Calcutta H.C : The present rule was issued on 19th Sept., 1977, at the instance of the writ petitioner challenging the show-cause notice dt. 20th Aug., 1977, under s. 140A(3) of the IT Act, 1961

High Court Of Calcutta

Dr. Soumyendra Chandra Gooptu vs. Income Tax Officer & Ors.

Section Art. 226, 139, 140A, 153

Asst. Year 1970-71

Susanta Chatterjee, J.

Criminal Revision No. 5046 of 1977

20th April, 1989

Counsel Appeared

Sanjay Bhattacharya & Mrs. Chandrima Bhattacharya, for the Petitioner : R.C. Prasad, for the Respondents

SUSANTA CHATTERJEE, J.:

The present rule was issued on 19th Sept., 1977, at the instance of the writ petitioner challenging the show-cause notice dt. 20th Aug., 1977, under s. 140A(3) of the IT Act, 1961, issued by respondent No. 1, the ITO, D-Ward, District VIII, Calcutta, for the asst. yr. 1970-71. It is stated that the petitioner is an assessee under the provisions of the IT Act since the asst. yr. 1965-66 having his P.A. No. 11-015-PT-7335/CAL/VIII/D. It is alleged that after the demise of the petitioner’s father in December, 1967, the petitioner became liable for assessment under the provisions of the WT Act and since then the petitioner is an assessee also under the WT Act, 1957. For the asst. yr. 1970-71, the petitioner submitted his return of income on 29th Sept., 1970. Fixing the date of hearing of the case for the asst. yr. 1970-71, a notice dt. 17th Feb., 1973, was issued by the ITO, 1st Additional Survey Ward, Distric VII, under s. 143(2) of the IT Act. In the course of hearing on 8th March, 1973, it transpired that there was an omission made by the petitioner in the original return regarding a claim for deduction of Rs. 6,000 from a date of income from his house property which the petitioner’s mother was entitled to as a result of the will made by the petitioner’s father at the time of his death. The alleged mistake was corrected and a revised return was filed by the petitioner on 8th March, 1973. A revised return for the asst. yr. 1970-71 was also necessitated for disclosing certain amounts as capital gain arising out of a sale of a joint property. On 17th Sept., 1973, the petitioner was asked to comply with some requisition and the same was complied with. On 24th Jan., 1974, the petitioner filed another revised return for the asst. yr. 1970-71 and the then ITO could not complete the assessment within 24th Jan., 1975. It is further stated that the reasons for the time to time revision of return for the asst. yr. 1970-71 is also mainly due to the lack of a correct legal opinion and/or the opinion of a valuer as to the correct valuation of the said property as on 1st Jan., 1954. The amount of capital gain could not be correctly disclosed in the return of the petitioner’s income as he could not prepare the same properly without the help of a lawyer and a valuer. The petitioner had to file revised returns on account of a revision of opinion of the expert on the question of capital gain. However, in the meantime, the petitioner’s file was transferred from the ITO, 1st Additional Survey Ward, District VI to C-Ward, District VI, Calcutta, on 23rd July, 1974. The file was again transferred to Doctors’ Circle under the jurisdiction of the ITO of District VIII, ‘I’-Ward, Calcutta. The file was further transferred to D-Ward of District VII, Calcutta, respondent No. 1. It is disclosed in the writ petition that the assessment for the asst. yrs. 1971-72 to 1975-76 are completed but no assessment whatsoever for the asst. yrs. 1970-71 has been made by the ITO. The petitioner submits that, in any event, the matter as it stands is that the assessment is completely barred by limitation and no assessment has been and/or can be made under the provisions of the IT Act, 1961, or, in other words, no assessment of income of the petitioner has been made and no liability for the asst. yr. 1970-71 has been determined. In spite of such position, the petitioner was surprised to receive a notice dt. 28th Aug., 1977 purported to have been issued under s. 140A(3) of the IT Act. It appears that penalty is sought to be levied upon the petitioner for the petitioner’s alleged failure to pay tax on self-assessment for the asst. yr. 1970-71. By challenging the said notice, the petitioner has come to this Court on the ground that when regular assessment and/or provisional assessment is made following the filing of a return of income, no proceeding for imposition of penalty under s. 140A(3) of the IT Act, 1961, is permissible in law. The show-cause notice dt. 28th Aug., 1977, as such is illegal, invalid and without jurisdiction. In any event, when there was no valid return filed on 18th March, 1975, there was no question of levying any penalty for non-payment of tax on selfassessment under s. 140A(3) of the said Act.

