TaxTMI 
TaxTMI 
1996 (6) TMI 349
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....e issued under section 148 is bad in law and the consequent assessment is, therefore, also bad in law and void". The appellants also had challenged the levy of interest under sections 234A and B of the Income-tax Act, 1961 (hereinafter referred to as the Act) in the like manner as was raised in their appeal for the assessment year 1990-91. 3. On the three common issues for the two assessment years, it is agreed between the assessee and the Revenue that they involve identical facts, circumstances are similar and that the conclusion for the assessment year 1990-91 would apply with equal force. Considering the above and the fact that the additions, basis of the additions being similar in every respect to the facts for the assessment year 1990-91 and the same two assessees were involved, that was extensively argued by both parties, which was disposed of by a separate order, we direct the Assessing Officer (AO) to redo the assessment relating to these additions and while doing that, Assessing Officer would remember that all our directions, guidelines and observations would apply with equal force to the present two assessment years as well and would have to follow them in these two....
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....ing Officer (AO) shall serve on the assessee a notice requiring him to furnish within such period, not being less than thirty days, as may be specified in the notice, a return of his income. He had provided a copy of the notice that was issued in the instant cases and submitted that the notice gives a direction to the assessee to deliver to the Assessing Officer within thirty days from the date of service of the notice a return in the prescribed form in respect of which the assessee is assessable for the assessment year. 7. He pointed out that while the section allows furnishing of a return within such period not less than thirty days, the notice restricts the time for filing of the return by giving a direction to file the return within thirty days from the date on which the notice was served on the assessee. He contended that because the notice does not speak the same language as the section, it is invalid and illegal. He submitted that on the face of it, it may appear that the notice speaks the language of the section but, the Bombay High Court in Commissioner v. Ekbal & Co. (1945) 13 ITR 154 (Bom.) had categorically held that the words `not less than thirty days' and `withi....
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....r cases when they were pointed as above and in a few other cases, they had modified the notice to read as within 31 days in place of the earlier within thirty days. He had placed on our records such notices in support of the above submissions. 10. Mr. Mistry submitted that the words `not less than' had been examined by the Supreme Court in its two decisions, namely, Commissioner v. Braithwaite & Co. Ltd. (1993) 201 ITR 343 (SC) and in Commissioner v. New India Industries Ltd. (1995) 212 ITR 653 (SC) and both these decisions were with reference to the words appearing in the Second Schedule to The Companies (Profits) Surtax Act, 1964, which prescribed the rules for computing the capital of a company for the purposes of that Act. The words `not less than' appeared in relation to amount borrowed for the creation of a capital, the agreement of borrowal providing for repayment during a period not less than seven years. In the first case, the borrowal was repaid in exactly seven years and the Supreme Court upheld the denial of inclusion of the borrowal as part of the capital by observing that the words `not less than seven years' meant seven years and more. The second case wa....
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....upra) had examined the aspect of waiver by the assessee by filing the return too soon and had categorically held that the filing of the return does not mean waiver of the right to challenge the validity of the notice and had upheld the invalidity of the notice. 14. We have heard the rival submissions and have given them our very careful consideration. The issue raised by the assessee is rather intriguing and in the light of the submissions of the Departmental Representative that there had been a total overhaul of the 1922 Act it has aroused sufficient excitement too. We have, therefore, to examine the issue with reference to the similarity or its absence of between the 1922 Act and the Act, it is necessary to reproduce the provisions of sections 34(1) and 22(2) of the 1922 Act and comparative provisions of sections 148(1) and 139 (2) of the Act. Section 22 (2) 1922 Act Section 139 (2) 1961 Act In the case of any person whose total income is, in the ITO's opinion, of such an amount as to render such person liable to income-tax, the ITO may serve a notice upon him requiring him to furnish, within such period, not being less than thirty days as may be specified a return in t....
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....1922 Act and in order to bring uniformity between the section and the notice, had substituted the words used in the notice, namely, a notice to him and serve the same upon him requiring him to furnish, within thirty days from the date of service of the notice in the section itself. Thus, there remained no conflict between the section and the notice because the notice spoke the intention of the section and accordingly, there was no likelihood of a similar situation arising as was considered by the Bombay High Court in Ekbal & Co. (supra). The claim of the Departmental Representative that there was overhaul of the provisions under the 1961 Act, in view of the above, is found to be correct. 16. However, the amendment by the Direct Tax Laws (Amendment) Act, 1987, killed the uniformity that existed between the section and the notice and brought back to life the buried conflict as existed under the 1922 Act by using the words, the Assessing Officer shall serve on the assessee a notice requiring him to furnish within such period, not being less than thirty days, as may be specified in the notice, a return of his income, which words were part of section 22(2) of the 1922 Act, namely, the ....
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....eceipt of the notice.' The Tribunal in its judgment after referring to certain passages from Maxwell on `Interpretation of Statutes', 8th Edn., stated as follows The learned author proceeds to observe that where `not less than' or such other expression is used specifying the time for doing an act the ending terminal must also be excluded from the computation. Section 22(2) clearly lays down that an assessee must be given a period of `not less than 30 days' from the receipt of the notice to furnish the return of his total income. It would, therefore, follow that he must have thirty clear days and thirty days must be excluded from the computation. In the present case as we have already pointed out the assessee was asked to furnish the return within 30 days. Such a requirement did not amount to giving him clear 30 days for the purpose. We, therefore, think that the notice in this case is illegal. The fact that the assessee submitted a return later or that it was accepted for the purpose of making the assessment does not, in our opinion, cure the defect that initially lay in the notice. I agree with the statement of the Tribunal In my judgment expressions `within th....