S R MAZDA Vs. INCOME-TAX OFFICER

JUDGEMENT

(1.) This appeal by the assessee relates to the assessment year 1978-79. For this year, the assessment was made by the ITO u/s 144 of the Income-tax Act, 1961 on 7- 1-1982 computing a loss of Rs. 4,20,127. According to the assessee, he had filed an application u/s 146 on 20-2-1982 which remained to be undisposed of when the CIT (A) took up the appeal for hearing. The assessee has filed before us a copy of the letter written on 15-11-1984 to the CIT (A) regarding the filing of this application. The date of filing of the application was given as 20-2-1982. Apparently with reference to this application, which reads as under-

(2.) Amplifying on the aforesaid argument, the learned counsel for the assessee drew our specific attention to the acknowledgement obtained by the assessee dt. 20-2-1982 about the filing of the application u/s 146. Therefore, he submitted that the petition u/s 146 having been filed on 20-2-1982, it should have been disposed of in terms of the provisions of section 146 by 20-5-1982, and this not having been done, according to the decision of the Tribunal already referred to, the petition u/s 146 should be deemed to have been allowed on 20-5-1982. This being the position, the reassessment should have been completed within two years from the last day of the financial year, i.e., two years from 31-3-1983 and, therefore, the reassessment should have been completed by 31-3- 1985. Since the order of the CIT (A) itself was passed only on 9-4-1986 the learned counsel submitted that the CIT (A) erred in directing the ITO to make a fresh assessment after affording the assessee a reasonable opportunity. Such a direction he submitted could not have been given since limitation had already set in and the ITO was, therefore, barred from making a fresh assessment. He, therefore, submitted that we should pass an order expressly stating that the application filed u/s 146 on 20- 2-1982 should be deemed to have been allowed in the assessees favour on 20-5-1982 and since a fresh assessment had not been made by 31-3-1985, we should give a finding that no further assessment could be made in view of the provisions of section 153(2A).

(3.) The first submission of the learned departmental representative was that the acknowledgment slip and the application u/s 146, being on plain paper without any serial number, could not be accepted as authentic. We have already set out the contents of the petition which the assessee had filed before the CIT (A). The assessee had categorically stated that the petition u/s 146 had been filed on 20-2-1982 which is the date given in the acknowledgement slip. The CIT (A) had called for a specific report from the ITO, the contents of which also we have reproduced. We have also set out the reply of the ITO. If the ITO wanted any clarifications, he could have sought the same from the CIT (A) and could have probed the matter further with reference to any evidence which the assessee may have sought to rely in support of the assertion that the petition u/s 146 has been filed on 20-2-1982. No investigations having been made at that stage, we are unable to hold that this is a case where we should direct any further investigations to be made. We would take it as proved that the petition u/s 146 was filed on 20-2-1982. According to the provisions of section 146, which are applicable to the present assessment, which was made on 7-1-1982 before the section ceased to apply, the petition should have been disposed of within 90 days i.e. by 20-5-1982. This has not been done. The Tribunal has considered the effect of non-disposal in the decision in Mohammedbhai Hasanallys case (supra). According to the ratio of this decision, the application filed by the assessee should be deemed to have been allowed in the assessees favour. The learned departmental representative contests the correctness of the Tribunals finding in this regard, but the Bench of this Tribunal having taken this view for which they have given elaborate reasons we are unable to differ from the same.