ivil Appeal No 3119 of 1984
From the Judgment and Order dated 2091982 of the Delhi High Court in SAO No 181 of 1979
Dr YS Chitale and Mukul Mudgal for the Appellant
RK Garg Gopal Singh LR Singh and Mrs Vimal Sinha for the Respondent
The Judgment of the Court was delivered by PATHAK CJ
This is a landlady s appeal by special leave arising out of proceedings for the ejectment of the respondent tenant
The appellant let out the premises in suit to the respondent on 1 September 1962 the rent being stipulated as payable in advance
With effect from 1 January 1972 the rent payable was Rs 515 per month
On 29 November 1972 the contractual tenancy was determined by notice
The re spondent received a notice on 7 May 1976 calling upon him to pay the arrears of rent
The rent in fact had been re ceived upto 31 March 1976 and therefore when the notice of demand was served on the appellant rent for the months of April and May 1976 had fallen due
The rent was payable in advance
On 13 May 1976 the respondent offered a bank draft of Rs515 to the appellant
The appellant refused to accept it
Two days later the respondent sent the same bank draft by registered post
The appellant 746 received the bank draft and retained it
On 7 June 1976 the appellant wrote to the respondent informing him that his tender was not valid
On 11 June 1976 the appellant sent another bank draft for Rs515 to the landlady and this draft again was neither encashed nor returned
On 2 August 1976 the appellant filed an application for ejectment out of which the present appeal arises
After filing the application for ejectment the appellant informed the respondent that both the bank drafts sent by him were lying uncashed
The Additional Controller Delhi dismissed the eviction petition holding that the tenant was not in default
The Rent Control Tribunal Delhi noted that the rent was pay able in advance in accordance with the agreement between the parties that the respondent had earlier enjoyed the benefit of section 142 of the Act that when the notice of demand was served on 7 May 1976 the arrears of rent for the months of April and May 1976 had arisen that the bank draft sent on 13 May 1976 related to the rent of April 1976 only that as the rent for the month of May 1976 had also become due but had not been tendered the landlady was justified in not accepting the tender and that when the respondent again sent a draft on 11 June 1976 to cover the rent for the month of May 1976 the rent for the month of June 1976 had also fallen due but was not tendered
Holding that the respondent had not tendered the arrears of rent due up to date within two months of the notice of demand the Tribunal held that the ground of non payment of rent stood estab lished
The Tribunal noted that the rent had not been paid for the months of April May and June 1976 in advance for each month and therefore the respondent had committed three consecutive defaults
That being so the Tribunal observed the respondent was not entitled to the benefit of section 142 again
In second appeal the High Court reversed the decision of the Rent Control Tribunal and dismissed the application for ejectment upon the finding that the notice demanding the arrears of rent related to the months of April and May 1976 and as one draft had been sent on 13 May 1976 and another on 11 June 1976 representing a total of two months  rent and as this rent had been paid within two months of the service of notice of demand it must be taken that the rent due at the time of the service of notice of demand had been tendered by the respondent to the appellant
The High Court proceeded on the view that section 141a of the Act made out a ground for eviction only where the tenant had neither paid nor tendered the whole of the arrears of rent legally recov erable from him within two months of the date on 747 which a notice of demand for the arrears of rent was served on him by the landlord the arrears being the rent due on the date of the notice
In this case the High Court said as the notice called for payment of the arrears due for the months of April and May 1976 and the bank drafts were ten dered within the period indicated in the notice the notice was satisfied and no default could be said to have been committed in terms of section 141a of the Act
Accordingly the High Court allowed the appeal and dismissed the applica tion for ejectment
It is urged before us by learned counsel for the appel lant that section 141a of the Act contemplates the payment or tender of the whole of the arrears of rent legally recovera ble from the tenant on the date when the demand notice is sent including the rent which has accrued after service of the demand notice
When the notice was sent on 7 May 1976 rent for the months of April and May 1976 had become due and as two months was given for payment of the arrears it would include also the rent which had accrued during the said period of two months
We are not satisfied that there is substance in the contention
The arrears of rent envis aged by section 141a of the Act are the arrears demanded by the notice for payment of arrears of rent
