1976 (11) TMI 17 - HC - Income Tax

Summary

Issues:
1. Validity of the assessment order under the Assam Agricultural Income-tax Act, 1939.
2. Barred by limitation under the provisions of the Act for recovery proceedings.
3. Application of the amended section 36 of the Assam Agricultural Income-tax Act, 1939.

Detailed Analysis:
1. The petitioner, a company owning a tea estate, challenged the assessment order dated August 3, 1967, under the Assam Agricultural Income-tax Act, 1939. The petitioner contended that the assessment should be revised based on the revised assessments under the Income-tax Act. The Agricultural Income-tax Officer revised the assessment for the year 1960-61, leading to a demand notice for tax payment. Subsequently, recovery proceedings were initiated, leading to a writ petition challenging the jurisdiction of the proceedings.

2. The petitioner argued that the recovery proceedings were barred by limitation under the unamended section 36(5) of the Act, which stated that no recovery proceeding shall commence after three years from the date of the original demand. However, the Act was amended, replacing the old section with a new provision that did not include the three-year limitation clause. The petitioner claimed that the Bakijai proceeding initiated after the amendment was beyond the three-year limit from the original demand date, rendering it without jurisdiction.

3. The court analyzed whether the recovery proceedings were barred by the unamended provision before the amended section came into force. It was determined that since the demand was not barred on the date the amended section came into effect, there was no limitation issue under the new provision. Citing a Supreme Court decision, the court held that the recovery proceeding was valid under the amended section 36. Consequently, the petition was dismissed, and the rule discharged, with no order as to costs.

In conclusion, the court upheld the validity of the assessment order under the Assam Agricultural Income-tax Act, 1939, and ruled that the recovery proceedings were not barred by limitation under the amended section 36 of the Act.