TMI Blog2020 (9) TMI 1053X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Court in the country is not decisive. As provided in Section 153(6) of the Act, that there must be a Court, and there must be an order of the Court. Therefore, when this Court remands the matter, it is an order of the Court which would extend the limitation for completing the assessment by the Assessing Officer for another twelve months. Contention canvassed on behalf of the revenue that order of any Court in a proceeding otherwise than by way of an appeal or reference under the Act, like order passed under the Land Acquisition matter, etc., is only required to be taken into consideration for the purpose of enabling the AO to pass order of assessment, reassessment, etc., before the expiry of twelve months from the end of the month in which such order is received or passed cannot be accepted, because order of remand which may be passed by this Court would be an order of any Court in a proceeding, otherwise than by way of appeal or reference under the Act, 1961. Therefore matter is remanded back to the Assessing Officer to pass fresh denovo assessment order, after providing all the details and information in possession of Assessing Officer. - R/SPECIAL CIVIL APPLICATION N ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the business of operating an authorized petrol pump of Hindustan Petroleum Corporation Limited. 3.3. The petitioners filed online statement on 07.02.2017 showing total cash deposited by the petitioner, in compliance of the online report demanded by the respondent Income Tax Department on account of the demonetization of ₹ 500/and ₹ 1000/currency notes w.e.f. 08.11.2016. 3.4. It is the case of the petitioners that, the Assistant Director of Income Tax (Investigation) issued summons dated 21.03.2017 to the petitioners along with the questionnaire, wherein, it was mentioned that the petitioners had made a cash deposit of ₹ 4,19,92,190/with HDFC Bank Limited. The petitioners in compliance of the summons, furnished the details, and further clarified that petitioners had deposited cash in the bank after the demonetization amounting to ₹ 7,82,90,640/and not ₹ 4,19,92,190/as mentioned in the summons. 3.5. The petitioners filed return of income for A.Y. 2017 -18 on 24.10.2017 declaring total income of ₹ 12,18,570/. The return of income filed by the petitioners was processed under Section 143(1) of the Income Tax Act, 1961 (for short 'the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pondent to the petitioner to show cause nor the respondent relied upon the documents and information furnished by the petitioners. The respondent on the basis of the Income Tax details with the department came to the conclusion that the petitioners deposited cash amounting to ₹ 19,76,23,060/during the period of demonetization. The respondent, therefore, made an addition of ₹ 11,81,85,010/on account of cash deposited by the petitioners. The Assessing Officer also made an addition of ₹ 51,99,656/on account of cash on hand and further added ₹ 99,25,000/on account of time deposits with the bank, as per the information received and information collected under Section 133(6) of the Act, 1961. The Assessing Officer thus assessed the income of ₹ 13,45,28,236/. 4. Learned advocate Mr. Uchit N. Sheth appearing for the petitioners submitted that without giving an opportunity of hearing and without taking into consideration any of the replies to the show cause notices, the respondent has passed the impugned assessment order by making the additions only on the basis of the details available with the respondent is not tenable in law. 4.1. It was submitted that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... titioners online. Thus, the impugned assessment order is in nature of exparte, in nature of best judgment assessment order under Section 144 of the Act, 1961. However, the respondent has passed the impugned assessment order under Section 143(3) of the Act, 1961 which requires providing an opportunity to the assessee to rebut the proposed additions to be made as there are provisions under the Act, 1961 to issue show cause notices under Section 142(1) and under Section 143(2) of the Act calling upon the assessee to furnish the details and explanation for the additions proposed to be made by the Assessing Officer. 7. On perusal of the impugned assessment order, it appears that, the Assessing Officer has never provided the information in his possession with regard to the cash deposits of ₹ 19,76,23,060/, as against, the details of cash deposits provided by the petitioners amounting for ₹ 7,94,38,050/. Similarly, the details with regard to the information collected under Section 133(6) of the Act from the bank for the time deposit of ₹ 99,25,000/was also not provided to the petitioners, so as to seek explanation before making additions. 8. In view of the above un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rated the above proposition and held that where alternative remedy existed, it would be a sound exercise of discretion to refuse to interfere in a petition under Article 226. This proposition was, however, qualified by the significant words, unless there are good grounds therefor , which indicated that alternative remedy would not operate as an absolute bar and that Writ Petition under Article 226 could still be entertained in exceptional circumstances. 17. A specific and clear rule was laid down in State of U.P. vs. Mohd. Nooh 1958 SCR 595 = AIR 1958 SC 86, as under : But this rule requiring the exhaustion of statutory remedies before the Writ will be granted is a rule of policy convenience and discretion rather than a rule of law and instances are numerous where a writ of certiorari has been issued in spite of the fact that the aggrieved party had other adequate legal remedies. 