TMI Blog1990 (10) TMI 27X X X X Extracts X X X X X X X X Extracts X X X X ..... to agricultural income-tax. It is a public limited company. The respondent is the Revenue. We are concerned with the assessment year 1969-70, for which the accounting period ended on June 30, 1968. The original assessment for the year 1968-69 was completed on March 26, 1969, and for the year 1969-70, it was completed on April 25, 1972. An amount of Rs. 57,419 which was received by the company during the year 1969-70 towards the value of coffee pooled during the years previous to this year was excluded from assessment for 1970-71, treating the amount as income related to the accounting year relevant to the assessment year 1969-70. It was not assessed for any previous year. Out of the sum of Rs. 57,419, a sum of Rs. 10,679 related to the assessment year 1968-69 and Rs. 26,188 related to the assessment year 1969-70. In view of the decision of the Supreme Court in State of Kerala v. Bhavani Tea Produce Co. Ltd. [1966] 59 ITR 254, a decision rendered as early as October 7, 1965, the above amounts should have been assessed for the years 1968-69 and 1969-70. It was not done though the assessments were made for the year 1968-69 on March 26, 1969, and for the year 1969-70 on April 25, 1972. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... year 1969-70. We heard counsel for the applicant (assessee), as also counsel for the respondent (Revenue), Senior Government Pleader. Counsel for the assessee referred to the decisions in Bhavani Tea and Produce Co. v. Commr. of Agri. I. T. [1972] 2 Tax LR 2413 (Ker), Deputy Commr. of Agri. I. T. and S. T. v. P. S. B. Paul Pandian [1981] 128 ITR 809 ; [1981] KLT 66 (Ker) and Krishna Bhatta v. Agri. ITO [1981] 132 ITR 21 (Ker) and contended that the Commissioner of Agricultural Income-tax invoked the jurisdiction vested in him under section 34 of the Act after inordinate delay, that the said jurisdiction had not been invoked within a reasonable period and so the power vested in the Commissioner of Agricultural Income-tax has been exercised arbitrarily and capriciously. It was stated that, in these circumstances, in view of the lapse of 10 years, the Commissioner of Agricultural Income-tax has no power under section 34 of the Act to direct the assessing authority to make a revision of the assessment for the year 1969-70, originally completed on April 25, 1972, and the matter is barred by limitation. On the other hand, counsel for the Revenue submitted that the power of revision is v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n assessee, call for the record of any proceeding under this Act which has been taken by any authority subordinate to him and may make such enquiry or cause such enquiry to be made and, subject to the provisions of this Act, may pass such orders thereon as he thinks fit : Provided that he shall not pass any order prejudicial to an assessee without hearing him or giving him a reasonable opportunity of being heard : Provided further that an order passed declining to interfere shall not be deemed to be an order prejudicial to the assessee. Provided also that no application for revision shall be entertained under this section unless it is accompanied by satisfactory proof of the payment of the tax admitted by the petitioner to be due. (2) Any order passed under sub-section (1) shall be final subject to any reference that may be made to the High Court under section 60." We may also refer to sections 35(1) and 36(1) of the Act which deal with the provisions to assess income escaping assessment and the power to rectify mistakes in any assessment order. Section 35(1) reads as follows : " 35. Income escaping assessment.--(1) If for any reason agricultural income chargeable to ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... revise an order passed by the subordinate authority. Prima facie, the proceedings under section 34 can be initiated at any time. The outer time-limit or the frontier specified in section 35 of the Act (five years from the end of the assessment year) or in section 36 of the Act (three years from the date of the assessment order) are not prima facie applicable to proceedings in revision initiated under section 34 of the Act, to scrutinise the legality of an order passed by an assessing authority. Even so, the question arises as to whether the powers under section 34 of the Act can be exercised at any time to reopen an assessment which has become final, even beyond the time limit specified in sections 35 and 36 of the Act. In Bhavani Tea and Produce Co.'s case [1972] 2 Tax LR 2413 (Ker) the court took the view that it may be permissible to exercise the jurisdiction under section 34 of the Act to the benefit of the assessee at any time, but there should be some reasonableness regarding the time limit in case proceedings are taken suo motu, when the exercise of jurisdiction would affect the assessee adversely, at variance of an assessment already effected, and, in that case, nine yea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Act within a reasonable period. The order of assessment for the year 1969-70, passed on April 25, 1972, had become final. A notice to revise the said assessment was issued to the assessee on February 13, 1979. The assessee filed his objections thereto on March 8, 1979. By order dated February 28, 1982, passed under section 34 of the Act, the Commissioner of Agricultural Income-tax set aside the assessment order for the year 1969-70 and ordered a remit for fresh disposal in accordance with law. Admittedly, suo motu revision proceedings were initiated nearly seven years after the final assessment and the revisional order was passed nearly ten years after the said assessment was rendered. Is it possible to say that, in all the circumstances of the case, the power under section 34 of the Act has been exercised by the Commissioner of Agricultural Income-tax within a reasonable time ? The normal period within which an assessment, once made, can be reopened under section 35 of the Act, is five years from the end of the assessment year. Under section 36, a mistake could be rectified within three years from the date of the assessment order. Once a final assessment is rendered (after t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... within the four corners of the legislative mandate, it is said that he has arrived at the decision which is repugnant to "reason". The decision is "irrational" and so unfair and illegal. Viewed in the above perspective, can it be said that the order of suo motu revision passed by the Commissioner of Agricultural Income-tax dated February 28, 1982, reopening the assessment order for the year 1969-70 dated January 25, 1972, is rational or reasonable ? Is it fair and legal ? That is the sole question to be decided on the facts and circumstances of the case. That is the very point made out by the assessee in his objections dated March 8, 1979. But, unfortunately, the attention of the Commissioner of Agricultural Income-tax was not focussed on the said crucial question ; nor has he decided the said question when he passed the revisional order dated February 28, 1982. Since the question whether the power has been exercised within a reasonable period depends upon the facts of each case, it is initially for the statutory authority before whom such objection is raised to advert to all the facts and circumstances and then come to a decision on the said question. That has not been done in th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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