Kerala H.C : This tax revision case is filed by a registered company against agricultural income-tax assessments relating to asst. yrs. 1970-71 to 1987-88 (18 years).

High Court Of Kerala

Southern Plantations Ltd. vs. Commissioner Of Agricultural Income Tax

Sections KER Agrl. 2(p), KER Agrl. 35, KER Agrl. 64, KER Agrl. 77, KER Agrl. 99

Asst. Year 1970-71, 1971-72, 1972-73, 1973-74, 1974-75, 1975-76, 1976-77, 1977-78, 1978-79, 1979-80, 1980-81, 1981-82, 1987-88

Om Prakash, C.J. & J.B. Koshy, J.

TRC No. 20 of 1993

27th August, 1998

Counsel Appeared

C. Kochunny Nair, for the Petitioners : V.V. Asokan, for the Respondent

JUDGMENT

J.B. KOSHY, J. :

This tax revision case is filed by a registered company against agricultural income-tax assessments relating to asst. yrs. 1970-71 to 1987-88 (18 years). The assessee owns an estate mainly planted with cardamom. The total extent of the estate was originally about 688 acres. The Government took the contention that the above estate was vested with the Government as private forest under the Private Forest (Vesting & Assignment) Act, 1971. In June, 1977, on the basis of the decision of the Forest Tribunal, 262 acres were returned to the company. According to the assessee, the above land was never cultivated with rubber and for that purpose they have produced Annexure ‘A’ inspection report. Assessment orders were made against all these years showing rubber also as one of the crops.

For the asst. yrs. 1970-71, 1971-72, 1973-74 appeals were filed against the assessments and the appeals were dismissed. Further proceedings were not taken up. With regard to the asst. yr. 1972-73, even though assessment order was served on the company on 20th April, 1976, no appeal was filed. Other assessment orders were received by the company on or before 11th Oct., 1990. Eighteen revision petitions for asst. yrs. 1970-71 to 1987-88 (18 years) were filed before the Dy. Commr. of Agrl. IT on 26th March, 1991 under s. 34 of the Agrl. IT Act, 1950 (hereinafter referred to as ‘the 1950 Act’). They were rejected by a common order Annexure ‘E’ dt. 22nd Nov., 1991. For the years 1974-75, 1977-78 and 1978-79 to 1983-84 tax assessed was above Rs. 75,000 and, therefore, they were rejected due to lack of jurisdiction. The Dy. Commr. of Agrl. IT considered on merit the revision applications for other eight years, namely, 1970-71, 1971-72, 1972-73, 1973-74, 1984-85, 1985-86, 1986-87 and 1987-88. The main contention of the petitioner in the revision petitions was that notices and assessment orders were not served on the principal officer of the company and hence assessments are without jurisdiction and null and void in view of s. 2(p), 35(1) and 64 of the 1950 Act. Sec. 35(1) of the 1950 Act provides as follows: “35. Income escaping assessment.—(1) If for any reason agricultural income chargeable to tax under this Act has escaped assessment in any financial year or has been assessed at too low a rate, the Agrl. ITO may, at any time within five years of the end of that year, serve on the person liable to pay the tax or in the case of a company on the principal officer thereof a notice containing all or any of the requirements which may be included in a notice under sub-s. (2) of s. 17 and may proceed to assess or reassess such income and the provisions of this Act shall so far as may be, apply accordingly as if the notice were a notice issued under that sub-section”. Sec. 64(2) of the 1950 Act reads as follows : “64. Manner of service of notice : (2) Any such notice or requisition may, in the case of a firm, or HUF be addressed to any member of the firm or to the Manager, Karanavan or Yejman, as the case may be, orany adult member of the family and, in the case of any other AOP be addressed to the principal officer thereof”. Sec. 2(p) of the 1950 Act defines ‘Principal Officer’ as : “(i) the Secretary, Treasurer, Manager or Agent of the company or association, or (ii) any person connected with the company or association upon whom the Agrl. ITO has served a notice of his intention of treating him as principal officer thereof”.

It is the contention of the petitioner that statutory notices and assessment orders were not addressed to the principal officer. There is no proper service and as such there is jurisdictional defect and, therefore, they are entitled to file revision application at any point of time.

It is the contention of the petitioner that in view of the decision of the Supreme Court in Y. Narayana Chetty vs. ITO (1959) 35 ITR 388 (SC) and the decision of this Court in P.N. Sasikumar & Ors. vs. CIT (1988) 69 CTR (Ker) 78 : (1988) 170 ITR 80 (Ker) : TC 51R.1847, the assessment orders should have been issued in the name of the principal officer. Then only it is legally served, notwithstanding the fact that notices addressed in the name of the company were accepted by the director in charge without any objection. It was further contended that notices were also not served on the secretary, treasurer, manager or agent of the company.

The Dy. Commr. of Agrl. IT noticed that even though notices and assessment orders were posted in the name of the company, they were accepted by the director in charge and, therefore, such contentions are not tenable.

