2006 (8) TMI 133 - HC - Income Tax

Assam Agricultural Income Tax Act, 1939 demand notices issued under section 23 of the Assam Agricultural Income-tax Act, 193 it is sought to be contended that the assessments under the Assam Act are liable to be correspondingly revised, the impugned notices in question are, therefore, not legally sustainable. held that such contention is not acceptable further in respect of another contention of refund of excess tax paid, the documents enclosed by the petitioner contain mere assertions made by it to the effect that excess tax has been paid under the Assam Act and refund is due. No order of refund as contemplated by the Act has been placed before the court The provisions for refund are contained in Chapter VI of the Assam Act and refunds are to be granted on completion of a proceeding in this regard as contemplated by the Act. held that this writ petition will not justify grant of any relief to the petitioner. Consequently and for the reasons stated this writ petition has to be dismissed which I hereby do.

Issues Involved:
1. Legality of demand notices under section 23 of the Assam Agricultural Income-tax Act, 1939.
2. Legality of the notice proposing to levy penalty under section 36(3) of the Assam Agricultural Income-tax Act, 1939.
3. Impact of pending appeals and revisions under the Income-tax Act, 1961 on assessments under the Assam Agricultural Income-tax Act.
4. Entitlement to refunds under the Assam Agricultural Income-tax Act and its impact on the demand notices.

Issue-wise Detailed Analysis:

1. Legality of Demand Notices under Section 23 of the Assam Agricultural Income-tax Act, 1939:
The petitioner company challenged the demand notices dated June 21, 2001, on the grounds that the assessments under the Income-tax Act, 1961 (Central Act) were not finalized due to pending appeals and revisions. The court noted that the assessments for the years 1989-90, 1990-91, and 1991-92 were remitted to the Commissioner of Income-tax (Appeals) by the Income-tax Appellate Tribunal in 1998. For the years 1993-94 and 1994-95, the primary authority's assessments were partially modified by the Commissioner of Income-tax (Appeals), and the petitioner had further appealed to the Tribunal. The court emphasized that the petitioner failed to provide evidence of any rectifications or revisions made under the Central Act that would necessitate corresponding revisions under the Assam Act. Consequently, the court held that the demand notices were legally sustainable as the assessments under the Central Act had not been modified or rectified.

2. Legality of the Notice Proposing to Levy Penalty under Section 36(3) of the Assam Agricultural Income-tax Act, 1939:
The petitioner also challenged the notice dated February 28, 2001, proposing to levy a penalty. However, the court did not specifically address this issue separately in the judgment. The dismissal of the writ petition implies that the court did not find merit in the challenge against the penalty notice either.

3. Impact of Pending Appeals and Revisions under the Income-tax Act, 1961 on Assessments under the Assam Agricultural Income-tax Act:
The court detailed the statutory provisions requiring the computation of business income from tea manufacture and sale under the Income-tax Act, with 60% of such income constituting agricultural income for assessment under the Assam Act. The court observed that necessary corrections or rectifications in the Central Act assessments could affect the Assam Act assessments. However, the petitioner did not provide evidence of any such rectifications. The court held that until the Central Act assessments were modified, the Assam Act assessments would remain valid and enforceable. The court also referred to section 20D of the Assam Act, which requires submission of a revised return if the Central Act income is revised, but noted that the petitioner did not resort to this provision.

4. Entitlement to Refunds under the Assam Agricultural Income-tax Act and Its Impact on the Demand Notices:
The petitioner argued that refunds for subsequent assessment years were due under the Assam Act, making the demand notices for earlier years unjustified. The court examined the letters and documents provided by the petitioner, which contained assertions of excess tax payment but no formal orders of refund as required by the Act. The court concluded that without proper orders of refund, the petitioner's claim could not be substantiated. The court distinguished this case from the precedent in Kamrup Construction Co. P. Ltd. v. State of Assam, where a direction for refund was considered appropriate based on specific facts.

Conclusion:
The court dismissed the writ petition, upholding the legality of the demand notices and the notice proposing to levy a penalty. The assessments under the Assam Act were deemed valid in the absence of finalized modifications under the Central Act. The petitioner's claim for refunds was not substantiated by proper evidence, leading to the rejection of the argument against the demand notices. The court made no order as to costs.

← Previous Next →