1983 (2) TMI 81 - AT - Income Tax

Issues Involved:
1. Whether the assessment order passed under section 143(3)/144B of the Income-tax Act, 1961, is time-barred and void ab initio.
2. Validity of service of draft assessment order.
3. Compliance with procedural requirements under section 144B.
4. Extension of time for submission of objections by the assessee.

Issue-wise Detailed Analysis:

1. Whether the assessment order passed under section 143(3)/144B of the Income-tax Act, 1961, is time-barred and void ab initio:
The assessee contended that the assessment order was time-barred as the draft assessment order was received after the limitation period, which ended on 31-3-1980. The Commissioner (Appeals) noted that the draft assessment order was served by the Inspector of Income-tax on 26-3-1980 and also sent by registered post on the same date. The assessee's objection that the draft assessment order was incomplete and received after the limitation period was rejected by the Commissioner (Appeals), who found that the draft assessment order was duly served before 31-3-1980. The Tribunal upheld this finding, stating that the forwarding of the draft assessment order by the ITO on 26-3-1980 was within the limitation period and thus valid.

2. Validity of service of draft assessment order:
The assessee argued that the draft assessment order was served by affixation without proper procedure and was received after the limitation period. The Commissioner (Appeals) found that the draft assessment order was served by affixation on 26-3-1980 and also sent by registered post on the same date. The Tribunal noted that the forwarding of the draft assessment order cannot be equated with the issue of a statutory notice or requisition under section 282 of the Act. The Tribunal held that the word 'forward' used in section 144B does not mean 'issue' and thus the service of the draft assessment order was valid.

3. Compliance with procedural requirements under section 144B:
The assessee contended that the draft assessment order was incomplete, unsigned, and thus invalid. The Tribunal referred to the case of Mrs. Meeraben P. Desai v. Union of India [1981] 130 ITR 922, where it was held that the forwarding of the draft assessment order is material and not the signature or date on the draft order itself. The Tribunal found that the ITO had complied with the procedural requirements under section 144B by forwarding the draft assessment order within the limitation period and providing the assessee an opportunity to object.

4. Extension of time for submission of objections by the assessee:
The assessee argued that the ITO extended the time for submission of objections beyond the 15 days allowed under section 144B(2), rendering the assessment order invalid. The Tribunal rejected this plea, stating that the extension of time was granted to facilitate the assessee and not to prejudice them. The Tribunal found no substance in this argument and upheld the validity of the assessment order.

Conclusion:
The Tribunal upheld the order of the Commissioner (Appeals), finding that the assessment order was not time-barred, the service of the draft assessment order was valid, the procedural requirements under section 144B were complied with, and the extension of time for submission of objections was not prejudicial to the assessee. The appeal of the assessee was rejected.

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