High Court Of Gauhati
Raj Kumar Deorah & Sons vs. CIT & Anr.
Sections 154, 155(1), Art. 226
Asst. Year 1992-93
J.N. Sarma, J.
Civil Rule No. 2904 of 1995
24th July, 2001
Dr. A.K. Saraf, K.K. Gupta & R.K. Agarwala, for the Petitioner : U. Bhuyan, for the Respondents
J.N. SARMA, J. :
This writ petition has been filed challenging the order dt. 13th March, 1995, passed by the Asstt. CIT, Circle II(1), Guwahati, under s. 155 of the IT Act, 1961. It is alleged that by that order, the earlier assessment completed under s. 143(3) of the IT Act was rectified. What happened in this case was that on 31st March, 1995, the income of Raj Kumar Deorah & Sons was completed and his share was shown as Rs. 1,18,878. On the same date itself it came to the notice of the AO that there was a mistake and accordingly it was corrected as Rs. 1,93,068 and it was found that the share of this partner was 25 per cent in the firm and the profit and Rs. 1,18,875 and accordingly that assessment order was passed vide annexure II. It is the legality and validity of this order which is challenged in this writ petition.
2. Heard Dr. A.K. Saraf, learned counsel for the petitioner, and Mr U. Bhuyan, learned counsel for respondents. An affidavit in opposition has been filed on behalf of the respondents where in para 4 it has been stated as follows : “4. That with regard to the statements made in para 4 of the writ petition, it is stated that the share income of the partner from the firm, S.B. Industries, was assessed in the asst. yr. 1992-93 by order dt. 31st March, 1995, passed under s. 143(3) of the IT Act, 1961 (for short âthe Actâ hereinafter), by inadvertent mistake. On a perusal of the assessment order of the registered firm, S.B. Industries, for the asst. yr. 1992-93, where the petitioner is a partner, it was noticed that the share income of the partner was much higher. Hence, the assessment order of Raj Kumar Deorah and others for the asst. yr. 1992-93 was rectified taking therein the correct share of income from the firmâs assessment. The said rectification order was passed on 31st March, 1995, and duly served upon the assessee. It is stated that no enhancement in the assessment as such was made in the hands of the partner except that the share income of the firm, S.B. Industries, which was wrongly taken was corrected in incorporating the correct share of profit by resorting to the provisions of s. 155 of the Act.” In para. 11, it has been stated as follows : “That the submissions made in para 17 of the writ petition are not tenable inasmuch as adequate and efficacious alternative remedy is available to the petitioner under the provisions of the Act. The petitioner can file statutory appeal before the CIT(A), Guwahati, and in fact the other partner of the firm, Sri Rohit Kumar Deorah, has availed of the alternative remedy by filing an appeal before the CIT(A), Guwahati. It has also been stated that an appeal has also been filed against the firmâs assessment order under s. 143(3) (annexure “III” to the writ petition) and as such the writ petition filed by the petitioner is not maintainable.”
After a lapse of almost six years, I am not inclined to throw out this application on the ground of availability of alternative remedy, but I want to dispose of the matter on the merits. Dr. A.K. Saraf, learned counsel for the petitioner, relying on s. 155 of the IT Act, urged that in this case notice is mandatory. This submission of learned counsel has no force in view of the fact that s. 155 envisages a different position. Sec. 155(1)(a), (b) and (c) is quoted below : “155. (1) Where, in respect of any completed assessment of a partner in a firm it is foundâ (a) on the assessment or reassessment of the firm, or (b) on any reduction or enhancement made in the income of the firm under this section, s. 154, s. 250, s. 254, s. 260, s. 262, s. 263 or s. 264, or (c) On any order passed under sub- s. (4) of s. 245D on the application made by the firm, that the share of the partner in the income of the firm has not been included in the assessment of the partner or, if included, is not correct, the AO may amend the order of assessment of the partner with a view of the inclusion of the share in the assessment or the correction thereof, as the case may be; and the provisions of s. 154 shall, so far as may be, apply thereto, the period of four years specified in sub-s. (7) of that section being reckoned from the end of the financial year in which the final order was passed in the case of the firm.” Sec. 155 provides that the provisions of s. 154 shall, so far as may be, apply thereto. Sec. 154(3) provides as follows : “An amendment, which has the effect of enhancing an assessment or reducing a refund or otherwise increasing the liability concerned has given notice to the assessee of its intention so to do and has allowed the assessee a reasonable opportunity of being heard.”
