RATTAN LAL TIKU Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) BY order dated May 22, 1972, the Income-tax Appellate Tribunal, Chandigarh Bench, has referred the following points of law to this court for opinion :

(2.) BEFORE answering the questions referred to us it will be necessary to mention a few facts which are not disputed by the counsel for the parties. The assessee is carrying on business in the name and style of Messrs. Amar Industries, Srinagar. The accounting year in dispute is the year 1963--assessment year 1963-64. The assessee filed his return for the year 1963-64 on May 1 8, 1965, showing an income of Rs. 570. It may be mentioned here that the assessee carries on business in the manufacture and sale of ruffal and silk. In the return which was signed by the assessee, his mother, Mst. Shobawati, was shown as the proprietor of the business. Notice under Section 143(2) of the Income-tax Act (hereinafter to be referred to as "the Act") was issued to the assessee on January 19, 1968, fixing the date of hearing for January 29, 1968. On several dates the Income-tax Officer examined the case of the assessee and in the course of his examination found that the cash credits in the books of the assessee during the period January 1, 1962, to March 31, 1963, stood as follows :

(3.) A perusal of this section clearly shows that it lays down the procedure to be adopted by the Income-tax Officer in two different contingencies. Sub-section (1) contemplates cases where the Income-tax Officer does not doubt the correctness of the return or the materials produced before him by the assessee and accepts the return, in which case it is not necessary for him to issue any notice to the assessee, but he can proceed with the assessment straightaway by accepting the return of the assessee. Sub-section (2) deals with a case where the Income-tax Officer is not satisfied about the correctness of the return of the assessee and before making the assessment it is incumbent on the Income-tax Officer to give a notice to the assessee. Sub-section (3) merely regulates the manner in which notice is to be issued and the hearing is to be conducted. Thus, it is absolutely clear that Section 143 of the Act is purely a procedural section laying down the procedure for making assessment in various contingencies. For these reasons, we find ourselves in complete agreement with the view of the Tribunal that Section 143 is a procedural section and not a substantive one. The first question, therefore, is answered accordingly,