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TMI Blog1990 (7) TMI 158X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment resulted in a refund of Rs.11,07,107. No interest under section 214 of the Act was granted by the Income-tax Officer. The ITO disallowed Rs. 1,820 being 1/3rd of thmotor car expenses claimed at Rs. 5,460 towards "personal use of the assessee". 4. For the assessment year 1982-83, the assessment was completed on 30-8-1983 on a total income of Rs. 1,02,040 under section 143(3) of the Act. In the said assessment order also the tax payable by the assessee was not determined and shown. However, in the notice of demand under section 156 of the Act, the "gross demand" was determined at Rs. 42,802. From the said gross demand the advance tax paid under section 210 of theActatRs. 32,200 and tax paid undersection 140A of Rs. 8,482 were adjusted. Thus, the assessment resulted in a tax payable of Rs. 2,120. The tax payable at Rs. 2,120 was adjusted out of the refund for the assessment year 1981-82. The ITO disallowed Rs. 3,316 being 1/3rd of the motor car expenses claimed at Rs. 10,048 towards "personal use of partners". Aggrieved by the assessment orders the assessee carried the matter in appeal to the CIT (Appeals). 5. Before the CIT (Appeals) it was contended that the ITO act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s per the two decisions an assessment to be complete must determine not only the total income but also the tax payable and there must be an actual determination of tax payable within the time stipulated under section 153. It has also been held by the High Court that there is no further statutory requirement either in the Act or in the Rules such as that the calculation should be signed by the ITO etc. It is seen on going through the records that the assessment for assessment year 1981-82 was completed on 30-8-1983 and on the same day the tax has been calculated in form No. ITNS 150, which is on record. The gross demand of tax has been shown in the notice of demand in form No. 7 sent to the assessee with the assessment order. Thus, the requirements of completing an assessment have been completed and if there is an omission it is only in furnishing a working of the gross tax demand of Rs. 10 1,303 to the assessee. This however, does not vitiate the assessment. The asscssment could easily have obtained the working of gross demand from the ITO after receipt of the demand notice and the assessment order. The ITO is, however, directed to furnish a copy of the working of the gross demand ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Income-tax Act, 1961. Apparently, the assessment orders were passed under section 143(3)(a) of the Act. As per the said section, the Income-tax Officer shall, by an order in writing, make an assessment of the total income or loss of the assessee, and dcterryiine the sum payable by him on the basis of such assessment. In the impugned orders dated 30-8-1983, the ITO only computed the total income of the assessee. He did not determine the sums payable or taxes payable by the assessee in the said assessment orders. Before the CIT(A) it was contended specifically that the two assessment orders were invalid. But he did not decide the issue whether the assessment orders were invalid. He construed the additional ground raised by the assessee as "challenging the validity of the assessments". Section 23(3) of the Indian Income-tax Act, 1922 corresponds to section 143(3) of the Income-tax Act, 1961. The Bombay High Court in the case of N.N. Kotak held that a notice of demand can only be served under section 29 of the Indian Income-tax Act, 1922 provided tax, penalty or interest is due in consequence of an order passed under the Act. Therefore, the condition precedent to the validity of a not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t order was invalid. The said contention was rejected by the High Court holding that there was no statutory requirement either in the Act or in the Rules that Form No. IT 30 should be signed by the ITO. The contention raised by me before the CIT (A) was different from the contention raised by the assessee in the case of Sint. Krishwanti Punjabi. The Calcutta High Court in the case of Mahendra J. Thacker Co. held that the assessment order must include not only the computation of the total income but also the determination of tax. Even though, the attention of the CIT(A) was specifically drawn to thisjudgment, he chose to confine himself to the Head-notes given in Income-tax Reports in the case of Smt. Krishwanti Punjabi. Evidently, he did not go through the judgment of the Calcutta High Court in the case of Mahendra J. Thacker. He held that the tax was calculated in Form No. ITNS 150 which is on record and that the gross demand of tax had been shown in the notices of demand in Form No. 7 sent to the assessee with the assessment orders. A look at Form No. ITNS 150 would show that they were not prepared by the Income-tax Officer himself. They were prepared and checked by the ministe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have to be passed in order that the tax determined should be recoverable by issuance of a notice of demand. In the case of R. Gopal Ramnarayan tax was not quantified in the assessment orders as required by section 143(3). The Bangalore Bench of the Income-tax Appellate Tribunal in ITA Nos. 586 588/1977-78 anrwlled the assessment orders. The contention