TMI Blog1990 (6) TMI 65X X X X Extracts X X X X X X X X Extracts X X X X ..... t year 1971-72 showing income of Rs. 23,809. The Income-tax Officer informed the assessee that the income of Rs. 3,84,115 as respects the year 1970-71 and Rs. 3,359 relevant to the assessment year 1971-72 received by him from the Deputy Controller of Defence was not disclosed in the returns submitted by him. The assessee explained that the two amounts were received by his two employees, Janak Raj Suri and Mohendra Singh Vasin, who supplied fruits and vegetables to the Defence Department. He did not receive the amounts. In proof of his explanation, he produced a document subscribed by the two employees. Thereupon, the Income-tax Officer held an inquiry in that the account of the assessee in Punjab and National Bank was scrutinised and the two employees of the assessee were examined. The signatures found in the document were not denied by them. Their version was that they signed blank paper at the instance of the assessee and were completely unaware of what was written in the document. The two persons specifically stated that they have not received any monies from the Deputy Controller of Defence and repudiated the allegation that they had received the amounts. The Income-tax Off ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a girl called Alice and her discussion with her animal companions were profusely used in the minority opinion. The discussions of Alice with the Cheshire cat, Queen of Hearts, Humpty Dumpty, Tweedledum and Tweedledee, the Mock Turtle all have by this day passed into English literature and also into legal literature. It is accepted now that when a statutory authority holds individuals as discreditable persons or of unworthy or unreasonable conduct, the law requires such individuals to be dealt with fairly by the statutory authorities. This conclusion is restated in Secretary of State for Education and Science v. Tameside Metropolitan Borough Council [1977] AC 1014 (HL). The case related to the admission of students in schools. One set of students were to be admitted to grammar schools for their ability and aptitude. The rest were to be admitted without reference to ability or aptitude. The question in the case arose under the Education Act, 1944, wherein a provision contained the two words "satisfaction" and "unreasonable". The case has wealth of information as to the interpretation of the word "unreasonable". But the discussion in the case also turned on the implication of satis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tition. In that case, it was held that it was obligatory for the Income-tax Officer to make assessments within a period of four years. The assessment proceedings cannot be kept pending beyond the period of four years to attract section 28(1)(c) till the end of time on the ground that some concealment or the furnishing of inaccurate particulars might come to light at some distant future date. In the third case from Allahabad, CIT v. Surajpal Singh [1977] 108 ITR 746, the period for completing the assessment was shown as four years with two exceptions under section 23 or section 27. There is discussion in the case as to whether the 1922 Act applies or the 1961 Act. It was held that the case is governed by the former Act. The fourth case from Allahabad is Ram Bilas Kedar Nath v. ITO [1964] 54 ITR 11 (sic.), which referred to the second Allahabad case and held that if the Income-tax Officer does anything after the expiry of four years, he is required to disclose the material on the basis of which he proposes to take the case out of the normal period of limitation. On facts, it was held that section 28(1)(c) was not attracted. A Madras High Court case in S. Santosha Nadar v. First Add ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee was not made aware on that day that the Revenue is seeking to take the case out of the normal period of limitation. That notices were issued on March 27, is of no consequence as the notices were served on April 9 on the assessee. Now, so far as the first assessment for 1970-71 is concerned, if the satisfaction of the Income-tax Officer is shifted to April 9, the day when notice was served, the proceedings are barred. Therefore, the assessee very stoutly resisted the contention founded on March 27 as, on that day, notices were issued by the Income-tax Officer and were not served on that day. We have in the earlier part of the discussion pointed out that, if the result of the satisfaction of the statutory-authorities is evil or civil consequences, the affected persons must be informed as a principle of natural justice or as part and parcel of the rule of audi alteram partem. Therefore, it is not possible to hold that, without information to the assessee, the Revenue can take out the assessment proceedings from the normal period of limitation. The plea that on March 27 the Income-tax Officer was satisfied, therefore, cannot be countenanced. The next question at issue is whethe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be "a statute of repose". Corpus Juris Secundum, Vol. 53, at page 901 : "Statutes of limitation are statutes of repose, the object of which is to suppress fraudulent and stale claims from springing up at great distances of time and surprising the parties or their representatives when all the proper vouchers and evidences are lost or the facts have become obscure from the lapse of time or the defective memory or death, or removal of witnesses .... that the statute (of limitation) is for the benefit and repose of individuals and not to secure general objects of policy and morals " In the U. K., the most ancient case is that of A' Court v. Cross [1825] 3 Bing 329 at page 360, in that limitation was described as "an act of peace". In an opinion expressed in Ampthill Peerage's case [1976] 2 All ER 411 at p. 423, the House of Lords observed : "Truth may be shut out (by operation of limitation) but society considers truth may be bought ... the fundamental principle ... (is) that there should be some end to litigation . . We find solace in what is stated to be the eternal verity of life and law that statutes of limitation achieve peace and good administration but do not advance morals ..... X X X X Extracts X X X X X X X X Extracts X X X X
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