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2004 Supreme(Cal) 24
High Court Of Calcutta
Kalyan Jyoti Sengupta
GANGADHAR BERA - Appellant
Versus
ASSISTANT COMMISSIONER OF INCOME-TAX - Respondent
W. P. 1822 Of 2003
Decided On : 01/13/2004
P.K.MULLICK, R.Bharadwaj
A notice issued under Section 143(2) of the Income Tax Act, 1961, without specifying Clause (i) or (ii) is not invalid if the text of the notice makes the intention clear.
Headnote:
NOTICE UNDER SECTION 143(2) - INCOME TAX ACT, 1961 - VALIDITY - NOTICE ISSUED WITHOUT MENTIONING CLAUSE (I) OR (II) - CLARIFICATION ISSUED AFTER EXPIRY OF 12 MONTHS - WHETHER VALID - WAIVER OF OBJECTION BY PARTICIPATION IN PROCEEDINGS - SUPPRESSION OF MATERIAL FACTS.
Fact of the Case:
The petitioner received a notice under Section 143(2) of the Income Tax Act, 1961, without specifying Clause (i) or (ii). The petitioner objected to the notice, and the Assessing Officer issued a clarification stating that the notice was intended to be issued under Clause (ii). This clarification was issued after 12 months from the end of the month in which the return was furnished. The petitioner filed a writ petition challenging the validity of the notice.
Finding of the Court:
The court held that the notice was not invalid merely because it did not mention Clause (i) or (ii). The court also held that the clarification issued by the Assessing Officer was valid and related back to the date of the notice. The court further held that the petitioner had waived the objection to the notice by participating in the proceedings before the Assessing Officer. Finally, the court held that the petitioner had suppressed material facts by not disclosing his participation in the proceedings before the Assessing Officer in his writ petition.
Issues: 1. Whether a notice issued under Section 143(2) of the Income Tax Act, 1961, without specifying Clause (i) or (ii) is valid? 2. Whether a clarification issued by the Assessing Officer after 12 months from the end of the month in which the return was furnished is valid? 3. Whether the petitioner had waived the objection to the notice by participating in the proceedings before the Assessing Officer? 4. Whether the petitioner had suppressed material facts by not disclosing his participation in the proceedings before the Assessing Officer in his writ petition?
Ratio Decidendi: 1. A notice issued under Section 143(2) of the Income Tax Act, 1961, without specifying Clause (i) or (ii) is not invalid if the text of the notice makes the intention clear. 2. A clarification issued by the Assessing Officer after 12 months from the end of the month in which the return was furnished is valid and relates back to the date of the notice. 3. The petitioner had waived the objection to the notice by participating in the proceedings before the Assessing Officer. 4. The petitioner had suppressed material facts by not disclosing his participation in the proceedings before the Assessing Officer in his writ petition.
Final Decision: The writ petition was dismissed.
( 1 ) THIS writ petition is directed against a notice dated October 21, 2002, admittedly issued under Section 143 (2) of the Income-tax Act, 1961 (hereinafter referred to as the said Act ). I think the text of the notice must be incorporated hereunder :"there are certain points in connection with the return of income submitted by you on October 29, 2001, for the assessment year 2001-2002 on which I would like some further information. You are hereby required to attend my office on November 11, 2002, at 12. 30 p. m. either in person or by a representative duly authorised in writing in this behalf or produce or cause thereto be produced at the said time any documents, accounts and any other evidence on which you may rely in support of the return filed by you. "
( 2 ) AT the top of the aforesaid impugned notice, "section 143 (2) of the Income-tax Act, 1961" has been mentioned. This notice was issued on October 21, 2002. On receipt of this notice, the assessee/petitioner objected to the same taking a legal point that the notice is bad and invalid as it does not mention clause of the said sub-section, namely, whether Clause (i) or Clause (ii ). As such this notice should be withdrawn. The Assessing Officer replied to the objection of the petitioner and clarified by a letter dated November 17, 2002, contending that the aforesaid notice was issued or intended to be issued under Section 143 (2), Clause (ii ). This clarificatory notice came after slightly over twelve months from the end of the month in which the return was furnished. On the aforesaid factual aspect, Mr. R. Bharadwaj, the learned advocate, led by Mr. Mihirlal Bhattacharyya, learned senior counsel, contends that the said notice is bad in law as such this was clarified by subsequent notice as above. However, this clarification came at a certain point of time when the time limit for issuance of valid and lawful notice has expired as by the proviso to the said section the time limit is mentioned as twelve months, for issuance of this notice and on the expiry of this period the Assessing Officer has no jurisdiction to issue any such notice. Therefore, the subsequent clarificatory notice is bad, invalid and of no assistance.
( 3 ) IN support of his contention, he has drawn my attention to the aforesaid proviso which reads as follows :"provided further that no notice under this sub-section shall be served on the assessee after the expiry of twelve months from the end of the month in which the return is furnished. "
( 4 ) HE submits that twelve months have expired from the end of the month in which the return is made, End of the month in this case would be October 31, 2001, as the return was furnished on October 29, 2001, and this clarificatory notice came on November 17, 2002. He submits further that in fact the Department has admitted the earlier notice was bad as no clause of sub-section was quoted. In support of his submission he has relied on a few decisions, namely, Sunrolling Mills P. Ltd. v. ITO, CIT v. Smt. Kaushalya [1995j 216 ITR 660 (Bom), 236 ITR 992 (sic ).
( 5 ) HE further contends though on the date of the filing of the return the relevant provision of the aforesaid Section 143 was slightly different from what is at present, in the statute book. His contention is that on the date of issuance of the notice the present provision has been in force and under the law this provision will be applicable irrespective of the date of the filing of the return which in this case is the earlier one. This portion of his submission is supported by a decision reported in Hoosein Kasam Dada (India) Ltd. v. State of M. P. [1953] 4 STC 114 (SC ).
( 6 ) ON the question of suppression of fact, he says that suppression of all and every fact cannot be fatal to non-suit the petitioner. The point is whether such fact is material or relevant one. In support of his contention, he has cited Black's Law Dictionary that has defined what is material fact. In Black
