COMMISSIONER OF INCOME TAX Vs. MUTHULAKSHMI TIMBER DEPOT

JUDGEMENT

(1.) FOR the asst. year 1979 80 concerning Muthulakshmi Timber Depot, the assessee, the following three questions have been referred, the first two at the instant of the Revenue and the third at the instance of the assessee.

(2.) THE undisputed facts are, that the assessee filed a return for the asst. year 1979 80 on 23rd July, 1980, that the ITO was of the view that the addition to the income for the purpose of taxation would be more than one lakh rupees; that he sent a draft assessment order to the assessee on 29th March, 1982, before the expiry of the period of two years from the last day of assessment year; that notice was received by the assessee on 1st April, 1982, and the assessee in response to that notice sent a letter stating therein, inter alia, that the assessee was objecting to the proposed addition, as such addition was arbitrary and further the assessee needed two more weeks time to file a detailed statement of objection; that the assessee thereafter did not file the detailed objection within the time and sought further period of two weeks; and that the ITO declined to grant such further additional time and proceeded to make the assessment order on 24th April, 1982. That order was challenged by the assessee on the ground that the procedure prescribed under s. 144B has not been followed and, therefore, the order of assessment was a nullity. It was also the case of the assessee that the principles of natural justice had been breached in making the order on 24th April, 1982.

(3.) LEARNED counsel for the Revenue submitted that the order made, in so far as it disables the Revenue from proceeding further was opposed to law. Counsel for the assessee supported the reference made at the assessee's instance and submitted that there was breach of principles of natural justice which rendered the order void and no question of taking further proceedings would arise for consideration.