CROSSFIELD TRADERS Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) At the instance of the assessee, the Income Tax Appellate Tribunal has referred the following question of law, for the decision of this court, under S.256(1) of the Income tax Act:

(2.) The respondent is the Revenue. We are concerned with the assessment year 1977-78. Under S.153 of the Income Tax Act, the assessment should normally be over on or before 31-3-1980. The disparity between the income returned by the assessee and the income proposed to be assessed by the Income Tax Officer was more than Rs. l lakh. Therefore, the Income Tax Officer forwarded a draft assessment order to the assessee in terms of S.144B of the Act. It was received by the assessee on 5-3-1980. The assessee sent a reply on 12-3-1980 raising certain objections. The Income tax Officer forwarded the draft assessment order with the objections of the assessee to the Inspecting Assistant Commissioner. It was pending. While so, there was a change in the office of the Income Tax Officer. The Inspecting Assistant Commissioner, on 7-8-1980, ascertained from the assessee whether it required an opportunity of being heard to be given to it by the successor Income Tax Officer. On receipt of this, on 12-8-1980 the applicant/assessee made a request for a hearing by the successor Income tax Officer on 13-8-1980. The rehearing was made by the successor Income tax Officer on 15-9-1980. The Income tax Officer intimated the Inspecting Assistant Commissioner that his order under S.144B of the Act does not require any modification. The Inspecting Assistant Commissioner passed his order under S.144B of the Act, on 30-9-1980. The Income Tax Officer passed the consequential assessment order on 30-9-1980. It was served on the assessee on 15-10-1980, though sent by registered post on 30-9-1980 itself. Since the assessment should have been completed, under S.153 of the Income Tax Act, normally on or before 31-3-1980, the assessee contended that the assessment is barred. This plea was negatived by the Commissioner of Income tax (Appeals) and also by the Income Tax Appellate Tribunal. Thereafter, at the instance of the assessee, the Appellate Tribunal has referred the above question of law, for the decision of this Court.

(3.) We heard counsel for the applicant/assessee. It was argued that the assessee was not entitled to be reheard by the successor Income Tax Officer and the time taken for rehearing should not have been taken into account in deciding whether the assessment is barred. Counsel for the assessee submitted that the fact that the assessee made a request for a hearing, when he was not entitled to it, and that it was allowed by the authorities, will not be a case governed by the proviso to S.129 of the Income tax Act. In this connection, counsel for the applicant/assessee relied on the decision in Venkata Ramana v. C.I. T. (168 I.T.R. 747). Counsel for the Revenue submitted that having availed of the opportunity to be heard, in terms of the proviso to S.129 of the Income Tax Act, it is not open to the assessee to turn round and contend that he was not entitled to be afforded the said opportunity and the fact that such an opportunity was afforded to the assessee was irrelevant in considering whether the assessment is passed in terms of S.153 of the Income tax Act.