SEEYAN PLYWOODS Vs. INCOME TAX OFFICER

JUDGEMENT

(1.) THE petitioner is an assessee under the Income-tax Act, 1961. THE petitioner deals in manufacture and sale of plywood, veneers, etc. THE petitioner-firm started an industrial undertaking in 1974 at Baliapatam in Cannanore District. THE petitioner's claim for deduction under Section 80HH of the Income-tax Act was allowed during the assessment year 1977-78. This was confirmed by this court in I. T, R. No. 123 of 1987 (CIT v. Seeyan Plywoods, 1991 190 ITR 564). Thus, under the law the petitioner is entitled to have the benefit of deduction under Section 80HH of the Income-tax Act. But, on September 14, 1984, the Income-tax Officer (first respondent) rejected the claim for deduction under Section 80HH of the Act for the assessment year 1982-83. THE appeal filed by the petitioner before the Commissioner of Income-tax (Appeals), Calicut, was allowed and the matter was remitted to the Income-tax Officer to examine the claim Under Section 80HH afresh. On March 17, 1988, the Income-tax Officer served a letter on the petitioner's chartered accountant pointing out that the assessee has not furnished the report of audit in Form No. 10C along with the return of income filed for the year 1982-83. THE assessee was directed to show cause as to why its claim for deduction under Section 80HH should not be rejected for non-compliance of the prescribed conditions. THE assessee was asked to file its objections before March 25, 1988. But, no such objection was filed by March 25, 1988. Hence, the Income-tax Officer passed an order on March 25, 1988, disallowing the claim of the assessee under Section 80HH. THE assessee, however, filed the objection on March 29, 1988, by which time the assessment order had already been passed. THE assessee preferred a revision before the Commissioner of Income-tax (second respondent) under Section 264 of the Income-tax Act. By order dated September 27, 1991 (exhibit P-8), the second respondent dismissed the revision petition by upholding the order of the Income-tax Officer dated March 25, 1988. THE ground on which it was rejected is that the petitioner did not file the report of audit in Form No. 10C as required under law along with the returns.

(2.) LEARNED counsel for the petitioner by relying on Section 139(9) of the Income-tax Act, 1961, has contended that the Income-tax Officer committed an error in not granting 15 days time to cure the defect and any order passed before the expiry of 15 days from the date of service of the notice is void.

(3.) LEARNED counsel for the respondents relies on the decision of the Bombay High Court in Sarangpur Cotton Manufacturing Co. Ltd. v. CIT, 1957 31 ITR 698 and contends that the fifteen days time as per Sub-section (9) of Section 159 of the Act is available from the date before the first assessment and not after the matter was remanded to the Income-tax Officer for fresh assessment on the basis of the returns filed by the assessee. It has been held by the Bombay High Court as follows (headnote) :