Full Judgment Text
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PETITIONER:
STATE OF ASSAM AND ANOTHER
Vs.
RESPONDENT:
DEVA PRASAD BARUA & ANOTHER
DATE OF JUDGMENT:
14/08/1968
BENCH:
GROVER, A.N.
BENCH:
GROVER, A.N.
RAMASWAMI, V.
CITATION:
1969 AIR 831 1969 SCR (1) 698
CITATOR INFO :
RF 1970 SC2057 (8)
ACT:
Assam Agricultural Income Tax Act, 1939, ss. 19(1), 20(1)
and 30-Assessee filing return of agricultural income after
issue of general notice under s. 19(1)-Assessment not made
during the assessment year nor within three years specified
in s. 30 but made thereafter-if valid or barred by time.-
expression "at any time’’ in s. 19(3)-Scope of.
HEADNOTE:
A general notice was issued on April 13, 1955 under s..
19(1) 0 the Assam Agricultural Income Tax Act, 1939, for
submission of the return for the assessment year 1955-56
for the purpose of agriculture income tax. The respondents
filed a return on May 31, 1958 and April 7, 1959, the
Agricultural Income-tax Officer made an assessment under s.
20(1) of the Act and a notice of demand was issued under s.
32 on April 13, 1959. The respondents thereafter filed writ
petitions under Arts. 226 and 227 challenging the
assessments for that year and the subsequent year
primarily on the ground that no individual notice had been
served on them under s. 19(2) and therefore there was no
jurisdiction in the Agricultural Income-tax Officer to pass
an order of assessment’ under s. 20(1) of the Act; and
furthermore an assessment under s. relating to escaped
income was barred by limitation. The High Court allowed the
petitions holding, inter alia, that as the income received
in the year 1954-55 had not been assessed in the financial
year 1955-56, it had escaped assessment and could be
assessed to tax only under s. 30; and the assessment in the
present case was invalid as it was made beyond three
years from the expiry of the financial year in which the
income was received.
On appeal to this Court
HELDE: On the admitted fact that a general notice under s.
19(1) was published and that a return was filed by the
respondents in respect 0 the assessment years in question,
s. 30 did not become applicable at all Sub-section (3) of
’s. 19 states in categorical terms that if any person has no
furnished a return within the time allowed by or under
subs. (1) subs. (2), he may furnish a return at any
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time before the assessment made and any return so
made shall be deemed to be made in due time under the
section. Where a voluntary return has been filed pursuant
to general notice even after the expiry of the period
mentioned in that notice the Income-tax Officer must proceed
to assess the income by taking up that return. He cannot
ignore that return and serve on the assessee notice under
the provisions relating to escaped income such as s. 30 in
the present case or s. 34 in the Income-tax Act. [701 G-H;
70:2 E-F]
The words "at any time" in subsection 3 of s. 19 of the Act
be interpreted to mean that they are limited to the year of
assessment. Section 19 is in pari materia with s. 22 of the
Income-tax Act and the law which has been laid down by this
Court while interpreting the provisions of that section must
govern the construction of the provisions of s. 19 well.
[702 H-703 B]
699
The Commissioner of Income-tax, Bombay v. Ranchhoddas
Karsondas Bombay, [1960] 1 S.C.R. 114; and Commissioner o!
Income-tax, Madras, V.S. Raman Chettiar [1965] 1 S.C.R. 883;
referred to.
JUDGMENT:
CIVIL APPELLATE JURISDITCION: Civil Appeals Nos. 808 and 809
of 1967.
Appeals from the judgment and order dated April 23, 1963 of
the Assam High Court in Civil Rule Nos. 212 and 213 of 1962.
Naunit Lal and Baharul Islam, for the appellants (in’ both
the appeals).
Sukumar Mitra and D.N. Mukherjee, for the respondents (in
both the appeals) and the intervener (in C.A. No. 808 of
1967).
The Judgment of the Court was delivered by
Grover, J. These are two connected appeals by certificate
from a common judgment of the High Court of Assam and
Nagaland allowing two petitions under Art. 226 of the
Constitution and setting aside the assessments made in
respect of the respondents for the assessment years 1955-56
and 1957-58 under the Assam Agricultural Income-tax Act,
1939, hereinafter called the Act.
