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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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