The arrears due cannot be extended to rent which has fallen due after serv ice of the notice of demand
In this case the two bank drafts representing the arrears of rent covered by the notice of demand had been tendered within two months of the date of service of the notice of demand
The High Court is fight in the view taken by it
We are not satisfied that the construction placed by BC Misra J in Jag Ram Nathu Ram vs Shri Surinder Kumar SAO No 52 of 1975 decided on 28 April 1976 and in SL Kapur vs Dr Mrs PD Lal All India Rent Control Journal 1975 p 322 lays down the control law on the point
In the result the appeal fails and is dismissed but there is no order as to costs
PSS Appeal dismissed


Summary:
The appellant assessee a non resident sterling company carrying on business of purchase and sale of tobacco on its own and for commission effected purchases through its Indian agents
The agents filed returns of income on behalf of the assessee for the assessment years 1959 60 and 1960 61
The Income tax Officer completed the assessment to tax under section 233 of the Indian Income tax Act 1922
However in the course of assessment proceedings for the assessment year 1962 63 the Income tax Officer noticed that there was a mistake in computing the overhead expenditure
Therefore in the opinion that income had escaped assessment for the two assessment years he issued notices to the statu tory agents under section 148 of the Income tax Act 1961 but dropped the proceedings upon the agents  objection to the issue of the notice of reassessment on the agent of a non resident assessee after the expiry of two years from the end of the relevant assessment year
Thereupon the Income Tax Officer issued notice directly to the assessee
The assessee filed returns for both the years under protest
Rejecting the assessee s contention that it could not he served with the notices since its agents had already been proceeded against the Income Tax Officer made reassessments on the assessee for the two assessment years
The appeals filed by the assessee were dismissed by the Appellate Assistant Commissioner
In second appeal the Income Tax Appellate Tribunal held that the reassessments were without jurisdiction as they were proceeded on a mere change of opinion of the Income Tax Officer and that the assessee could not he proceeded against directly as the 732 assessments were made originally on the agents
On a reference made at the instance of the Revenue the High Court held that reassessments were not made due to a mere change of opinion of the Income Tax Officer but pursu ant to information received subsequent to the original assessments from the records of the 
subsequent assessment year that the overhead expenses related to the entire busi ness including the business as commission agents and not merely to the business of purchase and sale of tobacco and that there was nothing to prevent the Income Tax Officer from proceeding directly against the assessee and re assess ing it for the two assessment years when he found that reassessment proceedings could not be taken against the agents
In the appeal before this Court on behalf of the asses see it was contended that the Income Tax Officer had no jurisdiction to take proceedings under sections 147 and 148 of the income tax Act because the conditions pre requisite for making the reassessments were not satisfied and it was not open to the Income Tax Officer to take assessment proceed ings against the assessee when he had taken assessment proceedings against the Indian agent
Dismissing the appeals HELD 1
The Income Tax Officer came to realise that income had escaped assessment for the two assessment years when he was in the process of making assessment for a subse quent assessment year
While making that assessment he came to know from the documents pertaining to that assessment that the overhead expenses related to the entire business including as commission agents and not confined to the business of purchase and sale
The attention of the Income Tax Officer was not directed by anything before him at the time of original assessment to the fact that the overhead expenses related to the entire business
In the circum stances there is no doubt that the case fails within the terms of cl
b of section 147 of that Act and there was justi fication for initiating the proceedings for reassessment for the two assessment years in question
736A D 2
It is open to an Income Tax Officer to assess either a non resident assessee or the agent of such non resident assessee
But if an assessment is made on one there can be no assessment on the other
736E 733 Therefore in the instant case if the assessment had been made on the Indian agent the assessment could not have been made on the assessee
However the reassessment pro ceedings commenced on the agent were barred by time by reason of section 1493 of the Act
The issue of notice under section 148 of the Act to the agent after the expiry of two years from the end of the relevant assessment year is prohibited by the statute
Hence the assessment proceedings against the agent have to be ignored and cannot operate as a bar to assessment proceeding directly against the assessee
736F G