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TMI Blog1992 (3) TMI 29X X X X Extracts X X X X X X X X Extracts X X X X ..... of directions issued by the Honourable High Court? 2. On the facts and circumstances of the case, whether the decision of 0. P. Nos. 5850 and 5876 of 1970 (Bhavani Tea and Produce Co. v. Commr. of Agrl. L T. [1972] Tax LR 2413) of the Kerala High Court is applicable or not in the present case? 3. On the facts and circumstances of the case, whether the commissioner is right under law in holding that the principles of [1980] KLT 276 are not applicable in the instant case?" The respondent is the Revenue. We are concerned with the assessment year 1961-62 for which the accounting period was July 1, 1959, to June 30, 1960. The assessee is M/s. Kallakutta Farms, Muttathodi P.O., Kasargode. Till 1960-61, their assessments were completed in the status of " Hindu undivided family ". During the course of assessment for the year 1961-62, the assessee claimed the status of " tenants-in-common " by virtue of an agreement dated June 30, 1959, registered on June 25, 1960. They pleaded that there had been a severance in the status of the joint family. Copy of the agreement dated June 30, 1959, is annexure-B. The assessing authority, after making enquiries, by an order dated December 31, 1960 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sel was that the Commissioner of Agricultural Income-tax exercised the revisional power vested in him under section 34 of the Act after inordinate delay nearly 20 years after the assessment order and 13 years after the proceedings were initiated and notice was served on all the members. Counsel submitted that the initiation of the proceedings by the Commissioner of Agricultural Income-tax, by notice dated December 9, 1964, may be within time. Even so, in a proceeding initiated as early as December 9, 1964, the entire proceedings were put in cold storage for nearly 16 years. Notice was issued to all the adult members as early as March 9, 1966, and served on April 16, 1966. The members of the family filed their objections as early as August 22, 1967, and December 10, 1967. The Commissioner of Agricultural Income-tax simply folded his hands. He heard the parties as late as on April 22, 1980, and passed the order on October 31, 1980. It was passed after inordinate delay. The Commissioner did not act reasonably. So, the revisional order passed by the Commissioner is vitiated. The exercise of power is unreasonable or irrational. We find from the revisional order passed by the Commissio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... overnment of India v. Citadel Fine Pharmaceuticals [1990] 184 ITR 467 ; [1989] 3 SCC 483, held so. This court has, on more than one occasion, held that the Commissioner of Agricultural Income-tax can invoke his suo motu power of revision only within a reasonable time. The decisions are : Bhavani Tea and Produce Co. v. Commr. of Agrl. I.T. [1972] Tax LR 2413 (Ker) ; Deputy Commr. of Agrl. I.T and S. T v. P. S. B. Paul Pandian [1981] 128 ITR 809 (Ker) and Krishna Bhatta v. Agrl. ITO [1981] 132 ITR 21 ; [1981] 23 CTR 142 (Ker). These decisions were quoted with approval in a recent Bench decision of this court (to which one of us was a party) in Nelliampathy Tea and Produce Co. Ltd. v. Commr. of Agrl. I.T. [1991] 190 ITR 227 ; ITR 1991 (2) Kerala 68. After referring to the three earlier decisions of this court and the decision of the Supreme Court in Government of India v. Citadel Fine Pharmaceuticals [1990] 184 ITR 467, this court held that the power vested in the Commissioner of Agricultural Income-tax should be exercised bona fide and within a reasonable period. It was further held that the Revenue should be able to demonstrate that there were circumstances beyond control or other s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ward by the Revenue. It is trite law that statutory powers must be exercised bona fide, reasonably, without negligence, and for the purpose for which they were conferred. (See Halsbury's Laws of England, Third Edition, Volume 30, page 688, paragraph 1327). If the repository of a statutory power should exercise it reasonably, we are unable to understand the dichotomy in the said process that the initiation of the proceedings should be within reasonable time, but the rendering of the final order can be at any time, arbitrarily, no such distinction can be drawn. The said distinction has no legal basis to stand on. It is true that in Gwalior Rayon Silk Mfg. (Wvg.) Co. v. CIT [1982] 134 ITR 318 (MP), a case which arose under the Companies (Profits) Surtax Act, a Bench of the Madhya Pradesh High Court held that, in the absence of any statutory provision prescribing any period of limitation for the completion of an assessment, it cannot be held that the assessment must be made within a reasonable time or else it would be barred by limitation. The court referred to the decisions of the Supreme Court in State of Gujarat v. Patel Raghav Natha, AIR 1969 SC 1297 and S B. Gurbaksh Singh v. Unio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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