TMI Blog1981 (6) TMI 13X X X X Extracts X X X X X X X X Extracts X X X X ..... rder of the AAC. He observed in his order, inter alia, as follows: " I have carefully considered the appellant's contention with reference to the income-tax: record and find them to be correct. The original return was filed on June 25, 1965. Revised return filed on December 5, 1967. Due date for filing of the return was June 30, 1964. Ordinarily, the assessment for the assessment year 1964-65, should have been completed on March 31, 1969. It is seen that the demand notice is dated on May 30, 1969, received by the appellant on June 3, 1969. So, I find that the assessment has not been completed within the time allowed by the Income-tax Act, 1961. So, I hereby cancel the assessment as void and time-barred. The appeal is allowed." Being aggrieved by the aforesaid order of the AAC, the Revenue went up in appeal before the Tribunal. The Tribunal, after dealing with the rival contentions observed, inter alia, as follows : " We have considered the rival submissions. We have perused the assessment records. We find that the assessment order which is signed by the Income-tax Officer is dated March 26, 1969. We have also seen duplicate copy of the demand notice and it is dated March 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bunal that the assessment form determining the tax liability was also signed on March 27, 1969, is based on any material and/or evidence and whether the said finding is perverse ? 2. Whether, on the facts and in the circumstances of the case, the Tribunal was justified in law in holding that the assessment has been made within the period of limitation prescribed under section 153(1)(a) of the Income-tax Act, 1961 ? 3. Whether, an assessment made by the Income-tax Officer without communicating the said order of assessment and the demand notice of the said assessment within time can be treated as a valid assessment made within, the period of limitation prescribed under section 153(1)(a) of the Income-tax Act, 1961 ? " The Tribunal by its order held that the first question was a question of fact and was not referable to the High Court. The Tribunal was, however, of the view that questions Nos. 2 and 3 aforesaid should be referred. The Tribunal made a reference and the first reference is regarding those two questions. The assessee being aggrieved by the order of the Tribunal moved an application under s. 256(2) of the I.T. Act, 1961, for reference on the first question indicat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erved. Hence, another demand notice dated May 30, 1969, was issued. This was nothing but a duplicate one as the original demand notice was issued on March 27, 1969. Thus, he submitted that the assessment had been completed within time and the same was not time-barred. He also submitted that the Appellate Assistant Commissioner did not correctly apply the ratio laid down by the Madras High Court in the case of Rm. P. R. Viswanathan Chettiar v. CIT [1954] 25 ITR 79, and the ratio laid down by the Supreme Court in CIT v. Balkrishna Malhotra [1971] 81 ITR 759. Thus, he submitted that the order of the Appellate Assistant Commissioner should be cancelled. The learned counsel for the assessee submitted that the demand notice dated May 30, 1969, was the only one which was served on the assessee and it was not written on this notice that it was a duplicate one. Hence, it should be taken that it was the original demand notice issued for the first time on May 30, 1969. Hence, the assessment made was barred by time and the Appellate Assistant Commissioner was perfectly justified in cancelling the assessment. He further submitted that the registered notice which came back unserved had not bee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... preme Court reiterated that the jurisdiction conferred on the High Court under s. 66(1) of the I.T. Act was limited to entertaining a reference involving questions of law. If the point raised in the reference related to the construction of a document of title or to the interpretation of the relevant provisions of the statute, it was pure question of law. Though the High Court might have due regard for the view taken by the Appellate Tribunal, its decision would not be fettered by the Tribunal's view. It was free to adopt such construction of document or the statute, as appeared to it reasonable. Where the point sought to be raised on a reference was a pure question of fact, the finding of fact recorded by the Tribunal must be regarded as conclusive in proceedings under s. 66(1) of the 1922 Act. The Supreme Court observed that if, however, such a finding of fact was based on an inference drawn from primary evidentiary facts proved in the case, its correctness and validity were open to challenge in a reference proceeding within narrow limits. Here the Tribunal has not arrived at its conclusion that the assessment order was passed within March 31, 1969, on any fact apart from the fact ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... year in which the notice under section 148 was served; (b) where the assessment, reassessment or recomputation is to be made under clause (b) of that section, after (i) the expiry of four years from the end of the assessment year in which the income was first assessable, or (ii) the expiry of one year from the date of service of the notice under section 148, whichever is later. (3) The provisions of sub-sections (1) and (2) shall not apply to the following classes of assessments, reassessments and recomputations which may be completed at any time- (i) where a fresh assessment is made under section 146; (ii) where the assessment, reassessment or recomputation 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]; (iii) 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." The question is whether the order of assessment as contemplated under s. 152 woul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on, we have to see to the context in which the word is used and the purpose intended to be achieved. It is true that sub-sections (1), (3) and (4) of section 23 require the Income-tax Officer to 'assess the total income of the assessee and determine the sum payable by him'. In other words, in those provisions the word 'assess' has been used with reference to computation of the income of the assessee and not the determination of his tax liability. Bat in section 34(3) the word used is not 'assess' but 'assessment'. The question for decision is what is the meaning of that word ? As long back as September 24, 1953, the High Court of Madras in Viswanathan Chettiar's case [1954] 25 ITR 79 (Mad) came to the conclusion that the word 'assessment' in the proviso to section 34(3) means not merely the computation of the income of the assessee but also the determination of the tax payable by him. " The Supreme Court, however, noted that the Act of 1922 was repealed by the I.T. Act, 1961, and the provisions of the new Act were materially different from the previous Act. Now the Supreme Court was delivering judgment on July 28, 1971. So far as we are concerned, as we have noticed, the provisio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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