Kerala High Court
Teekoy Rubbers (India) Ltd. vs Commissioner Of Agricultural ... on 19 January, 1996
Equivalent citations: [1996]219ITR615(KER)
Author: G. Sivarajan
Bench: G. Sivarajan
JUDGMENT V.V. Kamat, J.
1. On hearing learned counsel for the petitioner-assessee in these revision cases as well as the learned Government Pleader for the Department, firstly, Tax Revision Case No. 38 of 1992 would not need separate consideration and consequent decision in view of its subject-matter being fully covered by Tax Revision Case No. 103 of 1992 and, secondly, in view of one common question urged and considered by us as to whether, on the facts and circumstances of the case, the proceedings of the Deputy Commissioner passed after the expiry of over eight years from the end of the relevant assessment year would create a bar of limitation, except consideration and decision of the above question of limitation, no other question would require consideration. This is because, in the earlier judgment dictated by us today before the recess in Income-tax Reference No. 201 of 1988 (Rajagiri Rubber and Produce Co, Ltd. v. CIT [1996] 219 ITR 611) we have considered the question of limitation threadbare and in necessary detail, to the effect that the bar of limitation in the matter of exercising suo motu revisional powers under Section 34 of the Agricultural Income-tax Act, 1950, would operate in a situation in regard to which there is total absence of the required explanation for exercise of such power belatedly. In view of detailed considerations in regard thereto, we do not repeat but choose to follow the same dictum.
2. The dictum is that the suo motu power is required to be exercised within a reasonable time supported by the necessary explanation acceptable in regard to the reasons for delay due to insurmountable difficulties beyond control.
3. Tax Revision Case No. 38 of 1992 challenges the order of the Commissioner of Agricultural Income-tax (anriexure-I) rejecting the said application against the order dated May 20, 1991, of the Deputy Commissioner, Kottayam, whereunder in exercise of the powers under Section 34 of the Act the Deputy Commissioner exercising the powers of the Commissioner thereunder exercised the said power of revision. On the other hand, Tax Revision Case No. 103 of 1992 challenges the suo motu exercise by the Deputy Commissioner by the order dated May 20, 1991, itself, It is, therefore, seen that these two revisions could be clubbed together for the purposes of this judgment. The subject-matter of these two cases is the assessment year 1982-83 in regard to which a proper assessment order is passed on February 13, 1984 (annexure-A to Tax Revision Case No. 103 of 1992). It would be seen that the suo motu power is sought to be exercised on the basis of the notice dated March 26, 1991, served on the petitioner-assessee on April 1, 1991, and is consequently exercised, as stated above, by the order dated May 20, 1991.
4. It needs to be stated that although in Tax Revision Case No. 166 of 1992 the assessment year is 1980-81, the assessment order is the same as Tax Revision Cases Nos. 38 and 103 of 1992, to be February 13, 1984. Even as regards the initiation of action under Section 34 of the old Act, the dates are also similar being a notice dated March 30, 1991, served on the petitioner on April 1, 1991, resulting in the order under Section 34 having been passed on December 13, 1991. Similarly although in Tax Revision Case No. 256 of 1992 the assessment year is 1981-82, the assessment order is passed on the same day--February 13, 1984, and notice of exercise of the power under Section 34 of the old Act is also issued on the same day being of March 30, 1991, having been served on the petitioner-assessee on April 1, 1991, resulting in the order of the Commissioner passed on December 13, 1991.
5. Thus it would be seen that in these revision cases necessary and relevant dates are almost identical for the purpose of considering the question urged that on the facts and circumstances of the case the proceedings intending exercise of suo motu revisional powers initiated after the expiry of well nigh a period of eight years would inherently suffer from lack of exercise as a result of the bar of limitation.
6. We have already stated that the question has been considered with reasons while deciding Income-tax Reference No. 201 of 1988 (Rajagiri Rubber and Produce Co. Ltd. v. CIT [1996] 219 ITR 611) and, therefore, it is not necessary to burden the record of this judgment in regard thereto.
7. There is no material on record with regard even to know of reason to the effect that there was some reason putting insurmountable difficulties on the part of the Department to take so much time to initiate proceedings under Section 34 of the Act. It is to be seen, as already observed, that there have to be reasonable limits of understanding in regard to the hanging sword on the head of the taxpayer. It is for these considerations, the courts have consistently held that although suo motu power is to be exercised within a reasonable time, the Department also is under a legal duty to place material to satisfy the conscience of the court. No such material is placed on record and there is no dispute that the power is sought to be exercised, it will have to be said, on the basis of whims and caprices of the situation. The very initiation of the proceedings on the basis of notice dated March 30, 1991, clearly displays lack of jurisdiction by, reason of there being a bar of limitation.
8. In view of the above situation, it is unnecessary and redundant to consider other questions, because lack of jurisdiction goes to the root of the matter and creates jurisdictional difficulties.
9. Accordingly, we hold that the initiation of the actions with regard to the assessment years 1980-81, 1981-82 and 1982-83 on the basis of the notice dated March 30, 1991, would have to be quashed and set aside. We do so. The revision cases are, therefore, allowed as above. Order accordingly.