9911796707
TMI Blog1998 (10) TMI 28X X X X Extracts X X X X X X X X Extracts X X X X ..... ax thereon. The Commissioner of Income-tax, to whom the assessee had appealed, upheld the order of the Assessing Officer. The assessee went up in further, appeal to the Tribunal. The Tribunal gave relief to the extent of Rs. 80,000. The assessee being aggrieved by the findings of the Tribunal, contending that the reopening of the assessment was barred by limitation ; that the assessee had not been given sufficient opportunity before the order came to be made and that the Assessing Officer could not include a sum of Rs. 2,25,000 in the assessed income although that amount had been treated as deposit in the original assessment there were no new facts and that no notice had been issued under section 147(b) of the Act, has caused this reference to be made. The first submission of learned counsel for the assessee was that the proceedings were barred by limitation, as the proceedings were not completed within four years from the end of the assessment year in which notice under section 148 of the Act was served on the assessee. It is not in dispute that the notice was served on October 29, 1969, and the period of limitation would end on April 1, 1974, and that the Explanation to section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es of reassessment, and the periods of limitation specified in section 153 alone are applicable to the proceedings mentioned in the several parts of the section. If after having dealt with cases of reassessment, Parliament chose to use the term assessment in the Explanation that could indicate legislative intent to confine the application of clause (ii) in Explanation 1 only to cases of assessment and not to any other proceedings. This argument was advanced in the background of the admitted fact that shortly after the notice had been issued to the assessee under section 148 of the Act on October 29, 1969, the assessee had moved the High Court and obtained an order of stay of the proceedings as on November 24, 1969, and that stay order continued to be operative till December 21, 1972. If the period during which the stay was operative is excluded while computing the period of limitation, the order made by the authority would be within the time prescribed under section 153 of the Act. The endeavour of the assessee is to take advantage of its own action in preventing the authority from completing the proceeding for a period of well over two years during which stay was in force. Lea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... injunction of any court to confine its operation only to assessment proceedings and not to reassessment proceedings. It is a settled principle of law in this country that no party shall be allowed to take advantage of his own wrong. We do not find anything in the language of the Explanation which would compel the court to permit and assist assessees to escape the proceedings for reassessment, when such assessees secure an order of stay or injunction from a court and ensure the continuation of stay or injunction till the period of limitation prescribed in the section expires. It is significant that the words used in clause (ii) of Explanation 1 are "assessment proceeding". It is the proceeding which is to be kept in abeyance for the period for which the proceeding had been stayed by an order of injunction of a court. The period is to be excluded for the purpose of computing the period of limitation. The definition of assessment in section 2(8) of the Act leaves no manner of doubt. The assessment is capable of including reassessment proceedings as well. That meaning has to be given to "assessment" unless the context requires otherwise. The context in which the term "assessment" is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the proceedings and made no attempt to file the return. Despite that conduct of the assessee, the Assessing Officer had been more than fair. lie had called upon the assessee by a letter dated March 14, 1977, to file the long overdue return and even thereafter the assessee chose to remain silent and had failed to file the return. The proceeding was by then eight years old, during which period the assessee had ample opportunity to file the return and seek any clarification he may have needed from the assessing authority. Counsel for the Revenue also referred us to the relevant provisions of sections 143, 147, 148, 139 and 142 of the Act in support of his submission that after the issue of notice under section 148 it was not necessary for the authority to wait tiny further even after the return is not filed in response to that notice, before proceeding to complete the assessment on the basis of the materials gathered by the Assessing Officer. The conduct of the assessee shows that despite the notice that had been given, the assessee had chosen to remain silent, and even after the dismissal of the writ petition the assessee had failed to file any return. That conduct continued even a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e income on the part of the assessee. Counsel relied upon the judgment of this court reported in Thanthi Trust v. ITO [1973] 91 ITR 261. This court dismissed the writ petition, which had been filed by the assessee, challenging the notice issued under section 148 for the assessment year 1957-58. The observation made by the court while dismissing the petition that if the facts alleged in the notice are established, that will clearly attract section 147(a) do not amount to a condition being imposed on the assessing authority for proceeding further with the reassessment. It was open to the assessing authority to proceed to reassess in accordance with the provisions of law and no fetter had been placed on his powers under the Act by the judgment of this court. In the absence of any rebuttal by the assessee to show that the certificate given by the Audit Bureau did not contain the correct figures relating to the circulation of the newspapers published by the assessee and in the absence of any effort on the part of the assessee to demonstrate that the figures so given by the Audit Bureau were not capable of being regarded as the actual sales of the newspapers published by the assessee in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al return. The Assessing Officer computed the income of the assessee on the basis of the sale figures set out in the certificate of the Audit Bureau and after giving credit for the sales already reported in the original return determined the extent of deficiency in the report of the assessee's income as Rs. 2,90,292. The assessee's contention that the material relied on by the Assessing Officer could not constitute sufficient basis for the reassessment cannot be accepted. Counsel for the assessee then submitted that the figure determined by the Assessing Officer includes a sum of Rs. 2,25,000 which had been shown in the assessee's account as deposit from the Youngmen's Tamilian Association. The assessee had in the course of original assessment proceedings informed the Assessing Officer that the newspapers had been supplied to that association to the extent of the deposit and that deposit was to be capitalised later. Despite that knowledge, the Assessing Officer, who made the original assessment, did not choose to regard that sum as representing the proceeds of sale and includible as income, but treated it as a deposit. The Assessing Officer in the course of reassessment while mak ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the date of the reassessment order, the order of the Tribunal which upheld the reassessment to the extent of Rs. 5,40,000 cannot be upheld in toto. The sum of Rs. 2,25,200 is required to be deleted therefrom as that sum had been wrongly included by the Tribunal despite the bar under section 147(b). The questions being a long list of nine questions, which apparently the assessee had proposed and which the Tribunal has without proper consideration adopted as its own may now be set out and our answers in relation to each also stated. The questions referred are : "1. Whether, on the facts and circumstances of the case, the Income tax Appellate Tribunal was right in holding that the 'reassessment' was validly done and that the question of establishing the allegation its directed by the High Court, would not arise ? 2. Whether the said interpretation of the High Court's order made by the Income-tax Appellate Tribunal is correct ? 3. Whether the Appellate Tribunal was right in holding that the 'reassessment' made on April 22, 1977, in pursuance of the notice dated October 29, 1969, was within the time prescribed under section 153(2) of the Act and the reassessment is not barred b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nus Rs. 2,25,200 is valid and is not required to be deleted. A sum of Rs. 2,25,200 out of the sum of Rs. 3,40,000 added by the Tribunal shall stand deleted. The ninth question must be answered again partly in favour of the assessee and partly in favour of the Revenue to the same extent as the answer recorded in relation to question No. 8. As each party has succeeded in part, parties shall bear their own respective costs. For being mentioned : This matter came up for "being mentioned" today. It is now brought to the notice of this court that the questions of law set out in our judgment, which was rendered on August 4, 1998, suffer from clerical errors. The questions of law, referred to us, as now brought to our notice are as follows : "(i) Whether on the facts and circumstances of the case, the Income-tax Appellate Tribunal was right in holding that the 'reassessment' was validly done and that the question of establishing the allegation as directed by the High Court, would not arise ? (ii) Whether the said interpretation of the High Court's order made by the Income-tax Appellate Tribunal is correct ? (iii) Whether the Appellate Tribunal was right in holding that the reassesmen ..... X X X X Extracts X X X X X X X X Extracts X X X X
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