JUDGMENT 1. Under S.60(1) of the Agricultural Income Tax Act, 1950, the Kerala Agricultural Income Tax Appellate Tribunal, Additional Bench, Kottayam expects answer to the following two questions: "1. Whether on the facts and in the circumstances of the case, was the Appellate Tribunal justified in holding that in a case where a return was not filed in response to a Valid notice issued under S.17(2) of the A.I.T. Act, 1950, the assessing authority is bound to terminate the assessment proceedings by ah order passed under S.18 (4) of that Act within the normal period of Limitation specified in S.35(2) of that Act. 2. Whether on the facts and in the circumstances of the case, was the Appellate Tribunal justified in setting aside the assessment made within the extended period of limitation provided in S.35(2) of the A.I.T. Act, 1950 as time-barred f or the reason that the notice under S.35 issued before concluding the assessment proceedings already initiated by issue of a valid notice under S.18(2) of that Act, was void ab initio?" 2. The factual matrix is undisputed and as follows: The relevant assessment year is 1982-83 ending on 31st March 1983. The assessee was assessed to Agricultural Income Tax by the Agricultural Income Tax Officer, Kanjirappally dated, 22nd February 1989. This was under S.35 read with S.18(3) of the Agricultural Income Tax Act, 1950. 3. There was an appeal before the first appellate forum (The Appellate Assistant Commissioner of Agricultural Income Tax and Sales Tax, Kottayam). It was urged that the action was barred by limitation and in answer thereto the submission is just brushed aside by a statement that a notice under S.35 has been served on the appellant in proper time. 4. This necessitated the assessee to approach the Agricultural Income Tax Appellate Tribunal. On the basis of the relevant dates the tribunal has referred them to consider the sustainability of the action under S.35 of the Act. It would be seen that the assessment is liable to be completed within 5 years on or before 31st March 1988 as against its completion on 22nd February 1989 obviously out of time in the context. The tribunal referring to the records available has pinpointed that S.35 notice bearing a date, 1.8th March 1988 came to be served on the assessee on 22nd March 1988. The tribunal referring to the records available has pinpointed that S.35 notice bearing a date, 1.8th March 1988 came to be served on the assessee on 22nd March 1988. The tribunal has also considered the steps taken by the assessee in proceeding to file a return in consequence of the receipt of the notice under S.35 of the Act. However for the purpose of consideration of the questions referred the subsequent dates of the events are wholly unnecessary. The tribunal has found as a finding of fact that a notice under S.17(2) of the Agricultural Income Tax has been issued bearing a date 9th June 1982. 5. In the process, the tribunal considered the provisions of S.18 (4) of the Act to observe that the said position makes it clear that the assessing authority shall make a best judgment assessment if the assessee fails to make a return under S.17(2) in a situation where the assessee is served with a notice under S.17(2) of the Act and did not act in pursuance thereof in filing the return. The tribunal has proceeded further that definitely during the pendency of this contemplated assessment proceedings on reliance of best judgment and before passing of a final assessment order, whatever it may be, there is no possible situation of an escape from assessment which can enable the Income Tax Officer to initiate action in any manner. The tribunal observed that the income cannot be said to have escaped assessment if assessment proceedings in respect of such income are still pending or deemed to have been understood as pending in the absence of any finding in regard thereto. The tribunal observed that the income cannot be said to have escaped assessment if assessment proceedings in respect of such income are still pending or deemed to have been understood as pending in the absence of any finding in regard thereto. To reach the above conclusion the tribunal has placed reliance on reported decisions in support thereof for an undisputed proposition thereby that the initiation of the action relating to an alleged escapement of the assessment presupposes an end of the assessment proceedings, whatever may be the result thereof and as a consequence if it is a situation that the assessment proceedings are pending or deemed to have been pending or there being no material to show the end of it, by reason of the expiry of the outer limit of limitation, there is no occasion for initiation of the action under the provisions of S.35 of the Act, obviously because there is no occasion or in common parlance a cause of action to feel that any item escaped assessment. 6. The tribunal on facts, with the help of the provisions of S.35(2) of the Act found that the outer limit of 5 years could be said to end on 31st March 1988 and it is only on and after the said date the assessment could be understood to have come to an end in regard thereto. The tribunal having already recorded a finding that S.17(2) notice dated 9th June 1982 having been received and served by the assessee, nothing prevented the assessing officer to resort to the best judgment procedure when it is found that the assessee did not respond to the said notice. This best judgment procedure also had an outer limit of a period of five years ending on 31st March 1988. 