Law: Business Profits Tax Act, 1947

Section: 11,14

(a) Business Profits Tax Act (XXI of 1947)----Ss. 11 & 14---Notice under S. 11(1) of the Act was issued by the Income-tax Officer calling upon assessee to submit his return of income more than four years after the end of chargeable accounting period---Such notice was not valid in law. Per. S.K. Das, J.; Kapur, J. agreeing; Hidayatullah, J. dissenting-- For the chargeable accounting period ending 31st October, 1948, a notice under section 11(1) of the Business Profits Tax Act was issued by the Income-tax Officer on 12th January, 1953, calling upon the assessee to submit his return of income. The notice was served on the assessee on 21st January, 1953. The return was filed under protest stating that the notice was barred under section 14 of the Act. The Income-tax Officer over-ruling assessee's objection completed the assessment on 17th February, 1953. On appeal the Appellate Assistant Commissioner upheld the objection of the assessee that the notice was invalid having been issued beyond the time limit mentioned in section 14 of the Act. On appeal by the Department both the Tribunal and the High Court upheld the view taken by the Appellate Assistant Commissioner, observing that sections 11 and 14 of the said Act must be interpreted together. The High Court, however, did not accept the view of the Tribunal that the notice under section 11 had to be given before the end of the chargeable accounting period. Held, that-- (i) sections 11 and 14 of the Business Profits Tax Act had to be read together; (ii) any advantage or relief which was available to the assessee under section 11 as to allowable deductions, deficiency, etc., was equally available, if the notice was issued under section 14; (iii) a notice under section 11(1) of the Business Profits Tax Act must be given within the financial year which commenced next after the expiry of the accounting period or the previous year which was by itself or included the chargeable accounting period in question; (iv) the words "profits escaping assessment" in section 14 of the Business Profits Tax Act applied equally to cases where notice had been given but had resulted in no assessment and to cases where due to…

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