Commissioner of Income Tax vs Subramanian and Co.

Chandurkar, C.J.—In view of the confusion which appears in the order of the Tribunal which has obviously led the revenue to file this

application u/s 256(2) of the income tax Act, 1961 (''the Act'') it becomes necessary to pass a slightly detailed order. The main question before the

Tribunal was the meaning of the word ''forward'' in section 144B of the Act, which requires the ITO in certain circumstances to ''forward a draft of

the proposed order of assessment...to the assessee''. The department''s case was that the draft order was forwarded on 30-3-1982. Admittedly

the order was received on 5-4-1982 by the assessee. When the matter reached the stage of the Tribunal, the Tribunal referred to the contention of

the assessee that the expression ''forward'' includes the fact of service of same. This contention, the Tribunal positively negatived by observing as

follows

...While we do not find any substance in the assessee''s contention that the expression ''forward'' should include the fact of service also on the

assessee, there seems to be some force in the contention that in the facts of this particular case it could be said that the draft order was forwarded

only after 31st day of March, 1982.

The above observation proceeded on the footing that though the assessee''s contention that the word ''forward'' must be equated with service had

to be rejected, in the case of the assessee the draft order was not forwarded before 31-3-1982. Having rejected the contention that the word

''forward'' should be equated with service, the Tribunal reiterated this view in the later part of the same order in the following observations:

We, therefore, consider that the expression ''forward'' u/s 144B(1) merely would mean putting the draft order in the process of communication to

the assessee and it will not include the requirement of actual service on the assessee.

These observations can leave no one in doubt that the Tribunal accepted the construction to be placed on the word ''forward'' as contended by the

revenue that it is not to be equated with a service and that it is enough if the draft order is put in the process of communication. What is, however,

important is that having thus laid down the correct meaning of the word ''forward'' the Tribunal proceeded to further observe that even the

forwarding of the draft order has been after 31-3-1982 as will be clear from following observations:

From the facts of this particular case, however, it is obvious that even the forwarding of the draft order has been after the time of 31st March,

1982. The mere fact that the order itself is dated 30th March, 1982, does not comply with the requirement of the order being forwarded. It must

be noted that the draft order was not sent by the income tax Officer through post and if he had done so before 31st of March, 1982, then there

maybe a justification for holding that he has forwarded the order within the time though it may be received by the assessee after the date by

allowing the time for transmission of the order by the postal authorities.

These observations, therefore, indicate that the Tribunal proceeded on the footing that the order was put in the process of communication only

after 31-3-1982. However, an apparently contrary observation was made by the Tribunal at the end of paragraph 23 of the order which has given

rise to the present petition. The finding is as follows:

The income tax Officer should, therefore, have taken adequate steps to see that the draft order was served on the assessee within time, before

31st of March, 1982. The service on 5th April, 1982 is clearly out of time.

These observations were preceded by the observations that the ITO, however, has chosen to send the order through the process-server of the

department but that no material was placed to show that the ITO took steps to ensure that the process-server concerned also served the order

within the time. Now undoubtedly, the later observations quoted above are likely to be misunderstood as indicating that the Tribunal held that the

word ''forward'' must mean service of the order. The entire order of Tribunal has to be read harmoniously and the observations which have been

made in the concluding portion of the order were made only on the facts of the case before the Tribunal, because they took the view that the order

not having been sent through post, the ITO should have taken care to see that the order was served on or before 31-3-1982. Notwithstanding this

observation the correctness of which really does not arise in this petition the order of the Tribunal unequivocally lays down the meaning of the word

''forward'' as rutting in the process of communication. Now if that is the meaning which the Tribunal has given, surely the question as to whether the

draft orders should be served within the time limit does not arise out of the order of the Tribunal.

The correctness of the view which the Tribunal has taken that the order was forwarded after 31-3-1982 is not put in issue in any question. That

finding is not challenged. Therefore, even assuming for a moment that on the facts of the present case, the Tribunal has taken the view that the

order should have been served before 31-3-1982, the question as suggested does not at all arise out of the order of the Tribunal since the Tribunal

has decided that the meaning of the word ''forward'' is only ''to put in process of communication''. That is the meaning which was canvassed by the

revenue. In this view of the matter, the petition is dismissed with costs Rs. 250.