1997 (10) TMI 15 - HC - Income Tax

Summary

Issues Involved:
1. Limitation of notice under section 35 of the Tamil Nadu Agricultural Income-tax Act, 1955.
2. Non-speaking order and quantification of tax payable.

Detailed Analysis:

1. Limitation of Notice under Section 35 of the Tamil Nadu Agricultural Income-tax Act, 1955:
The petitioner argued that the notice for reassessment under section 35 of the Act was issued beyond the prescribed period of five years from the end of the relevant assessment years (1975-76 and 1976-77). The notice was issued only in 1985, making the reassessment order illegal due to non-compliance with the statutory limitation period.

The court examined section 35 of the Act, which mandates that any reassessment notice must be issued within five years of the end of the relevant financial year. The court noted that the Assistant Commissioner of Agricultural Income-tax had previously set aside the initial reassessment for failing to issue a notice under section 16(2) of the Act before reassessment. The court agreed with the petitioner that the notice issued in 1985 was beyond the five-year limitation period, rendering the reassessment proceedings invalid.

2. Non-speaking Order and Quantification of Tax Payable:
The petitioner contended that the reassessment order did not specifically quantify the tax payable, merely confirming the previous order which had been set aside. The court acknowledged that the initial reassessment order dated May 22, 1985, was set aside, and thus, was not in existence when the revised reassessment was passed on November 19, 1985. The revised order simply confirmed the non-existent earlier order without specifying the tax amount.

The court referred to the decision in CIT v. Smt. Krishwanti Punjabi, which emphasized that an assessment must determine both the total income and the tax payable. The court found that the reassessment order lacked clarity on the quantum of tax, which is essential for the assessee to understand the tax liability. Despite this, the court concluded that the petitioner was aware of the tax amounts from the previous order and thus, this technical objection did not affect the validity of the assessment.

Conclusion:
The court concluded that the reassessment was invalid due to the issuance of the notice beyond the statutory limitation period. The common order passed by the Commissioner of Agricultural Income-tax was quashed, and the writ petitions were allowed. There was no order as to costs, and the related miscellaneous petitions were closed.