TaxTMI 
TaxTMI 
1984 (4) TMI 115
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....ound remaining for our decision was that the assessment was barred by limitation. 2. The return of income was filed by the assessee on 31-7-1978 declaring a total income of Rs. 3,23,904. The ITO wanted to make an addition exceeding Rs. 1,00,000 and, therefore, on 30-3-1981, he forwarded a draft of the assessment order to the assessee by registered post, which was served on the assessee on 1-4-1981. The assessee raised certain objections and after referring the matter to the IAC in terms of section 144B of the Act, the assessment was finally completed on 25-8-1981 on a total income of Rs. 4,60,490. In the ordinary course, the assessment should have been completed by 31-3-1981, but since procedure of reference to the IAC under section 144B....
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....t accordingly. In case of objections, however, the ITO has to forward the draft order, along with the objections, to the IAC and after receipt of his directions the assessment has to be completed. Section 153 prescribes the time limit within which an assessment has to be completed. Under section 153(1)(a)(iii), an assessment in the present case was to be completed within two years from the end of the assessment year. Thus, the last day for the completion of the assessment, as conceded on both sides, was 31-3-1981. Explanation 1 to section 153 provides for the exclusion of various periods in calculating the period of limitation. Clause (iv) of this Explanation provides that the period (not exceeding 180 days) commencing from the date on whic....
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....and under the postal rules, the ITO had a right to get back the postal article before it was delivered to the assessee, and therefore, since the article was in the possession of the ITO till the time it was delivered to the assessee on 1-4-1981, it cannot be said that it had been forwarded to the assessee. It was also argued that the word 'issue' in relation to issue of notices has, at times, been interpreted to mean 'served' and in the same manner, the word 'forward' in sub-section (1) of section 144B should also be read to mean 'served' or 'delivered'. 5. It is no doubt true that when an article is delivered to the postal authorities for transmission and delivery to another person, the postal authorities act as the agents of the sender....
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....retation, as laid down by the Hon'ble Supreme Court in R.L. Arora v. State of U.P. AIR 1964 SC 1230 and relied upon by the learned counsel for the assessee, is that in a statute the Court has to look at the setting in which the words are used and the circumstances in which the law came to be passed to decide whether there is something implicit behind the words actually used which would control the literal meaning of the words used in a provision to the statute. In Banarsi Debi v. ITO [1964] 53 ITR 100 (SC) the provisions of section 4 of the Indian Income-tax (Amendment) Act, 1959, came for interpretation before the Hon'ble Supreme Court and it was held that the word 'issued' used in section 4 meant 'served' as well and that the expressions ....
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....f the Legislature. In sub-section (2) of section 139 of the Act, when the ITO wants an assessee to file its return of income, the ITO has to 'issue a notice to him and serve the same upon him'. The words used in this section clearly indicate that the Legislature was even alive to the misunderstanding that the word 'issue' may cause and, therefore, it has specifically added the word 'serve'. Section 148 of the 1961 Act, which is equivalent to section 34 of the 1922 Act, also requires the ITO to serve on the assessee a notice. Here also, the Legislature has specifically provided for service of the notice. In contradistinction to this, in section 144B the word used is merely 'forward'. Then, in Explanation 1 to section 153 also the word 'forwa....
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.... the draft to the assessee and it comes to an end on the date the ITO receives the directions from the IAC. Neither the ITO has any option to extend the time for objections beyond a period of 15 days nor the IAC has the opportunity or discretion of keeping the matter pending with him as long as he likes. Therefore, clause (iv) of Explanation 1 specifically deals with the period which has to be excluded in computing the period of limitation and the word 'forward' used in this clause has its natural meaning, i.e., put in the course of transmission and cannot be read to mean 'served', as contended on behalf of the assessee. If the word 'forwards' was intended by the Legislature to have the same meaning as 'served', then the Legislature would n....