Smt. Kamla Devi vs Commissioner of Income Tax

A.K. Mathur, C.J.—This is a gift-tax reference u/s 26(1) of the Gift-tax Act, 1958 (''the Act'') at the instance of the assessee and the following questions of law have been referred by the Tribunal for answer of this Court : 1. Whether the Tribunal was justified in treating the return filed prior to the commencement of the assessment year as invalid and non est return?

Whether on the facts and in the circumstances of the case, the Tribunal was justified in holding the assessment completed on 31st March, 1986, as valid and not barred by limitation?

The brief facts giving rise to this reference are that the assessee made a settlement deed in favour of her daughter-in-law on 13-4-1972. The assessee filed the gift-tax return disclosing taxable gift of Rs. 2.30 lakhs on 1-7-1972 for the assessment year 1973-74 in respect of the property settled by her as per the deed of settlement dated 13-4-1972. The GTO treated this return as invalid and non est because it was filed before the commencement of the assessment year. The assessee also filed a duplicate return on 22-8-1997 and it was treated as invalid. The Assessing Officer issued notice u/s 16(1) of the Act on 11-2-1982 and in response to this, the assessee filed reply on 15-2-1982, the Assessing Officer held that it had already become barred by time; therefore, the proceeding u/s 16(1) was initiated. The Assessing Officer did not accept the request of the assessee and finally assessed the income of the assessee of Rs. 2.30 lakhs u/s 15(5) of the Act, on 31-3-1986.

Against the order of the Assessing Officer, the assessee filed an appeal challenging the assessment as barred by time before the First Appellate Court, who overruled this objection because of acquiescence. However, ex parte order was set aside because the Assessing Officer had not given reasonable opportunity to the assessee and the case was remanded. On further appeal to the Tribunal, the Tribunal upheld the order of the Commissioner (Appeals) and dismissed the appeal. Hence, the following questions of law have been referred by the Tribunal for answer by this Court.

We have heard the learned counsel for the parties and perused the record.

The word ''assessment year'' has been defined in section 2(iva) of the Act, which reads as under:

(iva) ''assessment year'' means the period of twelve months commencing on the 1st day of April every year;

The word ''previous year'' has been defined in section 2(xx), which reads as under:

(xx) ''previous year'' in relation to any assessment year -

(a) in the case of an assessee having no source of income, profits or gains or having a source of income, profits or gains in respect of which there is no previous year under the income tax Act, means the twelve months ending on the 31st day of March immediately preceding the assessment year;

According to section 13 of the Act, it clearly says that if during the previous year, any taxable gift has been made, then the assessee shall, on or before the 30th day of June of the corresponding assessment year, furnish a return of such gifts in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed.

So far as present case is concerned, the assessment year is 1973-74 and the previous year was 1972-73, i.e., 1-4-1972 to 31-3-1973. The return was filed on 1-7-1972. This was definitely much prior in time. As per section 13, it clearly transpires that the return has to be filed on or before the 30th day of June of the corresponding assessment year. The assessee could have filed return by 30-6-1973, but she filed the return on 1-7-1974. Therefore, this return was no return in the eye of law. Hence, the view taken by the Tribunal appears to be justified. So far as the escapement of assessment is concerned, we have already taken a view that the return filed by the assessee was no return in the eye of law. The matter was remanded back by the Commissioner (Appeals) and the notice was also issued u/s 17(1)(a), (b) and (c) of the Act. But the learned counsels for the revenue as well as for the assessee submit that the said notice has not been received by them so far. If so, then the period prescribed for the reassessment proceeding within the period of two years u/s 16A(1) of the Act pursuant to the order of the Commissioner (Appeals) has elapsed; however, we do not express any opinion on this issue. Hence, we answer both the aforesaid questions against the assessee and in favour of the revenue.