R.K. Agrawal, J. - (1.) THE Income-tax Appellate Tribunal has referred the following question of law under Section 256(1) of the Income-tax Act, 1961 (hereinafter referred to as "the Act"), for the opinion of this court : "Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was justified in holding that it would not be correct to interpret the word 'forward' in the same manner as the words 'issue' or 'serve' and, therefore, the assessment order dated August 24, 1977, was within the period of limitation ?"
(2.) THE said question of law, arises out of the order dated March 31, 1981, of the Income-tax Appellate Tribunal, passed in Income-tax Appeal No. 780 (Alld.) of 1980 relating to the assessment year 1972-73. The facts of the case in brief are that the assessee-applicant is a firm. The limitation for completing the assessment of the assessment year 1972-73, in the normal course, expired on March 31, 1975, in accordance with the provisions of Section 153 of the Income-tax Act, 1961. The Assessing" Officer completed the assessment under Section 144 of the Act on January 18, 1975. This assessment was, however, reopened on March 31, 1975, under Section 146 of the Act. A fresh assessment therefore, should have been completed in the normal course in accordance with the limitation prescribed by Sub-section (2A) of Section 153 of the Act on or before March 31, 1977. However, as the addition in the case of the assessee was of more than Rs. 1 lakh, the Income-tax Officer framed a draft assessment order in terms of Section 144B of the Act and forwarded the said draft assessment to the applicant along with the forwarding letter dated February 28, 1977. The said letter, was, however, registered at the post office on March 10, 1977, and was served on the applicant on March 28, 1977. The applicant filed objections to the draft assessment order on April 4, 1977. The Inspecting Assistant Commissioner issued directions under Section 144B of the Act to the Income-tax Officer on July 29, 1977, which were received by him on the same date. The Income-tax Officer passed the final assessment order on August 24, 1977. The applicant filed an appeal against the said order before the Commissioner of Income-tax (Appeals) and contended that the draft assessment order having been served on it on March 28, 1977, the Income-tax Officer could not have completed the assessment on the date beyond August 1, 1977. The reasoning given by the applicant was that the draft order having been served on it only three days prior to the normal period of limitation, the Income-tax Officer had only that much time to complete the assessment after receipt of the directions under Section 144B of the Act from the Inspecting Assistant Commissioner. It was urged before the Commissioner of Income-tax (Appeals) that even if the date on which the draft assessment order was posted to the applicant, i. e., March 10, 1977, was taken as a crucial date which gave the Income-tax Officer a period of 21 days, the assessment could not have been completed beyond August 19, 1977. The Commissioner of Income-tax (Appeals) rejected the contentions of the applicant. He relied on Clause (iv) of Explanation 1 to Section 153 which stipulated that in computing the period of limitation the period (not exceeding 180 days) commencing from the date on which the Income-tax Officer forwards the draft order to the applicant and ending on the date on which the Income-tax Officer receives the directions from the Inspecting Assistant Commissioner is to be excluded. He held that the word "forward" used in this section has an altogether different connotation from the words "issue" and "serve" and so in the present case February 28, 1977, should be taken as the date on which the assessment order had been forwarded to the applicant for the purpose of computing the limitation. In other words, he agreed with the Income-tax Officer that the period of limitation was 31 days from the date of receipt of the directions from the Inspecting Assistant Commissioner since the period between February 28, 1977 and March 31, 1977, was 31 days. The applicant challenged the order of the Commissioner of Income-tax (Appeals) before the Income-tax Appellate Tribunal. It urged before the Tribunal that in view of the decisions of the Supreme Court in the case of Banarsi Debi v. ITO [1964] 53 ITR 100, and the decision of the Allahabad High Court in the case of Kundan Lal Behari Lal v. CWT [1975] 98 ITR 359, the terms "issued and served" were interchangeable and that in the legislative practice they were sometimes used to convey the same idea. According to the applicant, the word "forward" had the same meaning as the word "issue" and, therefore the word "forward" should also be equated with the word "served". According to the applicant, if any other interpretation was given then it would mean that the Income-tax Officer could just sign an order and keep it with him for any length of time and thereby extend the period of limitation arbitrarily. According to the applicant, unless the applicant received the draft order, it could not be said that the order was forwarded to him because until the order was served on it, it would have no legal consequence.
(3.) THE Tribunal did not agree with the contentions of the applicant that the word "forward" should be equated with the word "issued" and "served". According to the Tribunal, the word "forward" has been used by the Legislature in contradistinction to the words "issued" and "served". Relying on the dictionary meaning of the word "forward", the Tribunal held that the said word denotes a stage when a document is ready for despatch. It concluded that when the Income-tax Officer prepares a draft order and signs the "forwarding letter" the draft assessment order is forwarded on the date when the Income-tax Officer signs the said letter. THE Tribunal further held that it cannot be said that the process of forwarding is the same as service. It was of the view that when the Income-tax Officer signs the covering letter to which the draft assessment order is enclosed he sets in motion the process of service of the order, etc., on the assessee. THE Tribunal, therefore, did not accept the contentions of the applicant and upheld the order of the Commissioner of Income-tax (Appeals). We have heard Shri Vikram Gulati, learned counsel for the applicant, and Shri A. N. Mahajan, learned counsel appearing for the Department.;