RAMANAND AGARWALLA Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THE following question of law has been referred to this court for adjudication :

(2.) THE material facts are these : THE assessee, Ramanand Agarwalla, was assessed under the provisions of the I.T. Act, 1961, as an individual. His income for the assessment year 1963-64 was the subject-matter of assessment before the ITO, who passed his assessment order on March 16, 1968. That order was then followed by a notice dated March 20, 1968, which was issued by the office of the ITO on March 30, 1968, and was served on the assessee on April 13, 1968. THE assessee filed an appeal against that assessment order contending, inter alia, that it was barred by time under Section 153 of the said Act. THE AAC repelled this contention holding that the assessment order was passed before March 31, 1968. THE assessee then preferred an appeal before the Income-tax Appellate Tribunal reiterating his contention that the assessment order was barred by time. THE said contention, however, did not find favour with the Tribunal, which held that the assessment was completed by the ITO on March 16, 1968, and was entered in the register in March, 1968. THE demand notice was also issued on March 30, 1968. THE assessee then moved the Tribunal for referring certain questions of law to this court. In compliance with the directions issued under Section 256(2) of the I.T. Act, 1961, by this court, a statement of the case has been drawn up and sent to the court.

(3.) THERE is no substance in the contention that not only the assessment order but the demand notice should also be issued before the expiry of four years from the end of the assessment year in which the income of the assesses was first assessable. Sub-section (1) of Section 153 of the Act requires an ITO to pass an order of assessment within the period prescribed in the Act. It does not require that the demand notice should also be issued within that period. The words "order of assessment" cannot be construed as to include a demand notice as well. The demand notice does not form part of the order of assessment as is evident from the provisions of Section 156 of the Act which says that when any tax, interest, penalty, fine or any other sum is payable in consequence of any order passed under this Act, the ITO shall serve upon the assessee a notice of demand in the prescribed form specifying the sum so payable.