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Commissioner of Income-tax Vs. Aggarwal Textile Mills - Court Judgment

LegalCrystal Citation
SubjectDirect Taxation
CourtPunjab and Haryana High Court
Decided On
Case NumberIncome-tax Reference No. 90 of 1977
Judge
Reported in[1985]154ITR234(P& H)
ActsIncome Tax Act, 1961 - Sections 147
AppellantCommissioner of Income-tax
RespondentAggarwal Textile Mills
Appellant Advocate Ashok Bhan, Sr. Adv. and; Ajay Mittal, Adv.
Respondent Advocate B.S. Gupta and; S.K. Mittal, Advs.
Excerpt:
- sections 80 (2) & 89 & punjab motor vehicles rules, 1989, rules 85 & 80: [t.s. thakur, cj, jasbir singh & surya kant, jj] appeal against orders of state or regional transport authority imitation held, a stipulation regarding the period of limitation available for invoking the remedy shall have to be strictly construed. that is because any provision by way of limitation is in the nature of a restraint on the remedy provided under the act. so viewed two inferences are clear viz., (1) sections 80 and 89 of the act read with rule 85 of the rules make it obligatory for the authorities making the order to communicate it to the applicant concerned and (2) the period of limitation for any appeal against the order is reckonable from the date of such communication of the reasons would imply.....sharma, j.1. for the assessment year 1971-72, the assessee was held liable to pay tax on a total income of rs. 77,090. later on, the ito reopened the assessment under section 147(b) of the i.t. act, 1961 (hereinafter called 'the act'), on the basis of a note received by him from the internal audit party of the income-tax department to the effect that 'customs drawbacks' amounting to rs. 71,386 had escaped assessment to tax. he, accordingly, served a notice under section 148 of the act on the assessee on april 24, 1974. in response to the notice, the assessee repeated the earlier return, which he had filed. the assessee also objected to the validity of the proceedings under section 147(b) of the act. the ito overruled the assessee's objections and included a sum of rs. 71,386 in the total.....
Judgment:

Sharma, J.

1. For the assessment year 1971-72, the assessee was held liable to pay tax on a total income of Rs. 77,090. Later on, the ITO reopened the assessment under Section 147(b) of the I.T. Act, 1961 (hereinafter called 'the Act'), on the basis of a note received by him from the Internal Audit Party of the Income-tax Department to the effect that 'customs drawbacks' amounting to Rs. 71,386 had escaped assessment to tax. He, accordingly, served a notice under Section 148 of the Act on the assessee on April 24, 1974. In response to the notice, the assessee repeated the earlier return, which he had filed. The assessee also objected to the validity of the proceedings under Section 147(b) of the Act. The ITO overruled the assessee's objections and included a sum of Rs. 71,386 in the total income of the assessee and refrained the assessment on a total income of Rs. 1,46,302. The assessee went up in appeal before the AAC of Income-tax. That Officer came to the conclusion that the assessee had disclosed the entire information to the ITO and reassessment on the basis of an audit note amounted to a mere change of opinion which was not permissible under Section 147(b) of the Act. He, therefore, annulled the assessment made by the ITO. The Revenue went up in appeal against this order passed by the AAC, which was dismissed by the Appellate Tribunal , Amritsar Bench.

2. At the instance of the Revenue, the following question of law has been referred to us for our opinion :

'Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in law in maintaining the order of the Appellate Assistant Commissioner holding that proceedings were not validly initiated by the Income-tax Officer under Section 147(b) of the Income-tax Act, 1961, for the assessment year 1971-72 ?'

3. The answer to this question stands concluded against the Revenue and in favour of the assessee on the basis of a Supreme Court judgment in Indian and Eastern Newspaper Society v. CIT : [1979]119ITR996(SC) and a Division Bench judgment of this court, CWT v. Smt. Savitri Devi . We, therefore, answer the question accordingly and make no order as to costs.


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