K.C. Singhal, Judicial Member - (1.) SINCE common issue is involved in both these appeals, the same are being disposed of by the common order for the sake of convenience.
(2.) At the outset and before coming to the main issue on merits, the learned counsel for the assessee Shri Ajay Vohra has challenged the validity of assessment for the assessment year 1997-98 by contending that the notice issued under Section 142(1), on the basis of which assessment was made by Assessing Officer, was barred by period of limitation and, therefore, the entire assessment proceedings were yoidab initio. It has been contended that though there is no express provision providing period of limitation for issuance of notice under Section 142(1), it can be deduced from the scheme of the Act. According to him, such notice cannot be issued after the end of the assessment year or alternatively, after the expiry of one year from the end of the assessment year. Since notice under Section 142(1) calling the assessee to file the return for assessment year 1997-98 was issued on 28-1-2000, it was barred by limitation. In support of the above contention, he has relied on the scheme of the Act under Chapter XIV. According to him, before the amendment effective from 1-4-1990, Section 142(1) authorized the Assessing Officer to call for the return of income where a person had failed to file the return till the end of the assessment year. After the amendment, the time for calling the return under Section 142(1) was preponed and the return could be called if the person failed to file the same before the expiry of time under Section 139(1). Sub-section (5) provided the time of one year from the end of the assessment year to revise such return. Section 139(4) provides the time limit of one year from the end of the assessment year where assessee has failed to file the return under Section 139(1) or in response to notice under Section 142(1). According to him, if harmonious construction of these provisions is made, then notice under Section 142(1) can be issued only before the expiry of one year from the end of the assessment year.
(3.) PROCEEDING further, it is contended that after the expiry of one year from the end of the assessment year, the provisions of Section 147 would come into play as it would be a case of escaped assessment and consequently, the assessment could be made only in pursuance of notice under Section 148. Therefore, according to him, the provisions of Sections 147 and 142 are mutually exclusive and do not impinge upon each other. Reliance was placed on the full bench decision of Karnataka High Court in the case of Kareem Sons (P.) Ltd. v. CIT [1992] 198 ITR 5431,of Calcutta High Court in the case of Satyanarayan Bhalotia v. CIT [1994] 207 ITR 10302 and in the case of Himmat Singhka Motors Works Ltd. 26 Taxman 259 (sic). According to him, the contention of the revenue that such notice can be issued before the expiry of the period provided in Section 153 for making the assessment cannot be accepted as in such a situation the provisions of Section 142(1) would impinge upon the provisions of Section 147.;