The writ petition is contested by the respondents by filing an affidavit-in-opposition sworn to by the ITO, ‘F’- Ward, District VIII, on 26th June, 1987. It is stated that the assessee filed a return for the asst. yr. 1970-71 on 29th Sept., 1970. Notice under s. 143(2) was issued on 17th Feb., 1973, and served on 21st Feb., 1973. On 8th March, 1973, the assessee filed a revised return with a different total income. The case was fixed on 21st Feb., 1974, when the assessee’s advocate filed another revised return showing a different total income. The case was re-fixed on 4th July, 1974, and the assessee submitted 3 (three) revised returns with varying figures. On each date of hearing, the assessee was found to file a revised return with widely varying incomes under different heads. Such steps were alleged to be taken with a view to mislead the Department so that there will be a limitation as to the assessment for the period. As the assessee defaulted to pay tax under s. 140A(1) and thereafter show cause notice dt. 28th Aug., 1977, under s. 140A(3) was issued and a maximum penalty involved was 50% of Rs. 1,03,594, i.e., Rs. 51,797. The steps taken by the respondent are well-justified and the case as made out by the petitioner is thoroughly misconceived and speculative, as submitted.

Mr. Sanjay Bhattacharya, learned counsel appearing for the petitioner, has argued at length as to the scope of s. 140A, s. 143 and s. 153(1)(b) and (1)(c) of the IT Act. According to him, there is no bar and/or impediment to file the revised return. By drawing the attention of the Court to cases reported in Addl. CIT vs. Free Wheels India Ltd. (1982) 28 CTR (Del) 85 : (1982) 137 ITR 378 (Del) : TC9R.709, Kshetra Mohan Roy vs. ITO (1983) 139 ITR 441 (Cal) and CIT vs. Ceanattu Firms (1987) 59 CTR (Ker) 143 : (1986) 160 ITR 588 (Ker) : TC9R.698, Mr. Bhattacharya contended that the impugned notice is thoroughly misconceived and the question of further consideration does not arise as the proposed step is hopelessly barred by limitation.

Mr. Prasad, learned advocate appearing for the respondents, has argued that in spite of various opportunities, the petitioner has abused the process of law and from time to time he has filed revised returns and the entire records have been produced to show that at all material points of time, steps were taken by the respondents as warranted in law and there is nothing otherwise, and the alleged claim of the petitioner cannot be sustained in law.

Having heard the learned lawyers of both sides at length and after considering the materials on record, this Court finds that admittedly the petitioner filed a return for the asst. yr. 1970-71 on 29th Sept., 1970. The notice under s. 143(2) of the Act was served on 27th Feb., 1973. The petitioner submitted a revised return with different income on 8th March, 1973. The notice under s. 143(2) was issued on 17th Sept., 1973, and the case was fixed for hearing on 21st Feb., 1974, when there was submission of another revised return showing a different income. While the case was fixed for hearing on 4th July, 1974, a third revised return was filed for a still different income. Another revised return was filed by the assessee on 18th March, 1975. True, there is no bar to file revised returns before the final assessment. While, in the instant case, the petitioner is found to file revised return from time to time, the filing of a further revised return on 18th March, 1975, cannot be ignored. In order to attract the period of limitation, the filing of a return on 18th March, 1975, cannot be brushed aside. Undisputedly, the assessee did not pay advance tax by filing an estimate under s. 212 of the Act. There is no payment of tax also under s. 140A(1) of the Act on his income as per the last revised return. In the result, the ITO had to record his satisfaction about concealment of income in the return. In the result, a show cause notice has been issued under s. 140A(3) as the assessee failed to pay tax under s. 140A(1) of the Act. At that stage, the petitioner has filed the writ petition and moved this Court seeking reliefs as indicated above. On 20th Sept., 1977, the notice under s. 271(1)(c) was issued and the petitioner’s advocate informed the ITO as to the issuance of the rule of this Court and the passing of the interim order restraining the ITO from taking steps pursuant to the notice dt. 20th Aug., 1977 under s. 140A(3) of the IT Act. The main grievance of the writ petitioner is that the assessment for the year 1970-71 is barred by limitation on the expiry of the extended period under s. 153(1)(c) after filing of the revised return and inasmuch as no regular assessment was made under ss.143 or 144 of the IT Act, the ITO has no power to levy the penalty under s. 140A(3) of the Act. This Court further finds that s. 140A(1) requires the petitioner to pay tax on self- assessment on the basis of the returns filed under s. 139 or revised return filed under s. 139(5) but the assessee has failed to pay such tax on self-assessment which obviously attracts the penalty. Before levying penalty, a notice under s. 140A(3) has been issued in accordance with law. The scheme of the Act is complete in itself. There is neither any lack of jurisdiction in issuing the notice in question nor is there mala fide or bad faith appearing from the record. The acts done and/or caused to have been done by the respondents in issuing the impugned notice under the facts and circumstances of the case are found to be justified and this Court is not inclined to interfere in this matter. Regard being had to the materials on record, this Court does not find any merit in the writ petition. As a result thereof, the rule is discharged. All interim orders are vacated. There will be no order as to costs.

[Citation : 179 ITR 616]

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