1980 (9) TMI 127 - AT - Income Tax

Summary

Issues:
Appeal against dismissal of appeals by Asstt. Commr. of Agrl. IT for assessment years 1973-74, 1974-75, and 1978-79.

Detailed Analysis:

1. Dismissal of Appeals by Asstt. Commr. of Agrl. IT:
The appeals were filed by a public limited company against the assessments made by the Agrl. ITO for the years 1973-74, 1974-75, and 1978-79. The Agrl. ITO finalized the assessments under section 17(3) due to the non-appearance of the assessee and failure to produce accounts despite notices. The Asstt. Commr. of Agrl. IT dismissed the appeals stating that the assessments should have been made under section 17(4) instead of 17(3) as the appellants did not produce the required accounts. The appellants argued that they maintained proper accounts, filed returns supported by statements, and cooperated with the assessing authority by attending with accounts and vouchers on multiple occasions. The Tribunal found discrepancies in whether the appellants actually produced accounts before the Agrl. ITO and held that the assessments were completed without proper verification of accounts, warranting a remand for disposal according to law after verification.

2. Assessment Procedure and Legal Interpretation:
The Agrl. ITO assessed the appellants by estimating income based on village accounts after issuing notices for production of accounts. The Asstt. Commr. of Agrl. IT's dismissal of the appeals was challenged on the grounds that the assessments were completed under section 17(3) and not 17(4), denying the appellants the opportunity to apply for cancellation of assessments under section 19. The Tribunal cited precedents and emphasized that assessments can be completed under section 17(3) even if the appellants fail to comply with notice under section 17(2). The Tribunal concluded that the assessments were not completed under section 17(4) and ordered a remand for proper verification of accounts before disposal.

3. Tribunal Decision and Refund of Fees:
In the final decision, the Tribunal remanded the appeals back to the Asstt. Commr. of Agrl. IT for disposal according to law after verifying the accounts. It was also ordered that the institution fees paid for the appeals would be refunded in full.

This judgment highlights the importance of proper compliance with assessment procedures, the distinction between sections 17(3) and 17(4) of the Act, and the necessity for thorough verification of accounts before finalizing assessments.