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High Court Of Calcutta
SABYASACHI MUKHERJI, SUDHINDRA MOHAN GUHA
MOHENDRA J.THACKER AND CO - Appellant
Versus
COMMISSIONER OF INCOME-TAX - Respondent
Income-Tax Reference 272 Of 1980
Decided On : 06/16/1981
INCOME TAX - ASSESSMENT - LIMITATION - ORDER OF ASSESSMENT - DETERMINATION OF TOTAL INCOME AS WELL AS TAX PAYABLE - SECTION 153 OF THE I. T. ACT, 1961.
Fact of the Case:
The assessee filed the original return on June 25, 1965, and a revised return on December 5, 1967. The assessment was completed on March 26, 1969. The assessee preferred an appeal before the AAC. It was urged before him that the demand notice dated May 30, 1969, was served on the assessee on June 3, 1969, and as such the assessment made was barred by time and should be cancelled. The AAC held that the assessment should have been completed by March 31, 1969. The Revenue went up in appeal before the Tribunal. The Tribunal held that the assessment was completed within time and as such the assessment was not time-barred.
Finding of the Court:
The Tribunal was not justified in drawing the conclusion that the assessment order was passed within March 31, 1969, on any fact apart from the fact that the so-called order which was produced before them bore the date March 27, 1969. Apart from that, the Tribunal has not indicated any other fact. The question, therefore, is whether the Tribunal was justified in drawing the inference that was in fact drawn in the light of the facts and circumstances. As we have mentioned before we find in the background of the preponderance of other evidence that the Tribunal was not justified in drawing the conclusion that was in fact arrived at by looking at the date of the order. Therefore, it cannot be said that the conclusion arrived at by the Tribunal was based on primary facts basically found.
Issues: 1. Whether the finding of the Tribunal that the assessment form determining the tax liability was also signed on March 27, 1969, was based on any material and/or evidence and whether the said finding was perverse? 2. Whether, on the facts and in the circumstances of the case, the Tribunal was justified in law in holding that the assessment has been made within the period of limitation prescribed under section 153 (1) (a) of the Income-tax Act, 1961? 3. Whether, an assessment made by the Income-tax Officer without communicating the said order of assessment and the demand notice of the said assessment within time can be treated as a valid assessment made within the period of limitation prescribed under section 153 (1) (a) of the Income-tax Act, 1961?
Ratio Decidendi: 1. The assessment order passed in this case was barred by limitation. 2. The assessment order must include not only the computation of the total income but also determination of tax and that is the order which is contemplated by Section 153 of the I. T. Act, 1961.
Final Decision: 1. The first question referred to this court in the reference under Section 256 (1) of the I. T. Act, 1961, that is to say, Income-tax Reference No. 189 of 1976 must be answered in the negative and in favour of the assessee. 2. So far as the next question in the said reference is concerned, in view of the decision of this court in the case of Badri Prasad Bajora v. CIT [1967] 64 ITR 362, the same must be answered in the negative and in favour of the Revenue. 3. So far as the question referred at the instance of the assessee in Income-tax Reference No. 272 of 1961 is concerned, in the light of the observations that we have made, we must hold that the finding of the Tribunal that the assessment determining the tax liability was also signed on March 27, 1969, was based on no material and/or evidence and as such perverse. This question is answered in favour of the assessee.
( 1 ) THESE two references are taken up together and disposed of by this common judgment.
( 2 ) IN these references, the first one under s. 256 (1) of the I. T. Act, 1961, and the second under s. 256 (2) of the I. T. Act, 1961, we are concerned with the assessment year 1964-65. The assessee filed the original return on June 25, 1965, and a revised return on December 5, 1967. The assessment was completed on the March 26, 1969. The assessee preferred an appeal before the AAC. It was urged before him that the demand notice dated May 30, 1969, was served on the assessee on June 3, 1969, and as such the assessment made was barred by time and should be cancelled. The AAC held that the assessment should have been completed by March 31, 1969. But the demand notice was dated on May 30, 1969, and it was received by the assessee on June 3, 1969. It would be appropriate in this case to refer to the order of the AAC. He observed in his order, inter alia, as follows:" I have carefully considered the appellant's contention with reference to the income-tax record and find them to be correct. The original return was filed on June 25, 1965. Revised return filed on December 5, 1967. Due date for filing of the return was June 30, 1964. Ordinarily, the assessment for the assessment year 1964-65, should have been completed on March 31, 1969. It is seen that the demand notice is dated on May 30, 1969, received by the appellant on June 3, 1969. So, I find that the assessment has not been completed within the time allowed by the Income-tax Act, 1961. So, I hereby cancel the assessment as void and time-barred. The appeal is allowed. "
( 3 ) BEING aggrieved by the aforesaid order of the AAC, the Revenue went up in appeal before the Tribunal. The Tribunal, after dealing with the rival contentions observed, inter alia, as follows. " We have considered the rival submissions. We have perused the assessment records. We find that the assessment order which is signed by the Income-tax Officer is dated March 26, 1969. We have also seen duplicate copy of the demand notice and it is dated March 27, 1969. We have also seen the computation assessment form in which the tax liability on the total income assessed has been determined and this is dated March 27, 1969. In view of this, we are satisfied that the Income-tax Officer did determine the tax liability on March 27, 1969, and issued a demand notice dated March 27, 1969. This could not be served on the assessee for some reason or other. In view of that he has issued another demand notice dated May 30,1969, which was served on the assessee on June 3, 1969. Merely, because the notice of demand which was served on the assessee is dated May 30, 1969, it cannot be presumed that the assessment was completed on that date. The original assessmept order is dated March 26, 1969, and the assessment form determining the tax liability was also signed on March 27, 1969, and the duplicate copy of the demand notice is dated March 27, 1969. In view of this, we are satisfied that the assessment has been completed within the time and as such the assessment is not time-barred. "
( 4 ) THE Tribunal further observed in its order as follows; *' In the instant case, there is no dispute that the assessment order was made on March 26, 1969, and we. are satisfied that it was made on March 26, 1969. In our view, merely because the demand notice dated May 30, 1969, is served on the assessee on June 3, 1969, it cannot be contended that the assessment is barred by limitation. The assessment has been made within the period of limitation and the tax payable was also determined on March 27, 1969. Thus, the assessment order is not barred by time. The decision relied on by the assessee's counsel has no application to the facts in the instant case. The Appellate Assistant Com mis- sioner was in error in coming to the conclusion that the assessment was time-barred. In our view, the assessment has been completed within the per
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