TMI Blog1991 (7) TMI 17X X X X Extracts X X X X X X X X Extracts X X X X ..... or the year 1976-77 inasmuch as he has reasonable grounds to believe that Income assessable to tax has escaped assessment, the notice does not mention or contain any facts. Soon after receiving this notice, the petitioner approached this court by way of this writ petition on April 15, 1980. It was admitted on April 16, 1980., and on the stay petition it was directed that the petitioner should file his return in response to the impugned notice and the Income-tax Officer may also continue the assessment proceedings but shall not sign the assessment order. Counsel for the Revenue was given six weeks time for filing a counter-affidavit. The writ petition came tip for hearing before us in the year 1991. After hearing the matter for some time, we ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ould make a provision for the said previous years in the calendar year 1971 (assessment year 1972-73). The Income-tax Officer observed further that hitherto the petitioner has been following the mercantile system and claiming deduction on the basis of actual payment and there is no reason why the petitioner should suddenly change over to the actuarial system of valuation of retirement gratuity liability. He rejected the argument that the issuance of a notification dated November 19, 1971, by the Government of Uttar Pradesh has any relevance to the change of method of calculation of liability by the petitioner. The Appellate Assistant Commissioner affirmed the order of the Income-tax Officer. Thereafter, the matter was carried in further app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ioner addressed a letter dated March 31, 1980, to the respondent stating that the impugned notice does not contain any reasons or grounds for which the assessment is sought to be reopened and asserting further that none of the grounds relevant for reopening of the assessment mentioned in either of the two clauses in section 147 are attracted in this case. The representative of the petitioner also personally met the respondents. The respondents informed the petitioner's representative that he proposes to include the aforesaid amount of Rs. 51,61,166 in the income of the petitioner-company in the assessment year 1976-77 under section 41(1) of the Act. The petitioner's representative was also apprised of the fact that action is sought to be ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... year 1972-73, the petitioner was following the practice of debiting the profit and loss account, with amounts actually paid or payable to the retiring workers in each year and had shifted to the actuarial valuation system from that assessment year onwards and has, in later years, shifted back to the old system, it does not follow therefrom that either the liability for which the said amount was provided has ceased or that there are any other facts or grounds attracting the provisions contained in section 41(1) of the Act. Learned counsel also explains that the petitioner has transferred back the amount of Rs. 81,20,209 representing the amount which was set apart as a provision for meeting the retirement gratuity liability, on actuarial valu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... other words, the petitioner abandoned the actuarial valuation method. In such a situation, it may happen that, in the subsequent years, as and when the workers retire and are paid the retirement gratuity, a part of the retirement gratuity amount will certainly come out of the said amount of Rs. 51,61,166 where, of course, the said worker was in the petitioner's employ during the assessment years to which the said amount relates. Out of the amount actually paid to each worker in any subsequent year, how much has come out of the said amount of Rs. 51,61,166 is a question of fact and may have to be looked into and ascertained by the Assessing Officer. But, we find it difficult to say, on the basis of the material before us, either that the lia ..... X X X X Extracts X X X X X X X X Extracts X X X X
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