COCHIN PLANTATIONS LIMITED Vs. INSPECTING ASSISTANT COMMISSIONER OF AGRICULTURAL INCOME TAX AND SALESTAX

JUDGEMENT

(1.) THE petitioner, a public limited company, owning agricultural lands, was assessed to tax under the Agricultural Income-tax Act, 1950 (Kerala) (hereinafter referred to as "the 1950 Act"), for the assessment year 1986-87, corresponding to the accounting year May 1, 1984, to April 50, 1985. This order of assessment, exhibit P-3, made by the Inspecting Assistant Commissioner of Agricultural Income-tax, Kollam, is dated April 23, 1986, and determined the accumulated loss to be carried forward to the next year at Rs. 4,44,200 after setting off the loss carried forward from the previous year, namely, Rs. 7,77,200, against the income of Rs. 3,33,000 for the current year. THE order was rectified on June 5, 1986, by another order, exhibit P-4, refixing the loss to be carried forward at Rs. 2,28,060. THE order, exhibit P-4, was not challenged and became final.

(2.) LONG thereafter, the petitioner was served with a notice, exhibit P-4, dated March 24, 1992, from the Inspecting Assistant Commissioner (Agricultural Income-tax and Sales tax), Kottayam (referred to hereinafter as "the Kottayam officer") under Section 35 of the 1950 Act, read with Section 99 of the Kerala Agricultural Income-tax Act, 1991 (15 of 1991) (which replaced the 1950 Act with effect from April 1, 1991) (hereinafter referred to as "the 1991 Act"), intimating the petitioner that its agricultural income for the year 1986-87 has either escaped assessment or been the subject of excessive relief and, therefore, calling upon the petitioner to deliver a return of its income assessable for the said year "not later than March 30, 1992". The notice was served on March 24, itself. The petitioner objected to the reopening of the assessment by its reply, exhibit P-6, but the objections were overruled and a fresh assessment was completed on March 31, 1992, determining an income of Rs. 5,49,142 as taxable for the year (as against the loss of Rs. 2,28,060 fixed under exhibits P-3 and P-4) and demanding an amount of Rs. 3,29,484 as tax payable for the year. A true copy of this assessment is exhibit P-7 and that is under challenge in this writ petition filed under Article 226 of the Constitution.

(3.) THE next point is one of limitation, but I do not find any substance in this submission as well. THE reassessment, exhibit P-7, was completed on March 31, 1992, after the proceedings were initiated by service of the notice under Section 35 of the 1950 Act on March 24. THE assessment year concerned is 1986-87 (i.e., year ending March 31, 1987), corresponding to the petitioner's accounting year ending April 30, 1985. Sub-section (1) of Section 35 of the 1950 Act enables initiation of proceedings for assessment of income which has escaped assessment for any financial year by service of a notice on the assessee at any time within five years of the end of that year. Sub-section (2) says that no order of reassessment shall be made after the expiry of five years from the end of the year in which the agricultural income was first assessable ; and the proviso thereto lays down that once the notice is issued within the time so limited, the reassessment may be made within another period of one year from the date of service of the notice. Section 41 is the corresponding provision in the 1991 Act. It provides for a longer period of ten years for reopening an assessment though Sub-section (2) thereof limits the period to five years unless the Commissioner of Agricultural Income-tax is satisfied on the reasons recorded by the Agricultural Income-tax Officer that it is a fit case for issue of notice to reopen the assessment. According to the petitioner, the Commissioner has not recorded his satisfaction in this case and, therefore, going even by the terms of Section 41 of the 1991 Act, the reassessment is barred.