HOPE TEXTILES LTD. AND ANOTHER VS UNION OF INDIA
1995 P T D 212
[205 I T R 508]
[Supreme Court of India]
Present: B.P. Jeevan Reddy and S. P. Bharucha, JJ
HOPE TEXTILES LTD. and another
Versus
UNION OF INDIA and others
Civil Appeal No.3006 of 1983, decided on 27/10/1993.
(Appeal by the special leave from the judgment and or order dated March 1, 1982, of Madhya Pradash High Court in C.W.P.No.574 of 1981).
Income tax----
----Reassessment---Notice for re-assessment ---Assessee filing return disclosing further losses---No order passed---High Court---Writ---Application for mandamus---No writ beyond period of limitation for making order of assessment---Indian Income Tax Act, 1961, Ss. 148 & 153(2).
A writ of mandamus cannot issue to compel a statutory authority to pass an order in violation of a statutory provision.
For the assessment year 1971-72, the appellant-company filed a return on the basis of which an order of assessment was made on March 27, 1974, accepting certain losses disclosed by it. On February 21, 1976, a reassessment notice was issued under section 148 of the Indian Income Tax Act. 1961, pursuant to which the company filed a return disclosed further losses. No order was passed till September, 1981. The appellant company filed a writ petition in the High Court for a mandamus to the Income Tax Officer to pass order in pursuance of the notice. The High Court dismissed the writ petition holding that no mandamus could be issued compelling the Income Tax Officer to make an order of assessment beyond the period of limitation prescribed by section 153(2). The appellant company preferred an appeal to the Supreme Court. The Supreme Court dismissed the appeal, observing that sub-clause (ii) of section 153(3) could not be understood as empowering the High Court to give a direction to the authority cinder the Act to ignore the period of limitation prescribed under the Act.
Vithaldas v. ITO (1969) 71 ITR 204 (All.) held confined to the facts of that case.
B. Sen, Senior Advocate (S.R. Aggarwal, Advocate, for Messrs Khaitan and Co., Advocates, with him) for Appellants.
R. Satish and D.S. Mahra, Advocates for Respondents.
ORDER
This appeal is preferred against the decision of the Madhya Pradesh High Court. The assessee is a limited company. For the assessment year 1971-72, it filed a return on the basis of which an order of assessment was made on March 27, 1974. By the said order, certain losses disclosed by the assessee were accepted. On February 21, 1976, a notice under section 148 of the Income Tax Act, .1961, was issued to the appellant, in pursuance where or it filed a return on March 27, 1976, for disclosing further losses. No orders were passed till about September, 1981, in the reassessment proceedings. The appellants say that on that date, they were informed that no order will be passed pursuant to the notice under section 148. Thereupon, the appellants approached the High Court by way of a writ petition for issuance of mandamus to the Income Tax Officer to pass orders in pursuance of the aforesaid notice. The writ petition was dismissed observing that no mandamus can be issued compelling the Income Tax Officer to make an order of assessment beyond the period of limitation prescribed by section 153(2). In this appeal, it is urged by Sri Sen, learned counsel for the appellant, that by virtue of clause (ii) of subsection (3) of section 153, the High Court could have directed the Income Tax Officer to pass an order of reassessment pursuant to the aforesaid notice, notwithstanding the expiry of the period prescribed in subsection (2) of section 153. We are not prepared to agree. A writ of mandamus can be issued to a statutory authority to compel it to perform its statutory obligation. It cannot issue to compel him to pass an order in violation of a statutory provision. The Income Tax Officer had no power to make a reassessment beyond the period prescribed by subsection (2), unless the case fell under any of the other subsection under section 153 or other provision extending the said period of limitation. No such provision is brought to our notice. The only provision relied upon is clause (ii) in subsection (3). Subsection reads as follows:
"(3) The provisions of subsections (1) and (2) shall not apply to the following classes of assessment, reassessments and recomputations which may, subject to the provision of subsection (2A), be completed at any time--
(i) where a fresh assessment is made under section 146;
(ii) where the assessment, reassessment or recomputation is made on the assessee or any person in consequence of or to give effect to any finding or direction contained in an order, under section 250, 254, 260, 262, 263 or 264 or in an order of any Court in a proceeding otherwise than by way of appeal or reference under this Act;
(iii) where, in the case of a firm, an assessment is made on a partner of the firm in consequence of an assessment made on the firm under section 147. "
On a reading of clause (ii), it would be evident that it in no way helps the appellants. It contemplates a situation where certain orders have to be passed in consequence of or to give effect to any finding or direction contained in any order passed under the provisions referred to therein or in an order of any Court in a proceeding otherwise than by way of appeal or reference under this Act. This sub-clause cannot be understood as empowering the High Court to give a direction to the authority under the Act to ignore the period of limitation prescribed in the Act.
Sri Sen, learned counsel, relies upon the decision of the Allahabad High Court in Vithaldas v. ITO (1969) 71 ITR 204. In that case, an order of assessment was made subject to rectification under section 35 of the Act. The order of assessment was dated December 15, 1955. Under section 35, the rectification could have been made only by March, 1960. It was not done. The assessee moved the High Court by way of a writ petition in 1967. It was allowed holding that the Income Tax Officer was under an obligation to make an order of rectification and that the expiry of the period of limitation is no answer. We must understand the said direction as confined to the particular facts and circumstances of that case. The said decision cannot be understood as laying down a proposition that an authority under the Act can be directed to make an order beyond the period of limitation prescribed by the statute.
The appeal accordingly fails and is dismissed. No costs.
M.B.A./294/T.FAppeal dismissed.