K.S. Paripoornan, J.
1. At the request of an assessee to agricultural income-tax, the Commissioner of Agricultural Income-tax, Trivandrum,has, by order dated April 25, 1986, referred the following question of law for the decision of this court :
'Whether, on the facts and in the circumstances of the case, the proceedings of the Commissioner of Agricultural Income-tax, Trivandrum, under Section 34 of the Agricultural Income-tax Act, by his order dated February 28, 1982, in respect of the assessment year 1969-70, after the lapse of about ten years, is barred by limitation of time and whether the Commissioner of Agricultural Income-tax has power under Section 34, after the lapse of about ten years, to direct the assessing authority to make a revision of assessment originally completed on April 25, 1972 ?'
2. The applicant is an assessee to agricultural income-tax. It is a public limited company. The respondent is the Revenue. We are concerned with the assessment year 1969-70, for which the accounting period ended on June 30, 1968. The original assessment for the year 1968-69 was completed on March 26, 1969, and for the year 1969-70, it was completed on April 25, 1972. An amount of Rs. 57,419 which was received by the company during the year 1969-70 towards the value of coffee pooled during the years previous to this year was excluded from assessment for 1970-71, treating the amount as income related to the accounting year relevant to the assessment year 1969-70. It was not assessed for any previous year. Out of the sum of Rs. 57,419, a sum of Rs. 10,679 related to the assessment year 1968-69 and Rs. 26,188 related to the assessment year 1969-70. In view of the decision of the Supreme Court in State of Kerala v. Bhavani Tea Produce Co. Ltd. : [1966]59ITR254(SC) , a decision rendered as early as October 7, 1965, the above amounts should have been assessed for the years 1968-69 and 1969-70. It was not done though the assessments were made for the year 1968-69 on March 26, 1969, and for the year 1969-70 on April 25, 1972. By notice dated February 13, 1979, the Commissioner of Agricultural Income-tax issued a notice proposing to revise suo motu the assessments for the years 1968-69 and 1969-70 under Section 34 of the Agricultural Income-tax Act. The assessee filed his objections thereto on March 8, 1979. It was contended that the original assessments were made for these years as late as on March 26, 1969, and April 25, 1972, when the decision of the Supreme Court in Bhavani Tea Produce Co. Ltd.'s case : [1966]59ITR254(SC) was available, that the action initiated under Section 34 to include certain income based on the decision of the Supreme Court aforesaid after a period of 12 years is illegal, that proceedings under Section 34 were not initiated within a reasonable time and so it is barred, and if at all, the original assessments could be revised only under Section 35 or Section 36 of the Act, and not in proceedings under Section 34 of the Act, viz., suo motu revision proceedings initiated by the Commissioner of Agricultural Income-tax. It was submitted that even if it is assumed that there is underassessment for both the years, it is not a case of escapedassessment and so proceedings under Section 34 of the Act is patently barred. Notwithstanding the objections raised by the assessee, the Commissioner of Agricultural Income-tax by order dated February 28, 1982, revised the assessments for the years 1968-69 and 1969-70 and remitted the proceedings to the assessing authority for fresh disposal according to law in the light of the observations contained in the aforesaid revisional order. The revisional orders were served on the assessee on July 10, 1982. The assessee-company filed two reference applications before the Commissioner of Agricultural Income-tax stating that, in passing the revisional orders dated February 28, 1982, the revisional authority has acted unreasonably, and the assessments were barred by limitation, and prayed for referring certain questions of law which arose out of the order passed by the Commissioner of Agricultural Income-tax dated February 28, 1982 for the decision of this court under Section 60(2) of the Agricultural Income-tax Act. It is thereafter and as directed by this court in O.P. No. 3550 of 1983 that the Commissioner of Agricultural Income-tax has referred the question of law, formulated hereinabove, in so far as it relates to the assessment year 1969-70.
