COMMISSIONER OF INCOME TAX Vs. SHEO KUMARI DEBI

JUDGEMENT

(1.) WHETHER the limitation provision of Section 149 of the Income-tax Act, 1961, envisages the issuance of a notice only, or its actual service subsequently on the assessee as well, is the intricate and significant question necessitating this reference to a Full Bench. Particularly in issue is the correctness of the view enunciated by the Full Bench on this point in Jai Hanuman Trading Co. Pvt. Ltd. v. CIT [1977] 110 ITR 36 (P & H).

(2.) THE assessment year in this reference was way back 1961-62. THE Revenue being of the opinion that substantial income has escaped assessment initiated proceedings under Sections 147 and 148 of the Income-tax Act, 1961 (hereinafter to be referred to as "the Act"). For that purpose, a notice for reassessment to the assessee which was actually signed on March 30, 1970, was admittedly issued by registered post on March 31, 1970. Though the precise date of its service is not on the record, it is common ground that the said notice was served later in the first week of April, 1970. THE assessee raised objection that the notice, though issued within the period of limitation but having not been served within eight years from the end of the assessment year in question, was illegal and without jurisdiction. This was, however, rejected and the Income-tax Officer made a best judgment assessment under Section 144 of the Act. THE assessee went up in appeal but the Appellate Assistant Commissioner rejected the same. Aggrieved thereby, a further appeal was carried to the Tribunal.

(3.) IT was on the basis of the aforesaid Twelfth Report that meaningful and somewhat radical changes were wrought in the law and the present income-tax Act of 1961 found its way on the statute book whilst totally repealing the earlier 1922 Act.