Case: Hope Textiles Limited and Another Vs. Union of India and Others

The assessee is a limited company. For the Assessment Year, it filed a return on the basis of which an order of assessment was made on. By the said order, certain losses disclosed by the assessee were accepted. On, a notice under Section 148 of the INcome Tax Act was issued to the appellant, in pursuance whereof it filed6 for disclosing further losses. No orders were passed till about September 1981 in the reassessment proceedings. The appellants say that on that date, they were informed that no order will be passed pursuant to the notice under Section 148. Thereupon, the appellants approached the High Court by way of a writ petition for issuance of mandamus to the ITO to pass orders in pursuance of the aforesaid notice. The writ petition was dismissed observing that no mandamus can be issued compelling the ITO to make an order of assessment beyond the period of limitation prescribed by Section 153(2). In this appeal, it is urged by Shri. Sen, learned counsel for the appellant that by virtue of clause (ii) of subsection (3) of Section 153, the High Court could have directed the ITO to pass an order of reassessment pursuant to the aforesaid notice, notwithstanding the expiry of the period prescribed in subsection (2) of section 153. We are not prepared to agree. A writ statutory obligation. It cannot issue to compel him to pass an order in violation of a statutory provision. The ITO had no power to make a reassessment beyond the others under Section 153 or other provision extending the said period of limitation. No such provision is brought to our notice.

Reasoning: In that case, an order of assessment was made subject to rectification under Section 35 of the Act. The order of assessment was dated. Under Section 35, the rectification could have been made only by March 1960. It was allowed holding that the ITO was under an obligation to make an order of rectification and that the expiry of period of limitation is no answer. We must understand the said direction as confined to the particular facts and circumstances of that case. That said decision cannot be understood as laying down a proposition that an authority under Act can be directed to make an order beyond the period of limitation prescribed by the statute