A general notice was issued under s. 19(1) of the Act for
submission of the return for the purpose of agricultural
income tax on April 13, 1955 for the assessment year 1955-
56. According to the departmental authorities a notice was
also issued under s. 19(2) on September 16, 1955 to the
respondents by the Agricultural Income-tax Officer for
submission of a return for the same year which was followed
by reminders sent on April 30, 1956 and April 15, 1958. It
is, however, not disputed that the respondents themselves
filed a return on May 31, 1958 relating to agricultural
income for the assessment year 1955-56. On April 7, 1959
the Agricultural Income-tax Officer made an assessment order
under s. 20( 1 ) of the Act and a notice of demand was
issued under s. 33 on April 13, 1959. It is unnecessary to
give the details about the proceedings relating to the
assessment year 1957-58 in which the dates are naturally
different but the position is identically the same. On June
4, 1962 the respondents filed two petitions under Art. 226 &
227 of the Constitution challenging the assessments which
had been made primarily on the ground that no notice had
been served under s. 19(2) and therefore there was no
jurisdiction in the Agricultural Income-tax Officer to pass
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an order of assessment under s. 20 (1 ) of the Act and
further that since no assessment order had been passed and
no notice of demand had been made within the period of three
years of the end of the relevant financial year the
assessments were barred by time under s. 30 of the Act. In
the return which was filed in the High Court to the writ
petitions, it was asserted by the Assistant
700
Commissioner of Taxes that the respondents had been served
with a notice under s. 19(2) and the details of the notices
and the reminders which were issued together with copies
thereof were filed as annexures. It was maintained that
even on the assumption that no notice under s. 19 (2) had
been received by the respondents the submission of the
return of agricultural income was in compliance with the
terms of the notice issued under s. 19( 1 ) and therefore
the assessment order made under s. 20( 1 ) was perfectly
valid and no question arose of the applicability of s. 30 in
such circumstances.
The High Court decided the petitions in favour of the
respondents primarily on the following considerations: (1 )
Once agricultural income has escaped assessment in any
financial year then such income could be assessed within the
period prescribed or laid down in s. 30 namely, a period of
three years by taking the steps indicated in that section.
In the present case the agricultural income was received for
the first year in the year 1954-55 and had to be assessed in
the financial year 1955-56. Since no assessment had. been
made in that financial year it had escaped assessment. Thus
s. 30 was directly attracted. As. the assessment was made
on April 7, 1959 which was beyond three years from the
expiry of the last date of the financial year in which the
income had been assessed the assessment was invalid. (2) As
no notice either under s. 19(2) or under s. 30 had been
shown to have been served the assessment should have been
made before the expiry of three years from the last date of
the financial year, namely, 1955.-56 which was not done.
(3) The submission of a voluntary return by the assessee did
not alter the situation as there is no provision in the Act
which would help the department in that behalf. It was open
to the department to have assessed the assessee before the
expiry of the period of three years on receipt of the return
but that was not done. Section 19 is. almost in the same
terms as s. 22 of the Income tax Act, 1922, hereinafter
called the Income-tax Act. Section 19( 1 ) reads as follows
:--
"The Agricultural Income-tax Officer shall, on
or before the first day of May or for the year
commencing 1st April, 1939 any later day
notified by Government in each ye
ar, give
notice by publication in the press and
otherwise in the manner prescribed by rules.,
requiting every person whose agricultural
income exceeds the limit of taxable income
prescribed in section 6 to furnish, within
such period not being less. than thirty days
as may be specified in the notice, a return,
in the prescribed form and verified in the
prescribed manner, setting forth (along with
such other particulars as may be required by
the notice) his total agricultural income
during the previous year :"
701
Section 20 of the Act is similar to s. 23 of the Income tax
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Act, Section 30 which deals with escapement of income tax is
in the following terms :--
"If for any reason any agricultural income
chargeable to agricultural income tax has
escaped assessment for any financial year, or
has been assessed at too low a rate (or has
been the subject of undue relief under this
Act), the Agricultural Income-tax Officer may,
at any time within three years of the end of
that financial year, serve on the person
liable to pay agricultural income tax on such
agricultural income or, in the case of a
company on the principal officer thereof, a
notice containing all or any of the
requirements which may be included in a notice
under sub-section (2) of section 19, and may
proceed to assess or reassess such income, and
the provisions of this Act shall, so far as
may be, apply accordingly as if the notice
were a notice issued under that section:
Counsel for the appellant has raised two principal
contentions before us, The first is that a notice had been
served under s. 19 (2) of the Act on the respondents and
therefore the reasoning of the High Court was based on an
erroneous assumption that no such notice had been served.
