Hotel Shah and Co. vs Assistant Commissioner of Income Tax and Another

A.S. Venkatachala Moorthy, J.—The petitioner is a partnership firm. For the year 1988-89 it should have filed its return by July 31, 1988, but that was not done. Similarly, the firm did not ask for extension of time to file its return. The Department issued notice dated August 30, 1988, u/s 139(2) of the Income Tax Act, 1961, to the petitioner. There was no reply. Again another notice was issued u/s 142(1) of the Act. Then again there was reply. Finally, the Department passed a best of judgment assessment on March 26, 1991, and they also cancelled the registration.

The case of the petitioner is that in view of the search and seizure made on February 22, 1989, the petitioner had no required details and hence it could not submit its return. It is also contended that an application was made requesting copies of the various documents seized and the same were not furnished. In fact on March 19, 1991, the petitioner approached the Department and asked for permission to take copies, but the Department did not accede to the request. Finally, the return was filed only on March 31, 1992. That being so, as the petitioner was prevented from filing its return for valid reasons, the Income Tax Department ought not to have cancelled the registration.

As already pointed out, the return for the assessment year 1988-89 should have been filed by July 31, 1988. If really the petitioner had any difficulty, it should have asked for extension of time u/s 139(2) of the Act. The petitioner did not choose to do so. That apart it also did not respond to the notices issued under Sections 139(2) and 142(1) of the Act, with the result the Department had to pass best judgment assessment. The plea of the petitioner that as there was search and seizure on February 22, 1989, it could not submit its return cannot be accepted because nothing prevented the petitioner to file return on July 31, 1988, long before the search and seizure. That apart, as already pointed out, nothing prevented the petitioner to seek for extension of time. Moreover, when the Department offered the petitioner to take copies by its communication dated August 25, 1990, the petitioner did not make use of it. On the other hand, the petitioner virtually in the last fortnight, that is only by the end of two years from April 1, 1989, approached the Department on March 19, 1991 and sought permission to take copies of the document. As the Department was very much busy in completing the various assessments the request of the petitioner could not be acceded to. In these circumstances, the petitioner has not made out a case for this court to interfere with the impugned orders.

Consequently, the original petition is dismissed.