1990 (11) TMI 71 - HC - Income Tax

Summary

Issues:
1. Best judgment assessment under the Tamil Nadu Agricultural Income-tax Act.
2. Imposition of penalty under section 20(2) of the Act.
3. Recall of best judgment assessment due to illness of the karwari.
4. Exercise of power under section 34 of the Act by the Commissioner of Agricultural Income-tax.
5. Reopening of assessment under section 19 of the Act.
6. Validity of the Commissioner's decision to interfere with the order recalling the best judgment assessment.
7. Jurisdiction of the revisional court to examine the sufficiency of cause shown.

Best Judgment Assessment and Penalty Imposition:
The petitioner failed to respond to a statutory notice under the Tamil Nadu Agricultural Income-tax Act, leading to a best judgment assessment and the imposition of a penalty under section 20(2) of the Act. Subsequently, upon the petitioner's plea citing the illness of his karwari, the taxing officer cancelled the assessment orders under section 17(4) of the Act. The petitioner was then given an opportunity to file his return and was assessed to tax under the Act.

Exercise of Power by the Commissioner:
The Commissioner of Agricultural Income-tax, Madras, exercised suo motu power under section 34 of the Act to review the assessments made on the basis of the petitioner's return. Despite the notice served, the petitioner did not appear before the Commissioner. The Commissioner held that the reopening of assessment under section 19 of the Act was irregular and issued a show-cause notice to set aside the orders. As the petitioner did not respond, an ex parte order was passed.

Validity of Commissioner's Decision and Jurisdiction of the Court:
The Commissioner set aside the orders for the assessment years 1972-73 and 1973-74, reinstating the original assessment under section 17(4) of the Act. The court found fault with the Commissioner's decision to interfere with the order recalling the best judgment assessment, stating that the petitioner's cause for recall was acceptable. The court emphasized that the revisional court should not interfere unless necessary and concluded that the Commissioner had no valid reason to question the order recalling the best judgment assessment.

Conclusion:
The court allowed the tax cases, quashing the Commissioner's orders and restoring the Agricultural Income-tax Officer's original orders. No costs were awarded in the matter.