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Section 7 of the Companies (Profits) Surtax Act, 1964 - Provisional assessment - Whether while making provisional assessment under section 7, ITO cannot adjudicate on any of objections raised before him by assessee and he is bound to accept every plea urged by assessee - Held, no - Whether section 7 confers unguided, uncanalised, uncontrolled and arbitrary powers on ITO and is, therefore, violative of article 14 of the Constitution - Held, no Facts For the relevant assessment year, the assessee-company filed its return under section 5 before the ITO disclosing, inter alia, that it was not liable to pay any tax under the said Act. The ITO, however, made a provisional assessment under section 7(2) rejecting the assessee's objections to be assessed, determining a certain sum as surtax payable by the assessee. On writ, the assessee contended that (i) section 7 did not empower the ITO to adjudicate any of the objections raised before him and that he was bound to accept them without any adjudication on any of them, and (ii) that if the above construction of section 7 did not find favour by the Court then that section conferring unguided, uncanalised, uncontrolled and arbitrary powers was violative of article 14 of the Constitution. Held In a very clear and unambiguous language, section 7 confers power to make a provisional assessment in a summary manner on the chargeable profits of a company, demand the amounts found due and recover them also. But before making this provisional assessment in a summary manner, the ITO is required to give notice to the assessee in the prescribed form enclosing a statement of particulars on the basis of which he proposes to make his assessment, giving it not less than 14 days' time from the date of service of such notice to file all such objections as are available to it with reference to such proposed assessment. On receipt of such notice, it is open to the assessee to accept or not to accept the same and file all such objections as are available to it within the period of 14 days from the date of service of such notice. When objections are filed, section 7 empowers the ITO to make a determination and serve a copy of his order to the…

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