Bombay High Court
Commissioner Of Income-Tax vs Dr. G.K. Pendkar on 28 January, 1993
Equivalent citations: [1993]202ITR698(BOM)
JUDGMENT U.T. Shah, J.
1. Under section 256(1) of the Income-tax Act, 1961, the Income-tax Appellate Tribunal has referred the following question at the instance of the Revenue :
"Whether the Tribunal was justified in law in holding that the extended time-limit for completing the assessment under section 153(1)(b) was not available to the Income-tax Officer as he had not come to grips with the alleged items of concealment before the normal period of limitation ran out ?"
2. The assessee-individual is a medical practitioner. He did not file any returns of income for the assessment years 1972-73 and 1973-74. Notice under section 148 of the Income-tax Act, 1961, for both the aforesaid years were served of April 10, 1974. The assessee filed the return for the assessment year 1972-73 on January 6, 1975, declaring income of Rs. 26,132 while the return for the assessment year 1973-74 was filed on March 31, 1975, declaring income of Rs. 23,254. Thereafter, the Income-tax Officer issued notice under section 143(2) for the assessment years 1972-73 for hearing on January 9, 1976, and notices under section 143(2) for the assessment year 1973-74 were issued on October 15, 1975, December 26, 1975, and October 4, 1976. However, the hearings were adjourned on the said dates. On November 19, 1976, when the Income-tax Officer again fixed the cases for the said two years, he discussed the cases with the assessee. The Income-tax Officer completed the assessments for both the assessment years on March, 7, 1977, determining the income at Rs. 62,450, for the assessment year 1972-73 and Rs. 56,580 for the assessment year 1973-74. It may be noted here that proceedings under section 271(1)(c) were initiated by the Income-tax Officer for both the years.
3. When the matter went to the Appellate Assistant Commissioner, he cancelled both the assessments on the ground that the reasons for taking action under section 148 for both the years were not made available to him on the ground that relevant records were untraceable. He, therefore, held that notices under section 148 for both the years had been issued without complying with requirements of section 149(2) and the said notices under section 148 for both the years were, therefore, invalid. He also rejected the Income-tax Officer's alternate contention that the extended time-limit of eight years under section 153(1)(b) was available as there was a prima facie case of concealment of Income as the Explanation to section 271(1)(c) was attracted in both the years. He held that the Income-tax Officer did not record any findings or bring any material on record within the normal period of time (of one year reckoned from the date of filing of the returns of income) to show that the assessment involved were cases of concealment. In both the years, the limitation under section 153(1)(c) of one year expired on January 5, 1976, for the assessment year 1972-73 and on March 31, 1976, for the assessment year 1973-74, while the Income-tax Officer took up the cases for hearing on November 19, 1976, which was after the said dates when limitation expired. The Appellate Assistant Commissioner held that a prima facie case of concealment should be established within the normal period of limitation. In the result, the Appellate Assistant Commissioner annulled the two assessments on the ground that both the assessments should have been completed within one year of the filing of the returns as the time-limit of one year under section 153(1)(c) applied as both the returns were deemed to be filed under section 139(4).
4. The Department came in appeal to the Tribunal who upheld the order of the Appellate Assistant Commissioner and dismissed the Departmental appeals. The Tribunal upheld the Appellate Assistant Commissioner's finding that, as the Income-tax Officer had not brought any material on record within the normal period of limitation for completing assessments for coming to a prima facie conclusion that there was any concealment, therefore, the extended time-limit under section 153(1)(b) was not available to the Department. The Tribunal relied on CIT v. Surajpal Singh .
5. At the outset, learned counsel for the assessee stated that the issue involved in the aforesaid questions is fully covered by the decision of the Supreme Court in the case of CIT v. Suraj Pal Singh [1991] 188 ITR 297, in favour of the assessee, inasmuch as the Supreme Court was upheld the decision of the Allahabad High Court which was relied on by the Tribunal. He, therefore, submitted that the reference may be answered accordingly. Further, he also brought to our notice the decision of the Gauhati High Court in the case of Smt. Savitri Rani Malik v. CIT [1990] 186 ITR 701, Which has also taken a similar view in favour of the assessee, Faced with this position. Learned counsel for the Revenue strongly relied on the orders of the income-tax authorities and submitted that the Tribunal was not justified in holding that the assessments framed by the Income-tax Officer were barred by limitation.
6. We have considered the submission of the parties. It would be clear from the facts of the case and also from the question itself that the Income-tax Officer had not come across any alleged item of concealment before the normal period of limitation ran out. That being so, the above decision of the Supreme Court is squarely applicable.
7. Therefore, following the aforesaid decision, we answer the question referred to us in the affirmative and in favour of assessee.
8. No order as to costs.