PANCHMAHAL STEEL LIMITED Vs. JOSHI U A ITO

JUDGEMENT

(1.) THE petitioner has challenged in this petition, the order dated March 5, 1980, passed by the Income -tax Officer, respondent No. 1, whereby he refused to accept the third revised return filed by the petitioner -assessee on the ground that he had already passed a draft assessment order on December 12, 1979, under section 143(3) read with section 144B of the Income -tax Act, 1961, and that the assessee was already heard by the Inspecting Assistant Commissioner with respect to the objections filed by the assessee against the said draft assessment order.

(2.) THE petitioner -company had set up a mini -steel plant and commenced production in 1974. It went on making losses and, therefore, a petition was filed in this court for winding up the petitioner -company. In that proceeding, this court by an order dated February 3, 1976, approved the scheme of compromise and arrangement between different classes of creditors and the company. As a result thereof, there was a reduction of the liability of the petitioner to the tune of Rs. 29,36,811. The petitioner's accounting period, corresponding to the assessment year 1977 -78, ended on September 30, 1976. It filed its return of income on June 30, 1977. A part of the reduced liability was shown as income under section 41(1) of the Act, but after carrying forward the business losses and expenses, the total income shown was nil. It is the case of the petitioner that it subsequently found some discrepancies in the return filed by it on June 30, 1977, and, therefore, it filed a revised return on February 20, 1979. This time, the income shown was Rs. 16,88,553. Again, the total income shown was nil. It then filed a second revised return on November 14, 1979, revising the amount shown as income under section 41(1). After hearing the petitioner, the Income -tax Officer passed a draft assessment order on December 12, 1979, under section 144B proposing variation in the income returned by the petitioner. A copy of the said order was served upon the petitioner and pursuant to the notice given to it, objections were filed by the petitioner on December 15, 1979. The hearing in respect of the objections was fixed before the Inspecting Assistant Commissioner, respondent No. 2, on January 11, 1980. According to the petitioner, it was brought to the notice of the petitioner that out of the sum of Rs. 17,06,835 mentioned in the first return filed under section 41(1), a sum of Rs. 16,75,998 was not covered by that section. Therefore, the petitioner filed a third revised return on February 11, 1980. According to that revised return, the amount offered for taxation under section 41(1) was reduced to Rs. 2,72,250. It appears that the said revised return was sent by the petitioner by post. The hearing before the Inspecting Assistant Commissioner, respondent No. 2, took place on February 21, 1980. It was the petitioner's case that at the said hearing, it had requested the Income -tax Officer and the Inspecting Assistant Commissioner to consider the third revised return as the final return of the petitioner, but neither of them was inclined to consider its request. On March 5, 1980, the Income -tax Officer wrote to the petitioner that as he had already passed a draft assessment order on December 12, 1979, and had served the same on the petitioner on December 13, 1979, and objections were filed by the petitioner against the draft assessment order, he was not in a position to take any action on the said revised return. In short, he refused to accept the third revised return filed by the petitioner. This refusal, as stated earlier, is the subject -matter of this petition.

(3.) IT is not necessary to reproduce section 143. Section 144B read as under :