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Assessment of excess profits tax barred by time under section 13 of the Excess Profits Tax Act - Interpretation of statutory provisions - Effect of amendment on limitation period - Applicability of notice under section 13 versus section 15 of the Act. Analysis: The judgment pertains to a reference made by the Income-tax Appellate Tribunal, Delhi, concerning the assessment of excess profits tax for the accounting period from 1st April, 1941, to 31st March, 1942. The central issue was whether the assessment, initiated with a notice under section 13 of the Excess Profits Tax Act in March 1950, was time-barred. The Excess Profits Tax Officer has the authority under section 13 to issue a notice for assessment to any person engaged in a relevant business. The dispute arose as the assessee contended that the assessment was beyond the statutory time limit. The judgment delves into the statutory provisions of the Excess Profits Tax Act, particularly sections 13 and 15. Section 15, dealing with profits escaping assessment, previously had a limitation period of five years. However, an amending Act in 1947 omitted this time frame retrospectively. The judgment emphasizes the legal fiction principle, citing precedents where statutory fictions must be given full effect. The court reasoned that the amendment effectively erased the five-year limitation period, rendering any plea based on it invalid. Furthermore, the judgment addresses the contention that the notice issued under section 13 was improper, and only a notice under section 15 would be valid. The court dismisses this argument, highlighting the broad language of section 13, which allows the Excess Profits Tax Officer to demand returns from individuals engaged in relevant businesses. The court concludes that, based on the interpretations of sections 13 and 15, the notice issued in March 1950 was not time-barred. The judges unanimously ruled against the time limitation argument, affirming the validity of the notice and the subsequent assessment of excess profits tax. In summary, the judgment clarifies the application of statutory provisions, the impact of legislative amendments on limitation periods, and the broad powers conferred on tax authorities under the Excess Profits Tax Act. It underscores the importance of adhering to statutory interpretations and upholding the legal fiction principle to determine the validity of assessments and notices under tax laws.
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