9911796707
TMI Blog2000 (2) TMI 4X X X X Extracts X X X X X X X X Extracts X X X X ..... cording that in his opinion, no credit for tax deducted at source is to be allowed the ITO cannot be said to have closed the proceedings finally. During the pendency of the return filed under s. 139 of the Act along with refund application under s. 237 of the Act, action could not have been taken under s. 147/148. Decided against the revenue. X X X X Extracts X X X X X X X X Extracts X X X X ..... de pursuant to the notice under s. 148 was equally invalid. To this the ITO sent his reply on 16th July, 1970, stating that the return filed on 2nd April, 1964, was disposed of on 10th Nov., 1965, by a note recorded by the ITO in his file. This note was recorded on 10th Nov., 1965, in the file pertaining to asst. yr. 1963-64 and was to the following effect. "In view of the Supreme Court judgment in the case of H.E.H. Nizam, the question of giving credit for tax deducted at source can be considered in the hands of the beneficiaries. Hence, no credit for the tax deducted at source is to be allowed here. The question of refunding the additional surcharge will have to be considered." Against the order of reassessment dt. 3rd July, 1970, trustees filed an appeal before the AAC questioning the same. The AAC took the view that the ITO had not passed the final orders on the return filed on 2nd April, 1964, along with application seeking refund. He, therefore, held that the reassessment made by the ITO pursuant to the notice under s. 148 of the Act was invalid and cancelled the same. The Revenue then took the matter in appeal to the Tribunal. Following two questions were raised before the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fund is a return under s. 139 and all the procedures, formalities and machineries applicable to proceedings of a return under s. 139 would apply and I have further agreed with his view that there has been no termination of the proceedings, I hold that both the Judicial Member and the AAC were right in holding that the assessment made by the ITO pursuant to notice under s. 147 was invalid and has to be accordingly cancelled." Thereafter, in conformity with the views of the majority of the members the Tribunal dismissed the appeal of the Revenue. At the instance of the Revenue under s. 256(1) of the Act the Tribunal referred the question of law arising from its order to the Andhra Pradesh High Court as set out in the beginning of this judgment for the opinion of the High Court. High Court was of the view that the order dt. 10th Nov., 1965, of the ITO on the note-sheet (reproduced above) was an order of disposal of tax return filed by the trustees. It held that the return filed by the trustees on 2nd April, 1964, along with refund application was one filed under s. 139 of the Act and was valid return and as the refund application was disposed of by order dt. 10th Nov., 1965, of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eld that the assessment proceedings were lawfully terminated and that "the orders terminating the assessment proceedings were not apparently communicated to the assessee did not affect the legality of those orders or their finality". 6. In V.S. Sivalingam Chettiar vs. CIT (1966) 62 ITR 678 (Mad) : TC 10R.544 again a similar question arose before the Madras High Court. It was contended that the conclusion of the Madras High Court in M. Ct. Muthuramon's case that "the orders terminating the assessment proceedings were not apparently communicated to the assessee did not affect the legality of those orders or their finality" was without reasons. But the Court rejected this contention and held : "But we are satisfied, if we may say so with respect, that that is the correct view to take. Whatever orders are made under the Act, which affect the assessee in some form or other, it has provided for service of notice and the remedy thereagainst. Sec. 29 requires notice of demand to be served on an assessee; but the section makes it a condition that a notice of demand will be required to be served only when any tax, penalty or interest is due in consequence of any order passed under or in pu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gh Court in M.Ct. Muthuraman and V.S. Sivalingam Chettiar's case Kerala High Court in Commr. of Agrl. IT vs. K.H. Parameswara Bhat (1974) 97 ITR 190 (Ker) : TC 10R.667 took somewhat a similar view. Kerala Agrl. ITAT under the Agrl. IT Act, 1950, however, had taken the view that since the order of "nil" assessment had not been communicated to the assessee, the notice under s. 35 was ab initio void. The ground for the decision was that as far as the assessee was concerned, the assessment proceedings originally commenced were still pending because the order of "nil" assessment had not been communicated to the assessee. High Court said that the view taken by the Tribunal was erroneous. It said : "The scheme of the Act indicates that the making of an assessment naturally by an order is different from the communication of the assessment order to the assessee. There is no specific provision in the Act enjoining that an assessment order must be communicated to the assessee. Nor is there any provision in the relevant Rules that assessment orders must be communicated. All that s. 30 of the Act requires is that a notice of demand in the prescribed form specifying the sum payable shall be ser ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce there was no separate income, the pending proceedings would be closed as N.A. and for income-tax year 1953-54 the file would be removed and clubbed with the family file F. 1005-A. This Court said that the order of the ITO should be interpreted in the light of the circumstances in which that order was passed and so interpreted "it appears to us that the ITO did not intend to conclude the proceedings before him." 10. An order under s. 237 of the Act is appealable as provided in cl. (k) of sub-s. (1) of s. 246 of the Act. Sec. 249 prescribes limitation for filing appeal. Sub-s. (1) of s. 249 is relevant and it is as under : "249. (1) Even appeal under this Chapter shall be in the prescribed form and shall be verified in the prescribed manner. (2) The appeal shall be presented within thirty days of the following date, that is to say--- (a) where the appeal relates to any tax deducted under sub-s. (1) of s. 195, the date of payment of the tax, or (b) where the appeal relates to any assessment or penalty, the date of service of the notice of demand relating to the assessment or penalty : Provided that, where an application has been made under s. 146 for reopening an assessment, ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
