BIDYUT PROVA RAHA Vs. INCOME TAX OFFICER

JUDGEMENT

(1.) THE petitioner describes herself as heiress and legal representative of late Barin Raha and an assessee under the Income-tax Act. By this application under Article 226 of the Constitution, she is challenging three orders of the Income-tax Officer, A-Ward, Digboi. THE first is an assessment order dated November 25, 1965, under Section 144 of the Income-tax Act, 1961 (hereinafter referred to as the "new Act"), for the assessment year 1961-62. THE second is an order dated December 26, 1967, rectifying the above order under Section 154 of the new Act and the consequent notice of demand dated December 29, 1967, under Section 29 of the Indian Income-tax Act, 1922 (hereinafter referred to as the "old Act"). THE third is a notice dated March 13, 1967, under, Section 148 of the new Act.

(2.) THE facts necessary for appreciation of the questions raised in this application may briefly be set out: A notice dated May 11, 1961, under Sections 22(2) and 38 of the old Act was served on the assessee, Barin Raha, by the Income-tax Officer, Digboi, in respect of the assessment year 1961-62 on May 16, 1961. THE assessee did not submit his return and died on February 22, 1963, after the commencement of the new Act with effect from April 1, 1962. Notice under Section 142(1) of the new Act was served upon the legal successor of the assessee on May 14, 1963. Another notice, dated June 4, 1964, under Section 22(4) of the old Act was also issued to the legal successor of the assessee. No one complied with the above notices and the order of assessment was passed under Section 144 of the new Act on November 25, 1965. Notice of demand under Section 156 of the new Act was accordingly issued to the legal successor on December 8, 1965, demanding payment of a sum of Rs. 19,597 within 35 days from the date of service of the said notice. THE petitioner applied to the Income-tax Officer for allowing her to pay the tax by instalments and she paid the entire tax in instalments by June 30, 1966. On March 13, 1967, a notice was issued under Section 148 of the new Act in respect of the assessment year 1961-62. On November 23, 1967, the petitioner challenged the entire proceedings before the officer as ultra vires and illegal and claimed refund of the tax already paid. On December 26, 1967, the Income-tax Officer passed an order under Section 154 of the new Act rectifying the earlier assessment order dated November 25, 1965. This rectification has not altered the quantum of assessment but substituted certain old sections of the Act in place of the new sections appearing in the earlier assessment orders. Consequent upon this rectification, a revised notice of demand was issued under Section 29 of the old Act on December 29, 1967. THE petitioner has preferred an appeal against this order to the Appellate Assistant Commissioner.

(3.) THE learned counsel for the petitioner submits that the order of assessment dated November 25, 1965, is null and void because the provisions of the new Act could not be invoked for the assessment year 1961-62. Secondly, he submits that the above order being absolutely invalid in the eye of law could not be rectified by the order dated December 26, 1967. Thirdly, he contends that in any event the order of rectification is without jurisdiction and is also bad for violation of the principles of natural justice. Lastly, he submits that the order under Section 148 is also without jurisdiction on account of the fact that the conditions precedent for such an order were lacking in this case. THE learned counsel also took in his petition the question of the vires of Section 297(2)(d)(ii) of the new Act, but did not press this point on account of a recent decision of the Supreme Court in Civil Appeal No. 1593 of 1969 (Jain Bros. v. Union of India, 1970 77 ITR 107 disposed of on November 18, 1969.