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TMI Blog1992 (4) TMI 39X X X X Extracts X X X X X X X X Extracts X X X X ..... For the assessment year 1980-81 (accounting year ending March 31, 1980), the petitioner was liable to pay advance tax under the Act, The petitioner submitted an estimate of her income as required under section 209A(1) of the Act on March 15, 1980, as she was not an assessee till then ; but no payment of advance tax was made in accordance with the estimate. Though the petitioner was bound to submit a return of her income for the assessment year 1980-81 on or before July 1, 1980, the return could not be filed in time. Later, the petitioner was served with a notice under section 147 of the Act, for submission of the return which was filed by her on February 19, 1983. Along with the return, she produced the challan for having paid self assessment tax in full under section 140A of the Act. The first respondent issued a notice under section 143(2) and completed the assessment by exhibit P-1 order dated October 12, 1983. While completing the assessment, the first respondent levied interest under section 217 in the sum of Rs. 56,368. Aggrieved by the levy of interest under section 217, the petitioner requested the second respondent, the Inspecting. Assistant Commissioner of Income-tax, Er ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tax Officer to assess such income under section 147 if the conditions mentioned in clauses (a) and (b) are satisfied. On that basis, counsel contended that an assessment made by resort to section 147 is not an assessment under section 143 or section 144 of the Act. It is his case that distinction is made in the Act between an assessment under section 143 or section 144 and an assessment under section 147 of the Act and he relied on the provisions contained in section 153 and section 246 for the above purpose. The income escaping assessment has to be assessed subject to the provisions of sections 148 to 153. Section 153 of the Act deals with the time limit for completion of assessments and reassessments. According to counsel, a distinction is made in section 153 between an assessment made under section 143 or section 144 and an assessment made under section 147 as they are separately dealt with under subsection (1) and sub-section (2) of the aforesaid section. Section 246 which confers a right of appeal against an order of assessment also makes distinction between an order of assessment made under section 143 or section 144 on the one hand and an assessment made under section 147 on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent under section 143 or section 144. As far as this case is concerned, we are concerned only with the question as to whether an assessment made for the first time by resort to section 147 is a regular assessment or not. It will be advantageous to understand the general scheme of the Act before going into this question and the decisions on that aspect. Under section 139 of the Act, every person who is assessable under the Income-tax Act has to file a return of his income within the time stipulated therein. If a person having assessable income omits to file a return and if the Income-tax Officer is of the opinion that such a person is assessable under the Act, he may, before the end of the relevant assessment year, issue a notice and serve the same on him, requiring him to furnish, within 30 days from the date of service of notice, a return of his income verified in the prescribed manner and setting forth such other particulars as may be necessary under section 139(2) of the Act. It is clear from the aforesaid sub-section that notice under section 139(2) has to be issued before the end of the relevant assessment year. Under section 140A of the Act, any tax payable on the basis of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... return filed by him, if there are materials available with him to come to the conclusion that income chargeable to tax has escaped assessment. As stated earlier, in this case, we are concerned only with assessment made for the first time under section 147. Section 148 of the Act deals with the procedure to make an assessment by resort to section 147. Section 148 enjoins the Income-tax Officer to serve a notice on the assessee containing all or any of the requirements which may be included in a notice under sub-section (2) of section 139. Section 148 further provides that, on the issuance of such a notice, all the other provisions of the Act, in so far as they relate to assessment, shall apply as if the notice was a notice issued under sub-section (2) of section 139. Sections 149 to 153 of the Act deal with the time limit for such a notice and other incidental matters. Sections 207 to 213 of the Income-tax Act 1961, deal with the liability, computation and mode of payment of advance tax payable under the Act. Section 214 provides for payment of interest by the Government on the amount by which the aggregate amount of advance tax paid during any financial year exceeds the amount