TMI Blog2003 (7) TMI 33X X X X Extracts X X X X X X X X Extracts X X X X ..... sident in the year of assessment. This notice was issued on January 8, 1996, long after the expiry of four years from the end of the assessment year. Section 154 notice was issued on the ground that the petitioner could not be assessed as a non-resident for the assessment year 1989-90 by reason of Explanation (b) under section 6(1)(c) of the Income-tax Act. Identical question arose in APOT. No. 735 of 2002 (Vijay Mallya v. Asstt. CIT [2003] 263 ITR 41 (Cal)) disposed of by us on May 12, 2003. In the said decision, we held that section 154 could not be attracted in view of the uncertain situation as to which of the interpretations would be correct. It is not in dispute that the facts are identical in both these cases. Having regard to the ratio decided and following the principle laid down in Vijay Mallya [2003] 263 ITR 41 (Cal)-APOT No. 735 of 2002, in this case, we hold that the impugned notice under section 154 does not conform to the ingredients of section 154 and, therefore, the same is illegal, invalid, bad in law and without jurisdiction. The other ground taken by Mr. Pal is related to two more notices issued by the authorities under section 142(1), one of which is dated No ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eats to the assessee. The assessing authority cannot prejudge the issue and that too without opportunity and unilaterally. The notice seems to be an example of putting the cart before the horse. This can be done in the process of the assessment after giving opportunity to the assessee in accordance with law. That apart the letter dated January 8, 1996, at page 146 cannot preclude the assessee from substantiating its claim in the assessment proceeding about the non-resident status and the assessing authority from determining the same in accordance with law without being influenced by the observation made in the said letter dated January 8, 1996, at page 146. Mr. Pal, learned counsel for the appellant, contends that there cannot be any piecemeal assessment. He relied on CIT v. Dhampur Sugar Mills Ltd. [1988] 170 ITR 449 (All); M.M.A.K. Mohideen Thumby and Co. v. CIT [1955] 28 ITR 252 (AP) and Debi Prasad Malviya v. CIT [1952] 22 ITR 539 (All) in support of his contention. The decision in Dhampur Sugar Mills Ltd. [1988] 170 ITR 449 (All) does not help Mr. Pal in the present context. Inasmuch as in the said decision, it was held that the Act does not provide for multiplicity of asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2 Act contemplated the making of a complete assessment on the basis of the total income of the assessee, it was not open to make assessments piecemeal. It was not open to the Assessing Officer to assess one part of the income and to assess the rest of the income on a later date even relying upon section 34 of the 1922 Act for re-opening of the assessment. The facts of the present case are completely different. In this case, it was not assessment piecemeal. In this case, a notice under section 142(1) was issued before assessment requiring furnishing of information. The Assessing Officer had resorted to an enquiry, which he is entitled to do before the assessment. Therefore, it is not an assessment of a part of the income. In that way it is not an assessment piecemeal or a compartmentalized assessment. On the other hand, it is an enquiry before assessment. It is an enquiry as to on which basis the computation of income is to be made. It is the basic foundation for making the assessment. In order to examine this question in the light of the contention raised by Mr. Pal, we may examine the assessment process provided in the 1961 Act as applicable to the relevant assessment year. Ch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 142(3) gives statutory recognition to a well-established principle of natural justice, which was being observed during the currency of the 1922 Act, even though that Act did not contain any express provision in that behalf. This principle was so recognized and formed the foundation for the decision by the Supreme Court in Dhakeswari Cotton Mills Ltd. v. CIT [1954] 26 ITR 775 and that of by the Kerala High Court in Swamy Bros. v. CIT [1958] 34 ITR 123. In Joseph Thomas and Bros. v. CIT [1968] 68 ITR 796 (Ker) and Polisetti Subbaraidu and Co. v. CIT [1968] 69 ITR 738 (AP), it was held that the absence of opportunity provided under section 142(3) on the basis of the information furnished by an assessee vitiates the order. The same view was taken by the Gauhati High Court in Assam Forest Products (P.) Ltd. v. CIT [1977] 110 ITR 558 and the Rajasthan High Court in Vimal Chandra Golecha v. ITO [1982] 134 ITR 119 and the Kerala High Court in Malayil Bankers v. Asst. CIT [1999] 104 Taxman 161. Section 143(2) and (3) also envisage some enquiry or scrutiny. The word "assessment" takes colour from the context. It has to be understood in each section with reference to the context in which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hearing to the assessee, he can determine the same in accordance with law. Instead of deciding the same question differently, he can do it in the order of assessment itself and ordinarily this determination with regard to the status should form part of the order of assessment. Such determination is definitely a part of assessment and as such in this case, it would also be a determination, though not one part of the income, but determination of a part of the assessment. Inasmuch as section 246 provides for appeal in respect of an assessment made under section 143(3). Therefore, a decision, which is part of the assessment unless complete with the assessment under section 143(3) would not be appealable and if decided separately that will give rise to a cause of action, which the assessee may not be waiting to challenge till the assessment is made. When an order under section 143 is appealable, the part of the order that forms the basis of the assessment for computing the income is an integral part of the assessment in respect of which an assessee would be entitled to prefer an appeal. If this determination is part of the order under section 143 in a completed assessment order, then t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... This order will not prevent the Assessing Officer from proceeding pursuant to the notice and the information furnished or may be furnished and deciding the question of status of the assessee in respect of the assessment years involved in accordance with law after giving opportunity to the assessee in the course of the assessment and make the said finding a part of the assessment order. The question was raised by the respondent as to the maintainability of one writ petition and one appeal with regard to the cause of action for different assessment years. Mr. Pal submits that he had put in the requisite court fees for the writ petition as well as the appeal treating the cause of action separately for each assessment year. The Registrar, Original Side shall examine the said question and if it is found that there is any deficit, the same may be notified and demanded from the appellant within a fortnight hereof and the appellant shall put in the same before obtaining certified copy of the order but not later than a fortnight after being notified. In case court fee amount is paid, in that event, certified copy of the order may be given. In default of payment of deficit court fee, if ..... X X X X Extracts X X X X X X X X Extracts X X X X
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