7. As a result the tribunal was left with no alternative other than to record that the defect committed by the assessing authority cannot be cured subsequently under law and this lapse cannot be set right by issuing a notice under S.35 within the period of limitation of a period of five years ending on 31st March 1985. 7. As a result the tribunal was left with no alternative other than to record that the defect committed by the assessing authority cannot be cured subsequently under law and this lapse cannot be set right by issuing a notice under S.35 within the period of limitation of a period of five years ending on 31st March 1985. In other words the tribunal considered it to be a lapse on the part of the assessing authority and proceeding by way of an attempt to get over the rigours of the period of limitation has an outer limit as prescribed by S.35(2) of the Agricultural Income Tax Act, 1950. 8. The legal position that there is a precondition for initiation of an action under S.35 of the Agricultural Income Tax Act, 1950 is beyond the pale of any kind of debate in regard thereto even on first principles in order to reach a conclusion that there has been an escapement, the logical answer is, escapement from what? and in regard thereto the inevitable answer would be escapement from assessment which is also the language of the relevant section not only of this aspect but also of the similar taxing statutes. Further logical easy exercise is that as a precondition of a cause of action in regard thereto relating to escapement of assessment there has to be an assessment. The assessment can be acceptance of Nil return by the assessee. The assessment can also be by way of and resort to the best judgment according to the procedure. There is yet another situation which can create a factual position and that is by the law of limitation whereby it can be a consequence that the assessment would come to an end. The provisions of S.35(2) of Act is the outer limit in regard to an assessment order under S.18 of the Act or under S.35(1) of this Act in the nature of assessment or re-assessment. It will have to be said that this outer limit with regard to the order of assessment either under S.18 or S.34 is the clear intention of the legislature, reading the provisions of S.35(2) of the Agricultural Income Tax Act, 1950 subject to the contents of the proviso. 9. In this case in fact in pursuance of S.17(2) notice no steps are taken according to the provisions of law in regard thereto. 10. 9. In this case in fact in pursuance of S.17(2) notice no steps are taken according to the provisions of law in regard thereto. 10. No wonder then that the learned Government Pleader resorted to take the help of the proviso in question granting a further period of limitation which should be made available and applied to the situation according to him. It is not possible to accept the submission by reason of the very opening words of the proviso in question. The relevant opening words are as follows: "provided that where a notice under sub-s.(1) has been issued within the time therein limited". The real question is as to whether even though S.35(1) issued within the period of 5 years ending on 31st March 1988, is there any cause of action for the issuance of such a notice, and it is only in the event of there being a cause of action there can be a consideration of the benefit of the extended period of limitation. 11. The situation is crystal clear as broad day light that when there was no assessment as such of when it cannot be said that the assessment could be said to have been made by a deeming situation it cannot be said that there is really a situation of escapement of assessment and when there is no situation of escapement of assessment the very initiation of the proceedings under S.35(1) of the Act by issuance of a notice thereunder rocks the jurisdictional foundation of the situation. 12. Before ending it is necessary to refer that the learned Government Pleader brought to our notice the decision of the Supreme Court 960 (Vol. 40) ITR 307 Commissioner of Income Tax, Bombay City v. Narsee Nagsee and Company dealing with a situation under the then Business Profits Tax Act, 1947 where in pursuance of an action under S.11(1) thereof a return was filed and the assessment was completed and thereafter an action under S.14 of the said Act was initiated with regard to an alleged escapement of assessment. In fact reasoning goes to support the jurisdictional situation that there has to be an end of the assessment of the proceedings and could be understood to situations where the Income Tax Officer erroneously fails to tax a part of the assessable income by way of an escapement. In fact reasoning goes to support the jurisdictional situation that there has to be an end of the assessment of the proceedings and could be understood to situations where the Income Tax Officer erroneously fails to tax a part of the assessable income by way of an escapement. The process on the basis of the notice has to be seen ended in regard thereto. 13. The result of the above discussion is that on factual matrix the very initiation by way of a resort to S.35 of the Agricultural Income Tax Act, 1.950 is without jurisdiction. For the above reasons we answer both the two questions in the affirmative-Against the revenue and in favour of the assessee. A copy of the Judgment under the seal of this Court and the signature of the Registrar shall be sent to the Kerala A.I.T. and S.T. Appellate Tribunal, Addl. Bench, Kottayam.