TaxTMI 
TaxTMI 
2006 (12) TMI 104
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....l in August, 2002. Reliance has been placed on section 153(2A) of the Income-tax Act, 1961 (IT Act) which, at the relevant time, mandated that a " fresh assessment" in pursuance of an order under section 250, 254, 263 or 264, setting aside or cancellation of an order must be made before the expiry of two years (currently one year) from the end of the financial year in which such order is received by the Chief Commissioner or Commissioner. It appears that on December 22, 2004, the Assessing Officer eventually issued a notice under section 152 of the Income-tax Act to the petitioner, who immediately responded vide its communications dated January 11, 2005, and February 24, 2005, that the proceedings were no longer competent, as they had travelled beyond the time prescribed in section 153(2A) of the statute. The present writ petition is predicated on this factual matrix. The Assessing Officer, however, framed the assessment on February 28, 2005, i.e., before the filing of the present writ petition. Indeed, it is remarkable that the averment in the writ petition is that as on March 11, 2005, " the Assessing Officer despite objection is adamant in framing the assessment despite the fact....
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.... Chemical Sales Corporation v. New Delhi Municipal Council [1996] VAD (Delhi) 89 another Division Bench has observed that in the ordinary course it may not be very appropriate to resort to article 226 if an alternative efficacious remedy is available. Nevertheless the Division Bench entertained the writ petition since the orders that had been assailed could have been viewed as void and non est and for the reason that the adjudication involved the determination of pure questions of law. Yet another Division Bench has dealt with this very question in Indian Hotels Co. Ltd. v. New Delhi Municipal Council [1996] III AD (Delhi) 299 noting that an earlier judgment of the Constitution Bench of the Supreme Court had not been laid before their Lordships when called upon to decide the appeal in Shyam Kishore v. Municipal Corporation of Delhi, AIR 1992 SC 2279. The Division Bench observed, inter alia, as follows : "34. Yet another aspect which needs to be taken note of is the pro vision by the Legislature for 100 per cent. deposit of tax before filing an appeal. This provision has been introduced obviously in the interest of revenue, so as to see that unwilling taxpayers do not delay....
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.... authority. This provision too deserves to be suitably amended so as to confer a discretionary power on the appellate authority allowing dispensation of the deposit of the amount of tax wholly or partially in very deserving cases made for payment of interest so as to adequately compensate the corporation for the delayed recovery in the event of appeal being dismissed or interim order being vacated. Such a provision would serve the ends of justice giving relief to the assessee/appellants in deserving cases and reduce the filing of writ petitions in superior courts." 4. Another Division Bench of this court in D. R. Aggarwal v. New Delhi Municipal Committee, AIR 1999 Delhi 67, has rejected a similar objection, and has articulated the following enunciation of the law (page 68) : "The Full Bench decision of this court in Shyam Kishore v. Municipal Corporation of Delhi, AIR 1991 Delhi 104, which was affirmed by the Supreme Court in 1993 (1) SCC 22 (AIR 1992 SC 2279), was mainly concerned with the question of validity of the provisions of section 170(b) of the Delhi Municipal Corporation Act, 1957. The Supreme Court while affirming the said Full Bench decision only stated that....
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....ute, viz., section 9 of the Code of Civil Proce dure. In our view it has always been the law in our country that a constitutional remedy available to a citizen cannot be barred by a provision regarding finality or alike in a statute." 5. It may also be recalled that the seven-judge Constitution Bench had clarified in L. Chandra Kumar v. Union of India [1997] 228 ITR 725; [1997] 91 FJR 1 (SC) ; 105 STC 618 (SC) ; [1997] 3 SCC 261, that the powers reposed in the High Courts under article 226 of the Constitution cannot be rendered nugatory by any statutory enactment. The court opined that the " . . . jurisdiction conferred upon the High Courts under article 226/227 and upon the Supreme Court under article 32 of the Constitution is part of the inviolable basic structure of our Constitution. While this jurisdiction cannot be ousted, other courts and Tribunals may perform a supplemental role in discharging the powers conferred by articles 226/227 and 32 of the Constitution." 6. Very recently, in State of H. P. v. Gujarat Ambuja Cement Ltd., AIR 2005 SC 3936 this very aspect of the law has been discussed in detail. The decision constitutes a restatement of the law on the interplay b....