18. This proposition was considered by a Constitution Bench of this Court in A.V.Venkateswaran, Collector of Customs. Bombay vs Ramchand Sobhraj Wadhwani Anr. AIR 1961 SC 1506 and was affirmed and followed in the following words: The passages in the judgments of this Court we ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Assessing Officer would be entitled to pass afresh assessment order, in view of the limitation for passing the assessment order as provided under Section 153 of the Act, 1961 as the assessment would lapse for want of limitation. 11. Learned advocate Mr. Uchit Sheth for the petitioner submitted that as per Section 153(6) of the Act, 1961, the Assessing Officer has time to pass an assessment order within a period of twelve months from the date of the order passed by this Court. He relied upon the decision of the Apex Court in the case of The Director of Inspection of Income Tax (Investigation), New Delhi and Another v. M/s. Pooran Mal Sons and Another reported in (1975) 4 SCC 568, wherein, the Apex Court has held as under: 6. Even if the period of time fixed under Section 132 (5) is held to be mandatory that was satisfied when the first order was made. Thereafter if any direction is given under Section 132 (12) or by a Court in writ proceedings, as in this case, we do not think an order made in pursuance of such a direction would be subject to the limitations prescribed under Section 132 (5). Once the order has been made within ninety days the aggrieved person has got t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... authority could do under Section 132 (12) a Court could do in writ proceedings. Though the observation was obiter we consider that it is correct. In this connection we must refer to the decision of the Gujarat High Court, relied upon by the respondents, in Ramjibhai Kalidas v. I. G. Desai, (1971) 80 ITR 721 (Guj). In that case it was held that Rule 112A, which provides that a show cause notice in respect of an inquiry under Section 132 (5) is to be made within 15 days from the date of the seizure, is mandatory and if that is not done no order under Section 132 (5) can be passed. It seems to have been admitted before the Bench by the Advocate General who appeared on behalf of the Revenue that he did not dispute that the period of ninety days prescribed under Section 132 (5) is a mandatory period. That decision is, therefore, no authority for the proposition that the period fixed under Section 132 (5) is mandatory. But even if it were the decision that R. 112A is also mandatory is clearly erroneous. When Section 132 (5) permits an Incometax Officer to pass an order within ninety days that power cannot be in any way whittled down by a rule made under that section. 7. On behalf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ;s Compensation Act, 1897 which requires the claim for compensation to be made within six months of the occurrence of the accident causing the injury, it was held that: An agreement arrived at between the parties shortly after the accident that there is a statutory liability on the employer to pay compensation, the amount of compensation being left open for future settlement, is evidence upon which the judge or arbitrator may properly find that the employer is estopped from setting up the defence that the request for arbitration was not filed within six months of the accident . The agreement between the parties in this case that the Incometax Officer may pass a fresh order within two months of the order of the High Court is an agreement which proceeded on the basis that the Incometax Officer had jurisdiction to pass a fresh order. The principle of these decisions is also stated in Craies on Statute Law (6th Edn.) at page 269 as follows: As a general rule, the conditions imposed by statutes which authorise legal proceedings are treated as being indispensable to giving the court jurisdiction. But if it appears that the statutory conditions were inserted by the legislatu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a step in the process of reaching the ultimate finding respecting A. If, however, the finding as to A's liability can be directly arrived at without necessitating a finding in respect of B, then a finding made in respect of B is an incidental finding only. It is not a finding necessary for the disposal of the case pertaining to A. The same principles seem to apply when the question is whether the income under enquiry is taxable in the assessment year under consideration or any other assessment year. As regard the expression direction in S. 153 (3) (ii) of the Act, it is now well settled that if must be an express direction necessary for the disposal of the case before the authority or court. It must also be a direction which the authority or court is empowered to give while deciding the case before it. The expressions finding and direction in Section 153 (3) (ii) of the Act must be accordingly confined. Section 153 (3) (ii) is not a provision enlarging the jurisdiction of the authority or court. It is a provision which merely raises the bar of limitation for making an assessment order under S. 143 or Section 144 of S. 147. Incometax Officer, AWard, Sitapur v. Murlidhar B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unable to hold that the observation of the Appellant Assistant Commissioner can be described as such a finding in relation to the assessees. 