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Vijaya Production Private Ltd. Vs. Commissioner of Income-tax - Court Judgment

LegalCrystal Citation
SubjectDirect Taxation
CourtChennai High Court
Decided On
Case NumberTax Case No. 437 of 1974 (Reference No. 232 of 1974)
Judge
Reported in(1979)11CTR(Mad)174; [1980]122ITR136(Mad)
ActsSuper Profits Tax Act, 1963 - Sections 9 and 19; Income Tax Act, 1961 - Sections 153
AppellantVijaya Production Private Ltd.
RespondentCommissioner of Income-tax
Appellant AdvocateM. Uttam Reddi, Adv.
Respondent AdvocateJ. Jayaraman and ;Nalini Chidambaram, Advs.
Excerpt:
.....of the omission or failure on the part of the assessee to make a return under section 6 for any assessment year or to disclose fully and truly all material facts necessary for his assessment for any assessment year, chargeable profits for that year have escaped assessment or have been under-assessed or assessed at too low a rate or have been made the subject-matter of excessive relief under the act, he may at any time serve on the assessee a notice containing all or any of the requirements which may be included in a notice under section 6, and may proceed to assess or reassess the amount chargeable to super profits tax. section 9(b) of the act deals with a situation where notwithstanding that there has been no omission or failure as mentioned in clause (a) of the section on the part..........to super profits tax. thus, it will be clear that neither section 6 nor section 9 prescribes a time limit within which the ito should complete the assessment proceedings and pass an order of assessment. the time limit prescribed in section 6(1) is for filing a voluntary return by the assessee and the time limit prescribed in section 6(2) is the time limit within which the assessee has to file a return after service of notice by the ito. similarly, as far as section 9 is concerned, in clause (a) there is no time limit whatever for the ito serving a notice on the assessee to file a return and it is only section 9(b) which contains a time limit and that time limit is four years from the end of that assessment year. section 9(b) will apply only to cases where an assessee has filed his.....
Judgment:

Ismail, J.

1. The proceedings relate to the assessment under the Super Profits Tax Act, 1963 (Central Act 14 of 1963), hereinafter referred to as 'the Act' and the assessment year concerned is 1963-64. The assessee had filed its return of chargeable profits according to the requirement of law for the year 1963-64, but the actual assessment order was passed by the ITO on July 29, 1968. The assessee put forward a contention that the order dated July 29, 1968, being beyond four years from March 31, 1964, the end of the assessment year in question, the ITO had no jurisdiction to make the order of assessment since he had to make the order of assessment within four years of the end of the assessment year. This contention of the assessee was rejected all through by the AAC and the Income-tax Appellate Tribunal. Thereupon, the assessee applied to the Income-tax Appellate Tribunal for a reference of the following question to this court and that is how the matter has come up before this court:

'Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the assessment order dated July 29, 1968, passed under the Super Profits Tax Act and relating to the assessment year 1963-64 was not barred by limitation ?'

2. Section 4 of the Act is the charging section and Section 6 deals with return of chargeable profits to be filed by the assessee. Section 5(1) contemplates an assessee filing return voluntarily before the 30th of September of the assessment year and the proviso confers power on the ITO, to extend the date for the furnishing of the return, in his discretion. Sub-section (2) of Section 6 envisages a situation where the ITO, being of the opinion that the company is assessable under the Act, issues a notice calling upon the company . to furnish the return within 30 days from the date of service of the notice. This sub-section also confers an enabling power on the ITO to extend, in his discretion, the date for the furnishing of the return. It is not in dispute that the assessee in the present case has filed the return as required by the provisions of Section 6. Section 9 is the section dealing with the procedure to be adopted to assess profits escaping assessment. Section 9(a) provides that if the ITO has reason to believe that by reason of the omission or failure on the part of the assessee to make a return under Section 6 for any assessment year or to disclose fully and truly all material facts necessary for his assessment for any assessment year, chargeable profits for that year have escaped assessment or have been under-assessed or assessed at too low a rate or have been made the subject-matter of excessive relief under the Act, he may at any time serve on the assessee a notice containing all or any of the requirements which may be included in a notice under Section 6, and may proceed to assess or reassess the amount chargeable to super profits tax. Section 9(b) of the Act deals with a situation where notwithstanding that there has been no omission or failure as mentioned in Clause (a) of the section on the part of the assessee, the ITO has in consequence of information in his possession reason to believe that chargeable profits assessable for any assessment year have escaped assessment or have been under assessed or assessed at too low a rate or have been made the subject of excessive relief under the Act and enables him at any time within four years of the end of that assessment year, to serve on the assessee a notice containing all or any of the requirements which may be included in a notice under Section 6 and may proceed to assess or reassess the amount chargeable to super profits tax. Thus, it will be clear that neither Section 6 nor Section 9 prescribes a time limit within which the ITO should complete the assessment proceedings and pass an order of assessment. The time limit prescribed in Section 6(1) is for filing a voluntary return by the assessee and the time limit prescribed in Section 6(2) is the time limit within which the assessee has to file a return after service of notice by the ITO. Similarly, as far as Section 9 is concerned, in Clause (a) there is no time limit whatever for the ITO serving a notice on the assessee to file a return and it is only Section 9(b) which contains a time limit and that time limit is four years from the end of that assessment year. Section 9(b) will apply only to cases where an assessee has filed his return as provided for under Section 6 and still as a consequence of the information in the possession of the ITO he has reason to believe that chargeable profits assessable for any assessment year have escaped assessment, etc. Thus, it is not in dispute that neither Section 6 nor Section 9 imposes any time limit for the ITO completing the assessment and passing an order of assessment.

3. Section 6 of the Act corresponds to Section 139 of the I. T. Act, 1961, and Section 9-of the Act corresponds to Section 147 of the I. T. Act, 1961. The I. T. Act,1961, contains Section 153 expressly prescribing a time limit within which anorder of assessment has to be made and this time limit varies dependingupon the different situations enumerated therein. As far as the Act is concerned, there is no express provision corresponding to Section 153 of the I.T. Act,1961, prescribing a time limit. On the other hand, the situation willwarrant the conclusion that the Legislature deliberately intended to excludethe applicability of Section 153 to the assessment proceedings under the Act.This is clear from Section 19 of the Act. That section says that the sections ofthe I.T. Act, 1961, enumerated therein will apply to the assessment tosuper-tax as if the said provisions were provisions of the Act and theincome-tax and super-tax referred to therein refer to super-tax. Section 153is not one of the sections enumerated by Section 19 of the Act. Therefore, Section 153 of the I.T. Act, 1961, cannot be invoked to the proceedings taken under theAct.

4. Mr. Uttam Reddy, the learned counsel for the assessee, did not dispute the proposition that neither Section 6 nor Section 9 of the Act prescribes any time limit for the completion of assessment under the Act and, equally, he did not dispute that under Section 19 of the Act, Section 153 of the I. T. Act, 1961, had not been made applicable to the proceedings under the Act. However, what the learned counsel contends is that implicit in Section 9(b) itself is a limitation for completing the assessment within a period of four years. We are unable to accept this argument. In the absence of any express provision limiting the time within which proceedings for assessment should be completed, it is not open to any court to imply such a limitation, more so when the statute itself has taken care to exclude the applicability of Section 153 of the I. T. Act to the proceedings under the Act when it applied certain other provisions of the I. T. Act to the proceedings under the Act. Under these circumstances, we are unable to imply the limitation contended on behalf of the assessee under Section 9(b) of the Act and consequently we answer the question referred to this court in the affirmative and against the assessee. The department is entitled to the costs of the reference. Counsel's fee Rs. 500.


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