of the assessee (i.e., myself) is identical. So, it is not permissible for the present Bench to take a different view, as held by the Madras High Court in the case of Crf v. L. G. Ramamurth [1977] 110 ITR 453. The decision of the Special Bench of the Tribunal in the case of Highway Construction Co. (P.) Ltd. v.ITO [1983] 4 ITD 545 (Cal.) is non est in law. Before the Special Bench in the aforesaid case, the objection of the assessee was that the order passed by the ITO under section 143(3) was invalid. But the Tribunal held that the assessment made by the ITO shall not be invalid. The Special Bench has not decided about the validity of the assessment order. The assessment is assessment of total income. The 'assessment order' means computation of total income plus determination of tax. The Special Bench of the Tribunal has annulled t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase supported his stand that the assessment orders under section 143(3) were invalid for both the years. It has to be seen that the Jammu Kashmir High Court observed in their judgment reported in S. Mubarik Shah Naqshbandi's case at page 224 that in neither of the cases in Rm. P.R. Vishwanathan Chetiar and Balkrishna Malhotra did the question arise for consideration whether the assessment order should not only specify the income as determined by the ITO but should also specify the tax payable on such income. Therefore, it is clear that no support can be derived from the decisions of the Madras High Court and the Supreme Court in RM.PR. Viswanathan Chettar's case and Balkrishna Mcilhotra's case respectively. Coming to the decision in S. Mubarik Shah Naqshbandi's case there the ITO did not compute the tax payable nor did fie inform the assessee of the detailed calculations of the amount of tax payable as per demand notice issued. As against this, in the assessee's case not only did the ITO determine the incomes assessable but also calculated the details of computation of taxes payable and issued the notices of demand on that basis on the very same date. The computation of tax payab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of a comma (,) each before and after the expression "make an assessment of the total income or loss of the assessee" will mean that the expression "an order in writing" will only quantify the expression "make an assessment of the total income or loss of the assessee." If there was no comma (,) after the expression "make the assessment of the total income or loss of the assessee", possibly the assessee's interpretation could have been worth considering. The next argument of the assessee was that the Standard Form in which assessment orders are to be made by ITOs, mentions in Hindi "Kar Nirdharan"; and Hindi being the official language of the Union, it will mean that calculation of tax payable has to be done compulsorily in the body of the assessment order itself. The above argument is not only fallacious but also ill-conceived. It is anybody's knowledge that the Form of Assessment order is Income Tax Non Statutory Form and, accordingly, its binding effect is easily understandable vis-a-vis those of Statutory Forms. As per official languages (use for official purposes of the Union) Rules, 1976 formed under Official Languages Act, 1963, West Bengal falls in "Region C" and that officia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on was one of directing fresh assessment after the expiry of the statutory limitation. However, the same situation did not obtain in the case of Manabendra Natli Pal. The assessee found fault with the decision of the Special Bench of the Tribunal in the case of Highway Construction Co. (P.) Ltd. Even though the Tribunal in that case concluded about the validity of the assessment the same has to be read contextually and not in isolation from the premises leading to its ultimate conclusion. Therefore, even according to the decision in S. Mubarik Shah Naqshbandi's case the requirement of section 143(3)(a) having been satisfied, the assessment orders in the present cases are valid. The decision in N.N. Kotak's case will not help the assessee inasmuch as the ratio of the said decision is that the validity of a notice of demand is conditional on an in consequence of penalty, tax or interest being due in consequence of any order passed under the Act. In the assessee's cases the validity of the notices of demand was not the subject-matter of challenge. Again, in the said case, the order passed by the ITO did not specify the amount of penalty for which the notice of demand was issued. In th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le with those in Highway Construction Co. (P) Ltd. The decision in Highway Construction Co. (P) Ltd. was given after considering the decision in Balkrishna Malhotra's case, S. Mubarik Shah Naqshbandi's case and Smt. Krishwanti Punjabi's case. In the case of Highway Construction Co. Ltd. the ITO determined the tax payable in a loose sheet of paper whereas in the assessee's case the calculations were made in appropriate Forms namely ITNS 150. So, it has to be held that the requirement at section 143(3)(a) was met in the assessee's case. In the case of CIT v. R. Giridhar [1984] 145 ITR 246 (Kar.) the assessment order passed by the ITO contained only the computation of income. It was signed by the ITO. The computation of tax was made on a separate sheet of paper. It was not signed by the ITO. Even then, the Karnataka