Madras High Court
Devi Educational Institution vs Commissioner Of Income-Tax on 13 March, 1990
Equivalent citations: [1990]184ITR519(MAD)
JUDGMENT Ratnam, J.
1. In this tax case reference under section 256(1) of the Income-tax Act, 1961 (hereinafter referred to as "the Act"), at the instance of the assessee, the following question of low has been referred to this court for its opinion :
"Whether, on the facts and in the circumstances of the case, the notice issued under section 148 calling upon the assessee to file the return in Form No. 3A was invalid and, consequently, the assessment made under section 144 is liable to be reopened under section 146 of the Income-tax Act, 1961, for the assessment year 1971-72 ?"
2. For the assessment year 1971-72, on the basis of the turn filed by the assessee in Form No. 3, the proceedings were closed as "N.A." on November 14, 1973. Subsequently, the Income-tax Officer had information that the assessee received donations from another trust and since, in his view, the income of the assessee had escaped assessment at the time of the passing of the original order of assessment, the Income-tax Officer issued a notice under section 148 of the Act requiring the assessee to file a return and also a notice under section 142(1) of the Act. On non-compliance with those notices by the assessee, the Income-tax Officer proceeded to make an ex parte assessment under section 144 of the Act, thereafter, the assessee filed application under section 146 of the Act for reopening the assessment. On the view that the assessee had not furnished any reason for non-compliance with the notices under sections 148 and 142(1) of the Act, the Income-tax Officer declined to reopen the assessment under section 146 of the Act as requested by the assessee. On appeal by the assessee to the Appellate Assistant Commissioner, the order of the Income-tax Officer was upheld on the ground that the assessee could have filed the return and there was absolutely no reason whatever for non-compliance with the statutory provisions, on further appeal to the Tribunal by the assessee, it took the view that, as the ex parte assessment had been made owing to the non-compliance with the notices under sections 148 and 142(1) of the Act and that the assessee could succeed only on establishing that it was prevented by sufficient cause from making the return under section 139(2) of the Act or it had no reasonable opportunity to comply with the notice under section 142(1) of the Act and as those grounds had not been established, the refusal to reopen the assessment under section 146 of the Act was in order.
3. Learned counsel for the assessee strenuously contended, referring to section 2(33) and 148 and rule 12 of the Income-tax Rules framed under the Act that the notice issued to the assessee under section 148 of the Act was not a valid notice, as, by that, the assessee had been called upon to file a return in Form No. 3A, while the appropriate form in respect of the assessee would only be Form No. 3. On the other hand, learned counsel for the Revenue invited our attention to the notice issued to point out that, under the notice issued under section 148 of the Act, the assessee was not called upon to file the return in Form No. 3A at all and, therefore, the notice issued was quite proper and valid and not open to any objection.
4. We have carefully persuade the notice issued to the assessee under section 148 of the Act and we are unable to find anything therein to show that the assessee had been called upon to file a return in Form No. 3A. In the absence of anything in the notice to show that the assessee had been called upon to file a return in a form not applicable to the assessee, we are unable to hold that the issue of the notice under section 148 of the Act was not valid. We may also point out that even if the assessee had entertained a belief that, by the notice under section 148 of the Act, it had been called upon to file a return in Form No. 3A in response to the notice issued, it could have submitted a return and brought to the notice of the Income-tax Officer the invalidity of the notice if any even by that return. Without doing so, the assessee had not complied with the notices issued under sections 148 and 142(1) of the Act and that had led to the passing of an ex parte order of assessment under section 144 of the Act. It has to be further pointed out that the assessee had not made out a case for the reopening of the assessment on one or more of the grounds enumerated under section 146 of the Act. Even in the application filed by the assessee for reopening the assessment, it had maintained that a certain donation received from another trust cannot be taxed. This, however, cannot form the basis for reopening of the assessment under section 146 of the Act It is not the case of the assessee the it did not receive the notice under section 142(1) of the Act or that it had not a reasonable opportunity to comply with or was prevented by sufficient cause from complying with the terms of the notice under section 142(1) of the Act, Equally, the assessee had not made out that it was prevented by sufficient cause from making the return under section 139(2) as per the notice under section 142(1) of the Act. Thus, on a consideration of the facts and circumstances of the case and also the terms of the notice issued to the assessee under section 148 of the Act, we are of the view that the notice issued to the assessee was valid and that no ground had been established by the assessee for the reopening of the assessment made under section 144 of the Act. We answer the question referred to us in the negative and against the assessee. The Revenue will be entitled to the costs of this reference, counsel's fee Rs. 500.