3. We heard counsel for the applicant (assessee), as also counsel for the respondent (Revenue), Senior Government Pleader. Counsel for the assessee referred to the decisions in Bhavani Tea and Produce Co. v. Commr. of Agrl. I. T. [1972] Tax LR 2413, Deputy Commr. of Agrl. I. T. and S. T. v. P. S. B. Paul Pandian : [1981]128ITR809(Ker) and Krishna Bhatta v. Agrl. ITO : [1981]132ITR21(Ker) and contended that the Commissioner of Agricultural Income-tax invoked the jurisdiction vested in him under Section 34 of the Act after inordinate delay, that the said jurisdiction had not been invoked within a reasonable period and so the power vested in the Commissioner of Agricultural Income-tax has been exercised arbitrarily and capriciously. It was stated that, in these circumstances, in view of the lapse of 10 years, the Commissioner of Agricultural Income-tax has no power under Section 34 of the Act to direct the assessing authority to make a revision of the assessment for the year 1969-70, originally completed on April 25, 1972, and the matter is barred by limitation. On the other hand, counsel for the Revenue submitted that the power of revision is vested in the Commissioner of Agricultural Income-tax to set aside any erroneous assessment, that the statute has not fixed a time-limit within which the power should be exercised and regard being had to the facts of this case, it cannot be said that the power vested in the Commissioner of Agricultural Income-tax had been exercised unreasonably or in an arbitrary or capricious manner.
4. We are afraid that both sides have pitched their case very high. According to the assessee-applicant, the revisional order passed after 10 years is barred by limitation and the assessee contends for adopting an extremerigid view. Counsel for the Revenue contends that there is no bar of limitation at all since Section 34 of the Act permits the power to be exercised at any time. No fetter is imposed thereon. The Revenue is canvassing for an extreme liberal view of the section. The real question that arises for consideration has not been properly brought out either in the question referred to this court, nor considered by the Commissioner of Agricultural Income-tax when he passed the suo motu revisional order dated February 28, 1982. It should be stated that, in the objections filed by the assessee dated March 8, 1979, the assessee has pointedly stated, that though Section 34 does not refer to any time-limit for revision of assessment, still it should be done within a 'reasonable' time and since it is not so done, the proceedings are illegal, unauthorised and without jurisdiction. This aspect, as such, was not clearly adverted to in the revisional order. The revisional order proceeds to say that Section 34 of the Agricultural Income-tax Act had been invoked to set aside the mistake or irregularity committed by the assessing authority in not including the amount of Rs. 26,188 relating to this year in the assessment and since no period of limitation is prescribed for revising the assessment under Section 34 of the Act, no question of limitation arises. We are afraid that the Commissioner of Agricultural Income-tax failed to understand the objections raised by the petitioner from a proper angle and perspective to the effect that the proceedings under Section 34 of the Act can, if at all, be initiated only within a reasonable time.
5. Section 34 of the Agricultural Income-tax Act provides as follows :
'34. Revision.--(1') The Commissioner may, of his own motion or on application by an assessee, call for the record of any proceeding under this Act which has been taken by any authority subordinate to him and may make such enquiry or cause such enquiry to be made and, subject to the provisions of this Act, may pass such orders thereon as he thinks fit:
Provided that he shall not pass any order prejudicial to an assessee without hearing him or giving him a reasonable opportunity of being heard :
Provided further that an order passed declining to interfere shall not be deemed to be an order prejudicial to the assessee.
Provided also that no application for revision shall be entertained under this section unless it is accompanied by satisfactory proof of the payment of the tax admitted by the petitioner to be due.
(2) Any order passed under Sub-section (1) shall be final subject to any reference that may be made to the High Court under Section 60.'
6. We may also refer to Sections 35(1) and 36(1) of the Act which deal with the provisions to assess income escaping assessment and the power to rectify mistakes in any assessment order. Section 35(1) reads as follows :
'35. Income escaping assessment.--(1) If for any reason agricultural income chargeable to tax under this Act has escaped assessment in any financial year or has been assessed at too low a rate, the Agricultural Income-tax Officer may, at any time within five years of the end of that year, serve on the person liable to pay the tax or in the case of a company on the principal officer thereof a notice containing all or any of the requirements which may be included in a notice under Sub-section (2) of Section 17 and may proceed to assess or reassess such income and the provisions of this Act shall, so far as may be, apply accordingly as if the notice were a notice issued under that sub-section :
Provided that the tax shall be charged at the rate at which it would have been charged if such income had not escaped assessment or full assessment, as the case may be ;
Provided further that the Agricultural Income-tax Officer shall not issue a notice under this sub-section unless he has recorded his reasons for doing so.'