High Court held that the separate sheet of paper, although did not contain signature of the ITO formed part of assessment order. After considering the provisions of section 292B of the Income-tax Act, 1961, the High Court held that the assessment order could not be said to be invalid under section 143(3) of the Act and could not be annulled. Unfortunately, for the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d disallowed for personal use of partners" when the assessee was only an individual. Such error would not invalidate the conclusion. The assessee had argued that nowhere in the past such disallowance was made and that a disallowance made in a similar manner was deleted by the AAC in the appeal for the assessment year 1973-74. The said argument is devoid of any merit. It is a fact of life that people owning conveyance used the same for personal purposes as well. The assessee could have maintained a logbook or such other document to prove that there was no personal user of the motor car. The assessee failed to produce any such record. The disallowance-made by the ITO was very fair, modest and in consonance with the standard normally admitted and approved in such matter. 12. Regarding the non-granting of interest under section 214, the assessee argued that the CIT(A) committed an error in holding that the said aspect was not appealable and then requesting the ITO to look into the said aspect anq to take necessary action. The assessee urged that granling of interest under section 214 was inescapably linked with the determination of tax liability and so it was an appealable order. Re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... speak of "assessment order". The subjects covered by that section are return of income, assessment, notice, summons or other proceedings. Even assuming that the "assessment order" is covered by the said section, the assessment orders under consideration are not in substance and effect in conformity with or according to the intent and purpose of the Income-tax. In the case of R. Giridhar the High Court erred in taking cognizance of unsigned paper particularly when there was no reference to the same in the assessment order. In that case, the High Court held that the separate sheet of paper on which the computation of tax payable was made was a part of the assessment order. Absence of signature is not a mere inconsequential technicality as laid down in the case of Unmshankar Mishra v. CIT [1982] 136 ITR 330 (MP). Only technical mistakes are covered by section 292B, as laid down by the Allahabad High Court in the case of CIT v. Smt. Phoolmati Devi [1983] 144 ITR 954. As held by the Calcutta High Court in the case of Sunrolling Mills P. Ltd. v. ITO [1986] 160 ITR 412, section 292B covers only technical grounds. The said section does not apply to material omissions. The observations refe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rpn. Ltd. [1976] 105 ITR 219. The decision in 139 ITR 703 is on different subject, namely, whether the signature of an ITO in Form No. IT 30 is a condition precedent for the validity of an assessment. The order of the Tribunal Special Bench Highway Construction Co. (P) Ltd.'s case is based on irrelevantconsiderations. The fourth error committed by the Tribunal in the aforesaid Special Bench decision is that when it observed that as no form of assessment order is prescribed if the tax is determined on a paper within the prescribed period of limitation, it would fulfil the requirement of section 143(3). Both the determination of income as well as the tax should be in the assessment order only the fifth error committed by the Tribunal Special Bench is in holding that the assessment was a valid assessment. It did not say anything about the assessment order. In my case, computation of tax is not given to me. The CIT(A) also did nothing. Now the same cannot be given to me. Even if the computation of tax is communicated now, it is time-barrred. The assessment for the assessment year 1981-1982 got time barred by 31-3-1984 and the assessment for the assessment year 1982-1983 got timebarred ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The ITO had only served the assessment orders in ITNS-65 to the assessee. It is true, they did not contain the tax payable/refundable to the assessee. The Hon'ble Calcutta High Court in the case of Kailasho Devi Burman held that the Income-tax Act does not provide for service of the assessment order on the assessee but the Act provides for service of the notice of demand on the assessee. It is an admitted fact that in the assessee's case notices of demand for these two years had been served on the assessee. As per the said decision of the Calcutta High Court service of the assessment orders in ITNS-150 on the assessee was not at all necessary. However, the assessment orders in ITNS-65 had been served on the assessee. The omission of determination of tax payable/refundable to the assessee in the said assessment orders in ITNS-65 is curable under section 292B of the Income-tax Act, 1961. The words "other proceeding" in section 292B comprehends the assessment order in Form No. ITNS-65 also. In the circumstances we are unable to accept the assessee's argument that the assessment orders for these two years under appeal in ITNS-65 served on the assessee were invalid. 16. Regarding the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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