5. On the basis of this s. 154(3), learned counsel makes the submission that without issuing a notice and without a reasonable opportunity of being heard, no correction can be made and in support of this contention he places reliance on the following decisions : ITO vs. Mohanlal (1975) 100 ITR 118 (AP) : TC 33R.725. That was a case from the Andhra Pradesh High Court. There the notices which were issued for rectification of the mistakes under s. 35 of the Indian IT Act, 1922, were challenged on the ground that the notices became barred by time and thus the notices issued by the respondent are without jurisdiction and illegal. The learned counsel relies on the following portion : “The real question which arises in the present proceedings is whether the rectification order made by the ITO on 17th Feb., 1963, was a valid order. We think it was not. Under s. 35(1) of the Act, a provision which admittedly applied to the present proceedings, it was incumbent upon the ITO before he made any rectification to issue notice to the assessee communicating his intention to rectify the provisional assessment which he had earlier made. He was also under an obligation to allow a reasonable opportunity of being heard. It could not be doubted that the first proviso to s. 35(1) is mandatory and ought to have been followed. The effect of not following that mandatory provision cannot but be to make the order passed by the ITO a nullity. We are fortified in our view by a decision of this Court in K. Ramakrishna Reddy vs. TRO (1973) 87 ITR 86 (AP).” This position really does not arise for decision before the Court inasmuch as indicated above, the point which was urged was that notice having been issued beyond four years, that is without jurisdiction. Be that as it may, on the facts and circumstances of this case, this decision does not help the petitioner.
6. The next case relied on by learned counsel is M. Chackalingam & M. Meyyappan vs. CIT (1963) 48 ITR (SC) 34 : TC 53R.542. That was a case where the assessment was completed on 11th July, 1953, and 30th Aug., 1954. Thereafter, in the year 1956, the ITO started proceeding under s. 35 of the Act for rectifying the assessment no notice was sent to either brother by the ITO and ordered to pay penal interest. It was in that background, the apex Court in p 41 pointed out as follows : “A similar view was also expressed by this Court in Sinha Govindji vs. Dy. Chief Controller of Imports & Exports (1962) 1 SCR 540. It is more so in this case where the proviso to s. 35 itself makes it incumbent upon the ITO to give notice and a hearing to an assessee when the effect of the rectification would be the enhancement of the assessment. The learned counsel for the Department raised the forlorn argument that the addition of penal interest in not enhancement of assessment as stated in the proviso. We do not see what else it could be. The word âassessmentâ is used in the proviso not as an equivalent of the tax calculated at the rate given in the Finance Act but the total amount which the assessee is required to pay. The proviso applies whenever the effect of the order is to touch the pocket of the assessee and in our opinion this was such a case.” This case also is of no help to the petitioner inasmuch as there is no dispute with regard to the total income of the firm and the share received by each of the partners. There is no dispute that this was the amount received by the petitioner as profit from that firm and the earlier assessment order which was mistakenly shown as the amount as indicated above and that was only corrected. By taking this technical stand, stay order was obtained in the year 1995 and since then the petitioner is enjoying the benefit.
7. The Writ Court is not a forum where a person can get relief on the basis of technicalities. It must be shown that substantial injustice has been caused to a person. That is what is not found in this case. In view of that matter, this writ application has no merit and accordingly in stands dismissed. Stay order, passed earlier also stands vacated.
[Citation : 251 ITR 597]