BIHAR STATE ROAD TRANSPORT CORPORATION Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THE petitioner, Bihar State Road Transport Corporation, is challenging a notice of reassessment issued under Section 148 of the Income-tax Act, 1961 (briefly "the Act"), dated the 20th March, 1969, issued by the Income-tax Officer, A-Ward, Patna, for reopening the assessment for the assessment year 1960-61, and the subsequent notice dated the 26th February, 1973, issued by the Income-tax Officer, Special Circle, Patna (copies of which are annexures "8" and "9" respectively) calling upon the petitioner to produce the accounts and documents mentioned therein. Originally, it also contained a prayer for quashing the order dated November 14, 1969, made under Section 154 of the Act (copy of which is annexure "5") but at the time of hearing, it was not pressed.

(2.) THE relevant facts are these: Prior to the establishment of the petitioner-corporation under the provisions of the Road Transport Corporation Act, 1950, the State of Bihar was operating and running a fleet of buses on various routes in the State, I which was known as "Bihar Rajya Transport". In pursuance of the scheme of the said Act, all the assets of the Bihar State Rajya Transport was transferred to the corporation, the capital of which was contributed by the State of Bihar and the Indian Railways, for providing road transport facilities to the general public in the State. THE petitioner is said to have received, on transfer, the vehicles at the original cost price shown in the documents of the Rajya Transport which stood at Rs. 1,53,72,599 as also the other assets, such as building, etc., at the value of the original cost. It, however, appears that the Rajya Transport was maintaining a separate account as "Depreciation Reserve" in which it was crediting the amount year after year, representing the depreciation value of the assets and the total amount standing in the said reserve account was to the tune of Rs. 19,07,258. THEse figures were mentioned in the balance-sheet of the Rajya Transport, which was prepared by the State Government at the time of transfer of the undertaking to the petitioner-corporation, on which basis, it is said, the corporation purchased the assets.

(3.) THE petitioner again filed an appeal before the Appellate Assistant Commissioner, which was allowed in part by his order dated June 30, 1970 (a copy of which is annexure "7"). A secoad appeal before the Appellate Tribunal was filed, by the petitioner which was pending when the writ application was filed, but has since been decided on July 19, 1973. In the supplementary affidavit filed by the petitioner on February 8, 1976, with our permission, it has been stated that the Tribunal, although it held that the purported mistakes in question could be rectified by the Income-tax Officer within the scope of the provisions of Section 154, yet allowed the appeal and cancelled the order of rectification as being barred by limitation. It has further been stated in the supplementary affidavit that on the application of the petitioner as well as respondent No. 1 filed separately under Section 256(1) of the Act, the Tribunal has drawn up a consolidated statement of case and has referred two questions of law to this court.