THANTHI TRUST Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THE assessee is a charitable trust engaged in the business of publishing newspapers. For the assessment year 1957-58, exemption under Section 4(3)(i) of the Indian Income-tax Act, 1922, was granted while completing the assessment on February 23, 1966. Subsequently, on October 29, 1969, the Assessing Officer served a notice on the assessee under Section 148 of the Act proposing to reopen the assessment. That notice along with others was challenged by the assessee. That writ petition in so far as it related to the assessment year 1957-58 was concerned, was dismissed by this court on December 21, 1972. THE decision of this court is reported in Thanthi Trust v. ITO [1973] 91 ITR 261, 287. THEreafter, the reassessment was completed on April 22, 1977. THE Income-tax Officer computed the income at Rs. 4,20,000 and levied the tax thereon. THE Commissioner of Income-tax, to whom the assessee had appealed, upheld the order of the Assessing Officer. THE assessee went up in further appeal to the Tribunal. THE Tribunal gave relief to the extent of Rs. 80,000. THE assessee being aggrieved by the findings of the Tribunal, contending that the reopening of the assessment was barred by limitation ; that the assessee had not been given sufficient opportunity before the order came to be made and that the Assessing Officer could not include a sum of Rs. 2,25,000 in the assessed income although that amount had been treated as deposit in the original assessment there were no new facts and that no notice had been issued under Section 147(b) of the Act, has caused this reference to be made,

(2.) THE first submission of learned counsel for the assessee was that the proceedings were barred by limitation, as the proceedings were not completed within four years from the end of the assessment year in which notice under Section 148 of the Act was served on the assessee. It is not in dispute that the notice was served on October 29, 1969, and the period of limitation would end on April 1, 1974, and that the Explanation to section 153 of the Act had been invoked by the assessing authority. It is the case of the assessee that, that Explanation is unavailable to the authority. It was also sought to be contended that the period of limitation fixed is four years, that it commences on the last date of the assessment year in which the notice was issued and ends at the expiry of the period of four years from the date. Section 153(2) of the Act fixes the time limit within which period the proceedings should be concluded. It does not impose a bar on the officer from continuing the proceedings, till the assessment year in which he issued the notice had come to an end. THE entire period commencing from the date of issue of a notice till the expiry of the period of four years from the last date of the assessment year in which that notice was served is available to the authority for completing the proceedings.

(3.) THAT decision, in our view, does not assist the assessee in any manner. What was held by the court therein was that the matter which had been specifically dealt with in Sub-section (2) of Section 153 could not be said to have been comprehended within Sub-section (1) which refers to assessment proceedings alone while Sub-section (2) refers to reassessment proceedings as well, by falling back on the definition of assessment in Section 2(8) of the Act. The question here is not as to whether Section 153(3) can be invoked for passing an order of reassessment under Section 147(a) or 147(b). It is the scope of the Explanation which is in issue. The Explanation is meant to apply to the entire section. The matter dealt with in Explanation 1(ii) is the effect of an order of stay granted by the court against the completion of the proceedings referred to in the section. If Parliament chose to refer to all the proceedings referred to in Section 153 in the several Sub-sections (1), (2), (2A) and (3) by referring to them compendiously as assessment proceedings, there can possibly be no objection to such a course, having regard to the definition of assessment in Section 2(8) of the Act. Instead of setting out all the terms assessment, reassessment and re-computation the term assessment proceeding was used in Clause (ii) of Explanation 1. THAT cannot be a ground especially in the context of the factor referred to in that class, namely, stay or injunction of any court to confine its operation only to assessment proceedings and not to reassessment proceedings.