Ajit K.Sengupta, J. - (1.) At the instance of the assessee, the following questions of law have been referred to this court under Section 256(1) of the Income-tax Act, 1961, for the assessment year 1971-72 : " 1. Whether, on the facts and in the circumstances of the case and on a true interpretation of the order of remand dated January 29, 1983, passed by the Tribunal, the Tribunal is justified in law in holding that the Commissioner of Income-tax was bound to act within the four corners of the directions of the Tribunal and in not allowing the assessee to raise the question whether, in view of the notification dated January 6, 1970, by which the property in question stood vested in the State of West Bengal from that date, no transfer of property took place within the relevant accounting year and as such the capital gain, if any, exigible to tax, could not be assessed in the relevant assessment year? 2. Whether, on the facts and in the circumstances of the case and on a true interpretation of the relevant provisions of the Act, the Tribunal is justified in law in holding that the capital gain had escaped assessment at the time of making of the original assessment by the Income-tax Officer during the relevant assessment year and was further justified in upholding the order made by the Commissioner of Income-tax under Section 263 of the Act ? 3. Whether the conditions for exercise of power by the Commissioner of Income-tax under Section 263 have been satisfied and whether, on the facts and in the circumstances of the case, the Tribunal was justified in confirming the order of the Commissioner of Income-tax?"
(2.) The facts relating to this reference are that the assessee did not file returns of income for the assessment year 1971-72. The Income-tax Officer issued a notice under Section 148 of the Income-tax Act, 1961. The assessee, in compliance with such notice, filed returns of income on March 14, 1977. The Income-tax Officer also completed the assessment in the status of an association of persons under Section 143(3) of the Act on March 21, 1979. The assessment was completed on the income from house property and other sources.
(3.) The Commissioner of Income-tax on a perusal of the assessment order was of the view that the assessment made by the Income-tax Officer was erroneous and prejudicial to the interests of the Revenue on the ground that the land owned by the assessee was acquired by the Government of West Bengal and compensation of Rs. 8,40,410.48 was received by the assessee on August 7, 1970.;