M. Katju, J. - (1.) THIS writ petition has been filed for quashing the impugned order of the Income-tax Appellate Tribunal, dated March 8, 1983, annexure G to the writ petition, as well as the order dated January 30, 1978, passed by the Inspecting Assistant Commissioner of Income-tax vide annexure F to the petition.
(2.) THE case relates to the Business Profits Tax Act, 1947. THE petitioner is a public limited company incorporated under the Indian Companies Act, 1913, and is now a Government company as it has been taken over by the Central Government. The petitioner submitted four returns for the chargeable accounting periods, namely, for periods ending December 31, 1946, December 31, 1947, December 31, 1948 and March 31, 1949. In respect of these periods, provisional assessments were made under Section 13 of the Act on various dates from December 27, 1948 to January 22, 1951, and the tax determined under the provisional assessments was paid. The regular assessment was made on December 31, 1969. However, the regular assessment was quashed by the Tribunal by its order dated March 24, 1973, annexure 1 to the supplementary affidavit. Against this order of the Tribunal, a reference was made to the High Court vide I. T. R. No. 255 of 1974 but the High Court decided the reference on August 28, 1978, in favour of the assessee vide anneuxre 4 to the supplementary affidavit. Hence, the decision of the Tribunal became final. The Tribunal took the view that the assessment under the Business Profits Tax Act cannot be made after the lapse of nearly twenty years and as such the assessment order was null and void. The Tribunal and the High Court also held that the regular assessment under Section 12 has to be made within four years from the end of the chargeable accountable period. In view of these decisions of the Tribunal and the High Court, the petitioner applied for refund of the tax it had paid pursuant to the provisional assessments. The petitioner submitted that after the regular assessments had been quashed the provisional assessments did not have any legs to stand on their own and hence the amount deposited pursuant to the provisional assessments had to be refunded. However, the Inspecting Assistant Commissioner by order dated January 4, 1978, rejected the claim of the assessee for refund of tax paid on the basis of the provisional assessments. The petitioner filed an appeal to the Commissioner of Income-tax (Appeals), which was also dismissed. However, when the matter was taken up in further appeal before the Tribunal there was a difference of opinion between the Judicial Member and the Accountant Member. The Judicial Member held in favour of the assessee while the Accountant Member held in favour of the Department. The matter went to a Third Member who was also an Accountant Member who held in favour of the Department. Against that order, this writ petition has been filed.
(3.) WE are of the opinion that the judgments of the Tribunal and the Inspecting Assistant Commissioner are not correct and deserve to be set aside. In our opinion, the provisional assessment will merge into the regular assessment as is evident from Section 13(5) to (7) of the Business Profits Tax Act, 1947. Section 13(5) to (7) states as follows : "(5) There shall be no right of appeal against a provisional assessment made under this Section, and it shall, until a regular assessment is made in due course under Section 12, determine the amount of business profits tax due from the assessee. (6) If, when a regular assessment is made in due course under Section 12, the amount of business profits tax payable thereunder is found to exceed that determined as payable by the provisional assessment, it shall be reduced by the amount determined as payable by the provisional assessment. (7) If, when a regular assessment is made in due course under Section 12, the amount of business profits tax payable thereunder is found to be less than that determined as payable by the provisional assessment, any excess of tax paid as a result of the provisional assessment shall be refunded to the assessee, together with interest at two per cent, per annum calculated from the date of payment of such excess tax to the date of the order of refund, both days inclusive." A reading of the above provisions clearly shows that the provisional assessment will merge into the regular assessment when the latter is made. Once the regular assessment is made the provisional assessment ceases to exist, and hence if the regular assessment is quashed there can be no liability of the assessee on the basis of the provisional assessment.;