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....nder section 34 were not satisfied and came to the court at the earliest opportunity. There is nothing in its conduct which would justify the refusal of proper relief under article 226. When the Constitution confers on the High Courts the power to give relief it becomes the duty of the courts to give such relief in fit cases and the courts would be failing to perform their duty if relief is refused without adequate reasons. In the present case we can find no reason for which relief should be refused. 16. We have, therefore, come to the conclusion that the company was entitled to an order directing the Income-tax Officer not to take any action on the basis of the three impugned notices. We are informed that assessment orders were in fact made on March 25, 1952, by the Income-tax Officer in the proceedings started on the basis of these impugned notices. This was done with the per mission of the learned judge before whom the petition under article 226 was pending, on the distinct understanding that these orders would be without prejudice to the contentions of the parties on the several questions raised in the petition and without prejudice to the orders that may ulti....
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.... 3. PF collection under section 36(i)(va) 8,148 4. Unclaimed sundry balance over three years 71,137 10. The matter eventually came to be disposed of by the Income-tax Appellate Tribunal vide their consolidated order dated June 23, 2000, in three appeals covering three combined assessment years 1992-93, 1993-94 and 1994-95. The operative part of the order, which is at the fulcrum of the disputes before us, reads as follows : "15. We have considered the rival submissions and the materials on the file. We are of the view that the case had not been properly examined by the Assessing Officer and the learned Commissioner of Income-tax (Appeals). It appears that sufficient reasonable opportunity was not given to the assessee to place the complete facts and to furnish necessary explanation and evidences regarding the cash payment in question. Both the Assessing Officer and the learned Commissioner of Income-tax (Appeals) considered the issue in question in a routine manner. It was a case where huge amounts were involved in all the three years in question and the case required proper con sideration of the details, explanations. We find that neither the Assessing Offi....
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....nd then to pass fresh order as per law, rule and the Central Board of Direct Taxes circulars." 11. Along with the writ petition, the petitioner has annexed a copy of the letter dated August 18, 2000, addressed to the Deputy Commissioner of Income-tax, Company Circle 2(1), New Delhi, forwarding a photocopy of the aforementioned consolidated order of the Income-tax Appellate Tribunal, and stating that-" Perusal of the order would show that the hon' ble Tribunal has given directions for fresh order and has allowed the appeals for statistical purposes" . There is a stamp of the assessee of even date. The contention of Shri J. R. Goel, learned counsel for the Revenue, is that the above extract clearly shows that the remanded assessment was to be made in order to give effect to the findings and directions made by the Income-tax Appellate Tribunal in the order passed under section 254 of the Act. Although the remand order is dated June 23, 2000, a notice under section 143(2) is stated by the Department to have been served on the assessee as late as on September 2, 2004, requiring the assessee to appear before the Assessing Officer on September 10, 2004. No explanation has been offe....
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.... the selected aspects of the assessment which it had " restored" for reconsideration of the Assessing Officer, arguments pertaining to the time-barring of the proceedings would have been obviated. Further still, instead of the words " fresh order as per law" it should preferably have used the words " fresh assessment" or " reassessment" or " re-computation" . The language employed by the Income-tax Appellate Tribunal is most unsatisfactory and has resulted in creating scope for further litigation. 13. The time-limit for completion of assessments and reassessments is to be found in section 153 of the Income-tax Act. It has already been noted that different periods have been prescribed for actions envisaged in the statute. Thus, the limitation is presently two years for first assessment as it used to be for section 147/148 (which stands reduced to one year by the Finance Act, 2001) etc. etc. We are presently concerned with sub-section (2A) relied upon by Mr. Kapur, learned counsel for the assessee whereas sub-section (3)(ii) is referred to by Shri Goel, learned counsel for the Revenue : "153(2A) Notwithstanding anything contained in sub-sections (1), (1A), (1B) and (2), i....