of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5 ITR 548, have taken the view that such an assessment will not be a regular assessment and that only the first assessment will be a regular assessment. Gates Foam and Rubber Co.'s case [1973] 90 ITR 422 (Ker), CIT v. Ram Chandra Singh [1976] 104 ITR 77 (Patna), Smt. Kamla Vati v. CIT [1978] 111 ITR 248 (P H), CIT v. Smt. Jagjit Kaur [1980] 126 ITR 540 (All), CIT v. Ganeshran Nayak [1981] 129 ITR 43 (Orissa), Monohar Gidwany v. CIT [1983] 139 ITR 498 (Cal), Charles DSouza v. CIT [1984] 147 ITR 694 (Kar) and CIT v. Padma Timber Depot [1988] 169 ITR 646 (AP) are cases coming under the first category. K. Gopalaswami Mudaliar v. Fifth Addl. ITO [1963] 49 ITR 322 (Mad), National Agricultural Co-operative Marketing Federation of India Ltd. v. Union of India [1981] 130 ITR 928 (Delhi) and CIT v. Pratap Singh of Nabha [1982] 138 ITR 27 (Delhi) are cases coming under the second category. In Deviprasad Kejriwal v. CIT [1976] 102 ITR 180, the Bombay High Court has taken the view that any assessment made in pursuance of a proceeding under section 147, whether it is an assessment for the first time or a reassessment will be a "regular assessment" under the Act. It is not necessary for us to g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... esort to section 34 of that Act. This view appears to have been practically dissented from in the decision in Gopalaswami Mudaliar v. Fifth Addl ITO, Coimbatore [1963] 49 ITR 322, and a distinction has been sought to be drawn between cases where there has been a previous assessment and cases in which there had been no previous assessment. The decision in Gopalaswami Mudaliar v. Fifth Addl. ITO, Coimbatore [1963] 49 ITR 322 (Mad), related to a case where there had not been any previous assessment and it was held therein that interest can be charged under section 18A(6). In the later decision it was suggested that when there had been no previous assessment, the assessment made by resort to section 34 is a regular assessment and that, therefore, section 18A(6) will apply to such assessment ; but that section may not apply to a case where there had been previous assessment, before action was taken under section 34 of the Act. It is not for us to consider whether any such distinction can be drawn on the basis of the provisions of the Indian Income-tax Act, 1922, nor are we called upon to consider the correctness of the view taken in Natarajan Chettiar v. ITO, Karaikudi [1961] 42 ITR 29 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of India Ltd. v. Union of India [1981] 130 ITR 928, elaborately considered the scope and content of the expression " regular assessment " in the light of the provisions contained in the Indian Income-tax Act of 1922 and the 1961 Act. Though the case arose under section 214 of the Income-tax Act, 1961, dealing with the right of an assessee to get interest on the excess advance tax paid, the matter was elaborately considered and it was held that an assessment made for the first time by resort to section 34 of the 1922 Act or under section 147 of the 1961 Act will be a regular assessment. This was followed by the same High Court in Pratap Singh's case [1982] 138 ITR 27. The Bombay High Court in Deviprasad's case [1976] 102 ITR 180, went further and held that even a reassessment made under section 34 of the 1922 Act or under section 147 of the 1961 Act would also be a regular assessment for the purpose of section 273. Anyhow, it is not necessary to go to that extent as we are concerned in this case only with an assessment made for the first time. After considering the various provisions of the Act and the decisions rendered in the matter, we are clearly of the opinion that the view t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t respect, we dissent from the view expressed in certain decisions referred to earlier in this judgment which take a contrary view. If this interpretation is not given to the expression " regular assessment ", it may lead to an anomalous position. Section 217 authorises the Income-tax Officer to levy interest for non-payment of, or deficit payment of, advance tax under the Act. If an interpretation is given to the expression " regular assessment " as contended by counsel for the petitioner, the result would be that a person who actually files a return within the assessment year will be liable to pay interest if he does not pay advance tax or if there is deficiency in the amount of advance tax, whereas if person fails to file a return within the assessment year but files it after the assessment year, he is not liable to pay interest at all under section 217. Courts have to interpret the sections in a statute in a reasonable manner which would not defeat the avowed object. It should not lead to absurd results and, in that view of the matter also, we are clearly of the opinion that an assessment as in the present case will be a regular assessment for the purpose of section 217 of th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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