VARKEY JACOB CO Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THE petitioner, an unregistered dealer, was the lessee of a rubber estate which was acquired by the Government. Consequent on the acquisition, the petitioner got a share of the compensation for the land acquired and consequent termination of lease. THE initial award was in March, 1974. THEreafter there was a claim for enhancement of compensation which ended up in the judgment of this court on January 28, 1987. Pursuant to the said judgment, the petitioner returned the income received as interest by filing returns for the assessment years 1979-80 to 1984-85 admitting its share of interest awarded in the land acquisition case. THE Assessing Officer on receipt of the returns dated January 3, 1990, initiated reassessment proceedings apparently by issuing notices under Section 147(a) of the Income-tax Act, 1961. It may be noticed that the assessments were completed under, Section 143(3) read with Section 147(a) of the Act THE impugned assessments are dated October 30, 1990. Even though the petitioner-filed returns offering to pay tax on the interest, the petitioner later felt that the Department is not authorised to complete the assessments on account of limitation for proceeding under* Section 147(b) of the Act which was only four years. According to the petitioner, its case is not one falling under Section 147(a) of the Act and that is the position conceded by the Department also. THErefore, revision petitions were filed challenging the assessments before the first respondent under Section 264 of the Act. THE Commissioner overruled the objections of the petitioner and sustained the assessments under the amended provisions of Section 147 of the Act which was introduced with effect from April 1, 1989. THE Commissioner found that the Section quoted as Section 147(a) in the assessment is an obvious mistake and the assessments can only be under the amended provisions of Section 147. Further, he has relied upon Section 292B of the Act to hold that the assessments are not invalidated by the misquoting of the section. THE Commissioner has gone into the period of limitation and on being satisfied, he has held that the assessments are completed within time. Thus, he has sustained the assessments. It is against the order of the Commissioner produced as exhibit P13, the petitioner has approached this court by filing this original petition under article 226 of the Constitution of India.

(2.) I have heard Mr. N. Srinivasan and Mr. M. P. Abraham, learned counsel for the petitioners, and Mr. P. K. R. Menon, learned senior Central Government standing counsel for the Income-tax Department.

(3.) THEREFORE, I feel that the Commissioner is right in rejecting the contentions of the petitioner. The contention of the petitioner that returns are non est does not have any relevance because the returns are not treated as returns for the purpose of assessment. The Assessing Officer has got information regarding the escaped income and thereafter assessment was completed after issuing notice under Section 147 though mistakenly quoted as Section 147(a) of the Act. Section 147 of the Act authorises the Assessing Officer to make an assessment for charging the escaped income if the officer has reason for the same. In this case the assessment on the settled position of law is about the returned income which constituted information for invoking the amended provision of Section 147 of the Act. When the Assessing Officer has sufficient reason for the assessment there is no scope for examination as to whether the officer has proceeded under the amended provision of Section 147 of the Act.