13. It is also not possible to say that the order of the Appellate Assistant Commissioner contains a direction that the excess should be assessed in the hands of the coowners. What is a direction for the purposes of S. 153 (3) (ii) of the Act has already been discussed. In any event, whatever else it may amount to, on its very terms the observation that the Income-tax Officer is free to take action to assess the excess in the hands of the coowners cannot be described as a direction . A direction by a statutory authority is in the nature of an order requiring positive compliance. When it is left to the option and discretion of the Income-tax Officer whether or not to take action it cannot, in our opinion, be described as a direction. 14. Therefore, in our judgment the order of the Appellant Assistant Commissioner contains neither a finding nor a direction within the meaning of Section 153 (3) (ii) of the Income tax Act in consequence of which or to give effect to which the impugned assessment proceedings can be said to have be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 153. (6) Nothing contained in subsections (1) and (2) shall apply to the following classes of assessments, reassessments and re-computation which may, subject to the provisions of subsections (3) and (5), be completed- (i) where the assessment, reassessment or re-computation is made on the assessee or any person in consequence of or to give effect to any finding or direction contained in an order under section 250, section 254, section 260, section 262, section 263, or section 264 or in an order of any court in a proceeding otherwise than by way of appeal or reference under this Act, on or before the expiry of twelve months from the end of the month in which such order is received or passed by the Principal Commissioner or Commissioner, as the case may be; or (ii) where, in the case of a firm, an assessment is made on a partner of the firm in consequence of an assessment made on the firm under section 147, on or before the expiry of twelve months from the end of the month in which the assessment order in the case of the firm is passed. 14. On perusal of the aforesaid provision of Section 153(6)(i) of the Act, 1961 which applies to assessment, reassessment or re-c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (ii) where the assessment, reassessment or re-computation is made on the assessee or any person in consequence of or to give effect to any finding or direction contained in an order under section 250, 254, 260, 262, 263 or 264 or in an order of any court in a proceeding otherwise than by way of appeal or reference under this Act. Section 153(3) in clear terms lifts the bar of limitation for reopening of assessments to which certain periods of limitation are prescribed under s. 153(1) and (2) of the Act. Sri Ramabhadran also does not dispute this position also. But, he contends that the words or in an order of any court in a proceeding otherwise than by way of appeal or reference under this Act should be given a restricted meaning and should be read as referable to proceedings of the very assessee for the very assessment period either before a High Court or the Supreme Court that can deal with an assessment under the Constitution and not to every order of every court in other legal proceedings like the land acquisition proceedings. Maxwell on the Interpretation of Statutes (eleventh edition) states the very first principle of construction of statutes in these words : ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... retation, which is impermissible. Section 153(3) is not a charging section but is only a machinery provision. It is well settled that machinery provisions should be construed liberally. Applying this principle, as also the first principle of construction of statutes, namely, that the statute has to be expounded according to the intent of them who made it, it is not possible to accede to the construction suggested by Sri Ramabhadran. In New Jehangir Vakil Mills' case [1979] 117 ITR 849, the Gujarat High Court, examining a similar question, has expressed thus (p. 857) : It is clear that once the amount of compensation is finally determined in judicial proceedings, effect to that finding will have to be given with reference to the year in which possession was taken and since that is so, by virtue of s. 153(3)(ii), the question of limitation would not arise for consideration. That is the prima facie view which appears to us at the present stage. Sri Ramabhadran contends that this enunciation made by their Lordships of the Gujarat High Court, without any discussion and reasons, was not necessary for deciding the case that arose before this court. Even assuming th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... horities as apprehended by them. Under these circumstances, the directions which were sought for availing of alternative remedy are not necessary at all. Under these circumstances, the Tribunal was right in refusing to give directions as it did. The question in Reference No. 124 of 1978 must, therefore, be answered in the affirmative, that is, in favour of the assessee and against the revenue. 18. In view of the above dictum of law, the contention canvassed on behalf of the revenue that order of any Court in a proceeding otherwise than by way of an appeal or reference under the Act, like order passed under the Land Acquisition matter, etc., is only required to be taken into consideration for the purpose of enabling the Assessing Officer to pass order of assessment, reassessment, etc., before the expiry of twelve months from the end of the month in which such order is received or passed cannot be accepted, because order of remand which may be passed by this Court would be an order of any Court in a proceeding, otherwise than by way of appeal or reference under the Act, 1961. Therefore, in view of the above discussion, the Assessing Officer would be able to pass fresh assessmen ..... X X X X Extracts X X X X X X X X Extracts X X X X
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