Devi Educational Institution vs Commissioner of Income Tax

Ratnam, J.—In this tax case reference u/s 256(1) of the Income Tax Act, 1961 (hereinafter referred to as ""the Act""), at the instance of the

assessee, the following question of low has been referred to this court for its opinion :

Whether, on the facts and in the circumstances of the case, the notice issued u/s 148 calling upon the assessee to file the return in Form No. 3A

was invalid and, consequently, the assessment made u/s 144 is liable to be reopened u/s 146 of the Income Tax Act, 1961, for the assessment

year 1971-72 ?

For the assessment year 1971-72, on the basis of the turn filed by the assessee in Form No. 3, the proceedings were closed as ""N.A."" on

November 14, 1973. Subsequently, the Income Tax Officer had information that the assessee received donations from another trust and since, in

his view, the income of the assessee had escaped assessment at the time of the passing of the original order of assessment, the Income Tax Officer

issued a notice u/s 148 of the Act requiring the assessee to file a return and also a notice u/s 142(1) of the Act. On non-compliance with those

notices by the assessee, the Income Tax Officer proceeded to make an ex parte assessment u/s 144 of the Act, thereafter, the assessee filed

application u/s 146 of the Act for reopening the assessment. On the view that the assessee had not furnished any reason for non-compliance with

the notices under sections 148 and 142(1) of the Act, the Income Tax Officer declined to reopen the assessment u/s 146 of the Act as requested

by the assessee. On appeal by the assessee to the Appellate Assistant Commissioner, the order of the Income Tax Officer was upheld on the

ground that the assessee could have filed the return and there was absolutely no reason whatever for non-compliance with the statutory provisions,

on further appeal to the Tribunal by the assessee, it took the view that, as the ex parte assessment had been made owing to the non-compliance

with the notices under sections 148 and 142(1) of the Act and that the assessee could succeed only on establishing that it was prevented by

sufficient cause from making the return u/s 139(2) of the Act or it had no reasonable opportunity to comply with the notice u/s 142(1) of the Act

and as those grounds had not been established, the refusal to reopen the assessment u/s 146 of the Act was in order.

Learned counsel for the assessee strenuously contended, referring to section 2(33) and 148 and rule 12 of the Income Tax Rules framed under

the Act that the notice issued to the assessee u/s 148 of the Act was not a valid notice, as, by that, the assessee had been called upon to file a

return in Form No. 3A, while the appropriate form in respect of the assessee would only be Form No. 3. On the other hand, learned counsel for

the Revenue invited our attention to the notice issued to point out that, under the notice issued u/s 148 of the Act, the assessee was not called upon

to file the return in Form No. 3A at all and, therefore, the notice issued was quite proper and valid and not open to any objection.

We have carefully persuade the notice issued to the assessee u/s 148 of the Act and we are unable to find anything therein to show that the

assessee had been called upon to file a return in Form No. 3A. In the absence of anything in the notice to show that the assessee had been called

upon to file a return in a form not applicable to the assessee, we are unable to hold that the issue of the notice u/s 148 of the Act was not valid. We

may also point out that even if the assessee had entertained a belief that, by the notice u/s 148 of the Act, it had been called upon to file a return in

Form No. 3A in response to the notice issued, it could have submitted a return and brought to the notice of the Income Tax Officer the invalidity of

the notice if any even by that return. Without doing so, the assessee had not complied with the notices issued under sections 148 and 142(1) of the

Act and that had led to the passing of an ex parte order of assessment u/s 144 of the Act. It has to be further pointed out that the assessee had not

made out a case for the reopening of the assessment on one or more of the grounds enumerated u/s 146 of the Act. Even in the application filed by

the assessee for reopening the assessment, it had maintained that a certain donation received from another trust cannot be taxed. This, however,

cannot form the basis for reopening of the assessment u/s 146 of the Act It is not the case of the assessee the it did not receive the notice u/s

142(1) of the Act or that it had not a reasonable opportunity to comply with or was prevented by sufficient cause from complying with the terms of

the notice u/s 142(1) of the Act, Equally, the assessee had not made out that it was prevented by sufficient cause from making the return u/s

139(2) as per the notice u/s 142(1) of the Act. Thus, on a consideration of the facts and circumstances of the case and also the terms of the notice

issued to the assessee u/s 148 of the Act, we are of the view that the notice issued to the assessee was valid and that no ground had been

established by the assessee for the reopening of the assessment made u/s 144 of the Act. We answer the question referred to us in the negative

and against the assessee. The Revenue will be entitled to the costs of this reference, counsel''s fee Rs. 500.