The Court interpreted Section 11, Business Profits Tax Act, 1947, in light of Section 14 to imply a limitation period of four years for issuing notices for assessment, thereby protecting assessees from indefinite apprehension of tax liability.

1. The assesses companys assessment to income-tax for the assessment year 1949-50 which corresponds to the previous year S. Y. 2004 (13-11-1947 to 31-10-1948) was "completed by the Income-tax Officer on 17-2-1953. On 12-1-1953 the Income-tax Officer issued a notice under Section 11(1), Business Profits Tax Act, 1947, against the assessee company In respect of the chargeable accounting period. 13-11-1947 to 31-10-1948.

The assessee company filed a return under protest. The protest was overruled by the Income-tax Officer and he completed the assessment. On, appeal by the assessee company, the Appellate Assistant Commissioner held that the assessment was invalid in view of Section 14(1), Business Profits Tax Act. The Income-tax Officer appealed to the Appellate Tribunal and the Appellate Tribunal took the same view as the Appellate Assistant Commissioner. The Commissioner of Income-tax has now come on this reference.

2. Section 11(1) which deals with the issue of notice for assessment under the Business Profits Tax Act, 1947, provides:

"The Income-tax Officer may for the purposes of this Act; require any person whom he believes to be engaged in any business to which this Act applies, or to have been so engaged during any chargeable accounting period, or to be otherwise liable to pay business profits tax, to furnish within such period, not being less than forty-five daya from the date of the service of the notice, as may be specified In the notice, a return in the prescribed form and verified in the prescribed manner setting forth (along with such other particulars as may be provided for in the notice) with respect to any chargeable accounting period specified In the notice, the profits, taxable profits of the business or the amount of deficiency, if any, available for relief under Section 6."

The whole of Mr. Joshis argument on behalf of the Commissioner is that the Legislature has not provided any limitation of time with regard to the Issue of this notice. It is pointed out that the notice may be issued with regard to any chargeable accounting period and the notice may be issued at any time, and what is urged is that if Section 11 does not limit the jurisdiction of the Income-tax Officer to issue such a notice for any specific period of time, the Court cannot import into the section a provision which the Legislature did not think fit to incorporate.

It is perfectly true that if we were to read Section 11 by itself, it would be difficult to resist the point of view put forward by Mr. Joshi. The notice is issued on the 12-1-1953, it is for the chargeable accounting period 13-11-1947 to 31-10-1948, and there is no reason why on a construction of Section 11 by itself we should take the view that the notice which has been issued more than four years after the end of the chargeable accounting period is not a proper or valid notice.

It is also pointed out by Mr. Joshi, and that is a proposition to which Mr. Palkhivala also subscribes, that the liability to pay tax arises not by reason of any notice issued under Section 11 but by reason of 6. 4 which is the charging section. Therefore, at the close of the chargeable accounting period if the assessee company had made any business profits which were liable to tax, then the liability to pay that tax arose by reason of the provisions of Section 4, and what Mr. Joshi urges is that if there was a liability that liability could be enforced at any time under Section 11.

It is also pointed out that it is not helpful to consider the provisions of the Income-tax Act because the provisions of that Act and the Business Profits Tax Act are not in pari materia. It Is said that under Section 22(2), Income-tax Act by reason of the language used by the Legislature a notice has to be issued before the close of the assessment year and if a notice is not issued then the assessment would be bad if the Income-tax Officer wishes to assess the assessee to tax under that section. If the notice is not issued w