STATE V. M/S.UNION TIMBER TRADERS

OTC/18/2005

AI Insights

This case involves the State of Kerala as the petitioner and M/s. Union Timber Traders as the respondent, concerning tax revision cases filed under Section 78(1) of the Agricultural Income Tax Act, 1991. The core issue was the timeliness of re-assessments made for the assessment years 1988-89 and 1990-91, which were argued to be time barred. The original assessments were completed prior to the enactment of the Agricultural Income Tax Act, 1991, and subsequent re-assessments were challenged for not adhering to the statutory time limits prescribed under the earlier 1950 Act. The Tribunal had cancelled the assessments due to procedural lapses, which the court upheld on different grounds, focusing on the statutory limitation period.

• Counselvise Citation: [2008] 140 COUNSELVISE.COM (IT) 679785 (HC-KERALA)
• Appeal Type: Others
• Pronouncement Date: 21-02-2008
• Assessment Year: misc
• Laws Referred To: Agricultural Income Tax Act, 1991, Agricultural Income Tax Act, 1950
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: K B KUTTY; K M FIROZ
• Assessee Lawyers: K P PRADEEP
• Keywords: Agricultural income-tax; Income escaping assessment; Re-assessment; Time barred
• Section: 41(2); 41(1); 35(2); 78(1); 99(3); 39(6)

Judgement Text

" IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.N.RAMACHANDRAN NAIR & THE HONOURABLE MR. JUSTICE T.R.RAMACHANDRAN NAIR THURSDAY, THE 21ST FEBRUARY 2008 / 2ND PHALGUNA 1929 OTC.No. 18 of 2005 ---------------------------- TA.44 & 49 OF 1999 OF S.T.A.TRIBUNAL,ADDL.BENCH,PALAKKAD ...................................... REVISION PETITIONER/RESPONDENT/REVENUE --------------------------------------------------------------------- STATE OF KERALA REPRESENTED BY DEPUTY COMMISSIONER (LAW), COMMERCIAL TAXES, ERNAKULAM. BY GOVERNMENT PLEADER SRI. K.P. PRADEEP RESPONDENTS: APPELLANTS/ASSESSEE ------------------------------------------------------------ M/S. UNION TIMBER TRADERS, VADAKKANCHERRY, ALATHUR, PALAKKAD DISTRICT. BY ADV. DR.K.B.MUHAMED KUTTY (SR.) SRI.K.M.FIROZ THIS OTHER TAX CASES HAVING BEEN FINALLY HEARD ON 21/02/2008 ALONG WITH OTC NO.19 OF 2005, THE COURT ON THE SAME DAY PASSED THE FOLLOWING: C.N. Ramachandran Nair & T.R. Ramachandran Nair, JJ. - - - - - - - - - - - - - - - - - - - - - - - - O.T.C.NOs.18 & 19 of 2005 - - - - -- - - - - - - - - - - - - - - - - - - - - Dated this the 21st day of February, 2008. JUDGMENT C.N. Ramachandran Nair, J. These tax revision cases are filed by the State under Section 78(1) of the Agricultural Income Tax Act, 1991 against orders of the Tribunal cancelling the income escaped assessments as time barred. We have heard Government Pleader appearing for the petitioner and the Senior Counsel Dr. Mohammedkutty appearing for the respondent. The question raised is whether re-assessments completed in the case of the respondent for the assessment years 1988-89 and 1990-91 are time barred. The Agricultural Income Tax Act, 1991 came into force on 1.4.1991 and the assessments involved pertain to the assessment years prior to the commencement of the new Act. The original assessment of the respondent for the assessment year 1988-89 was completed on 5.1.1993. After appeal and remand, the assessment was revised by the Assessing Officer on 31.10.1995 against which assessee filed another round of appeal. While this appeal was pending, assessment was reopened and the income escaping assessment was made on 30.11.1996 on the ground that income from substantial area OTC 18 & 19/2005 -2- cultivated by the assessee was not included in the original assessment. For the assessment year 1990-91, respondent-assessee did not file any return. Therefore, the Assessing Officer issued notice on 27.11.1995 and made income escaping assessment on 30.5.1997. The impugned revised assessments were made under Section 41(1) and (2) read with Section 39(6) of the Act, 1991. The Tribunal cancelled the assessments for the reason that notice issued under Section41(1) was without prior approval of the Commissioner in terms of Section 41(2) of the Act. 2. The question to be considered is the Act, the provisions of which are applicable for the purpose of computation of limitation for the assessment completed. Section 99(3) of the Agricultural Income Tax Act, 1991 specifically states that notwithstanding the repeal of the A.I.T. Act 1950, the provisions of the said Act will apply for initiation and completion of any proceeding including assessment of agricultural income. This section makes it clear that for reopening any assessment prior to the year in which the 1991 Act came into force, the provisions of the old repealed Act are applicable. Under Section 35(2) of the 1950 Act, assessment shall be completed within five years from the end of the year for which the agricultural income was first assessable. Admittedly the escaped income for the years 1988-89 and 1990-91 were assessed beyond five years from OTC 18 & 19/2005 -3- the end of the relevant previous year. We, therefore, find that the assessments are time barred under the provisions of the 1950 Act and consequently the appeals filed by the Revenue are dismissed, though not for the reasons stated by the Tribunal in their order. (C.N. Ramachandran Nair, Judge.) (T.R. Ramachandran Nair, Judge.) kav/ OTC 18 & 19/2005 -4- C.N. Ramachandran Nair & T.R. Ramachandran Nair, JJ. - - - - - - - - - - - - - - - - - - - - - - O.T.C.NOs.18 & 19 of 2005. - - - - - - - - - - - - - - - - - - - - - - JUDGMENT 21th February, 2008. "