N. Nallasenapathi Sarkarai Mandradiar vs Commissioner of Agricultural Income Tax

R. Jayasimha Babu J.

The assessment was made against the petitioner on December 3, 1980, in respect of the assessment year 1978-79. The assessment for the

assessment year 1979-80 was also made on December 3, 1980. Those orders of assessment were sought to be revised in 1981 and a notice was

sent to the assessee in that year. The notice so sent was a printed form in which the line which set out that the assessment had been done at too

low a rate was struck off. The assessee did not file any reply to that notice. More than six years thereafter, on November 13, 1987, the

assessments made for the years 1978-79 and 1979-80 were purported to be revised. In the revised assessment order, it is merely stated that there

was an escapement of income from cumbu. Aggrieved by these orders, the assessee preferred appeals to the Appellate Assistant Commissioner,

who found fault with the assessee for not having replied to the notice and proceeded to affirm the revised order of assessment. The Tribunal has

adopted the same course and, therefore, the assessee is before us in revision.

We find it impossible to sustain these orders. After the assessment had been concluded, the assessee, in the normal course, is entitled to assume

that the proceedings were terminated and that such proceedings may be reopened only in strict conformity with law. A vague notice informing the

assessee that the tax determined under the assessment order already passed has been arrived at by adopting lower rate than what was applicable,

would not entitle the authority to revise the turnover, add amounts which had not been treated as income earlier and make such addition without

setting out the basis for the same, and then proceed to demand substantial further amounts as tax from the assessee. The prejudice caused to the

assessee in these cases has been all the more on account of the gross and undue delay on the part of the authority. Having issued a notice in the

year 1981, and without any further notice to the assessee, the authority waited for six years and at the end of that period, passed a fresh order of

assessment merely asserting that there had been escapement of income, and specifying a certain sum. The basis on which the authority had reached

the conclusion that there was escapement, is not set out. The quantity of the commodity from which the income is alleged to have been realised is

not set out. The basis for arriving at the figure mentioned as the value of the commodity cannot be fathomed from a perusal of the orders passed

u/s 35 of the Tamil Nadu Agricultural Income Tax Act.

Section 35 of the Act does not confer arbitrary power on the officers to reopen the proceedings as and when they consider it admissible without

informing the assessee the precise reason for seeking to reopen the proceedings and without setting out the basis on which the order is to be

revised. In these cases, it is not as if the assessee as also the Department were fully aware of the relevant facts on the basis of which the

reassessment was being done. No information whatsoever is available from the record as to why and how the addition was made to the income of

the assessee which had been duly considered and assessed six years earlier.

The officers are required to act with reasonable despatch, and not take assessees by surprise by making orders several years after issuing a

notice and remaining silent in the interval. The impugned orders of the Tribunal as also of the Agricultural Income Tax Officer and the Appellate

Assistant Commissioner are, therefore, set aside. The revision petitions are allowed. No costs.