant for indefinite period on future unforeseen events. Proceedings, which have attained finality under existing law due to bar of limitation cannot be held to be open for revival unless the amended provision is clearly given retrospective operation so as to allow upsetting of proceedings, which had already been concluded and attained finality. The amendment to subsection (1) of section 150 is not expressed to be retrospective and, therefore, has to be held as only prospective. The amendment made to sub-section (1) of section 150 which intends to lift embargo of period of limitation under section 149 to enable authorities to reopen assessments not only on the basis of orders passed in proceedings under the but also on order of a Court in any proceedings under any law, has to be applied prospectively on or after 1.4.1989 when the said amendment was introduced to sub-section (1). The provision in subsection (1), therefore, can have only prospective operation to assessments, which have not become final due to expiry of period of limitation prescribed for assessment under section 149.

14. 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 as applicable prior to 1.4. 1989, would amount to give sub section (1) a retrospective operation which is neither expressly nor impliedly intended by the amended sub-section.

15. On behalf of the assessee before the High Court and in this Court reliance has been placed on the provisions contained in sub-section (2) of section 150. It is submitted that the provision contained in sub-section (2) of section150 is in the nature of clarification or Explanation to sub section(1). Subsection (2) makes it clear that the embargo of period of limitation lifted under sub section (1) for proposed reassessments based on order in proceedings under appeal, reference or revision, as the case may be, would not apply to assessments which have attained finality due to bar of limitation applicable at the relevant time.

16. The High Court rejected the above contention of the assessee on the ground that on the amendment introduced with effect from 1.4.1989 in sub-section (1), which enables reopening of assessment based on any Order of 'Court in any proceedings in any law', there is no corresponding amendment made in sub-section (2) of Section 150 to bar reassessment based on Order of Court passed in any proceedings in any law in cases where prescribed period of litigation for reassessment had already expired.

17. We do not find the above reasoning of the High Court is sound. The plain language of sub-section (2) of Section 150 clearly restricts application of sub-section (1) to enable the Authority to reopen assessments which have not already become final on the expiry of prescribed period of limitation under Section 149. As is sought to be done by the High Court, sub-section (2) of Section 150 cannot be held applicable only to reassessments based on Orders 'in proceedings under the' and not to Orders of Court 'in proceedings under any other law'. Such an interpretation would make the whole provision under Section 150 discriminatory in its application to assessments sought to be reopened on the basis of Orders under the and other assessments proposed to be reopened on the basis of Orders under any other law. Interpretation, which creates such unjust and discriminatory situation, has to be avoided. We do not find that sub-section (2) of section 150 has that result. Subsection (2) intends to insulate all proceedings of assessments, which have attained finality due to the then existing bar of limitation. To achieve the desired result it was not necessary to make any amendment in sub-section (2) corresponding to sub-section (1), as is the reasoning adopted by the High Court.

18. Sub-section (2) aims at putting embargo on reopening assessments, which have attained finality on expiry of prescribed period of limitation. Sub-section (2) in putting such embargo refers to whole of sub-section (1) meaning thereby to insulate all assessments, which have become final and may have been found liable to reassessments or re-computation either on the basis of Orders in proceedings under the or Orders of Courts passed under any other law. The High Court, therefore, was in error in not reading whole of amended sub-section (1) into sub-section (2) and coming to the conclusion that reassessment proposed on the basis of order of Court in proceedings under Land Acquisition Act could be commenced even though the original assessments for the relevant years in question have attained finality on expiry of period of limitation under Section 149 of the. On a combined reading of sub-section (1) as amended with effect from 1.4.1989 and subsection (2) of Section 150 as it stands, in our view, a fair and just interpretation would be that the Authority under the has been empowered only to reopen assessments, which have not already been closed and attained finality due to the operation of the bar of limitation under Section 149.

