Amar Raj Lall vs Income-Tax Officer.
1990 Latest Caselaw 110 Del

ORDER

1. This is an assesseds second appeal arising out of his assessment for assessment year 1975-76. I have heard the learned counsel for the assessed and the learned Departmental Representative and have perused the material placed before me.

2. In this case the assessed paid an advance tax of Rs. 64,821 in respect of his estimated income of the accounting year ending 31-3-1975 assessable for assessment year 1975-76. The assessed filed a return of income on the 30th June, 1975 and then filed a revised return on 31-3-1979. No assessment was, however, made on the basis of those returns as the same were not traceable. Since according to the income returned by the assessed he was entitled to a sizeable refund, he approached the concerned authorities pointing out that the assessment has become barred by time and the entire amount of Rs. 64,821 be refund to him. The assessed has placed before me a copy of the letter dated 9-3-1984 addressed by him counsel to the Inspecting Asstt. Commissioner-VI, C-Circle, Mayur Bhawan, New Delhi. Ultimately vide letter dated 12-9-1984 addressed by his counsel applied to the Chairman, Central Board of Direct Taxes, New Delhi seeking the Boards intervention to ensure that assessed gets his rightful dues of Income-tax refund of Rs. 64,821 and interest thereon. According to the assessed the Board issued instructions under sec. 119(2) of the Income-tax Act, 1961 vide letter No. F. No. 212/428/84-ITAII dated 19-2-1985. Then assessed then addressed a letter dated 22-2-1985 to the IAC, Delhi Range, Co. I. C. R. Building New Delhi quoting the Boards instructions as below, and praying to finalise the assessment :

"Government has authorised the ITO to complete the assessment for the year 1975-76.

In relaxation to the limits prescribed under sec. 153 of the I. T. Act, and pass orders in accordance with law and grant refund, if any." Copies of the assesseds letter dated 22-2-1985 were endorsed to the several authorities, including the assessing officer, i. e. ITO VIII (13) with the request to finalise the assessment and issue the assessment order along with the ITRO for the due amount. It is in pursuance of the Boards instructions aforesaid and the assesseds letter dated 22-2-1985 that the assessing officer made an assessment order dated 17-10-1986 determining the assesseds total income at Rs. 59,100. The amount of refund becoming due to the assessed on the basis of this assessment and the interest thereon was duly refunded to the assessed and there is no dispute in respect thereof. Against the assessment the assessed and there is no dispute in respect thereof. Against the assessment the assessed appealed to the AAC contending that the entire amount or tax paid in advance by way of Tax Deduction at source and self-assessment under sec. 140A be refunded to him, as the assessment made was bad in law having been made after the expiry of the time limit. The AAC rejected the appeal by observing that it was not within his powers to order the refund of the entire tax. The assessed is now in appeal before this Tribunal and again the assesseds contention is that the assessment order made in this case is barred by time and hence the entire amount of tax should be refunded. For this proposition reliance has been placed on the case of Deep Chand Jain v. ITO [1984] 145 ITR 676 (Punj. & Har.). The learned Departmental Representative, on the other hand, contended that the assessment having been made under instructions of the Board was a valid one.

3. In the case before me, as is evident from the narration of the facts stated above, the assessed himself approached the Board under sec. 119(2) so that the assessed may get back the amount refundable to him. The Board in exercise of its powers under sec. 119(2) (b) directed the ITO to make an assessment in relaxation or the limits prescribed under sec. 153 and to grant the assessed refund, if any. The assessed accepted the Boards instructions and vide letter dated 22-2-1985 the assessed himself brought the Boards instructions to the notice of the IAC and the assessing officer and prayed that an assessment order be made soon. It is in pursuance of the Boards instructions and the assesseds acceptance of those instructions as binding that the ITO made the assessment, which is now challenged by the assesseds as barred by limitation. I am of the view that since it was the assessed himself who approached the Board for relief, in terms of sec. 119(2) (b) the Board was empowered to relax the time limit for the completion of the assessment. Even if the Boards instructions relaxing the limits prescribed under sec. 153 are beyond its powers then the assessed having accepted the Boards instructions and having again requested the assessing officer to make an assessment accordingly is stopped from challenging the assessment order on the grounds of limitation. It has to be remembered that limitation only bars the remedy, it does not extinguish the right. The assessed does not dispute the quantum of income assessed. Therefore, the Governments right to tax on the assessed income existed in spite of the expiry of the period of limitation and the assessed having got the benefit of the refund in pursuance of the Boards instructions cannot now be allowed to contend that the Boards instructions exceeded its authority.

4. As regards the case of Deep Chand Jain (supra) the facts, were different. In that case no assessment was made and there were no instructions of the Board in terms of sec. 119. The Hon'ble High Court was dealing with Writ Petition under Art. 226 while the assessed is coming to this Tribunal by way of an appeal against the assessment order, which, in my view, has been made validly in pursuance of the instructions of the Board and also in accordance with the consent of the assessed, as contained in its letter dated 22-2-1985. The assessed, therefore, cannot have a grievance against the assessment as null and void. I, therefore, do not find any force in this appeal and the same is hereby dismissed.