Madhya Pradesh H.C : Whether the Tribunal was right in holding that the word ‘forward’ used in s. 144B(1) of the IT Act, 1961, does not mean ‘serve’ ?

Counsel Appeared

D.C. Bhamore, for the Assessee : B.K. Rawat, for the Revenue

G.G. SOHANI, ACTG. C.J.:

By this reference under s. 256(1) of the IT Act, 1961 (hereinafter referred to as ‘the Act’), the Tribunal, Indore Bench, Indore, has referred the following questions to this Court for its opinion:

“(i) Whether the Tribunal was right in holding that the word ‘forward’ used in s. 144B(1) of the IT Act, 1961, does not mean ‘serve’ ?

(ii) Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the assessment made by ITO for the asst. yr. 1978-79 after recourse to s. 144B of the IT Act, was within time ?”

2. The material facts giving rise to this reference, briefly, are as follows: The assessee is assessed in the status of a registered firm. For the asst. yr. 1978-79, the accounting year of which ended on 31st March, 1978 the assessee filed its returns on 31st July, 1978. As the ITO proposed to make an addition exceeding Rs. one lac in the income of the assessee, the ITO forwarded the draft of the proposed order of assessment to the assessee on 30th March, 1981, as required by the provisions of s. 144B of the Act. That draft order was received by the assessee on 1st April, 1981. The assessee thereupon forwarded it objections. Hence a reference was made by the ITO to the IAC under the provisions of sub-s. (4) of s. 144B of the Act. On receipt of directions from the IAC, the ITO completed the assessment on 25th Aug., 1981. Aggrieved by the order of assessment the assessee preferred an appeal before the CIT(A). One of the contentions advanced on behalf of the assessee before the CIT(A) was that the assessment was barred by time and provisions of Expln. 1(iv) to s. 153 of the Act were not attracted because the draft assessment order was served on the assessee within the period of limitation prescribed therefor which expired on 31st March, 1981. This contention was rejected by the CIT(A). On further appeal before the Tribunal, the Tribunal affirmed the order passed by the CIT(A) in this behalf. Aggrieved by the order passed by the Tribunal, the assessee sought reference and it is at the instance of the assessee that the aforesaid questions of law have been referred to this Court for its opinion.

3. The answers to the questions referred to this Court for its opinion turn on the meaning to be given to the expression ‘forward’ occurring in s. 144B(1) of the Act. It is not disputed that if the provisions of Expln. 1(iv) to s. 153 of the Act are attracted, then the assessment would be within the time prescribed therefor. The contention urged on behalf of the assessee is that the word ‘forward’ used in s. 144B(1) of the Act means ‘serve’. To appreciate this contention, it is necessary to refer to the relevant provisions of s. 144B of the Act which are as follows: “144B(1) Notwithstanding anything contained in this Act, where in the assessment to be made under sub- s. (3) of s. 143, the ITO proposes to make any variation in the income or loss returned which is prejudicial to the assessee and the amount of such variation exceeds the amount fixed by the Board under sub-s. (6), the ITO shall, in the first instance, forward a draft of the proposed order of assessment (hereafter in this section referred to as the draft order) to the assessee. (2) On receipt of the draft order, the assessee may forward his objections, if any, to such variation to the ITO within seven days of the receipt by him of the draft order or within such further period not exceeding fifteen days as the ITO may allow on an application made to him in this behalf.”

From a perusal of the aforesaid provisions, it is clear that whereas under sub-s. (1) of s. 144-B the ITO has to forward a draft of the proposed order of assessment to the assessee under sub-s. (2) of s. 144B, the assessee is required to forward his objections, if any, to the ITO within seven days, or fifteen days, as the case may be, of the receipt by him of the draft order. It cannot be disputed that the expression ‘forward’ occurring in sub-s. (1) or sub- s. (2) of s. 144B of the Act has to be given the same meaning unless the context otherwise requires. It is well settled that when the legislature uses the same word in different parts of the same section, there is a presumption that the word is used in the same sense throughout. The legislature has advisedly not used the word ‘serve’ in sub- ss. (1) and (2) of s. 144B of the Act. That would have caused hardship to the assessee. The learned counsel for the assessee was unable to point out any cogent reason for holding that the word ‘forward’ occurring in s. 144B of the Act should not be given its natural meaning which is ‘to put in course of transmissions’ or to transmit. It has not been shown that the requirement of the context is such that the word ‘forward’ occurring in s. 144B(1) of the Act has to be understood as meaning ‘serve’. The Tribunal, in our opinion was right in holding that the word ‘forward’ used in s. 144B(1) of that Act did not mean ‘serve’ and that on the facts and in the circumstances of the case , the assessment was within time.

4. Our answers to the questions referred to this Court are, therefore, in the affirmative and against the assessee. In the circumstances of the case, parties shall bear their own costs of the reference.

[Citation : 173 ITR 585]