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Issues Involved
1. Validity of notices under sections 22(4), 28(1)(a), and 46(5A) of the Income-tax Act. 2. Jurisdiction of the Income-tax Officer to assess beyond the four-year limitation period. 3. Applicability of section 28(1)(c) for extending the limitation period. 4. Harassment allegations against the Income-tax Officer. Detailed Analysis 1. Validity of Notices under Sections 22(4), 28(1)(a), and 46(5A) The writ petition challenges the notices issued under sections 22(4), 28(1)(a), and 46(5A) of the Income-tax Act for the assessment years 1953-54 and 1954-55. The petitioner seeks to quash these notices and requests a writ of mandamus to prevent further assessment of the firm for these years. The court acknowledges the absence of a counter-affidavit from the respondents, hence the allegations in the petition are taken as true. 2. Jurisdiction to Assess Beyond Four-Year Limitation The core issue is whether the Income-tax Officer can assess beyond the four-year limitation period specified in section 34(3) of the Act. The court notes that the normal period for completing an assessment is four years, and this can only be extended if there is a prima facie case for the applicability of section 28(1)(c). The court emphasizes that the Income-tax Officer cannot keep assessments pending indefinitely on the theoretical possibility of discovering concealment in the future. 3. Applicability of Section 28(1)(c) The court scrutinizes whether section 28(1)(c) can be invoked to extend the limitation period. It is noted that no penalty notice under section 28(1)(c) was issued during the original assessment under section 23(4). The court asserts that without a prima facie case for concealment, the Income-tax Officer lacks jurisdiction to extend the assessment period beyond four years. The court distinguishes the present case from previous cases like Mir Suba Hari Bhakta and Lalji Haridas, where the applicability of section 28(1)(c) was determined at the time of assessment. 4. Harassment Allegations The court takes into account the affidavit alleging harassment by the Income-tax Officer. The absence of a counter-affidavit from the respondents further supports the petitioner's claims. The court finds that the continuation of assessment proceedings beyond the limitation period, without any indication of invoking section 28(1)(c), amounts to harassment. This aligns with the Supreme Court's stance in the Calcutta Discount Co. case, where the court emphasized preventing harassment even if alternative remedies are available. Conclusion The court concludes that the Income-tax Officer had no jurisdiction to continue assessment proceedings beyond the four-year limitation period without a prima facie case for section 28(1)(c). The court issues a writ of certiorari to quash the notices under sections 22(4), 28(1)(a), and 46(5A), and a writ of mandamus to prevent further assessment proceedings based on the voluntary returns filed by the assessee. The petition is allowed without any order as to costs.
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