Kerala High Court
S.Selvaraj vs State Of Kerala Represented By on 11 June, 2008
Bench: C.N.Ramachandran Nair, V.K.Mohanan
IN THE HIGH COURT OF KERALA AT ERNAKULAM
OTC.No. 20 of 2006()
1. S.SELVARAJ, 73, NO.3 -
... Petitioner
2. S.JAYARAJ,
3. S.MOHANRAJ,
4. S.BABY LAKSHMY,
5. S. PREMA,
6. S.RADHA,
7. S.SANTHA,
8. S.USHARANI,
Vs
1. STATE OF KERALA REPRESENTED BY
... Respondent
For Petitioner :SRI.K.I.MAYANKUTTY MATHER
For Respondent : No Appearance
The Hon'ble MR. Justice C.N.RAMACHANDRAN NAIR
The Hon'ble MR. Justice V.K.MOHANAN
Dated :11/06/2008
O R D E R
C.N.RAMACHANDRAN NAIR &
V.K.MOHANAN, JJ.
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O.T.C. Nos.20 & 26 of 2006
....................................................................
Dated this the 11th day of June, 2008.
JUDGMENT
Ramachandran Nair, J.
The petitioner is challenging Annexure F order issued by the Commissioner of Agricultural Income Tax Act under Section 76 of the Agricultural Income Tax Act, 1991 cancelling the first appellate authority's order whereunder petitioners' assessments for 1993-94 and 1994-95 were declared invalid by him. Admittedly assessees filed the returns on 27.10.1995. Even though returns were belated and consequently non est in law, the Assessing Officer completed the assessments on 25.3.1999. Since the assessments were not completed within two years from the date of filing the return, the assessees challenged the same as time barred based on Section 39(6) of the A.I.T. Act. The first appellate authority allowed the appeals by cancelling the assessments as time barred. However, the Commissioner in exercise of suo moto revisional power under Section 76 of the Act reversed the orders of the appellate authority and upheld the assessments are made within time. It is against this common order passed for both the years the assessees have filed these cases. We have heard 2 counsel appearing for the petitoiners-assessees and the Government Pleader appearing for the respondent.
2. The short question to be considered is whether assessments completed for the assessment years 1993-94 and 1994-95 on 25.3.1999 are time barred or not. The assessees admittedly did not file the return in time and therefore, belated returns filed are non est in law. Counsel for the assessees contended that Section 39(6) applies to every case where return is filed irrespective of whether return filed is in time or not. Therefore, according to him, even if the assessment is completed based on belated return, such assessment should be within the time prescribed under Section 39(6) of the Act. Government Pleader referred to Explanation introduced to Section 39(6) by Finance Act, 2000 with retrospective effect from 1.4.1991 whereunder it is stated that time limit for assessment completed on belated return should be considered with reference to Section 41 of the Act and contended that assessments are within time under Section 41 of the Act as held by the Commissioner. It is to be noted that the retrospective amendment brought to Section 39(6) by addition of the Explanation is not under challenge. Therefore, validity of assessments has to be considered with reference to amended provision. Section 6 of the Finance Act, 1991 validates assessment completed within the period mentioned under Section 41, if return was not filed within time. The assessees' case is squarely covered by the amended provisions and therefore, the appellate authority's 3 order, though passed prior to the amendment, becomes invalid by virtue of the amendment. Moreover, we are of the view that the Explanation is only clarificatory in nature because a return filed beyond the time prescribed under Section 35 of the Act is non est in law and any assessment initiated other than based on a valid return should be taken as an assessment under Section 41 of the Act. In this case admittedly assessees did not file the returns in time and therefore, the returns filed by the assessees would only constitute information for completing assessments under Section 41 of the Act. Therefore, even without reference to Explanation, the assessments completed is within the time prescribed under Section 41 of the Act. Consequently we uphold the order of the Commissioner and dismiss the tax revision cases. The appeals will stand restored to the first Appellate Authority for reconsideration on other grounds i.e. grounds other than limitation. There will be direction to the appellate authority to dispose of the appeals after hearing the appellants within three months from date of receipt of copy of this judgment.
C.N.RAMACHANDRAN NAIR Judge V.K.MOHANAN Judge pms