SRINIVASA NAICKEN V Vs. AGRICULTURAL INCOME TAX OFFICER

JUDGEMENT

(1.) THE petitioner was assessed to agricultural income tax on 5th Oct., 1958, for the asst. year 1955 1956, corresponding to the accounting year 1129 M. E. On 27th Nov., 1958, the Agrl. ITO, Palai, issued exhibit P 1, notice, to the petitioner, intimating him that he proposed to reassess his income for the accounting years 1129, 1130 and 1131 M. E. and inviting objections, if any, to be filed within 35 days of the receipt of the notice. This was followed by another notice, exhibit P 2, dt. 30th Jan., 1959, which stated that the assessments made on the petitioner for the asst. yrs. 1955 56, 1956 57 and 1957 58 will be reopened and fresh assessments made under S. 35 of the Agrl. IT Act, 1950, which may be referred to briefly as the "Act". The petitioner took no action pursuant to the notice. The Agricultural Income tax Office made a reassessment by order, exhibit P 3, on 10th March, 1959. A notice of demand, exhibit P 4, was then issued to the petitioner for the payment of tax imposed. This petition is to quash both exhibit P 3 and P 4.

(2.) THE chief ground on which the petitioner relies is that no notice had been issued to the petitioner under S. 35 of the Act and that therefore the ITO had no jurisdiction to make the assessment. It was not disputed before me that the issue of the notice under S. 35 is a condition precedent to the assumption of jurisdiction by the ITO to make a reassessment. The controversy was as to the scope of a notice under S. 35. The material part of this section provides :

(3.) IT was common ground that exhibit P 1 was not a notice in terms of S. 35 of the Act, but the learned Government Pleader maintained that exhibit P 1 was the notice in compliance with that provision. According to counsel for the petitioner exhibit P 1 was bad in law as not containing "all or any of the requirements" of a notice under S. 17(2) of the Act, viz., the requirements to furnish a return of income in the prescribed form, to verify it in the prescribed manner, and to set forth, along with other particulars as may be provided in the notice the total agricultural income. The learned Government Pleader argued in reply that, once an assessee had made a return of his income under S. 17(2) for the original assessment a further return is unnecessary and uncalled for, for making a reassessment under S. 35 of the Act, and that the omission to call for a return in the notice under that section is not fatal. If this argument is to prevail, the three requirements of notice under S. 17(2), being related to the central requirement as to the return and turning upon it, there need be no requirement of that notice at all in a notice at all in a notice under S. 35. Surely, the expression "all or any of the requirements" cannot mean none. The suggestion that the specification of a time limit of 35 days, as in exhibit P 1, is such a requirement in the notice under s. 17(2) cannot be countenanced, for the period of time has to be related to a specific act or must qualify a specific requirement in the notice. The period, standing by itself, means nothing. Dealing with period of 30 days prescribed by S. 22(2) of the Indian IT Act, 1922, Chagla, C.J. in CIT vs. Ramsukh Motilal (1955) 27 ITR 54 treated it as but qualifying the three requirements in the notice, which were stated to be the requirements to make a return, to verify and to give particulars. It seems therefore clear that a return of income or particulars as to the total agricultural income is the central requirement in a notice under S. 17(2) of the Act, which cannot be dispensed with. It is seen from the Income tax Manual that the IT Department had, in prescribing the form of a notice under S. 34 of the Indian IT Act, 1922, before it was amended, made the requirement as to the making of a return, an essential ingredient in it. In the Bombay case too, it appears that, though the assessee had furnished a return of his income for the original assessment, he was called upon to make a fresh return for the reassessment, the illegality in the notice complained of in that case being that a period of only six days was given to the assessee instead of a minimum period of thirty days. On principle the making of a fresh return cannot be considered to be meaningless or redundant; it may be that the assessee may have discovered some mistake in the original return he had made or may wish to modify it in the light of fresh circumstances which may have come to his notice and it is only reasonable for the Department to give the assessee a last chance, as it were, to make a return of his income before proceeding against him by way of reassessment. In CIT vs. Mahaliram Ramjidas (1940) 8 ITR 442 too the assess had furnished a return of his income under S. 22(2) of the Indian IT Act, 1922, for the original assessment and the notice issued under s. 34 of that act specifically called on him to make a fresh return of his income. On this, the Privy Council observed as follows :