1984 (10) TMI 86 - AT - Income Tax

Summary

Issues Involved:

1. Whether the assessment for the year 1978-79 was barred by limitation.
2. Whether the assessment was void due to lack of opportunity under section 129 of the Income-tax Act, 1961.

Detailed Analysis:

1. Limitation of Assessment for the Year 1978-79:

The assessee argued that the assessment for the year 1978-79 was barred by limitation. The ITO, J Ward, forwarded the draft assessment order to the assessee on 28-3-1981, and the assessment was to be barred by limitation after 31-3-1981. The ITO, B Ward, completed the assessment on 31-8-1981. The Tribunal examined the provisions of section 153(3) of the Act and found that the period of limitation was extended to enable the assessee to raise objections to the draft assessment order. The Tribunal concluded that the assessment was completed within the extended period and was not barred by limitation.

2. Validity of Assessment Due to Lack of Opportunity under Section 129:

The assessee contended that the assessment was void as no opportunity under section 129 of the Act was provided before the completion of the assessment. The Tribunal noted that the ITO, J Ward, forwarded the draft assessment order along with the assessee's objections to the IAC, Special Range III. The IAC, Special Range III, gave the assessee an opportunity to be heard under section 129, but the assessee chose not to avail of this opportunity. The Tribunal observed that the ITO, after forwarding the draft assessment order, had no power to rehear the assessee and that the IAC had the jurisdiction to hear the assessee on the objections raised. The Tribunal concluded that the opportunity provided by the IAC was effective and substantial, and there was no non-compliance with the provisions of section 129.

Conclusion:

The Tribunal upheld the findings of the Commissioner (Appeals) that the assessment for the year 1978-79 was not barred by limitation and that there was no non-compliance with the provisions of section 129. The Tribunal found that the opportunity provided by the IAC was effective and substantial, and the assessment was valid. The appeal by the assessee on these points was dismissed.