19. This Court took similar view in the case of S.S. Gadgil (supra) in somewhat comparable situation arising from the retrospective operation given to Section 34(I) of Income Tax Act, 1922 as amended with retrospective effect from 1.4.1956 by the Finance Act of 1956. In the case of S.S. Gadgil (supra) admittedly under clause (iii) of the proviso to Section 34(I) of the Indian Income Tax Act, 1922, as it then stood, a notice of assessment or reassessment could not be issued against a person deemed to be an agent of a non-resident under Section 43, after the expiry of one year from the end of the year of assessment. The Section was amended by Section 18 of the Finance Act, 1956, extending this period of limitation to two years from the end of the assessment year. The amended was given retrospective effect from April 1, 1956. On March 12, 1957, the Income Tax Officer issued a notice calling upon the assessee to show cause why, in respect of the assessment year 1954-55, the assessee should not be treated as an agent under Section 43 in respect of certain non-residents. The case of the assessee, inter alia, was that the proposed action was barred by limitation as right to commence proceedings of assessment against the assessee as an agent of non-resident for the assessment year 1954-55 ended on 31.3.1956, under the before it was amended in 1956. This Court in the case of S.S. Gadgil (supra) accepted the contention of the assessee and held as under: " 'The legislature has given to section 18 of the Finance Act, 1956, only a limited retrospective operation, i.e., up to April 1, 1956, only. That provision must be read subject to the rule that in the absence of an express provision or clear implication, the legislature does not intend to attribute to the amending provision a greater retrospectivity than is expressly mentioned, nor to authorise the Income-tax Officer to commence proceedings which before the new Act came into force had by the expiry of the period provided become barred.'

20. 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 retrospectivity 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 or under any other law.'

14. The ratio of KM Sharma and S.S. Gadgil, in the opinion of this court covers the facts of this case. Reassessment for 1998-99 could not be reopened beyond 31.03.2005 in terms of provisions of Section 149 of theas applicable at the relevant time. The petitioner's return for assessment year 1998-99 became barred by limitation on 31.03.2005. The question of revival of the period of limitation for reopening assessment for AY 1998-99 by taking recourse to the subsequent amendment made in Section 149 of thein the year 2012, i.e., more than 8 years after expiration of limitation on 31.03.2005, has been dealt with by the Supreme Court in KM. Sharma (supra)."

16. Apart from the above decisions, there are several other decisions on the point and it may not be necessary for this Court to refer to all those decisions, as the issue is no longer res integra. Thus, the Tribunal fell in error in dismissing the appeal filed by the assessee. The Tribunal also fell in error in not taking note of the settled legal position that the law applicable as on the date of issuance of notice alone should be taken into consideration.

17. As per Section 149 of theas it stood prior to amendment by the Finance Act 2001 with effect from 01.6.2001, the limitation provided under Section 149(b)(iii) of thewas seven years, but not more than 10 years from the end of the relevant assessment year unless income chargeable to tax, which has escaped assessment, amounts to or is likely to amount to Rs.50,000/- or more for that year. After amendment, in terms of Section 149(1)(b) of the Act, no notice under Section 148 shall be issued for the relevant assessment year if four years, but not more than six years have lapsed from the end of the relevant assessment year unless the income chargeable to tax, which has escaped assessment, amounts to or is likely to amount to one lakh rupees or more for that year.

18. Admittedly, the notice under Section 148 of thewas issued by the Assessing Officer on 22.12.2005 and the law applicable as on date prescribed the limitation of four years, but not more than six years. Thus, the notice issued on or after 31.3.2004 would suffer from lack of jurisdiction as it is clearly hit by the limitation prescribed under the Statute. Unfortunately, the Tribunal failed to take note of this very important legal issue, which has been settled by the Hon'ble Supreme Court. In fact, the assessee, at the earliest point of time, referred to the decision of the Hon'ble Supreme Court in the case of K.M.Sharma, which was erroneously distinguished by the Assessing Officer, the CIT(A) and the Tribunal and they committed an error in gross violation of the Statute.

19. For the above reasons, the above tax case appeal is allowed, the orders passed by (i) the Assessing Officer dated 04.12.2006, (ii) the CIT(A) dated 05.10.2007 and (iii) the Tribunal dated 06.1.2009 are set aside and the substantial questions of law raised are answered in favour of the assessee. No costs.