Skip to content


Deputy Commissioner of Agrl. Income-tax and Sales Tax Vs. P.S.B. Paul Pandian - Court Judgment

LegalCrystal Citation
SubjectDirect Taxation
CourtKerala High Court
Decided On
Case NumberIncome-tax Reference (Agrl.) No. 96 of 1979
Judge
Reported in[1981]128ITR809(Ker)
ActsKerala Agricultural Income Tax Act, 1950 - Sections 34
AppellantDeputy Commissioner of Agrl. Income-tax and Sales Tax
RespondentP.S.B. Paul Pandian
Appellant AdvocateGovernment Pleader
Respondent Advocate T.P. Varghese, Adv.
Cases ReferredSwastik Oil Mills Ltd. v. H.B. Munshi
Excerpt:
- - at the time of hearing was that action under section 34 of the act not having been taken within a reasonable period, the order was bad......not to have been estimated on the basis of thatinspection report for the period relevant to the assessment years 1967-68 to 1969-70 as it could have been related, only to the assessment of the accounting years 1964-65 and 1965-66. he also observed that as per the inspection report, the yield estimated from the drought affected area was 30 kgs. per acre for the 1963-64 season. he, therefore, took up the matter in suo motu revision in exercise of the powers conferred on him under section 34 of the kerala agricultural i.t. act, 1950 (act xxii of 1950), for short 'the act'. after having heard the assessee on august 31, 1978, he passed an order holding that there was irregularity in estimating the yield from the area of 10 acres for the assessment years 1967-68, 1968-69 and 1969-70, and.....
Judgment:

Bhaskaran, J.

1. For the years 1967-68, 1968-69 and 1969-70 the asses-see, who is a cardamom planter, was assessed to agricultural income-tax by the assessing authority as per his orders dated November 2, 1967, November 20, 1968, and March 1, 1974, respectively. On examining the records of assessment, the Dy. Commr. of Agrl. I.T. found that the assessments were completed by the assessing authority estimating the income from ten acres of middle aged cardamom plantation, out of the total extent of 43*04 acres, at 10 Kgs. per acre for 1967-68 and at 12 Kgs. per acre for 1968-69 and 1969-70 ; this was found to have been done on the basis of the report of a spot inspection conducted on August 1, 1965. The Dy. Commr. took the view that the yield ought not to have been estimated on the basis of thatinspection report for the period relevant to the assessment years 1967-68 to 1969-70 as it could have been related, only to the assessment of the accounting years 1964-65 and 1965-66. He also observed that as per the inspection report, the yield estimated from the drought affected area was 30 Kgs. per acre for the 1963-64 season. He, therefore, took up the matter in suo motu revision in exercise of the powers conferred on him under Section 34 of the Kerala Agricultural I.T. Act, 1950 (Act XXII of 1950), for short 'the Act'. After having heard the assessee on August 31, 1978, he passed an order holding that there was irregularity in estimating the yield from the area of 10 acres for the assessment years 1967-68, 1968-69 and 1969-70, and directing the assessing authority to make a fresh assessment according to law.

2. At the instance of the assessee, under Section 60(2) of the Act, the following question of law has been referred to this court by the Dy. Commr.:

'Whether, on the facts and in the circumstances of the case, the proceedings of the Deputy Commissioner under Section 34 of the Agrl. I.T. Act in the instant case is barred by limitation of time ?'

3. From the revisional order dated August 31, 1978 (annex. 'D' to the statement of the case), it is found that what was mainly urged by the assessee before the Dy. Commr. at the time of hearing was that action under Section 34 of the Act not having been taken within a reasonable period, the order was bad. The counsel for the assessee reiterated before us the above contention which did not find favour with the Dy. Commr In support of his submission he cited the decision of this court in Bhavani Tea & Produce Co. v. Commr. of Agrl. I.T. [1972] 2 Tax LR 2413, wherein Issac J. has observed as follows in para. 6 at page 2415 of the report:

'Though section 34 does not prescribe any period of limitation, the section indicates that, in a case where exercise of that jurisdiction would affect an assessee adversely, any variance of the assessment can be done only subject to the provisions of the Act. In other words, the proceedings would be also subject to the periods of limitation provided for the different proceedings under the Act. It may be permissible to exercise that juris-diction to the benefit of an assessee at any time ; but there should be some reasonableness regarding the time-limit: and nine years after the assessments have become final is not certainly a reasonable period within which that jurisdiction can be invoked.'

4. We have already noticed that the assessment in respect of the years 1967-68, 1968-69 and 1969-70 was completed, respectively, on November 2, 1967, November 20, 1968, and March 1, 1974. The Government pleader, appearing for the revenue, contended that no period of limitation is prescribed for the exercise of revisional jurisdiction vested in the Commissioner under Section 34 of the Act and, therefore, the argument advanced on behalf ofthe assessee could not be countenanced. Reliance was placed by him on the following observation of the Supreme Court in Swastik Oil Mills Ltd. v. H.B. Munshi [1968] 21 STC 383 at pp. 399, 400 :

'Section 22 of the Act of 1946 and section 31 of the Act of 1953 do not lay down any limitation for exercise of the power of revision by a Deputy Commissioner suo motu, and we are not prepared to accept that any such limitation must be necessarily read in the two Acts.'

5. It has to be noticed that in the case which came up before the Supreme Court the power of suo motu revision of the Dy. Commr. was exercised when the matter was already pending in revision and the assessment had not become final. In our view, whatever the Supreme Court observed in that case has to be understood in the context of the facts and circumstances of that case, without treating it as one laying down a principle of general application. To us it appears to be a sound principle that even though Section 34 of the Act in terms does not prescribe a time-limit within which the power under that section has to be exercised, in order to avoid prejudice and hardship to the assessee it should be exercised within a reasonable time once the assessment becomes final, lest it be a Damocles' sword hanging over the head of the assessee for all time. We have not been shown anything to justify the inordinate delay between the completion of assessment for the years 1967-68 and 1968-69 on November 2, 1967, and November 20, 1968, respectively, on the one hand and its reopening on August 31, 1978, on the other, the delay being about 11 years in one case and about 10 years in the other. The assessment for the year 1969-70 was completed only on March 1, 1974, and its reopening as per the order dated August 31, 1978, could not be said to be not within a reasonable time. This being the position, we consider it just and proper to hold that the order of the Dy. Commr. dated March 31, 1978, in so far as it relates to the assessments for the years 1967-68 and 1968-69, cannot be sustained on account of the long and unjustifiable delay between the completion of the assessments and the passing of the revisional order, without affecting its validity in so far as it relates to the assessment year 1969-70.

6. In the result, we answer the question in so far as it relates to the assessment years 1967-68 and 1968-69 in the affirmative, i.e., in favour of the assessee and against the revenue; and in so far as it relates to the assessment year 1969-70 in the negative, i.e., in favour of the revenue and against the assessee. In the circumstances of the case, we direct the parties tobear their respective costs.

7. A copy of the judgment under the seal of the court and the signature of the Registrar shall be sent to the Deputy Commissioner of Agricultural Income-tax and Sales Tax, Central Zone, Ernakulam.


Save Judgments// Add Notes // Store Search Result sets // Organizer Client Files //