9911796707
TMI Blog2005 (2) TMI 102X X X X Extracts X X X X X X X X Extracts X X X X ..... . The petitioner which was being assessed to tax on coffee income on receipt basis until the assessment year 1995-96, opted for payment of tax at compounded rate based on extent of yielding area of plantation in terms of section 13 of the Act. After availing of composition of tax under section 13 for the assessment years 1995-96 to 2000-01, the petitioner reopted for payment of tax based on income from the assessment year 2001-02 onwards, in terms of section 39(3) of the Act. Even though the Assessing Officer originally completed the assessment for the year 2001-02 by determining net loss at Rs. 5,98,150, the said assessment was reopened and revised assessment was issued vide annexure VI on the ground that the assessment originally complete ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Tribunal calling for decision by us under section 78 of the Act. We, therefore, redraft the two questions as follows: "(i) Whether, on the facts and in the circumstances of the case, the Assessing Officer has jurisdiction and authority under section 42 of the Act to rectify and revise original assessment to assess income received on the sale of opening stock of the agricultural crop in the previous year, which was omitted to be assessed in the original assessment, and even if the revised assessment is not authorised under section 42, whether such assessment can be sustained by virtue of section 41 of the Act, which provides for income escaping assessment? (ii) If the answer to the above question is in the affirmative, was the Appellat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee, the assessment was rightly revised under section 42 of the Act. So far as the other disallowance is concerned, i.e., claim of exemption of opening stock which was sold in the previous year relevant for the assessment year concerned, the assessee's contention is that it is a debatable issue which is not a matter for rectification under section 42 of the Act. On going through the original assessment, we find that the officer has not considered the question as to whether opening stock of crop sold during the previous year has to be assessed or exempted. Moreover, it is stated in the original assessment that the method of accounting followed by the assessee was the mercantile system. However, the specific finding in the revised assessme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... und that in view of the finding of the officer that the system of accounting based on which. original assessment was completed was not the system regularly employed by the assessee and so much so, there was violation of section 40(1) and such mistake in the original assessment could be rectified in proceedings under section 42 of the Act. In any case it is settled position that misquoting or non-mentioning of a section is not a ground for setting aside an order invalid. We have already found that even if the officer has no jurisdiction to rectify the assessment under section 42, since he has powers under section 41 to revise the assessment as an income escaping assessment, the revised assessment in the absence of allegation of any procedura ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n (1) reopts to pay tax in accordance with section 3 notwithstanding anything contained in any other provisions of this Act, shall be assessed as if it were a new assessment and shall not be eligible to carry forward any loss incurred in any of the previous years or any depreciation." The real question is as to what consequences follow by treating an assessment as a new assessment in terms of section 13(6) of the Act. While according to the assessee, a new assessee cannot have opening stock in the previous year relevant for the assessment year, the Government pleader contended that section 13(6) cannot be taken in isolation and once an assessment is switched over from composition under section 13(1) to regular assessment under section 39, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s bound to maintain books of account for its own purposes. Moreover, when the assessee opts for switchover of assessment from composition method to regular assessment, the assessee has to maintain books of account for the previous year relevant for the assessment year. The factual finding of the Assessing Officer confirmed by the two authorities below is as follows: "In this case, the assessments of the assessee before 1995-96, were completed in income base and the cash system of accounting was followed. From 1995-96 to 2000-01, the assessee opted for compounding system and the assessments were completed on extent base. On 2001-02, the assessee switched over to the mercantile system of accounting from cash system of accounting. The assess ..... X X X X Extracts X X X X X X X X Extracts X X X X
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