SOUMYENDRA CHANDRA GOOPTU Vs. INCOME TAX OFFICER

JUDGEMENT

(1.) The present rule was issued on September 19, 1977. at the instance of the writ petitioner challenging the show-cause notice dated August 20, 1977, under Section 140A(3) of the Income-tax Act, 1961, issued by respondent No. 1, the Income-tax Officer, D-Ward, Dist. VIII, Calcutta, for the assessment year 1970-71. It is stated that the petitioner is an assessee under the provisions of the Income-tax Act since the assessment year 1965-66 having his P. A. No. 11-015-PT-7335 CAL/VIII/D It is alleged that after the demise of the petitioner's father in December, 1967, the petitioner became liable for assessment under the provisions of the Wealth-tax Act and since then the petitioner is an assessee also under the Wealth-tax Act, 1957. For the assessment year 1970-71, the petitioner submitted his return of income on September 29, 1970. Fixing the date of hearing of the case for the assessment year 1970-71, a notice dated February 17, 1973, was issued by the Income-tax Officer, 1st Additional Survey Ward, Dist. VII, under Section 143(2) of the Income-tax Act. In the course of, hearing on March 8, 1973, it transpired that there was an omission made by the petitioner in the original return regarding a claim for deduction of Rs. 6,000 from a date of income from his house property which the petitioner's mother was entitled to as a result of the will made by the petitioner's father at the time of his death. The alleged mistake was corrected and a revised return was filed by the petitioner on March 8, 1973. A revised return for the assessment year 1970-71 was also necessitated for disclosing certain amounts as capital gain arising out of a sale of a joint property. On September 17, 1973, the petitioner was asked to comply with some requisitions and the same was complied with. On January 24, 1974, the petitioner filed another revised return for the assessment year 1970-71 and the then Income-tax Officer could not complete the assessment within January 24, 1975. It is further stated that the reasons for the time to time revision of return for the assessment year 1970-71 is also mainly due to the lack of a correct legal opinion and/or the opinion of a valuer as to the correct valuation of the said property as on January 1, 1954. The amount of capital gain could not be correctly disclosed in the return of the petitioner's income as he could not prepare the same properly without the help of a lawyer and a valuer. The petitioner had to file revised returns on account of a revision of opinion of the expert on the question of capital gain. However, in the meantime, the petitioner's file was transferred from the Income-tax Officer, 1st Additional Survey Ward, Dist. VI to C-Ward, Dist. VI, Calcutta, on July 23, 1974. The file was again transferred to Doctors' Circle under the jurisdiction of the Income-tax Officer of Dist. VIII, 'I'-Ward, Calcutta. The file was further transferred to D-Ward of Dist. VII, Calcutta, respondent No. 1. It is disclosed in the writ petition that the assessment for the assessment years 1971-72 to 1975-76 are completed but no assessment whatsoever for the assessment year 1970-71 has been made by the Income-tax Officer. The petitioner submits that, in any event, the matter as it stands is that the assessment is completely barred by limitation and no assessment has been and/or can be made under the provisions of the Income-tax Act, 1961, or, in other words, no assessment of income of the petitioner has been made and no liability for the assessment year 1970-71 has been determined. In spite of such position, the petitioner was surprised to receive a notice dated August 28, 1977 purported to have been issued under Section 140A(3) of the Income-tax Act. It appears that penalty is sought to be levied upon the petitioner for the petitioner's alleged failure to pay tax on self-assessment for the assessment year 1970-71. By challenging the said notice, the petitioner has come to this court on the ground that when regular assessment and/or provisional assessment is made following the filing of a return of income, no proceeding for imposition of penalty under Section 140A(3) of the Income-tax Act, 1961, is permissible in law. The show-cause notice dated August 28, 1977, as such is illegal, invalid and without jurisdiction. In any event, when there was no valid return filed on March 18, 1975, there was no question of levying any penalty for non-payment of tax on self-assessment under Section 140A(3) of the said Act.

(2.) The writ petition is contested by the respondents by filing an affidavit-in-opposition sworn to by the Income-tax Officer, 'F'-Ward, Dist. VIII, on June 26, 1987. It is stated that the assessee filed a return for the assessment year 1970-71 on September 29, 1970. Notice under Section 143(2) was issued on February 17, 1973, and served on February 21, 1973. On March 8, 1973, the assessee filed a revised return with a different total income. The case was fixed on February 21, 1974, when the assessee's advocate filed another revised return showing a different total income. The case was re-fixed on July 4, 1974, and the assessee submitted 3 (three) revised returns with varying figures. On each date of hearing, the assessee was found to file a revised return with widely varying incomes under different heads. Such steps were alleged to be taken with a view to mislead the Department so that there will be a limitation as to the assessment for the period. As the assessee defaulted to pay tax under Section 140A(1) and thereafter show cause notice dated August 28, 1977, under Section 140A(3) was issued and a maximum penalty involved was 50% of Rs. 1,03,594, i.e., Rs. 51,797. The steps taken by the respondent are well-justified and the case as made out by the petitioner is thoroughly misconceived and speculative, as submitted.

(3.) Mr. Sanjay Bhattacharya, learned counsel appearing for the petitioner, has argued at length as to the scope of Section 140A, Section 143 and Section 153(1)(b) and (1)(c) of the Income-tax Act. According to him, there is no bar and/or impediment to file the revised return. By drawing the attention of the court to cases reported in Addl. CIT v. Free Wheels India Ltd. [1982] 137 ITR 378 (Delhi), Kshetra Mohan Roy v. ITO and CIT v. Ceanattu Firms, Mr. Bhattacharya contended that the impugned notice is thoroughly misconceived and the question of further consideration does not arise as the proposed step is hopelessly barred by limitation.