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TMI Blog1986 (7) TMI 154X X X X Extracts X X X X X X X X Extracts X X X X ..... commencing from the date on which the Income-tax Officer forwards the draft order under sub-section (1) of section 144B to the assessee and ending with the date on which the Income-tax Officer receives the directions from the Inspecting Assistant Commissioner under sub-section (4) of that section, or, in a case where no objections to the draft order are received from the assessee, a period of thirty days" shall be excluded while computing the period of limitation for making the assessment. In other words, the time not exceeding 180 days envisaged under clause (iv) of the Explanation is to be added to 31-3-1983 and if the assessment has been made within such extended period, then it would be saved from limitation. On the other hand, if the assessment has been made not even within this extended period, then it will be barred by limitation and so be invalid in law. The case of the assessee before the Commissioner (Appeals) was that the assessment made was barred by limitation as it has been made on a date which was not only beyond 31-3-1983 but also beyond the extended period envisaged under clause (iv) of the aforesaid Explanation. The following dates were pointed out by the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d at 149 days which was enough to explain the delay of 140 days. In this view of the matter, he held that the assessment made on 18-8-1983 has been made within the extended period envisaged under clause (iv) of the aforesaid Explanation and so it was not barred by limitation and quire valid in law. Hence, he dismissed the assessee's appeal. 4. Shri R. N. Bajoria, the learned representative for the assessee, urged before us that the Commissioner (Appeal) erred in his decision. According to him, the draft order was not forwarded on 2-12-1982. All that was done on that day was that the ITO signed the draft order and the forwarding letter with the intention to forward the same. It was still lying in his office and he could have recalled it and cancelled it had he wanted to do so. He urged that the process of forwarding begins only when the ITO puts the draft order in the process of transmission in such as way that it is beyond his power to recall it. Such a situation arose only when the draft order left his office on 14-12-1982. Further, he urged that the forwarding never commenced until the contents of the draft order were communicated to the assessee on 16-12-1982. According to him, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the order has to be communicated to the person who would be affected by that order and so it is not effective until such communication. Shri R. N. Bajoria pointed out that the decision in the case of Mahabir Prosad Poddar was confirmed by a Division Bench of the Hon'ble Calcutta High Court in CIT v. Mahabir Prasad Poddar [1974] 93 ITR 215. He referred to page 221 of that report wherein it has been stated that the order under section 132(8) should be communicated to the owner of the seized books as otherwise the right of appeal granted under section 132(10) would become nugatory. The Hon'ble High Court has laid down that communication is essential in such a case as it is in accordance with the clear intention of the Legislature. Hence, he urged that in the instant case the date of forwarding of the draft order should be taken as the service on the assessee, i.e., on 16-12-1982 so that the assessment made on 18-8-1983 becomes time barred by five days. He urged that the assessment made by the ITO deserved to be quashed on that ground. 5. Shri A. Singh, the learned representative for the department, on the other hand, supported the order of the Commissioner (Appeals). He stated th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... il it was served on the assessee on 16-12-1982. He stated that the case of Mahabir Prosad Poddar is distinguishable because in that case no communication at all was made unlike the instant case where the communication has been made within a reasonable time. He pointed out that the letter was signed on 2-12-1982, and it was served on the assessee on 16-12-1982 and the small gap of 14 days taken for observing the official formalities cannot be said to be so large as to cancel the forwarding which had already begun. Hence, he said that the decision in the case of Mahabir Prosad Poddar does not apply to the facts of the instant case. On the contrary, he urged that the decision in the cases of K. U. Srinivasa Rao and Sheo Kumari Debi applies to the facts of the present case. 6. We have considered the contentions of both the parties as well as the facts on record. The short issue that is raised in this appeal centres round the meaning of the word 'forwards' appearing in clause (iv) of explanation 1 to section 153. In particular, when does this forwarding of the draft order of the ITO begin? Does it begin when the ITO signs the forwarding letter and passes it on to the issue section of h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly when it is communicated to the assessee. On a bare reading of the provisions contained in clause (iv) of Explanation 1 to section 153, and remembering its context and setting, it is quite clear that the Legislature refers to the Act of forwarding by the ITO. No reference is intended to the issue of the draft order by the office of the ITO or its service on the assessee. Both these events are, in our opinion, subsequent in point of time to the Act of forwarding. Evidently, the ITO only finalises the draft order and the forwarding letter by signing and dating them. He forwards those papers to the issue section of his office which then follows the normal course of ensuring that the papers proceed on their onward journey till their ultimate destination of reaching the assessee. Thus, the forwarding begins went be papers, duly signed and dated and intended for dispatch to the assessee leave the table of the ITO. The Legislature has clearly intended this event when it has used the word 'forward'. Otherwise, there was no difficulty in using the word 'issue' or 'serve' as has been used at several other places in the Act. The cases relied on by the learned representative for the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X
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