7. Section 36(1) of the Act reads as follows :
'36. Rectification of mistake.--(1) The authority which passed an order on appeal or revision may at any time within three years from the date of such order passed by him on appeal or in revision, and the Agricultural Income-tax Officer may at any time within three years from the date of any assessment or refund order passed by him of his own motion, rectify any mistake apparent from the record of the appeal, revision, assessment or refund, as the case may be, and shall, within the like period rectify any such mistake which has been brought to his notice by an asses-see : Provided that no such rectification shall be made having the effect of enhancing an assessment or reducing a refund unless the appellate or revisional authority or the Agricultural Income-tax Officer, as the case may be, has given notice to the assessee of his intention so to do and has allowed him a reasonable opportunity of being heard.'
8. Under the Act, once an assessment made for a year becomes final (after the appeal or revision or reference, as the case may be), it cannot be normally reopened except as provided in Sections 35 and 36 of the Act and within the time specified in those sections. It is true that Section 34 contains a general power to revise without limitation of time. The statute has not imposed any time-limit within which proceedings' could be initiated by the Commissioner under Section 34 of the Act to revise an order passed by the subordinate authority. Prima facie, the proceedings under Section 34 can be initiated at any time. The outer time-limit or the frontier specified in Section 35 of the Act (five years from the end of the assessment year) or in Section 36 of the Act (three years from the date of the assessmentorder) are not prima facie applicable to proceedings in revision initiated under Section 34 of the Act, to scrutinise the legality of an order passed by an assessing authority. Even so, the question arises as to whether the powers under Section 34 of the Act can be exercised at any time to reopen an assessment which has become final, even beyond the time limit specified in Sections 35 and 36 of the Act.
9. In Bhavani Tea and Produce Co.'s case [1972] Tax LR 2413 the court took the view that it may be permissible to exercise the jurisdiction under Section 34 of the Act to the benefit of the assessee at any time, but there should be some reasonableness regarding the time limit in case proceedings are taken suo motu, when the exercise of jurisdiction would affect the assessee adversely, at variance of an assessment already effected, and, in that case, nine years after the assessments became final was held to be an unreasonable period for the exercise of the suo motu revisional power. Similarly, in P.S.B. Paul Pandian's case : [1981]128ITR809(Ker) , a Bench of this court held that a delay of about 11 years in one case and of about 10 years in the other, to revise the assessments already completed, would be barred by limitation on account of the long and unjustifiable delay. In Krishna Bhatta's case : [1981]132ITR21(Ker) , an order levying penalty after 16 years was held to be bad. It is based on these decisions that counsel for the assessee contends, that the order of revision passed in this case for the year 1969-70 proposing to revise the assessment order dated April 25,1972, is patently barred by limitation.
10. We should say that no question of bar of limitation arises in suo motu revision proceedings initiated under Section 34 of the Agricultural Income-tax Act. The Act does not provide any time-limit within which the proceeding should be initiated. The power is vested in very wide terms. It is trite law that such statutory power must be exercised bona fide, reasonably, without negligence and for the purpose for which it is conferred. While it is true that no period of limitation is prescribed for initiating proceedings under Section 34 of the Act, action, if any, must be taken within a reasonable period. As stated by the Supreme Court in Government of India v. Citadel Fine Pharmaceuticals : [1990]184ITR467(SC) :
'In the absence of any period of limitation, it is settled that every authority is to exercise the power within a reasonable period. What would be a reasonable period would depend upon the facts of each case. Whenever a question regarding the inordinate delay in issuance of a notice of demand is raised, it would be open to the assessee to contend that it is bad on the ground of delay and it will be for the relevant officer to consider the question whether, in the facts and circumstances of the case, the notice of demand for recovery was made within a reasonable period. No hard andfast rule can be laid down in this regard as the determination of the question will depend upon the facts of each case.'