With regard to assessment years (10 years) where Dy. Commr. of Agrl. IT rejected the revisions for lack of jurisdiction due to monetary limit, one common revision application dt. 4th April, 1991 was filed before the Commr. of Agrl. IT under s. 77 of the Agrl. IT Act, 1991 (hereinafter referred to as ‘the 1991 Act’) which came into force on 1st April, 1991. It is not stated how one common revision application can be filed against ten independent assessment orders for ten different assessment years. A second common revision application for eight assessment years was filed against the revisional order of the Dy. Commr. of Agrl. IT (where the matter was considered on merit and dismissed) before the Commr. of Agrl. IT under s. 77 of the 1991 Act. It was rejected on the ground that no revision application is maintainable under the 1991 Act as the Dy. Commr. of Agrl. IT has passed the order as Commr. of Agrl. IT. The revision applications directly filed before the Commr. of Agrl. IT were rejected because assessment orders or demand notices did not accompany the revision application and defects were not cured in spite of opportunities given. Revision applications filed under s. 77 of the 1991 Act for the years 1970-71, to 1973-74 and 1984-85 to 1987-88 (8 years) against order of the Dy. Commr. of Agrl. IT under s. 34 of the 1950 Act is clearly not maintainable. Even though the above order was passed after coming into force of the 1991 Act, no revision application will lie under s. 77 of the 1991 Act because order was passed by the Dy. Commr. of Agrl. IT under s. 34 of the Act exercising the powers of the Commr. of Agrl. IT and such power was continued to be vested with the Dy. Commr. of Agrl. IT in view of s. 99(4) of the 1991 Act which is as follows: “99. Repeal and saving: (4) Notwithstanding such repeal of the Agrl. IT Act, 1950 (Act XXII of 1950), any proceedings pending before any Agrl. IT Authority, Tribunal or High Court at the commencement of this Act, shall be continued and finally decided or determined under the provisions of this Act”. Here, while passing orders under s. 34, Dy. Commr. of Agrl. IT acted as Commr. of Agrl. IT and, therefore, no further revision will lie to the Commr. of Agrl. IT under the new Act. Apart from the above, under the new Act revision application can be filed before the Commr. of Agrl. IT under s. 77 of the 1991 Act from the orders of the Dy. Commr. of Agrl. IT passed under ss. 16 or 75 of the 1991 Act. Sec. 16 deals with orders passed by the Dy. Commr. of Agrl. IT on the status of charitable trust or institution. Sec. 75 speaks about suo motu revisions and not revisions filed by parties. Therefore, no further revision application will lie against the order passed by the Dy. Commr. of Agrl. IT on the basis of the petition filed under s. 34 of the 1950 Act. Therefore, Commr. of Agrl. IT was right in holding that the revision applications were not maintainable.

With regard to common revision application filed for ten assessment years where the assessment was more than Rs. 75,000, Commr. of Agrl. IT rejected the application because they were not accompanied by assessment orders or demand notices. Under s. 34 of the 1950 Act read with rules, no application for revision shall be entertained unless it is accompanied by assessment orders, demand notices and satisfactory proof of the payment of tax admitted by the petitioner to be due and it should be filed in the prescribed form. Under s. 77 of the 1991 Act also revision application should be filed “within a period of thirty days from the date on which a copy of the order was communicated to him in the manner prescribed”. The revision application dt. 21st March, 1991 of the petitioner before the Commr. of Agrl. IT was filed on 4th April, 1991, that is, after coming into force of the new Act and copy of the order communicated to the company was not enclosed as prescribed. Even though defects were pointed out, they were not cured. The petitioner did not attend the hearing when the cases were posted for hearing. On that ground also, the Commr. of Agrl. IT rejected this case. It cannot be stated that the above grounds are wrong or invalid. Apart from technical points, even on merit, we see no merit in the instant tax revision case. Dy. Commr. of Agrl. IT has found that notices were issued in the name of the company on 20th Jan., 1971. Postal acknowledgement is signed by the director in charge. In respect of asst. yrs. 1970-71, 1971-72 and 1973-74, the director in charge also filed appeals against the assessment orders. Having received the assessment orders by the principal officer as defined under s. 2(p) of the 1950 Act and the principal officer without taking any objections regarding service of notice filed appeals, it cannot be contended that notice was not received by the principal officer or notice addressed to the company is not enough and it should be addressed to the principal officer’s name itself. In Sasikumar’s case (supra), on the facts of that case, it was held as follows : “… In the present case, the assessments were made on an “AOP”. It is an entity which is distinct and different from the various persons who are members of the unit, “AOP”. There is no material to show that the prescribed notices were sent to any “AOP” or to Sasikumar as representing the “AOP”. In this view of the matter, it is clear that the notices under s. 148 of the Act were not served in accordance with law and the said assessee, who was assessed, was not called upon to file the returns. The notice was addressed only to an individual, Sasikumar. The ITO did not make it clear or plain that the proposal was to assess the “AOP” consisting of Sasikumar and others. So, on the basis of the notices sent, the ITO was incompetent to assess the “AOP” consisting of Sasikumar and others. The entire proceedings are illegal and without jurisdiction”. But, in the instant case, notices were addressed in the name of the company making it clear that assessments were made on the company and notices were sent in the name of the company and it was accepted by the director in charge who is admittedly the principal officer and who filed appeals and revision applications. Here, notices were addressed in the name of the company and not in the name of any individual persons as in Sasikumar’s case. Notices were accepted by the director in charge who is the principal officer of the company and under s. 2(p) of the 1950 Act he accepted it only as an agent of the company. In any event, having accepted the notices addressed in the name of the company and the company acted upon the same by filing appeals wherein it is not disputed by the company that notices were not statutorily sent, the present contention that assessment orders were not properly served cannot be accepted and on that ground it cannot be stated that assessments were without jurisdiction. According to the assessee, in view of the jurisdictional question in spite of appellate remedy available (and even if appeals are dismissed) revision application can be filed. The only jurisdictional question raised by the petitioner in this tax revision case was that notices were not served on the principal officer or secretary, treasurer, manager or agent of the company. We have already held that when the notice is issued in the name of the company which is accepted by the principal officer of the company as agent of the company, it cannot be stated that notices and assessment orders are without jurisdiction and invalid as it was not addressed in the name of the principal officer.

11. There is no merit in the tax revision case and hence it is dismissed.

[Citation: 236 ITR 509]

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