According to him in the return filed in the High Court it
had been clearly asserted that such notices had been issued
followed by reminders. No counteraffidavit, however, had
been filed by the respondents in the High Court
contradicting the statement in the return. Counsel further
points out that the statement in the judgment of the High
Court "but it is not disputed that the notices under s. 19
(2) of the Act had not, in fact, been served on the
petitioners", is based on some misunderstanding or
misapprehension. The counsel for the appellant did not
make any concession on the point before the High Court and
at the earliest opportunity, in the petition which was filed
for leave under Art. 133 of the Constitution, this matter
was raised and the same assertions which were made in the
return were reiterated. It seems to us that it is futile to
go into this question because (a) it is substantially a
question of fact.and (b) the present appeals can be decided
on another ground which arises out of the second contention
raised before us. On the admitted fact that a general
notice under s. 19 (1 ) was published and that a return was
filed ’by the respondents in respect of each of the two
assessment years in question it is not possible to see how
s. 30 would become, applicable at all. Sub-section 3 of s.
19 says in categorical terms that if any person has not
furnished a return within the time allowed by or under sub-
s. (1 ) or sub-s. (2) he may furnish a return at any time
before the assessment is made and any return, so made shall
be deemed to be made in due
702
time under the section. In The Commissioner of Income tax,
Bombay v. Ranchhoddas Karsondas, Bombay(1), a public notice
-under s. 22( 1 ) of the Income tax Act was published on May
1, 1945. On January 5, 1950 the assessee submitted a
voluntary return showing an income of Rs. 1,935 for the
assessment year 1945-46 and added a footnote to his return
that his wife had sold her old ornaments and deposited a
sum of Rs. 59,026 with some Syndicate in which he was a
partner. The Income-tax Officer ignored the voluntary
return and in February 1950 issued a notice under s. 34(1)
of that Act pursuant to which the assessee submitted a
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return in March 1950. The Income-tax Officer made the
assessment in February 1951 including the sum of Rs. 59,026
in the total income of the assessee. The assessee
,contended that the assessment was invalid as it was
completed more than four years after the end of the
assessment year in violation of s. 34(1)(b). The department
contended that the voluntary return was no return as it did
not disclose any taxable income and the assessment was valid
under the proviso to s. 34(3). It was held that the
voluntary return filed by the assessee even though it did
not disclose any taxable income was a good return. As such
no question arose under s. 34( 1 ) of income escaping
assessment and the Income-tax Officer was not justified in
issuing a notice under s. 34(1). The assessment which was
therefore made pursuant to the notice under that section was
barred by time, having been made beyond the period
prescribed. The principle which has been settled by this
decision is that where a voluntary return has been filed
pursuant to a general notice even after the expiry of the
period mentioned in that notice, the Income-tax Officer must
proceed to assess the income by taking up that return. He
cannot ignore that return and serve on the assessee a notice
under the provisions relating to escaped income which was s.
34 in the Income-tax Act. This view also finds support
from the decision of this Court in Commissioner of Income-
tax, Madras v.S. Raman Chettiar(2) in which it was laid
down, inter alia that s. 22(3) of the Income-tax Act, 1922
permitted an assessee to furnish a return at any time
before the assessment was made, namely, before the time
mentioned in s. 34(3) of that Act. In the present case it is
not disputed and cannot indeed be disputed that if the word
"at any time" in sub-s. (3) of s. 19of the Act has not to be
limited to the year of assessment as has been contended by
the learned counsel for the respondents, the present case
would be governed by the principles laid down by this Court
in the above decisions. It has been urged that the words
"at any time" should be given a limited meaning and should
be confined to the year of assessment, namely, that the
return should be made at any time within the year of
assessment and not later in which case sub-s. (3 ) would not
apply and the provision of s. 30 would
(1) [1960] 1 S.C.R. 114.
(2) [1965] 1 S.C.R. 883.
703
be at once attracted. This contention has only to be stated
to be rejected. In the first place if sub-s. (3) has to be
read in the manner suggested it would become ambiguous and
almost unintelligible. Secondly according to the ordinary
cannons of interpretation the words employed must be given
their proper and plain meaning. Moreover s. 19 is in pari
materia with s. 22 of’ the Income-tax Act and the law which
has been laid down by this Court, while interpreting the
provisions of that section, must govern the construction of
the provisions of s. 19 as well. The High Court, in giving
the reasons on which the petitions were allowed, was not
alive to all these matters and the view taken by it is
clearly unsustainable.
The appeals are consequently allowed and the writ petitions
are directed to be dismissed. The appellants will be
entitled to. one set of costs.
R.K.P.S. Appeals
allowed.-
704
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