1996-VIL-08-GAU-DT

Equivalent Citation: [1997] 223 ITR 729, 140 CTR 137

GAUHATI HIGH COURT

Date: 24.09.1996

BENGAL TEA AND FABRICS LIMITED

Vs

ASSISTANT COMMISSIONER OF TAXES

BENCH

Judge(s)  : D. N. BARUAH., N. S. SINGH 

JUDGMENT

The judgment of the court was delivered by

D. N. BARUAH J. --- In this agricultural income-tax reference, the following three questions have been referred under section 28(2) of the Assam Agricultural Income-tax Act, 1939 (for short, "the Act"), by the Assam Board of Revenue for opinion of this court :

" (I) Whether, in the facts and circumstances of the case, the order of the assessment passed by the Agricultural Income-tax Officer by way of rectification under section 31(1) of the Assam Agricultural Income-tax Act, 1939, has been rightly set aside when such order had the effect of enhancing the assessment ?

(II) Whether, in the facts and circumstances of the case, the learned Board was justified in upholding the order of the Assistant Commissioner of Taxes setting aside the order of rectification passed under sub-section (1) of section 31 of the Assam Agricultural Income-tax Act, 1939, which was prima facie violative of the mandatory requirements contained in the provision to the aforesaid sub-section (1) ?

(III) Whether, in the facts and circumstances of the case, the learned Board was justified in confirming the order of the Assistant Commissioner of Taxes setting aside the order of the rectification having the effect of enhancing the assessment of the assessee when such rectification was illegal and invalid as no notice and reasonable opportunity of being heard was given to the assessee in terms of the proviso to sub-section (1) of section 31 of the Assam Agricultural Income-tax Act, 1939 ? "

The assessee carries on business of cultivation, manufacture and sale or supply of tea. For the assessment year 1978-79, the company submitted its return of total agricultural income. The Agricultural Income-tax Officer determined the taxable income at Rs. 42,34,369 raising a demand of tax for Rs. 29,64,053. On an audit objection made by the Accountant-General regarding the allowance, etc., to the extent of Rs. 1,31,020 and non-consideration of certain items of agricultural income in the original assessment order, the Agricultural Income-tax Officer initiated a suo motu proceeding under section 31 of the Act enhancing the earlier assessment without giving any opportunity. Being aggrieved the assessee preferred an appeal before the Assistant Commissioner of Taxes, Silchar Zone. The assessee contended before the appellate authority that the order was passed in complete violation of the provisions of section 31 of the Act inasmuch as no notice was issued and no opportunity was given to the assessee before passing an order under section 31(1) of the Act. The appellate authority being satisfied with the contention set aside the order. However, the appellate authority gave a direction to initiate a fresh proceeding after complying with the mandatory provisions of law, namely, giving opportunity to the other side. The assessee being still not satisfied approached the Board of Revenue. The contention of the assessee before the Board of Revenue was that the appellate authority was no doubt right in cancelling the order of the Assessing Officer, but the appellate authority had no jurisdiction to give a direction to the Assessing Officer to initiate fresh proceeding. The direction given by the appellate authority would amount to giving jurisdiction to the Assessing Officer for initiation of a fresh assessment proceeding irrespective of whether it was barred by limitation or not. This aspect was not considered while giving direction by the appellate authority. The Board also upheld the said decision ignoring that aspect of the matter. Hence, the present petition.

We have heard Mr. G. K. Joshi, learned counsel appearing on behalf of the assessee, and Dr. B. P. Todi, learned Government Advocate, Assam, appearing on behalf of the respondent.

It is an established principle of law that the appellate authority cannot confer any jurisdiction which the Assessing Officer does not have. In this case, if the assessment is already barred, then the giving of the direction which would amount to conferring jurisdiction, will be illegal and without jurisdiction. Dr. Todi submits that in the facts and circumstances of the case, fresh assessment was not barred. This is a matter to be considered by the Assessing Officer whether the assessment was barred or not. But a blanket direction cannot be given by the appellate authority. The appellate authority can only direct the Assessing Officer to make assessment in accordance with law. As this was not done, in our opinion, the appellate authority was wrong in giving the direction. Similarly, the Board of Revenue also did not consider that aspect of the matter.

In view of the above, we answer all the questions in the negative and in favour of the assessee.

A copy of this judgment under the signature of the Registrar and seal of the High Court shall be transmitted to the Assam Board of Revenue, Guwahati.

 

 

 

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