1982 (10) TMI 25 - HC - Income Tax

Issues Involved:
1. Validity of consolidated notice under Section 35 of the Agrl. I.T. Act, 1950.
2. Issuance and service of demand notices under Section 30 of the Act.
3. Time-limit for making assessment orders under Section 35(2) of the Act.
4. Requirement of recording reasons before issuing escaped assessment notices under Section 35(1) of the Act.
5. Legality of assessments made under Section 18(4) instead of Section 35 of the Act.
6. Initiation of revenue recovery proceedings.

Detailed Analysis:

1. Validity of Consolidated Notice Under Section 35 of the Act:
The petitioner argued that the assessments were invalid because a consolidated notice (Ex. P-1) was issued instead of separate notices for each financial year. The court found that separate notices were indeed sent for each year, as evidenced by the file and counter-affidavit. Hence, the alleged infirmity did not exist.

2. Issuance and Service of Demand Notices Under Section 30 of the Act:
The petitioner contended that separate demand notices were required for each year and that the imposition of penalty was illegal without them. The court found that separate demand notices were issued and served for each financial year, as shown by the postal acknowledgments in the file. Therefore, this ground of attack failed.

3. Time-Limit for Making Assessment Orders Under Section 35(2) of the Act:
The petitioner claimed that the assessment orders were made after the expiry of the time-limit prescribed in Section 35(2). The court noted that the time-limit for the first financial year (1975-76) ended on March 31, 1981, and Ex. P-2 assessment order was made and served before this date. Thus, the assessment orders were within the time-limit.

4. Requirement of Recording Reasons Before Issuing Escaped Assessment Notices Under Section 35(1) of the Act:
The petitioner argued that the first respondent did not record reasons before issuing escaped assessment notices, making the proceedings illegal. The court found that the first respondent had recorded reasons based on plantation tax assessment and decided to issue notices under Section 35(1). Therefore, this contention was dismissed.

5. Legality of Assessments Made Under Section 18(4) Instead of Section 35 of the Act:
The petitioner contended that assessments should have been made under Section 35, which would have allowed for appeals under Section 31. The court explained that Section 35 does not contain independent procedural provisions and refers to the procedures in Sections 17 and 18. Best of judgment assessments under Section 18(4) are valid for escaped assessments, and no appeal lies against such assessments under Section 31. Therefore, the assessments under Section 18(4) were legally valid.

6. Initiation of Revenue Recovery Proceedings:
The petitioner claimed that the initiation of revenue recovery proceedings was illegal. The court found no steps had been taken under the Revenue Recovery Act at the time of the original petition, and the 5th respondent's attempts to persuade the petitioner to pay the amounts due were not illegal.

Conclusion:
The original petition was dismissed without costs. The court found that the assessments and demand notices were validly issued and served, the time-limits were adhered to, and the assessments under Section 18(4) were legally sound. The petitioner's contentions regarding the procedural and substantive legality of the assessments and notices were rejected.

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