9911796707
TMI Blog1984 (4) TMI 69X X X X Extracts X X X X X X X X Extracts X X X X ..... te of 22.5 per cent declared by the assessee in the previous assessment year 1974-75. In respect of wax, which is the main raw material consumed by the assessee in the proofing of canvas cloth the following position was found by the ITO. Tons Qtls. Kgs. Opening stock of wax 2 8 12 Purchase during the year 30 --------------------------------------------------------- 32 8 12 Deduct : Closing stock at the end 2 3 75 --------------------------------------------------------- Balance 30 4 37 --------------------------------------------------------- The ITO found the consumption of wax to be high. He, therefore, concluded that the assessee had proofed more canvas cloth, whereas it had declared only at the rate of 4,600 meters per ton of wax consumed. He noticed that other dealers in the same line of business had processed their cloth with the aid of machines, whereas the assessee had done so with manual aid. The ITO made enquiries from the director of industries showing that the consumption of wax should be at the rate of 180 grams per meter of canvas cloth proofed. At this rate, he found that the canvas cloth proofed came to 5,555 meters per ton of wax consumed. He, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the following decisions--Smt. Lucy Kochuvareed v. CAIT [1971] 82 ITR 845, 858 (Ker.) (FB), Gargi Din Jwala Prasad v. CIT [1974] 96 ITR 97 (All.) and Director of Inspection of Income-tax (Investigation) v. Pooran Mall Sons [1974] 96 ITR 390, 397 (SC). He also submitted that if there is a flagrant violation of principles of natural justice, the assessment order is vitiated. Reference in this connection was made by him to the following decisions--Raja Jagdambika Pratap Narain Singh v. CBDT [1975] 100 ITR 698 (SC), Jai Prakash Singh v. CIT [1978] 111 ITR 507 (Gauhati) and Lakshmi Industries Cold Storage Co. (P.) Ltd., In re. [1980] 124 ITR 828 (All.), [1981] 51 Comp. Cas. 254 (sic) S.L. Kapoor v. Jagmohan AIR 1981 SC 136, Smt. Kanti Khare v. Kali Prasad Asthana AIR 1983 All. 45, 46 and Ka. Oldphimai Mukhim v. District Council Jaintia Hills AIR 1983 Gauhati. 1. Shri Saxena submitted that the assessment order could be made by the ITO in this case up to 31-3-1978 and that the effect of the setting aside by the AAC was that the period of limitation prescribed for making assessments was enlarged thereby. He argued that this could not be done. In this connection, reference was made b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... osition that an assessment order passed pursuant to the Court's direction was not barred by limitation. Reference was also made by him in this connection to the decision of the Hon'ble Allahabad High Court in ITO v. Gargidin Jwala Prasad [1980] 124 ITR 203. Reference was also made by him to the decision of the Hon'ble Madhya Pradesh High Court in the case of Banarsidas Bhanot Sons v. CIT [1981] 129 ITR 488 that the case could be restored to the ITO after making a fresh assessment after serving a fresh and complete draft order on the assessee. Lastly, reference was made by him to another decision of the Hon'ble Madhya Pradesh High Court in CIT v. Prem Syndicate [1983] 141 ITR 290 for the proposition that the breach of principles of natural justice affect the legality of the order and not the jurisdiction of the Commissioner. Reference was also made by him to section 153(2A) of the Act for the proposition that an order of fresh assessment in pursuance of an order under section 250 of the Act setting aside or cancelling an assessment could be made at any time before the expiry of two years from the end of the financial year in which the order was received by the Commissioner. So con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 77 in pursuance of which another return was filed by the assessee on 6-7-1977 under section 148. The reassessment proceedings were dropped by the ITO on 17-3-1978. There was a letter of the assessee on 17-3-1978 and it is after this letter and after the reassessment proceedings were dropped that the ITO issued another letter on 23-3-1978 for the cross-examination of the partner R.S. Shukla on the statement recorded during the reassessment proceedings. Thereafter the assessment was completed on 30-3-1978. The assessment proceedings had already commenced and it is not as if the issue of the notice under section 143(2) was a condition precedent to the assumption of jurisdiction by the ITO to assess the assessee. It is another matter that notice had to be issued by the ITO under section 143(2), before he could complete the assessment under section 143(3). It is not any and every disregard of the principles of natural justice which nullifies the proceedings. Such a result follows only if the violation of the principles of natural justice cuts at the very jurisdiction of the authority concerned (the ITO in this case). For all procedural or technical violations the assessment can be compl ..... X X X X Extracts X X X X X X X X Extracts X X X X
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