1985 (10) TMI 83 - HC - Income Tax

Summary

Issues:
Challenge to order of Agricultural Income-tax Officer for rectification beyond the prescribed time limit.

Analysis:
The petitioner challenged an order by the Agricultural Income-tax Officer for rectification, issued beyond the time limit prescribed under section 37(7) of the Karnataka Agricultural Income-tax Act, 1957. The petitioner contended that the order was barred by time and without jurisdiction. The Agricultural Income-tax Officer had issued a show-cause notice proposing rectification on February 1, 1978, but the actual rectification order was made on August 19, 1981, which was beyond four years from the original assessment order made on May 28, 1976. The court analyzed the language of section 37(7) and concluded that the authority must make the rectification order within four years from the original assessment order, with no scope for completion beyond that period. The court held that the order was beyond the prescribed time limit and therefore without jurisdiction and illegal.

The court referred to previous judgments to support its decision. In the case of K. G. Subramanya v. Commr. of Agrl. LT., it was ruled that orders of revision must be made within four years from the date of the order, which was deemed applicable to the present case. Additionally, in Sha Vajeshankar Vasudeva and Company v. Assistant Commissioner of Commercial Taxes, a distinction was made between rectification proceedings under different statutes, indicating that the ruling in that case did not support the respondent's argument that the order was not barred by time. The court emphasized that the language of section 37(7) must be construed strictly and held that the rectification order and the consequential demand notice were liable to be quashed due to being beyond the prescribed time limit.

In conclusion, the court quashed the rectification order made by the Agricultural Income-tax Officer and the consequential demand notice. The rule issued was made absolute, with each party directed to bear their own costs.