11. So the question that arises in this case is whether the Commissioner of Agricultural Income-tax exercised the suo motu power of revision vested in him under Section 34 of the Act within a reasonable period. The order of assessment for the year 1969-70, passed on April 25, 1972, had become final. A notice to revise the said assessment was issued to the assessee on February 13, 1979. The assessee filed his objections thereto on March 8, 1979. By order dated February 28, 1982, passed under Section 34 of the Act, the Commissioner of Agricultural Income-tax set aside the assessment order for the year 1969-70 and ordered a remit for fresh disposal in accordance with law. Admittedly, suo motu revision proceedings were initiated nearly seven years after the final assessment and the revisional order was passed nearly ten years after the said assessment was rendered. Is it possible to say that, in all the circumstances of the case, the power under Section 34 of the Act has been exercised by the Commissioner of Agricultural Income-tax within a reasonable time The normal period within which an assessment, once made, can be reopened under Section 35 of the Act, is five years from the end of the assessment year. Under Section 36, a mistake could be rectified within three years from the date of the assessment order. Once a final assessment is rendered (after the appeal or revision or reference, as the case may be), the finality attached to the order can be put in peril and the assessment can be reopened normally only in proceedings under Section 35 or 36 of the Act. To reopen the final assessment after the said periods, in exercise of the powers under Section 34 of the Act, demands cogent and sufficient reasons. The power vested in the Commissioner of Agricultural Income-tax should be exercised bona fide and within a reasonable period. The Revenue should be able to demonstrate that there were circumstances beyond control or other supervening events or insurmountable difficulties for not setting in motion the proceedings under Section 34 of the Act within the normal period provided in Sections 35 and 36 of the Act. Whether there were exceptional or extenuating circumstances, explaining the reason for not setting in motion the proceedings under Section 34 of the Act within the normal period, to revise or reopen an assessment which will affect the assessee adversely, would depend upon the facts and circumstances of each case. It should be remembered that the statutory power conferred for public purposes is conferred, as it were, upon trust, not absolutely, and it can validly be used only in the right and proper way, which the Legislature, when conferring it, is presumed to have intended. In a system based on the rule of law, there is no unfettered or untrammelled discretion in any statutory or public authority : See Wade on Administrative Law, 5th Edition, page 355. It is settled law that an action of a statutory oradministrative authority can be attacked as 'irrational' or 'unreasonable'. The principles relating thereto have been laid down in Associated Provincial Picture Houses Ltd. v. Wednesbury Corporation [1947] 2 All ER 680 and explained in later decisions of the House of Lords. See Council of Civil Service Unions v. Minister for the Civil Service [1984] 3 All ER 935 and Wheeler v. Leicester City Council [1985] 2 All ER 1106. The word 'irrational' or 'unreasonable' is used in a comprehensive sense. It is used as a general pointer or description of the things that must not be done. It covers a multitude of sins. It is a generalised rubric which takes within its fold decisions which are tainted by perversity, arbitrariness, caprice or absurdity. Though the repository of jurisdiction under the statute acts within the four corners of the legislative mandate, it is said that he has arrived at the decision which is repugnant to 'reason'. The decision is 'irrational' and so unfair and illegal. Viewed in the above perspective, can it be said that the order of suo motu revision passed by the Commissioner of Agricultural Income-tax dated February 28, 1982, reopening the assessment order for the year 1969-70 dated January 25, 1972, is rational or reasonable Is it fair and legal That is the sole question to be decided on the facts and circumstances of the case. That is the very point made out by the assessee in his objections dated March 8, 1979. But, unfortunately, the attention of the Commissioner of Agricultural Income-tax was not focussed on the said crucial question ; nor has he decided the said question when he passed the revisional order dated February 28, 1982. Since the question whether the power has been exercised within a reasonable period depends upon the facts of each case, it is initially for the statutory authority before whom such objection is raised to advert to all the facts and circumstances and then come to a decision on the said question. That has not been done in this case. The question referred to this court has not clearly brought out the above aspect. Moreover, in the statement of the case evidenced by order dated April 25, 1986, the Commissioner of Agricultural Income-tax has stated that there was 'escapement' of income in the assessments completed for the years 1968-69 and 1969-70 (paper book page 1, line 40). If it be so, can the power under Section 34 of the Act (revisional jurisdiction) be invoked at all The decision of the Supreme Court in Commr. of Agrl. I. T. v. Lucy Kochuvareed : [1976]103ITR799(SC) is a pointer in this regard. That aspect has not been borne in mind at all. It seems that the Commissioner of Agricultural Income-tax was not definite or clear about his jurisdiction or power to pass the 'revisional order'. Therefore, we decline to answer the question referred to this court but, at the same time, direct the Commissioner of Agricultural Income-tax, Trivandrum, to restore the revisional proceedings to file for the year 1969-70 and dispose of the matter in accordance with law and in the light of the observations contained hereinabove.
12. A copy of this judgment under the seal of this court and the signature of the Registrar will be forwarded to the Commissioner of Agricultural Income-tax, Trivandrum, under Section 60(6) of the Agricultural Income-tax Act.