9911796707
TMI Blog1978 (2) TMI 67X X X X Extracts X X X X X X X X Extracts X X X X ..... l, therefore, in its order dated April 11, 1963, in I.T.A. No. 5800 of 1962-63 directed the ITO to take necessary action for assessing the escaped income. Proceedings were initiated in accordance with the direction by the ITO under s. 147(a) of the Act, and in response to the notice served on the assessee under s. 148, the assessee filed a return on September 24, 1963, admitting a sum of Rs. 44,401 arrived at by adding a further sum of Rs. 16,500 to the income of Rs. 27,901 originally assessed, in accordance with the order of the Appellate Tribunal. The ITO in his assessment order dated January 27, 1965, computed the income of the assessee at Rs. 1,46,701 which included a sum of Rs. 16,500, the income which escaped assessment. On appeal against that assessment order, the AAC upheld the inclusion of Rs. 16,500. The ITO then initiated penalty proceedings and the IAC levied a penalty of Rs. 6,960 under s. 271(1)(c) of the Act by his order dated December 16, 1969. That led to the assessee preferring a futher appeal to the Appellate Tribunal. The assessee objected to the levy of penalty before the Appellate Tribunal. Among the grounds raised before the Tribunal was the one relating to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... able for the assessment year 1955-56 for the reason that assessment was completed on January 27, 1965, after this Act came into force. S. 275 prescribes the period of limitation for imposing penalties and this section, to the extent relevant for discussion, reads : " No order imposing a penalty under this Chapter shall be passed-- (a) in a case where the relevant assessment or other order is the subect-matter of an appeal to the Appellate Assistant Commissioner under section 246 or an appeal to the Appellate Tribunal under sub-section (2) of section 253, after the expiration of a period of-- (i) two years from the end of the financial year in which the proceedings in the course of which action for imposition of penalty has been initiated, are completed..." The procedure for initiating penalty proceedings is prescribed in s. 274. An enquiry is contemplated under this section. The fact that the ITO or the AAC issues a notice under s. 274 does not by itself render the assessee liable to the imposition of penalty. Whether penalty should be imposed for failure to perform a statutory obligation is a matter of discretion of the authority to be exercised judicially and on a consid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ich the ITO directs the assessee to get his accounts audited under sub-section (2A) of s. 142 and ending with the date on which the assessee furnishes a report of such audit under that sub-section or the period (not exceeding one hundred and eighty days) commencing from the date on which the ITO forwards the draft order under sub-section (1) of s. 144B to the assessee, etc. It may be seen that no such period as provided in s. 153(3) is provided in computing the period of limitation for the purpose of s. 275, that is to say, there is no Explanation as in s. 153(3) which provides for excluding certain periods for the purpose of computing the period of limitation. It is thus seen that the legislature did not provide any period of limitation for the imposition of penalty under s. 28 and, similarly, the legislature has not Provided in s. 34 for excluding any period while computing the period of limitation in regard to cases where the income had escaped assessment. It may also be noticed that while no period of limitation was prescribed under s. 28 of the 1922 Act, a period of limitation of two years is prescribed under the present Act. Now, the question is what could be the legislative ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oth the assessment order and the order of registration. The assessee contended that the second order passed by the Commissioner was ineffective as it was made beyond the period of two years from the date of the orders sought to be revised as provided in s. 33B(2)(b). The learned judges held that the words of s. 33B(2)(b), though wide in the abstract, must be read as used with reference to an order made by the Commissioner in revision suo motu, and the period of limitation prescribed by the provision did not apply to an order passed by the Commissioner in pursuance of an order or direction of any higher authority and that the rule of limitation prescribed by s. 33B(2)(b) did not reach the second order passed by the Commissioner in the case. In reaching that conclusion, the learned judges were of the view that the rule of literal construction and linguistic clearness must not be pushed so far as to result in irrational or absurd conclusions. It should be remembered that, while interpreting the provisions of a taxing statute, nothing is to be read in, nothing is to be implied. One can only look fairly at the language used. One has to look merely at what is clearly said. The language ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mmissioner made after remand. The Supreme Court, in our opinion, has not laid down any such proposition. The learned judges have clearly stated that they were not deciding the question of taxing a person after the period prescribed therefor was over. After referring to the decisions cited before them, they said : " Reference was made to various decisions of the various courts which have held that the particular period of limitation under consideration by the court should be strictly construed. There is no doubt that there is no equity about limitation. Most of the decisions relied on relate to provisions which laid down a period of limitation for taking one kind of action or other in order to assess to tax the person concerned. Naturally, after the period of limitation has expired, no proceedings can be taken to assess nor could any period of limitation laid down by the Act be extended merely by a superior tribunal directing an inferior tribunal to make an assessment or to take proceedings which result in assessment after the period of limitation is over. They are not in pari materia with the present proceedings. In deciding to whom any property seized under section 132(1) belong ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a fresh order within two months. After a fresh enquiry the Income-tax Officer passed an order holding that the silver bars belonged to Pooran Mall, the individual, and not to the firm, Pooran Mall Sons. Thereupon, the firm and Pooran Mall again filed a writ petition challenging the second order and the High Court held that the ITO had no jurisdiction to pass that order beyond the period prescribed in s. 132(5) and set aside the order and directed return of the 114 silver bars. The Supreme Court, on appeal, held that the period of limitation prescribed by s. 132(5) was intended for the benefit of aggrieved persons like the respondents and, therefore, it was competent for them to agree to a fresh disposal of the case by the ITO and thereby waive the period of limitation. The learned judges, therefore, held that an order made in pursuance of a direction given under s. 132(12) or by a court in writ proceedings was not subject to the limitation prescribed under s. 132(5) and that rule 112A of the Income-tax Rules, 1962, was not mandatory. It is thus seen that the ratio of that decision is not applicable to cases where the provisions are mandatory and a definite time limit is fixed for ..... X X X X Extracts X X X X X X X X Extracts X X X X
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