Punjab & Haryana H.C : Whether, on the facts and in the circumstances of the case, the Tribunal was right in vacating the finding of the CIT(A), Ludhiana, that the return filed by the assessee on 14th Dec., 1977 was not valid and no regular assessment could be made on the basis of the same ?

High Court Of Punjab & Haryana

CIT vs. Amritsar Sugar Mills Co. Ltd.

Sections 139(2), 146, 256

Asst. Year 1974-75

D.K. Jain, C.J. & Surya Kant, J.

IT Ref. No. 72 of 1982

3rd January, 2006

Counsel Appeared

D.S. Patwalia, for the Applicant : Akshay Bhan, for the Respondent

JUDGMENT

D.K. Jain, C.J. :

The Income-tax Appellate Tribunal, Amritsar (for short ‘the Tribunal’), has referred under s. 256(1) of the IT Act, 1961 (for short ‘the Act’), the following questions for the opinion of this Court :

“1. Whether, on the facts and in the circumstances of the case, the Tribunal was right in vacating the finding of the CIT(A), Ludhiana, that the return filed by the assessee on 14th Dec., 1977 was not valid and no regular assessment could be made on the basis of the same ?

2. Whether, on the facts and in the circumstances of the case, the Tribunal was right in cancelling the order of the ITO passed on 26th March, 1979 ?” 2. Briefly stated, the material facts, as emerging from the statement of the case, are as follows : In respect of asst. yr. 1974-75, the ITO framed an assessment on the assessee under s. 144 of the Act on 26th Feb., 1977. On an application being moved by the assessee under s. 146 of the Act, the said assessment was reopened on 23rd March, 1977. On 14th Dec., 1977, the assessee filed its return of income declaring a substantial loss. The return was captioned as “revised”. During the course of fresh assessment proceedings, it was categorically stated on behalf of the assessee-company that no notice under s. 139(2) of the Act was served. Furthermore, on being questioned the assessee was unable to produce any evidence of filing of the original return. Consequently, vide order dt. 26th March, 1979 the “revised” return filed by the assessee, on 14th Dec., 1977, was ignored by the ITO. The ITO held that since the return had been filed after the expiry of more than two years from the end of the assessment year, it was an invalid return and no cognizance of such a return could be taken. Being aggrieved, the assessee took the matter in appeal before the CIT(A), who agreed with the ITO that the return filed on 14th Dec., 1977 was not a valid return and no regular assessment could be made on the basis thereof.

3. The assessee took the matter in further appeal to the Tribunal. By the impugned order, the Tribunal has held that notice under s. 139(2) of the Act having been issued by the ITO, proceedings taken thereafter could not be said to be erroneous or illegal. Accordingly, the Tribunal has reversed the decision of the ITO and CIT(A), directing filing of the return submitted on 14th Dec., 1977. Finally, the Tribunal has directed the ITO to proceed with reassessment under s. 146 (1) of the Act. Under these circumstances, the aforementioned questions have been referred for the opinion of this Court. We have heard Mr. D.S. Patwalia, learned counsel appearing for the Revenue and Mr. Akshay Bhan, learned counsel appearing for the assessee. It is submitted by Mr. Patwalia that the view taken by the Tribunal that the return filed by the assessee on 14th Dec., 1977 was pursuant to notice issued under s. 139(2) of the Act and, therefore, it could not be ignored, is based on a wrong premise that the said notice having been issued to the assessee, the same is deemed to have been served. Learned counsel asserts that since the stand of the assessee throughout has been that no notice under s. 139(2) of the Act had ever been served on the assessee, the question of presumption in favour of the assessee did not arise. It is, thus, urged that the return filed on 14th Dec., 1977 could not be taken into consideration. Mr. Akshay Bhan, learned counsel appearing for the assessee, on the other hand, while supporting the view taken by the Tribunal, has submitted that the finding of the Tribunal that notice under s. 139(2) of the Act had been issued and, therefore, it was deemed to have been served, has not been challenged by the Revenue and, thus, the return filed thereafter was rightly treated to have been filed pursuant thereto. It is urged that nothing turns on the statement of Bakshi Sampuran Singh, a director of the assessee-company, who, in his application under s. 146 (1) of the Act had merely stated that “as far as he remembers”, no notice was served on him.

7. We are of the opinion that in the absence of a specific challenge by the Revenue to the correctness of the finding of the Tribunal on the issue of service of notice under s. 139(2) of the Act, it would not be proper for us to go into this aspect of the matter although the factum of issue of notices under s. 142(1) of the Act, heavily relied upon by the Tribunal, may not be conclusive on the question of service of notice under s. 139(2). We also feel that the relevant material, referred to by the Tribunal in its order has not been made part of the statement of the case, with the result that the questions referred cannot be answered. Therefore, the options available at this juncture are either to call for a supplementary statement of the case or to return the reference unanswered. We are of the opinion that keeping in view the fact that by now a fresh assessment must have been framed, which information, learned counsel for the Revenue was unable to obtain from the Department, despite sufficient time having been granted for the purpose, we should prefer the latter option. Accordingly, we return the reference unanswered.

[Citation : 284 ITR 312]

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