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....me 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 regards the expression ' direction' in section 153(3)(ii) of the Act, it is now well settled that it 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 section 143 or section 144 or section 147 : ITO v. Murlidhar Bhagwan Das [1964] 52 ITR 335 (SC) and N. K. T. Sivalingam Chettair v. CIT [1967] 66 ITR 586 (SC). The question for mulated by the Tribunal raises the point whether the Appellate Assistant Commissioner could convert the provisions of section 147(1) into those of section 153(3)(ii) of the Act. In view of section 153(3)(ii) dealing with ....
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.... would be lifted . . ." . 17. The question that had arisen before the Division Bench of the Patna High Court in CIT v. Dhanpatram Chhotelal [1985] 156 ITR 682 was whether the assessment of a firm for the assessment year 1966-67 had become barred by limitation. The erstwhile members of a Hindu undivided family had entered into a partnership which filed its return on September 26, 1966. The Hindu undivided family had also filed a return on the same date. The appellate order was passed on December 31, 1971, and the assessment was made on February 14, 1972, in the status of a registered firm. The Appellate Assistant Commissioner (AAC) negatived the plea of limitation since, in his opinion, section 153(3) of the Income-tax Act was operative as the Income-tax Officer had acted on the directions of the Appellate Assistant Commissioner. The Income-tax Appellate Tribunal reversed the position. Applying Daffadar Bhagat Singh and Sons v. ITO [1969] 71 ITR 417 (SC) the Patna High Court took the view that in order to decide the appeal it was necessary to determine whether the firm or the Hindu undivided family was liable to be taxed and, hence, section 153(3)(ii) had the effect of enlarging ....
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....e Tribunal observed, by orders dated February 28, 1979, that since " the order has to be passed in accordance with law de novo, the Income-tax Officer has to be left unfettered to act in the light of his judgment, to consider the law and to pass orders, in accordance there-with. We, therefore, direct that while passing such order, the Income-tax Officer will ignore the various observations made by the Commissioner of Income-tax in his order enunciating his views under the law. . . . ." This decision is not directly relevant since what was held was that two years period was to be reckoned from the date of the Tribunal' s order and not of the Commissioner of Income-tax. A perusal of the facts of the case in Rikhabdas Jhaverchand v. CIT [2001] 249 ITR 774; [2001] 169 CTR 196 (Bom) is directly relevant. The Bench was presided over by His Lordship S.H. Kapadia and it was held that section 153(2A) refers to an order of fresh assessment being passed pursuant to the assessment order being set aside. Since the Tribunal in its order dated January 10, 1989, had only directed the Assessing Officer to clarify the correctness of the claim for bad debts made by the assessee by calling for inf....
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....stitution Bench decision of the Supreme Court in Estate of Late Rangalal Jajodia v. CIT [1971] 79 ITR 505. Rangalal Jajodia had filed his Income-tax return for the assessment years 1942-43 and 1943-44 but died subsequent thereto. On a construction of his will it was evident that his second wife was one of the heirs as well as the executors and since the assessment had not been completed without notice to her, the Appellate Assistant Commissioner set aside the assessments, directing the officer to make fresh assessment after giving notice to the heirs/executrix. The assessment was made more than four years after the end of the assessment years. The Supreme Court held that the failure to give notice to the widow/second wife only rendered the assessments defective. The order for issuance of a notice to the said heirs/executrix was a " finding and direction" as contemplated in the second proviso to section 34(3) (corresponding to section 153(3)(ii)). 21. Having had the advantage of perusing the plethora of precedents on the aspect of law which has engaged our attention, we are of the view that section 153(2A) is not attracted in the facts of the present case ; no period of limitatio....