- (1.) ORDER
(2.) SRI Kalyankumar Ray, a tax lawyer from Calcutta, has preferred these petitions raising an attractive and ingenious but, in our opinion, technical and untenable plea. We, therefore, dismissed the petitions on 26-7-91 but stated we would give our reasons later. Hence this order. The petitions arise out of the petitioner's assessments under the Income-tax Act, 1961, ('the Act'). The point raised by Sri Ray, which is common to the two assessment years 1981-82 and 1982-83, arises this way. For the assessment year 1981-82, the Income-tax Officer (I.-T.O.) passed an "assessment order" in which he computed the assessee's total income for the year at Rs. 1,89,320. Then he added: "Assessed as above. The assessee paid Rs. 1, 12,4 10 under S. 2 10 and Rs. 26,000 against C.D.S. Allow credit for T.D.S. of Rs. 768.00. Issue D.N. and Challan." This was followed up by a demand notice u/S. 156 of the Act served on the assessee stating that, "for the assessment year 1981-82, a sum of Rs. 1,01,303, details of which are given on the reverse, have been determined as payable by you". This is somewhat inaccurate, for the back of the notice contained the following details: JUDGEMENT_424_SUPP2_1992Html1.htm The position regarding assessment year 1982-83 was similar. The amount adjusted against the demand for this assessment year was the payment made under Ss. 210 and 140A leaving a sum of Rs. 2,120.00 which was adjusted against the refund due to the assessee for assessment year 1981-82. Both assessment orders and (nil) demand notices were dated 30-8-83 and both were signed/ initialled by the I.T.O. The assessee has not voiced any grievance against the computation and adjustments made except that he had not been awarded interest u/ s 214 of the Act. His short point is that, under the statute, the "assessment order" itself should contain the calculations of the tax, interest etc. and of the net sum payable by/ refundable to the assessee. These details, he urges, cannot be relegated to the demand notice. Failing compliance with this statutory requirement, he contends, the assessment orders should be held to be void and of no effect and, consequently, annulled. This contention was not accepted by the Commissioner (Appeals) and the Income-tax Appellate Tribunal. The assessee's applications under S. 256(1) and (2) of the Act were also dismissed. The assessee seeks special leave against the High Court's orders declining to call for reference and, by way of abundant caution, also files petitions for special leave to appeal to this Court - which are naturally belated since the assessee awaited the outcome of his applications under S. 256 - directly from the Tribunal's orders. We see no reason to entertain the second set of appeals which are considerably beyond time. However, we are also of opinion that the Tribunal's decision is correct and that the High Court was also justified in declining to call for a reference.
(3.) SRI S. Padmanabhan, learned counsel for the petitioner, invited attention to the language of S. 143(3) of the Act which mandates that the I.T.O. "shall, by an order in writing, make an assessment of the total income or loss of the assessee, and determine the sum payable by him on the basis of such assessment". The Department pointing to the placement of a comma after the word "assessee" suggested before the Tribunal that an order in writing is required only for the assessment of the income or loss and that the determination of the sum payable can be an independent process not necessarily in writing. The suggestion seems plausible but is not really tenable. As pointed out for the petitioner, judicial decisions under the 1922 Act as well as the present Act have read both clauses together. 'Assessment' is one integrated process involving not only the assessment of the total income but also the determination of the tax. The latter is as crucial for the assessee as the former. S. 144, which also describes the same process, makes no distinction as suggested. It will not be therefore correct to read the provision as leaving undefined the process of determination of the net sum payable by the assessee. In our opinion, therefore, learned counsel for the petitioner is right in his submission that the I.T.O. has to determine, by an order in writing, not only the total income but also the net sum which will be payable by the assessee for the assessment year in question and that the demand notice under S. 156 has to be issued in consequence of such an order. The statute does not, however, require that both the computations (i.e. of the total income as well as of the sum payable) should be done on the same sheet of paper, the sheet that is superscribed "assessment order". It does not prescribe any form of the purpose. It will be appreciated that once the assessment the total income is complete with indications of the deductions, rebates, reliefs and adjustments available to the assessee, the calculation of the net tax payable is a process which is mostly arithmetical but generally time consuming. If, therefore, the I.T.O. first draws up an order assessing the total income and indicating the adjustments to be made, directs the office to compute the tax payable on that basis and then approves of it, either immediately or some time later, no fault can be found with the process, though it is only When both the computation sheets are signed or initialled by the I.T.O. that the process described in S. 143(3) will be complete.;