TMI Blog1976 (3) TMI 7X X X X Extracts X X X X X X X X Extracts X X X X ..... 61, set aside the assessment order holding that the status of the petitioner is one of tenants-in-common and not company. Thereupon, on the basis of Ext. P-1 order, the Dy. Commr. of Agrl. I.T. S.T., North Zone, Kozhikode, allowed a revision petition filed by the petitioner against the levy of penalty for the year 1960-61. For the subsequent years the petitioner was assessed as tenants-in-common. The 1st respondent by orders, Exts. P-3 to P-5, assessed the petitioner for the assessment years 1970-71 to 1972-73, respectively, assigning the petitioner the status of tenants-in-common. The tax due as per the assessment orders, Exts. P-3 to P-5, were also paid by the four brothers. On March 16, 1974, the 1st respondent issued Ext. P-6 notice under s. 35 of the Act, informing the petitioner that the status assigned as per Exts. P-3 to P-5, orders of assessment, was not correct. In reply to Ext. P-6 notice the petitioner sent Ext. P-7 contending that the status of the petitioner is nothing but tenants-in-common. But the 1st respondent rejected the above contention of the petitioner and issued Ext. P-8 pre-assessment notice proposing to revise Exts. P-3 to P-5 assessments. To Ext. P-8 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... counsel refers to Agri. ITO v. Srinivasa Naicken [1961] KLJ 1320, wherein M.S. Menon J. (as he then was), speaking for the court, has said : " Section 35 of the Act provides that the notice to be issued under that section should contain 'all or any of the requirements which may be included in a notice under sub-section (2) of section 17' . The requirements which may be included in a notice under section 17(2), as is clear from that sub-section, are '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), the total agricultural income of the person concerned during the relevant period. The notice issued does not contain all or any of those requirements and it must follow that it cannot be sustained as a valid notice under section 35 of the Act." Learned counsel then refers to Gajendra Transports (P.) Ltd. v. Anamallais Bus Transports (P.) Ltd., AIR 1970 Mad 379, and contends that in a case where initial jurisdiction is totally wanting, the High Court in the exercise of the discretion vested in it under art. 226 of the Constitution will not be prepared to ignore the ground merel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... connection, learned counsel refers to Nagaraja Overseas Traders v. State of Mysore [1974] 33 STC 315, wherein the Mysore High Court has said: "Section 12A of the Mysore Sales Tax Act, 1957, empowers the assessing authority to bring to tax an escaped turnover. When the turnover was already before the assessing authority when he made the first order of assessment, that turnover cannot be said to be an escaped turnover. In such a case the order granting deduction or exemption has to be corrected in revision under section 21 of the Act." Reference is also made to Chickanarasimhiah v. Asst. CCT [1971] 28 STC 98, wherein the Mysore High Court has said : " When the turnover was before the assessing authority and that turnover was specifically exempted from tax, it cannot be said that the said turnover is an escaped turnover. If on a wrong view of the law, the assessing authority has exempted the turnover, that order has to be corrected under section 21 of the Mysore Sales Tax Act, 1957, in exercise of the revisional powers." Learned counsel also refers to Kanhaiyalal Bahadursingh v. Commr. of ST [1962] 13 STC 615, wherein the Madhya Pradesh High Court has said (per headnote) : ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... out, seeds and cultivation expenses were advanced from a common account and they were recouped at the time of the harvest. At the end of each year, the net agricultural income was apportioned among the assessees in the ratio of their holdings. On the question whether the assessees constituted an "association of individuals", the Madras High Court held: "......there was no common enterprise in the matter of realisation of agricultural income. The mere fact of a single establishment or common management for carrying on personal cultivation or for leasing out property could not brand the assessees together as an association of individuals. Section 3(3) of the Act governed the relationship between the parties and hence they were assessable as tenants-in-common." Learned Government pleader contends that in the case of " association of persons " or " tenants-in-common ", there is no strait-jacket formula and when there is a joint venture then the status can be only one of " association of persons ". Learned Government pleader points out that Ext. P-6 notice issued under s. 35 of the Act is not in any way bad in law for want of the necessary particulars insisted by the section. Acco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an item of income under the belief that it was exempt, is competent to assess that item under section 26 of the Bihar Agricultural Income-tax Act, 1938, even though that item was included in the return submitted by the assessee in connection with the original assessment proceedings." In Narayana Shenoi v. State of Kerala [1961] 12 STC 665 (Ker), this court has said: " The jurisdiction of an officer to make a reassessment under rule 33(1) of the Travancore-Cochin General Sales Tax Rules, 1950, is not confined to cases where the turnover has escaped assessment, because it is not before the officer by reason of inadvertence, omission, or deliberate concealment on the part of the assessee, or because of want of care on the part of the officer. That rule also authorises the officer to reopen an assessment if a legal error has been committed in the original assessment." In Annamalai Reddiar v. CIT [1964] 53 ITR 601 (Ker), this court has said : " The assessment in each year is a separate proceeding under the Indian Income-tax Act, 1922, and the view adopted by the department in any particular year cannot possibly bind it in respect of a year subsequent thereto. New materials may p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er someone else supplied that information to the Income-tax Officer or whether he informed himself. An item of information available in the papers filed before the Income-tax Officer will 'become information' only when its existence is realised and its implications are understood. Therefore, the proceedings initiated in the present case under section 147(b) on the basis of the audit note are legal and valid. " Shri P. A. Mohammed, learned counsel for the petitioner, replying to the arguments of the learned Government pleader contends that the revised assessment orders are inspired by administrative directions and since there is no independent application of the mind of the officer concerned the impugned orders are bad in law. According to the learned counsel, the decision in Trivandrum Co-operative District Wholesale Society Ltd. v. Deputy Registrar [1975] KLT 589; AIR 1976 Ker 124, is not applicable to a case like this where there is an erroneous exercise of jurisdiction. Learned counsel also reiterates his contention that the right to insist that the reasons for invoking the powers under s. 35 of the Act must be recorded being a statutory right, no question of waiver of that ri ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
