Vijaya Production Private Ltd. vs Commissioner of Income Tax

Ismail, J.—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 ?

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 u/s 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 u/s 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 u/s 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 u/s 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.

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 an order of assessment has to be made and this

time limit varies depending upon 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 will warrant the conclusion that the

Legislature deliberately intended to exclude the 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 of the I.T. Act, 1961, enumerated therein will apply to the assessment to super-tax as if

the said provisions were provisions of the Act and the income tax and super-tax referred to therein refer to super-tax. Section 153 is 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

the Act.

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 u/s 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 u/s 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.